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Snow Park Outlines Serious Long-Term Issues That Front Yard Has Failed to Address
Sends Letter to Fellow Stockholders Detailing the Systemic
Performance, Strategy and Governance Shortcomings That Have Led to
Long-Term Value Erosion
Lays Out Why Front Yard’s Intended Acquisition of Another 35,000
Homes – After Years of Declining NAV – Would Represent Yet Another
Costly Strategic Misstep That Harms Stockholders
Reiterates That No Credible Plan Exists to Close the Company’s
Staggering Valuation Gap and Unlock the Roughly 85% of Upside Value
Trapped in its Shares
Launches Campaign Website at www.RenewRESI.com
Urges Stockholders to Support Necessary Change in the Boardroom by
Voting on the BLUE Proxy Card to Elect Snow
Park’s Highly-Qualified, Independent Nominees
NEW YORK–(BUSINESS WIRE)–Snow Park Capital Partners, LP (together with its affiliates, “Snow
Park” or “we”), a significant long-term stockholder of Front Yard
Residential Corporation (NYSE: RESI) (“Front Yard” or the “Company”),
which together with the other participants in its solicitation
beneficially owns approximately 2.1% of the Company’s outstanding
shares, today issued a public letter to stockholders in connection with
its nomination of three highly-qualified, independent candidates for
election to the Company’s Board of Directors at the upcoming annual
meeting of stockholders.
Please note that upon taking into account thoughtful feedback from our
fellow stockholders and evaluating Front Yard’s most pressing needs,
Snow Park today narrowed its slate to three members with respective
expertise in the single-family residential market, real estate
investment and transactions, and Real Estate Investment Trust (“REIT”)
sector corporate governance and portfolio management.
Snow Park urges all stockholders to vote the BLUE
proxy card today. Our nominees – stockholders Leland Abrams, Lazar
Nikolic and Jeffrey Pierce – possess strong real estate pedigrees,
robust mortgage and financial services experience, and deep knowledge of
effective corporate governance practices in the REIT sector. We believe
a reconstituted Board that includes our nominees will have the necessary
expertise and ownership perspectives to support a full and fair
strategic review and help the incumbent directors identify paths to
value creation at Front Yard. Please visit www.RenewRESI.com
today for more information and resources.
Below is the full text of the letter.
***
April 29, 2019
Dear Fellow Stockholders:
Snow Park Capital Partners, LP (together with its affiliates, “Snow
Park” or “we”) believes that the long-term underperformance endured by
stockholders of Front Yard Residential Corporation (NYSE: RESI) (“Front
Yard” or the “Company”) is the result of strategic missteps, poor
balance sheet management, inadequate corporate governance and a weak
non-independent Board. This stockholder suffering is underscored by the
fact that since the beginning of 2015, Front Yard’s stock is down nearly
50%, and in 2018 alone, its stock was down approximately 30%.
Unfortunately, we feel the incumbent Board is presently either
ill-equipped and/or unwilling to address Front Yard’s significant
challenges, including one of the Real Estate Investment Trust (“REIT”)
sector’s most staggering valuation gaps. This is why we have nominated a
slate of highly-qualified, independent director nominees with deep
experience when it comes to the portfolio management, operations, and
governance of publicly traded REITs. Our slate stands for enhanced
accountability for management, improved strategic thinking across all
facets of the business and stockholder-friendly governance policies –
all of which can help us maximize value for stockholders. Our nominees
are also committed to ensuring that stockholders have a true voice in
the boardroom and that Front Yard objectively assesses all avenues to
unlocking the value currently trapped within its shares.
Snow Park would also like to call your attention to the fact that upon
taking into account thoughtful feedback from fellow stockholders and
evaluating Front Yard’s most pressing needs, we decided to narrow our
slate to three members with respective expertise that aligns to the
Company’s most urgent challenges. We – in contrast to the incumbent
Board – believe that soliciting and embracing the input of stockholders
in this manner is essential to strategic decision-making.
