Cansortium Reports Third Quarter 2024 Results

  • Q3 Revenue improves 3.5% Year-over-Year to $26.1 million
  • Delivers $7.5 million in Adjusted EBITDA, representing 29% margin
  • Generates $9.6 million in Positive Cash Flow from Operations

TAMPA, fLA., Nov. 29, 2024 /PRNewswire/ – Cansortium Inc. (CSE: TIUM.U) (OTCQB: CNTMF) (“Cansortium” or the “Company”), a vertically-integrated, multi-state cannabis company operating under the FLUENT™ brand, today announced its financial and operating results for the  quarter ended September 30, 2024. Unless otherwise indicated, all financial results are presented in U.S. dollars.

Advertisement

“We completed the third quarter by delivering our 12th consecutive quarter of positive cash flow from operations as well as steady year over year revenue growth,” said CEO Robert Beasley. “Our focus on continuous improvement and gaining efficiencies has continued to be a positive contributor to our solid performance.”

Mr. Beasley added, “In Florida, we have increased our cultivation canopy to remain in balance with strong medical market demand and anticipate adding four new stores in 2025 while expanding our brand and product portfolio. Fortunately, our growth strategy did not depend on the outcome of Amendment 3 passing in Florida and we have made no financial commitments which depended on the adult use measure. FLUENT remains committed to the mission of serving the medical cannabis patients of Florida.

Mr. Beasley concluded, “Looking ahead, with our primary loan refinancing completed and our business combination with RIV Capital set to close by year end, our business is exceptionally well positioned heading into 2025. We have already commenced integration activities and are looking forward to leveraging the combined talent of both teams to scale our market share in the state of New York. Additionally, we also continue to seek out opportunities to drive revenue growth in both Pennsylvania and Texas.”

Q3 2024 Financial Highlights (vs. Q3 2023)

  • Revenue increased 3.5% to $26.1 million compared to $25.3 million.
  • Florida revenue increased 3.6% to $22.0 million compared to $21.3 million.
  • Gross profit before fair value adjustments1 was $14.3 million or 54.6% of revenue, compared to $13.7 million or 54.0% of revenue.
  • Adjusted EBITDA was $7.5 million compared to $7.7 million, with the decrease primarily driven by higher general and administrative expenses.
  • Cash flow from operations for the three months ending September 30, 2024, was $9.6 million compared to $7.1 million in the prior year primarily.
  • On September 30, 2024, the Company had approximately $8.9 million of cash and cash equivalents and $74.1 million of total debt outstanding, with approximately 303 million shares outstanding.

Recent Operational Highlights

  • In Florida, Cansortium currently operates 35 stores and anticipates opening 4 new stores by the end of 2025.
  • The Ruskin, FL Facility is now operational and Cansortium completed its first harvest in June 2024, adding approximately 14,000 sq ft of cultivation canopy.
  • The Rosa, FL Facility is under construction, and the Company anticipates it will complete its first harvest by Q2 2025, adding another 7,000 sq ft of canopy to Cansortium’s Florida footprint.
  • There was no major damage to the Company’s facilities or retail locations as a result of the hurricane’s which impacted Florida in 2024.
  • Subsequent to quarter end, the Company completed a new senior secured credit agreement of up to $96,500,000 with Chicago Atlantic Admin, LLC, refinancing its existing $71,000,000 senior secured term loan that was set to mature May 29, 2025.

RIV Transaction Update and Conference call

The Company has continued its integration activities with RIV Capital Inc. (“RIV Capital”) and, with all required regulatory approval obtained, expects to complete the business combination in early December 2024. In connection with the closing, the Company expects to host a conference call to discuss the proforma business as well as its financial and operating results for the third quarter ended September 30, 2024. Details will be announced upon completion of the RIV Capital transaction.

___________________________

1 Gross profit before fair value adjustments is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. The Company calculates gross profit before fair value adjustments from gross profit plus (minus) the changes in fair value of biological assets, as presented in the consolidated statement of operations.

About Cansortium Inc.

Cansortium is a vertically-integrated cannabis company with licenses and operations in Florida, Pennsylvania and Texas. The Company operates under the Fluent™ brand and is dedicated to being one of the highest quality cannabis companies for the communities it serves. This is driven by Cansortium’s unrelenting commitment to operational excellence in cultivation, production, distribution and retail. The Company is headquartered in Tampa, Florida.

Cansortium Inc.’s Common Shares trade on the CSE under the symbol “TIUM.U” and on the OTCQB Venture Market under the symbol “CNTMF”. For more information about the Company, please visit www.getFLUENT.com.

Forward-Looking Information

Certain information in this news release may constitute forward-looking information within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent the Company’s expectations, estimates, and projections regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control.

