Cannabis Investment Club

[JohnCM]

TGIFF
1933 Industries Inc.
Ordinary Shares
0.0755
0.00426

5.98%

0.074 / 0.0761 (30631 x 78945)

OTC DISCLOSURE & NEWS SERVICE
1933 Industries Reports First Quarter 2021 Financial Results
Press Release | 12/29/2020

A 60% decrease in net loss and an 80% improvement in adjusted EBITDA bring the Company closer to profitability

VANCOUVER, BC / ACCESSWIRE / December 29, 2020 / 1933 Industries Inc. (the "Company" or "1933 Industries") (CSE:TGIF)(OTCQX:TGIFF), a vertically integrated cannabis consumer packaged goods company, is pleased to announce its first quarter ("Q1 2021") financial results for the period ended October 31, 2020. All amounts expressed are in Canadian dollars.

Q1 2010 Financial Highlights

Fiscal 2020 Consolidated Results
Q1 2021
(Oct 31, 2020)
Q4 2020
(July 31, 2020)
Q1 2020
(Oct 31, 2019)
Revenues
$2,687,516
$2,388,010
$3,881,183
Gross margin
$728,700
$63,177
$2,085,104
Cash balance
$2,044,574
$2,761,542
$14,872,277
Expenses
$3,544,687
$5,426,639
$5,901,402
Net loss
($2,818,577)
($7,236,277)
($3,816,298)
Comprehensive loss
($2,929,123)
($8,426,832)
($3,962,300)
Adjusted EBITDA loss
($1,351,212)
($7,196,520)
($1,827,699)
Basic and diluted loss per share
($0.01)
($0.03)
($0.01)
Total assets
$45,431,525
$46,584,470
$61,358,608
Total liabilities
$26,714,275
$27,132,288
$26,033,715
Equity
$18,717,250
$19,452,182
$35,324,893

Operating Results

During the reporting period, total revenues were $2.7 million, a 13% increase from the previous quarter. The increase was attributed to the Company's launch of cannabis flower and pre-rolls in the Nevada market. With improved plant genetics and in-demand strains, the Company's new saleable flower and cannabis products have sold out after each harvest, as the demand for craft cannabis flower remains strong in Nevada, despite the loss of tourism due to the COVID-19 pandemic.

Gross margin was $729,000 or 27%, compared to $63,000 or 3% during Q4 2020. The increase in gross margin from the prior quarter is due to the Company's enhanced ability to produce saleable flower and biomass from its cultivation facility.

General and administration expenses in Q1 2021 were $1.2 million, compared to $2.0 million during Q4 2020 and $2.3 million during Q1 2020. This change over the prior quarter represents managements' commitment to making strategic reductions to streamline operations with the overarching goal of reaching profitability in the near future.

Expenses were $3.5 million for Q1 2021, a 35% decrease from $5.4 million in Q4 2020 and a 40% decrease from $5.9 million for Q1 2020. The Company reduced expenses in all areas, including management and consulting fees, wages and benefits. It is management's priority to continue to reduce costs to meet its financial goals.

Net loss from continuing operations was $2.8 million or $0.01 per share for Q1 2021. The net loss for Q1 2021 represents a 61% improvement from a $7.2 million loss in Q4 2020 and a 26% decrease from losses incurred in Q1 2020.

Adjusted EBITDA loss was $1.4 million, an 81% improvement from $7.2 million in Q4 2020, and a 26% improvement from $1.8 million for Q1 2020.

The Company's licensed cultivation and production subsidiary, Alternative Medicine Association ("AMA") reported revenues of $1.6 million and gross margin of $164,000. Infused MFG, a subsidiary focused on the manufacturing of proprietary hemp derived CBD products under the Canna Hemp™ brand, reported revenues of $1.1 million and gross margin of $565,000.

Balance Sheet

Cash at October 31, 2020 was $2.0 million, compared to $2.8 million at July 31, 2020, a decrease of 29%. Subsequent to the reporting period, the Company completed a private placement financing for proceeds totalling $918,720.

Total assets were $45.4 million during Q1 2021, compared to $46.6 million during the previous quarter, a decrease of 3%.

Working capital for Q1 2021 was a deficiency of $5.0 million, compared to a working capital surplus of $6.1 million for Q4 2020, due to the reclassification of $10.0 million convertible debentures from long term to current liabilities as they mature on September 14, 2021. The Company anticipates that the convertible debentures will most likely be converted into common shares as per recent amendments, (see news release dated June. 29, 2020).