We urge all stockholders to vote the enclosed BLUE
proxy card or BLUE voting
instruction form to elect our slate of three highly-qualified
individuals – Leland Abrams, Lazar Nikolic and Jeffrey Pierce – to Front
Yard’s seven-person Board. If you have already voted using the Company’s
voting form, or if your vote was taken over the telephone by a
representative of the Company, you have every right to change your vote
by simply returning a later dated BLUE
voting form in the enclosed pre-paid envelope. Alternatively, you can
quickly send the Company a strong message that the status quo is
unacceptable by voting over the Internet or by telephone, as well.
For years, Snow Park has been troubled by what we consider to be Front
Yard’s reluctance to acknowledge and address the issues plaguing the
Company. Moreover, we believe the consequences associated with the
Board’s years of inaction have created an indefensible record for the
incumbent directors. This is a critical juncture in Front Yard’s
lifecycle as a public company, which is why we feel it is important to
remind stockholders about the Company’s track record and why it is so
vital for the status quo to change. Consider the following:
Miserable Financial Performance
Despite operating during a bull market in the single-family residential
space and a period of tremendous economic growth, Front Yard has
delivered negative returns
while dramatically underperforming relative to its peers and the broader
marketplace. We believe the Company’s total shareholder returns are
unacceptably poor over the past one, three and five-year periods.
TOTAL RETURN PERFORMANCE | |||||
1 Year | 3 Year | 5 Year | |||
Front Yard Residential | (0.5%) | (7%) | (57%) | ||
Invitation Homes* | 9% | – | – | ||
American Homes for Rent | 15% | 48% | 44% | ||
MSCI US REIT Index | 21% | 20% | 54% | ||
S&P 500 | 11% | 47% | 68% | ||
RESI Relative Returns vs: |
|||||
Invitation Homes | (9%) | – | – | ||
American Homes for Rent | (15%) | (55%) | (101%) | ||
MSCI US REIT Index | (21%) | (26%) | (111%) | ||
S&P 500 | (11%) | (54%) | (126%) | ||
*Invitation Homes went public on 1/31/2017 | |||||
Source: Bloomberg; performance calculated as of close on April |
|||||
Despite this poor track record, we find it confounding that the
incumbent Board has shown such little interest in adding ownership
perspectives or even learning about what has been troubling
stockholders. This is yet another reason why we no longer feel the
status quo is acceptable.
Costly and Concerning Strategic Lapses
Punctuated by a Leverage-Fueled Acquisition Spree
We believe Front Yard’s prolonged underperformance is largely the
byproduct of what we consider to be easily avoidable strategic missteps.
In particular, the Company has been built up in recent years through
unsustainable and leverage-fueled acquisitions, leaving stockholders
burdened with more risk while at the same time offering no solutions to
fix what has become one of the most leveraged balance sheets in the
sector.
As many studies have shown, REITs with excess leverage persistently
trade at a discount1 to their Net Asset Value (“NAV”)
calculations. Since Front Yard has not shown any ability to even access
the capital markets, we believe this pattern of poor balance sheet
management has been a primary factor that has led to stockholder losses.
Complicating this issue is Front Yard’s contract with its external
advisor.2 Specifically, the contract states that all equity
raised will generate a 2% fee for the external advisor. With acquisition
cap rates at sub-6% levels, this makes it infeasible to raise common
equity to lower leverage (even if the stock traded at the Company’s
stated NAV) – as any deals would be dilutive and the General &
Administrative expense burden would continue to worsen. We question, as
all stockholders should, why the Board allowed the balance sheet to
deteriorate without any reasonable path to de-leveraging. This sort of
balance sheet management underscores that the incumbent Board lacks the
accountability, checks and balances, and necessary expertise that all
modern publicly-traded REIT boards should have. We find it indefensible
that Front Yard has placed its balance sheet in such a precarious
position.
Moreover, perhaps the most troubling fact pattern is that by Front
Yard’s own admissions, its leveraged-fueled acquisition spree has had
consequences beyond just failing to increase the Company’s NAV. Its own
NAV estimate, which in 2016 was $21 per share, has actually declined
to $17.50 per share this year.3
And yet after all this, the message to stockholders on Front Yard’s most
recent earnings call was that the Company plans to position the business
to buy another 35,000 homes.4 We firmly believe that the
Company’s track record in no way supports such an endeavor. To the
contrary, we feel this message only further underscores the lack of
accountability in the boardroom given that the incumbent directors sat
by idly as NAV inexplicably declined at the 15,000-home level.
