Medicine Man Technologies Inc (SHWZ)

[TFMG]

MDCL- MEDICINE MAN TECH HAS TREMENDOUS GROWTH, BULLISH.

Transcript from most recent earnings report.
Comparison of Results of Operations for the three months ended June 30, 2019 and 2018
During the three months ended June 30, 2019, we generated revenues of $1,757,819 including (i) product sales of $1,331,979, (ii) consulting, licensing and Cultivation Max fees of $422,596, and ( iii ) other operating revenues of $3,244 as compared with the three months ended June 30, 2018, where we generated revenues of $1,417,687 including (i) product sales of $380,699, (ii) consulting, licensing and Cultivation Max fees of $1,010,761, and ( iii ) other operating revenues of $26,227. Revenue for the three months ended June 30, 2019 increased by $340,132, or approximately 24.0%, over the three months ended June 30, 2018.

Cost of goods and services, consisting of expenses related to delivery of services and product procurement, was $1,086,413 during the three months ended June 30, 2019, compared to $380,396 during the comparable period in 2018. This increase was due to increased sales of product and increased salaries and related employment costs.

Operating expenses during the three months ended June 30, 2019, were $9,014,276, compared to operating expenses of $884,119 incurred during the three months ended June 30, 2018, an increase of $8,130,157. The increase during the three-month period ended June 30, 2019 was primarily attributable to non-cash, stock-based compensation and derivative liability charges.

As a result, we generated a net loss of $8,822,650 during the three months ended June 30, 2019 (or a loss of approximately $0.30 per share), compared to net income of $181,692 during the three months ended June 30, 2018.

Comparison of Results of Operations for the six months ended June 30, 2019 and 2018

During the six months ended June 30, 2019, we generated revenues of $3,761,295 including (i) product sales of $2,876,279, (ii) consulting, licensing and Cultivation Max fees of $876,265, and ( iii ) other operating revenues of $8,751 as compared with the six months ended June 30, 2018, where we generated revenues of $2,628,724 including (i) product sales of $840,034, (ii) consulting, licensing and Cultivation Max fees of $1,728,258, and ( iii ) other operating revenues of $60,402. Revenue for the six months ended June 30, 2019 increased by $1,132,571, or approximately 43.1%, over the six months ended June 30, 2018.

Cost of goods and services, consisting of expenses related to delivery of services and product procurement, was $2,685,125 during the six months ended June 30, 2019, compared to $753,914 during the comparable period in 2018. This increase was due to increased sales of product and increased salaries and related employment costs.

Operating expenses during the six months ended June 30, 2019, were $11,647,067, compared to operating expenses of $1,703,611 incurred during the six months ended June 30, 2018, an increase of $9,943,456. The increase during the three-month period ended June 30, 2019 was primarily attributable to non-cash, stock-based compensation and derivative liability charges.

As a result, we generated a net loss of $11,734,468 during the six months ended June 30, 2019 (or a loss of approximately $0.40 per share), compared to net income of $207,116 during the six months ended June 30, 2018.

Liquidity and Capital Resources

At June 30, 2019, we had $4,347,495 in cash on hand.

Net cash used in operating activities was $733,348 during the six-month period ended June 30, 2019, compared to cash used from operating activities of $857,400 for the similar period in 2018, a decrease of $124,052.

Cash flows used for investing activities was $242,670 during the six-month period ended June 30, 2019, compared to cash used of $40,092 for the similar period in 2018.

Cash flows from financing activities was $5,001,725 during the six-month period ended June 30, 2019, compared to $1,000,000 for the similar period in 2018. During the six months ended June 30, 2019, the Company received proceeds of $4,400,000 from the private sale of our common stock as compared to $1,000,000 in proceeds from the private sale of our common stock during the six months ended June 30, 2018. Additionally, the Company received $601,725 in proceeds in connection with the exercise of common stock purchase warrants during the six-month period ended June 30, 2019.

While no assurances can be provided, we believe we will generate positive cash flow from our operations in 2019. If we are successful in achieving this objective, of which there can be no assurance, we do not believe we will need to raise any additional capital and that the revenue generated will be sufficient to allow us to implement our current business plan. However, if we do not generate positive cash flow, or we identify an acquisition which we believe will significantly impact our business operations in a positive manner, or unforeseen developments occur, we may need to raise additional capital, either debt, equity or both. At this time, we are unable to state how much capital we will need. As of the date of this Report we have no commitment from any investor or investment-banking firm to provide us with any funding and there can be no assurances we will obtain such funding in the future. Failure to obtain this additional financing may have a material negative impact on our ability to generate profits on a regular basis in the future.



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