Forward-looking information is necessarily based on many opinions, assumptions, and estimates that, while considered reasonable by the Company as of the date of this news release, are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in the public documents of the Company available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this news release are made as of the date of this news release, and the Company expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.

For further information: www.getFLUENT.com.

Company Contact

Robert Beasley, CEO

(850) 972-8077

investors.getFLUENT.com

Investor Relations Contact

investors@cansortiuminc.com

Cansortium Inc.

Consolidated Statements of Financial Position (unaudited)

As of September 30, 2024, and December 31, 2023

 (Amounts expressed in thousands of United States Dollars unless otherwise stated)





 September 30, 


 December 31, 





2024


2023

Assets







Current assets







Cash




$                               8,932


$                     10,521

Trade receivable




51


215

Inventory, net


Note 3


13,419


9,244

Biological assets


Note 4


2,951


331

Prepaid expenses and other current assets


Note 5


2,794


1,882

Total current assets




28,147


22,193








Property and equipment, net


Note 6


31,476


27,642

Intangible assets, net


Note 7


94,714


93,593

Right-of-use assets, net


Note 12


32,692


31,943

Goodwill


Note 8


1,525


1,525

Other assets




1,373


907

Total assets




$                           189,927


$                   177,803








Liabilities







Current liabilities







Trade payable




$                               8,035


$                       5,525

Accrued liabilities




5,425


9,779

Income taxes payable




3,337


22,009

Derivative liabilities


Note 10


817


9,109

Current portion of notes payable, net


Note 11


63,989


213

Current portion of lease liabilities


Note 12


3,178


2,872

Total current liabilities




84,781


49,507








Notes payable, net


Note 11


7,414


61,189

Lease liabilities


Note 12


38,924


37,242

Deferred tax liability




22,303


17,398

Uncertain tax position




38,816


Other long-term liabilities


Note 21


3,447


3,882

Total liabilities




195,685


169,218








Shareholders’ equity







Share capital


Note 13


183,690


183,690

Share-based compensation reserve




7,158


6,739

Equity conversion feature




6,914


6,677

Warrants


Notes 13


29,634


29,634

Accumulated deficit




(232,820)


(217,821)

Foreign currency translation reserve




(334)


(334)

Total shareholders’ equity 




(5,758)


8,585








Total liabilities and shareholders’ equity




$                         189,927


$                  177,803

 

Cansortium Inc.

Statement of Operations (unaudited)

For the three- and nine-months ending September 30, 2024 and 2023

 (Amounts expressed in thousands of United States Dollars unless otherwise stated)





 For the three months ended


 For the nine months ended  





September 30,

2024


September 30,

2023


September 30,

2024


September 30,

2023

Revenue, net of discounts




$                       26,147


$                        25,260


$                       78,643


$                     71,746

Cost of goods sold




11,859


11,607


38,315


34,882

Gross profit before fair value adjustments




14,288


13,653


40,328


36,864












Fair value adjustments on inventory sold




(2,099)


4,492


(2,259)


9,044

Unrealized gain (loss) on changes

ccccin fair value of biological assets


Note 4


(611)


(3,627)


8,704


(11,719)

Gross profit




11,578


14,518


46,773


34,189












Expenses











General and administrative


Note 14


3,913


2,705


12,483


7,588

Sales and marketing


Note 14


5,846


5,354


17,298


14,928

Depreciation and amortization




1,737


2,003


5,247


5,780

Share-based compensation




228


228


419


643

Total expenses




11,724


10,290


35,447


28,939












Income from operations




(146)


4,228


11,326


5,250












Other expense (income)











Finance costs, net


Note 19


5,154


4,562


14,700


13,135

Loss (gain) on change in fair value of ccccderivative liability


Notes 10


(898)


426


(8,292)


262

Gain on debt settlement





(116)



(116)

Loss on disposal of assets






212


70

Loss from termination of a contract





2


5


6

Other miscellaneous income







67

Total other (income) expense




4,256


4,874


6,625


13,424












Income (loss) before income taxes




(4,402)


(646)


4,701


(8,174)












Income tax expense


Note 9


7,379


4,662


19,700


9,867












Net comprehensive loss




$                    (11,781)


$                         (5,308)


$                       (14,999)


$                     (18,041)












Net loss per share











Basic and diluted – continuing operations




$                        (0.04)


$                           (0.02)


$                           (0.05)


$                         (0.06)












Weighted average  number of shares











Basic number of shares




300,522,916


298,963,366


299,617,665


290,693,488

Diluted number of shares




341,807,051


358,650,277


341,616,139


345,906,048

 

Cansortium Inc.