Simply put, Front Yard finally needs to articulate a coherent strategy
with a timeline that will enable stockholders to be able to realize the
tremendous value that remains trapped in its shares before blindly
buying another 35,000 homes without any identifiable capital sources.
Snow Park’s nominees will be laser-focused on preventing further
strategic missteps in this area and ensuring NAV realization for
stockholders at last. We feel no strategy can be implemented or executed
without prioritizing this realization.
Limited Stockholder Alignment and Poor
Governance
We have long held that not having an ownership mentality in the
boardroom has led to poor corporate governance and unproductive
stockholder relations. While Snow Park’s nominees collectively
beneficially own approximately 2.1% of Front Yard’s outstanding shares,
the incumbent independent directors collectively beneficially own
approximately 0.07%5 of the Company’s outstanding shares. In
our view, the incumbents’ lack of a vested financial interest in the
Company’s performance causes a misalignment of interests between
stockholders and Front Yard’s Board.
But rather than seeking to add relevant expertise and ownership
perspectives to the Board, Front Yard in recent years has added former
long-term colleagues of its chief executive, George Ellison, who himself
is an employee of the Company’s property manager. We question whether it
was in the best interests of stockholders to place these allegedly
“independent” individuals – Rochelle Dobbs and George McDowell – into
Board leadership positions overseeing Mr. Ellison. Further, former
Chairman David Reiner, who only recently stepped down from the
chairmanship last year, is still on the Board despite presiding over the
Company’s catastrophic declines since its initial public offering. This
does not appear to be a board designed with true checks and balances,
but one designed to be friendly to management.
We also believe the Company has defied best practices in corporate
governance and severely limited the ability of stockholders to spur
necessary changes and have their voices heard. Front Yard is a
Maryland-incorporated entity that has not opted out of the Maryland
Unsolicited Takeovers Act, which allows the Board to take various
stockholder-unfriendly actions, such as classifying the Board without
stockholder approval. Moreover, unlike the numerous boards of Maryland
corporations that have sought to provide their stockholders with the
right to amend company bylaws, Front Yard has not.
On top of all the protections from its stockholders the Company is
afforded in Maryland, Front Yard also does not allow its stockholders to
effectively act by written consent – it must be unanimous – and they can
only call special meetings upon the request of a majority of outstanding
shares. In addition, directors may only be removed by a prohibitively
high two-thirds vote. These positions represent an affront to
stockholder rights that is emblematic of the Board’s unwillingness or
inability to take the right actions to improve stockholder value.
In sum, the only effective recourse stockholders have to take action is
through annual elections. This is why after many years of suffering,
Snow Park decided to nominate a slate with the ability and pedigree to
change the status quo and allow for owners to have a say in the
boardroom.
There Is an Alternative to the Dismal Status
Quo: Empower the Snow Park Slate to Renew RESI
It is clear to Snow Park that urgent change is needed at Front Yard in
order to rectify all of these challenges and put the Company on a path
to value creation. We once again encourage you to support the election
of our three highly-qualified director nominees – stockholders Leland
Abrams, Lazar Nikolic and Jeffrey Pierce – who will be laser-focused on
supporting an expert-led strategic review, reforming poor corporate
governance practices, and helping Front Yard take actions that can close
its valuation gap and unlock the significant upside in its shares.
We urge Front Yard stockholders to vote FOR all three of Snow Park’s
highly-qualified, independent nominees on the BLUE
Proxy Card and to return it in your postage-paid envelope provided. If
you have already voted Front Yard’s proxy card, you can change your vote
by providing a later dated BLUE proxy.
Should you have any questions or need assistance with voting, please
contact Saratoga Proxy Consulting LLC at (888) 368-0379 or (212)
257-1311 or by email at [email protected].
PROTECT YOUR INVESTMENT. PLEASE SIGN, DATE, AND MAIL THE BLUE
PROXY CARD TODAY!
Sincerely,
Jeffrey Pierce
***
About Snow Park
Snow Park Capital Partners, LP is a privately-held investment manager
that specializes in investing in publicly-traded real estate securities
across the capital structure. Based in New York City and founded by
Jeffrey Pierce, the firm focuses on producing strong risk-adjusted
returns for a diverse investor base of public institutions, private
entities and qualified individual clients.
__________ |
1 Green Street Advisors, LLC’s Heard on the Beach |
2 Specifically, the flawed external advisory agreement with Altisource Asset Management Corp. |
3 A NAV of $21 was set forth in Front Yard Residential |
4 Front Yard Residential Corp.’s February 2019 earnings |
5 Front Yard Residential Corp.’s preliminary proxy statement filed on March 29, 2019. |
Contacts
For Investors:
Saratoga Proxy Consulting LLC
John Ferguson /
Joe Mills, 212-257-1311
[email protected]
/ [email protected]
For
Media:
Profile
Greg Marose / Charlotte Kiaie, 347-343-2999
[email protected]
/ [email protected]
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Cannabis
Rubicon Organics Reports Q1 2024 Financial Results
SCHWAZZE
Schwazze Announces First Quarter 2024 Financial Results
Schwazze Management to Host Conference Call Today at 5:00 p.m. Eastern Time
DENVER, May 15, 2024 /PRNewswire/ — Medicine Man Technologies, Inc., operating as Schwazze, (OTCQX: SHWZ) (Cboe CA: SHWZ) (“Schwazze” or the “Company”), today announced financial and operational results for the first quarter ended March 31, 2024.
“We delivered another period of revenue growth in Q1 as we further refined our retail strategy while contending with the prolonged competitive challenges in Colorado and New Mexico,” said Forrest Hoffmaster, Interim CEO of Schwazze. “Throughout the quarter, we continued to sharpen our pricing and promotional efforts while enhancing the in-store experience, widening assortment, improving in-stock position, and advancing our loyalty program to attract and retain new customers. We also strengthened our wholesale business with quarter-over-quarter growth, while surpassing 30% total door penetration across both states.”
“The Colorado market remains highly competitive with more than 680 active recreational licenses, underscoring the importance of delivering an exceptional customer experience and fully integrated retail support program. Although retail pricing has recently stabilized, Colorado sales in Q1 were down 10% year-over-year due to lower volumes. Nonetheless, we significantly outpaced the market as our sales were up 9%, demonstrating the effectiveness of our operating playbook to compete in challenging environments. We expect to continue driving improvements in customer acquisition, retention, and loyalty as we further increase market share in the state.”
“In New Mexico, the proliferation of new licenses continued to outpace state cannabis sales as store count in Q1 increased 31% year-over-year while the market grew only 13%. In addition to pricing and promotional efforts, we’ve focused on driving traffic into our stores by expanding assortment with high quality flower and delivering an elevated customer experience. The New Mexico regulatory body has also increased its license enforcement efforts in recent months, contributing to more than 70 store closures and a 33% sequential decrease in net new store openings in the first quarter. We will continue to support the New Mexico Cannabis Control Division as it develops its regulatory framework.”
“Over the past four years we have rapidly scaled our footprint through 13 acquisitions, building a leading retail presence in both Colorado and New Mexico. We are beginning to see positive momentum from our pricing and promotional strategy and will remain focused on driving operating efficiencies while further optimizing our assets as we consolidate cultivation facilities and eliminate underperforming stores that do not meet our high-margin thresholds. We believe these initiatives, coupled with our operating playbook and strict cost controls, will enable us to return to stronger levels of profitability moving forward.”
First Quarter 2024 Financial Summary
$ in Thousands USD |
Q1 2024 |
Q4 2023 |
Q1 2023 |
Total Revenue |
$41,601 |
$43,325 |
$40,001 |
Gross Profit |
$17,934 |
$7,034[1] |
$21,849 |
Operating Expenses |
$20,643 |
$23,276 |
$16,199 |
Income (Loss) from Operations |
$(2,709) |
$(16,242) |
$5,650 |
Adjusted EBITDA[2] |
$7,341 |
$10,953 |
$14,525 |
Operating Cash Flow |
$(3,700) |
$3,452 |
$(880) |
Recent Highlights
- Announced the grand opening of a medical and recreational dispensary in March under the Everest Apothecary banner in Las Cruces, New Mexico, increasing the Company’s retail footprint to 34 stores across the state.