Consolidated Statements of Cash Flow (unaudited)

For the nine months ended September 30, 2024 and 2023

 (Amounts expressed in thousands of United States Dollars unless otherwise stated)


 For the nine months ended 


September 30,

2024

September 30,

2023

Operating activities



Net loss from continuing operations

$                       (14,999)

$                       (18,041)

Adjustments to reconcile net loss to net cash provided by operating activities:



Unrealized loss (gain)  on changes in fair value of biological assets

(8,704)

11,719

Realized loss (gain) on changes in fair value of biological assets

2,259

(9,044)

Share-based compensation

419

644

Depreciation and amortization

11,366

10,961

Accretion and interest of convertible debentures

426

400

Accretion and interest of term loan

10,372

9,534

Interest of equipment loan

37

Interest on cultivation facility loan

61

Interest on insurance financing

9

Interest on convertible promissory note

224

Loss on disposal of assets

212

70

Change in fair market value of derivative

(8,292)

262

Interest on lease liabilities

3,588

3,041

Deferred tax expense

4,835

(1,003)

Uncertain tax position

38,816

Changes in operating assets and liabilities:



Trade receivable

164

(20)

Inventory

10,944

11,339

Biological assets

(11,294)

(12,609)

Prepaid expenses and other current assets

960

(497)

Right of Use Assets/Liabilities

(3,520)

455

Other assets

(466)

(66)

Trade payable

2,510

(3,275)

Accrued liabilities

(4,354)

(205)

Other long-term liabilities

(435)

2,531

Income taxes payable

(18,672)

10,872

Net cash provided by operating activities

16,429

17,105




Investing activities



Purchases of property and equipment

(10,543)

(4,500)

Purchase of intangible assets

(1,332)

Net cash used in investing activities

(11,875)

(4,500)




Financing activities



Net proceeds from issuance of shares and warrants

2,993

Net proceeds from insurance financing

800

Net proceeds from convertible note

3,983

Payment of lease obligations

(2,126)

(4,800)

Net proceeds from auto and equipment loan

48

Principal repayments of notes payable

(8,048)

(7,852)

Net cash used in financing activities

(6,143)

(8,859)

Net increase (decrease) in cash

(1,589)

3,746

Cash, beginning of period

10,521

8,359

Cash, end of period

$                             8,932

$                          12,105

 

Cansortium Inc.

Adjusted EBITDA Calculation (unaudited)

(Amounts expressed in thousands of United States Dollars unless otherwise stated)


Three months ended


September 30,

2024

September 30,

2023

Variance

Net loss

$                  (11,781)

$                    (5,308)

$                    (6,473)

Finance costs, net

5,154

4,562

592

Income taxes

7,379

4,662

2,717

Depreciation and amortization

3,801

3,829

(28)

EBITDA

$                       4,553

$                       7,745

$                    (3,192)










Three months ended


September 30,

2024

September 30,

2023

Variance

EBITDA

$                       4,553

$                       7,745

$                    (3,192)

Change in fair value of biological assets

2,710

(865)

3,575

Change in fair market value of derivative

(898)

426

(1,324)

Professional fees(1)

529

529

One-time employee costs(2)

162

162

Loss on debt settlement

(116)

116

Share-based compensation

228

228

Other non-recurring expense(3)

243

263

(20)

Adjusted EBITDA

$                       7,527

$                       7,681

$                         (154)










Nine months ended


September 30,

2024

September 30,

2023

Variance

Net loss

$                  (14,999)

$                  (18,041)

$                       3,042

Finance costs, net

14,700

13,135

1,565

Income taxes

19,700

9,867

9,833

Depreciation and amortization

11,274

11,490

(216)

EBITDA

$                    30,675

$                    16,451

$                    14,224










Nine months ended


September 30,

2024

September 30,

2023

Variance

EBITDA

$                    30,675

$                    16,451

$                    14,224

Change in fair value of biological assets

(6,445)

2,675

(9,120)

Change in fair market value of derivative

(8,292)

262

(8,554)

Loss on termination of contract

6

(6)

Loss on debt settlement

(116)

116

Professional fees(1)

4,170

4,170

One-time employee costs(2)

776

776

Share-based compensation

419

643

(224)

Loss on disposal of assets

212

70

142

Other non-recurring expense(3)

486

327

159

Adjusted EBITDA

$                    22,001

$                    20,318

$                       1,683

(1) Legal and professional fees associated with potential transactions and professional fees associated with prior periods.

(2) Severance and relocation costs.

(3) One-time costs incurred during the period related.

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/cansortium-reports-third-quarter-2024-results-302318159.html

SOURCE Cansortium Inc.

Disclaimer: The above press release comes to you under an arrangement with PR Newswire. USA Newshour takes no editorial responsibility for the same.