- Increased wholesale penetration in the first quarter to more than 30% of total doors in Colorado and New Mexico.
- Lowell Herb Co. pre-roll sales increased more than 3x quarter-over-quarter in Colorado, where it continues to be the #1 pre-roll in the state.
- Wana gummy sales up more than 2x quarter-over-quarter in New Mexico.
First Quarter 2024 Financial Results
Total revenue in the first quarter of 2024 increased 4% to $41.6 million compared to $40.0 million for the same quarter last year. The increase was primarily due to growth from new stores compared to the prior year period, partially offset by continued pricing pressure and the proliferation of new licenses in New Mexico.
Gross profit for the first quarter of 2024 was $17.9 million or 43.1% of total revenue, compared to $21.8 million or 54.6% of total revenue for the same quarter last year. The decrease in gross margin was primarily driven by the aforementioned pricing pressure in New Mexico, as well as higher medical sales mix in Colorado.
____________________________ |
1 Q4 2023 Gross Profit includes one-time, non-cash inventory adjustments of approximately $13.1 million comprised of $3.1 million of product consolidation, obsolescence, and shrinkage expenses, $4.3 million of net realizable value adjustments, and $5.8 million of fair value adjustments on acquired inventory in New Mexico in 2023. |
Operating expenses for the first quarter of 2024 were $20.6 million compared to $16.2 million for the same quarter last year. The year-ago period benefitted from a payroll tax credit of $3.9M. The remaining increase was primarily driven by personnel expenses and four-wall SG&A costs associated with 21 additional stores in Colorado and New Mexico that are still ramping.
Loss from operations for the first quarter of 2024 was $2.7 million compared to income from operations of $5.6 million in the same quarter last year. Net loss was $16.1 million for the first quarter of 2024 compared to net income of $1.7 million for the same quarter last year.
Adjusted EBITDA for the first quarter of 2024 was $7.3 million compared to $14.5 million for the same quarter last year. The decrease in Adjusted EBITDA was primarily driven by lower gross margin and higher operating expenses associated with the 21 additional stores that are still ramping.
As of March 31, 2024, cash and cash equivalents were $13.2 million compared to $19.2 million on December 31, 2023. Total debt as of March 31, 2024, was $159.7 million compared to $156.8 million on December 31, 2023.
Conference Call
The Company will conduct a conference call today, May 15, 2024, at 5:00 p.m. Eastern time to discuss its results for the first quarter ended March 31, 2024.
Schwazze management will host the conference call, followed by a question-and-answer period. Interested parties may submit questions to the Company prior to the call by emailing [email protected].
Date: Wednesday, May 15, 2024
Time: 5:00 p.m. Eastern time
Toll-free dial-in: (888) 664-6383
International dial-in: (416) 764-8650
Conference ID: 84167910
Webcast: SHWZ Q1 2024 Earnings Call
The conference call will also be broadcast live and available for replay on the investor relations section of the Company’s website at https://ir.schwazze.com.
Toll-free replay number: (888) 390-0541
International replay number: (416) 764-8677
Replay ID: 167910
If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at (720) 330-2829.
About Schwazze
Schwazze (OTCQX: SHWZ) (Cboe CA: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to explore taking its operating system to other states where it can develop a differentiated regional leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale.
Schwazze is anchored by a high-performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes. The Company’s leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as well as in the cannabis sector.
Medicine Man Technologies, Inc. was Schwazze’s former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc. Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth. To learn more about Schwazze, visit https://schwazze.com/.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include financial outlooks; any projections of net sales, earnings, or other financial items; any statements of the strategies, plans and objectives of our management team for future operations; expectations in connection with the Company’s previously announced business plans; any statements regarding future economic conditions or performance; and statements regarding the intent, belief or current expectations of our management team. Such statements may be preceded by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intends,” “plans,” “strategy,” “prospects,” “anticipate,” “believe,” “approximately,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” or the negative of these terms or other words of similar meaning in connection with a discussion of future events or future operating or financial performance, although the absence of these words does not necessarily mean that a statement is not forward-looking. We have based our forward-looking statements on management’s current expectations and assumptions about future events and trends affecting our business and industry. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Therefore, forward-looking statements are not guarantees of future events or performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control and cannot be predicted or quantified. Consequently, actual events and results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) regulatory limitations on our products and services and the uncertainty in the application of federal, state, and local laws to our business, and any changes in such laws; (ii) our ability to manufacture our products and product candidates on a commercial scale on our own or in collaboration with third parties; (iii) our ability to identify, consummate, and integrate anticipated acquisitions; (iv) general industry and economic conditions; (v) our ability to access adequate capital upon terms and conditions that are acceptable to us; (vi) our ability to pay interest and principal on outstanding debt when due; (vii) volatility in credit and market conditions; (viii) the loss of one or more key executives or other key employees; and (ix) other risks and uncertainties related to the cannabis market and our business strategy. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise except as required by law.
Investor Relations Contact
Sean Mansouri, CFA or Aaron D’Souza
Elevate IR
(720) 330-2829
[email protected]
MEDICINE MAN TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
For the Periods Ended March 31, 2024 and December 31, 2023
Expressed in U.S. Dollars
March 31, |
December 31, |
||||
2024 |
2023 |
||||
ASSETS
|
|||||
Current Assets |
|||||
Cash & Cash Equivalents |
$ |
13,151,317 |
$ |
19,248,932 |
|
Accounts Receivable, net of Allowance for Doubtful Accounts |
3,356,032 |
4,261,159 |
|||
Inventory |
26,382,184 |
25,787,793 |
|||
Marketable Securities, net of Unrealized Loss of $347,516 and Loss of $1,816, respectively |
108,583 |
456,099 |
|||
Prepaid Expenses & Other Current Assets |
3,502,310 |
3,914,064 |
|||
Total Current Assets |
46,500,426 |
53,668,047 |
|||
Non-Current Assets |
|||||
Fixed Assets, net Accumulated Depreciation of $10,061,700 and $8,741,782, respectively |
31,326,000 |
31,113,630 |
|||
Investments |
2,000,000 |
2,000,000 |
|||
Investments Held for Sale |
– |
202,111 |
|||
Goodwill |
67,492,705 |
67,499,199 |
|||
Intangible Assets, net Accumulated Amortization of $36,483,160 and $32,706,765, respectively |
162,391,482 |
166,167,877 |
|||
Other Non-Current Assets |
1,328,187 |
1,263,837 |
|||
Operating Lease Right of Use Assets |
34,575,832 |
34,233,142 |
|||
Deferred Tax Assets, net |
992,144 |
1,996,489 |
|||
Total Non-Current Assets |
300,106,350 |
304,476,285 |
|||
Total Assets |
$ |
346,606,776 |
$ |
358,144,332 |
|
LIABILITIES & STOCKHOLDERS’ EQUITY
|
|||||
Current Liabilities |
|||||
Accounts Payable |
$ |
9,443,233 |
$ |
13,341,561 |
|
Accrued Expenses |
8,106,618 |
7,774,691 |
|||
Derivative Liabilities |
1,319,845 |
638,020 |
|||
Lease Liabilities – Current |
5,186,316 |
4,922,724 |
|||
Current Portion of Long Term Debt |
29,579,713 |
3,547,011 |
|||
Income Taxes Payable |
28,235,039 |
25,232,782 |
|||
Total Current Liabilities |
81,870,764 |
55,456,789 |
|||
Non-Current Liabilities |
|||||
Long Term Debt, net of Debt Discount & Issuance Costs |
130,120,753 |
153,262,203 |
|||
Lease Liabilities – Non-Current |
30,735,072 |
30,133,452 |
|||
Total Non-Current Liabilities |
160,855,825 |
183,395,655 |
|||
Total Liabilities |
$ |
242,726,589 |
$ |
238,852,444 |
|
Stockholders’ Equity |
|||||
Preferred Stock, $0.001 Par Value. 10,000,000 Shares Authorized; 82,185 Shares Issued and |
|||||
82,185 Outstanding as of March 31, 2024 and 85,534 Shares Issued and 85,534 Outstanding as of |
|||||
December 31, 2023. |
82 |
86 |
|||
Common Stock, $0.001 Par Value. 250,000,000 Shares Authorized; 79,168,539 Shares Issued |
|||||
and 78,248,389 Shares Outstanding as of March 31, 2024 and 74,888,392 Shares Issued |
|||||
and 73,968,242 Shares Outstanding as of December 31, 2023. |
79,169 |
74,888 |
|||
Additional Paid-In Capital |
202,677,665 |
202,040,968 |
|||
Accumulated Deficit |
(96,843,602) |
(80,790,927) |
|||
Common Stock Held in Treasury, at Cost, 920,150 Shares Held as of March 31, 2024 and |
|||||
920,150 Shares Held as of December 31, 2023. |
(2,033,127) |
(2,033,127) |
|||
Total Stockholders’ Equity |
103,880,187 |
119,291,888 |
|||
Total Liabilities & Stockholders’ Equity |
$ |
346,606,776 |
$ |
358,144,332 |
MEDICINE MAN TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND (LOSS)
For the Periods Ended March 31, 2024 and 2023
Expressed in U.S. Dollars
For the Three Months Ended |
|||||
March 31, |
|||||
2024 |
2023 |
||||
(Unaudited) |
(Unaudited) |
||||
Operating Revenues |
|||||
Retail |
$ |
37,633,252 |
$ |
35,820,111 |
|
Wholesale |
3,898,320 |
4,058,925 |
|||
Other |
69,421 |
121,900 |
|||
Total Revenue |
41,600,993 |
40,000,936 |
|||
Total Cost of Goods & Services |
23,667,319 |
18,152,163 |
|||
Gross Profit |
17,933,674 |
21,848,773 |
|||
Operating Expenses |
|||||
Selling, General and Administrative Expenses |
11,835,818 |
10,100,934 |
|||
Professional Services |
1,671,881 |
1,187,364 |
|||
Salaries |
6,880,988 |
4,695,971 |
|||
Stock Based Compensation |
253,916 |
214,544 |
|||
Total Operating Expenses |
20,642,603 |
16,198,813 |
|||
Income from Operations |
(2,708,929) |
5,649,960 |
|||
Other Income (Expense) |
|||||
Interest Expense, net |
(8,307,369) |
(7,745,854) |
|||
Unrealized Gain (Loss) on Derivative Liabilities |
(681,825) |
8,501,685 |
|||
Other Loss |
10,500 |
– |
|||
Loss on Investment |
(33,382) |
– |
|||
Unrealized Gain on Investment |
(347,516) |
1,816 |
|||
Total Other Income (Expense) |
(9,359,592) |
757,647 |
|||
Pre-Tax Net Income (Loss) |
(12,068,521) |
6,407,607 |
|||
Provision for Income Taxes |
3,984,154 |
4,662,178 |
|||
Net Income (Loss) |
$ |
(16,052,675) |
$ |
1,745,429 |
|
Less: Accumulated Preferred Stock Dividends for the Period |
(2,155,259) |
(2,029,394) |
|||
Net Income (Loss) Attributable to Common Stockholders |
$ |
(18,207,934) |
$ |
(283,965) |
|
Earnings (Loss) per Share Attributable to Common Stockholders |
|||||
Basic Earnings (Loss) per Share |
$ |
(0.24) |
$ |
(0.01) |
|
Diluted Earnings (Loss) per Share |
$ |
(0.24) |
$ |
(0.06) |
|
Weighted Average Number of Shares Outstanding – Basic |
76,006,932 |
55,835,501 |
|||
Weighted Average Number of Shares Outstanding – Diluted |
76,006,932 |
101,608,278 |
|||
Comprehensive Income (Loss) |
$ |
(16,052,675) |
$ |
1,745,429 |
MEDICINE MAN TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Periods Ended March 31, 2024 and 2023
Expressed in U.S. Dollars
For the Three Months Ended |
|||||
March 31, |
|||||
2024 |
2023 |
||||
(Unaudited) |
(Unaudited) |
||||
Cash Flows from Operating Activities: |
|||||
Net Income (Loss) for the Period |
$ |
(16,052,675) |
$ |
1,745,429 |
|
Adjustments to Reconcile Net Income (Loss) to Cash for Operating Activities |
|||||
Depreciation & Amortization |
5,096,314 |
6,151,395 |
|||
Non-Cash Interest Expense |
1,031,431 |
991,184 |
|||
Non-Cash Lease Expense |
2,871,226 |
2,251,459 |
|||
Deferred Taxes |
1,004,345 |
(637,225) |
|||
Loss on Investment |
202,111 |
– |
|||
Change in Derivative Liabilities |
681,825 |
(8,501,685) |
|||
Amortization of Debt Issuance Costs |
421,512 |
421,513 |
|||
Amortization of Debt Discount |
2,303,246 |
1,999,933 |
|||
(Gain) Loss on Investments, net |
347,516 |
(1,816) |
|||
Stock Based Compensation |
640,974 |
214,544 |
|||
Changes in Operating Assets & Liabilities (net of Acquired Amounts): |
|||||
Accounts Receivable |
905,127 |
(118,181) |
|||
Inventory |
(587,900) |
(3,023,251) |
|||
Prepaid Expenses & Other Current Assets |
411,754 |
(3,036,801) |
|||
Other Assets |
(64,350) |
360,674 |
|||
Change in Operating Lease Liabilities |
(2,348,703) |
(1,531,765) |
|||
Accounts Payable & Other Liabilities |
(3,566,401) |
(3,464,671) |
|||
Income Taxes Payable |
3,002,257 |
5,299,403 |
|||
Net Cash Provided by (Used in) Operating Activities |
(3,700,390) |
(879,861) |
|||
Cash Flows from Investing Activities: |
|||||
Collection of Notes Receivable |
– |
10,631 |
|||
Purchase of Fixed Assets |
(1,532,287) |
(2,913,394) |
|||
Net Cash Provided by (Used in) Investing Activities |
(1,532,287) |
(2,902,763) |
|||
Cash Flows from Financing Activities: |
|||||
Payment on Notes Payable |
(864,938) |
– |
|||
Net Cash Provided by (Used in) Financing Activities |
(864,938) |
– |
|||
Net (Decrease) in Cash & Cash Equivalents |
(6,097,615) |
(3,782,624) |
|||
Cash & Cash Equivalents at Beginning of Period |
19,248,932 |
38,949,253 |
|||
Cash & Cash Equivalents at End of Period |
$ |
13,151,317 |
$ |
35,166,628 |
|
Supplemental Disclosure of Cash Flow Information: |
|||||
Cash Paid for Interest |
$ |
4,515,205 |
$ |
6,540,748 |
MEDICINE MAN TECHNOLOGIES, INC.
ADJUSTED EBITDA RECONCILIATION (NON-GAAP)
For the Periods Ended March 31, 2024 and 2023
Expressed in U.S. Dollars
For the Three Months Ended |
|||||
March 31, |
|||||
2024 |
2023 |
||||
Net Income (Loss) |
$ |
(16,052,675) |
$ |
1,745,429 |
|
Interest Expense, net |
8,307,369 |
7,745,854 |
|||
Provision for Income Taxes |
3,984,154 |
4,662,178 |
|||
Other (Income) Expense, net of Interest Expense |
1,052,223 |
(8,503,501) |
|||
Depreciation & Amortization |
5,618,834 |
6,612,814 |
|||
Earnings Before Interest, Taxes, Depreciation and |
|||||
Amortization (EBITDA) (non-GAAP) |
$ |
2,909,905 |
$ |
12,262,774 |
|
Non-Cash Stock Compensation |
253,916 |
214,544 |
|||
Deal Related Expenses |
637,761 |
1,195,802 |
|||
Capital Raise Related Expenses |
20,760 |
35,068 |
|||
Severance |
484,561 |
118,436 |
|||
Retention Program Expenses |
807,500 |
280,632 |
|||
Pre-Operating & Dark Carry Expenses |
1,053,837 |
391,917 |
|||
One-Time Legal Settlements |
417,653 |
– |
|||
Other Non-Recurring Items |
754,751 |
25,707 |
|||
Adjusted EBITDA (non-GAAP) |
$ |
7,340,644 |
$ |
14,524,880 |
|
Revenue |
41,600,993 |
40,000,936 |
|||
Adjusted EBITDA Percent |
17.6 % |
36.3 % |
View original content:https://www.prnewswire.co.uk/news-releases/schwazze-announces-first-quarter-2024-financial-results-302146858.html
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