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Aurora Cannabis Announces Financial Results for the Fourth Quarter and 2019 Fiscal Year

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Aurora Cannabis Inc. (the “Company” or “Aurora“) (NYSE | TSX: ACB), the Canadian company defining the future of cannabis worldwide, announced today its financial and operational results for the fourth quarter and fiscal year ended June 30, 2019.

“In 2019 Aurora took its place as the global leader in cannabis production, research, innovation, and international market development. We are executing on all our strategic priorities,” said Terry Booth, CEO. “Our best in class cultivation methods allow us to grow consistent, high-quality cannabis at scale. Because of this, we’ve delivered solid revenue growth in the fourth quarter. We are working to extend our reach in the U.S. markets. Our partnership with the UFC is a basis to explore CBD-from-hemp and hemp food products. We are also exploring additional opportunities and leveraging our Strategic Advisor. We are focused on building a sustainable, high-margin business while providing patients and consumers with access to safe and reliable medicine.”

Glen Ibbott, CFO, added, “We continue to see strong growth in cannabis revenues in both medical and consumer categories. Our cultivation execution continues to drive production costs lower and improve gross margins. Aurora’s diversified product portfolio remains in demand with patients and consumers alike. With the Canadian launch of derivative products in the coming months, we have made the necessary investments to ensure readiness and focus on a variety of value added products. We are very excited to supply an expanded consumer market with premium cannabis and new product forms.”

Fourth Quarter 2019 Highlights

(Unless otherwise stated, comparisons are made between Fiscal Q4 2019 and Q3 2019 results and are in Canadian dollars)

  • Net cannabis revenue up 61% sequentially to $94.6 million
    • Canadian consumer cannabis revenue up 52% to $44.9 million
    • Medical cannabis revenue up 10% to $29.7 million
    • Wholesale revenues of $20.1 million
  • Cash cost to produce per gram sold declined 20% sequentially to $1.14 per gram in Q4 2019.

  • Production volume increased 86% sequentially to 29,034 kgs.

  • Gross margin on cannabis net revenue increased by 3% to 58% sequentially.

  • Aurora’s medical patient base expanded 10% to 84,729 sequentially. As at the date of this release, Aurora has approximately 89,700 active registered patients, a further increase of 6%.

  • Adjusted EBITDA loss of $11.7 million represents an improvement of 68% compared to $36.6 million in Q3 2019.

Subsequent Events

  • Closed an amended and upsized $360 million secured credit facility which includes an accordion feature that enables Aurora to upsize the facility by approximately $40 million,

  • Sold its remaining 28,833,334 shares of The Green Organic Dutchman Holdings Ltd (“TGOD”), at a price of $3.00 per share for aggregate gross proceeds of $86.5 million, representing an approximate 50% internal rate of return for the Company.

Full Year Fiscal 2019 Highlights

  • Net revenue of $247.9 million, up 349% compared to the prior year.

  • Gross margin on cannabis net revenue of 55% in fiscal 2019 versus 65% in fiscal 2018.

  • Kilograms produced and kilograms sold of 57,442 kgs and 36,628 kgs, up 920% and 629% respectively compared to fiscal 2018.

Q4 2019 Key Financial and Operational Metrics

($ thousands, except Operational Results)

Q4 2019 (6)

Q3 2019

$ Change

% Change

Financial Results

Net Revenue (1)

$98,942

$65,145

$33,797

52%

Cannabis net revenue (2)(3a)

$94,640

$58,652

$35,988

61%

Medical cannabis net revenue (2)(3a)

$29,651

$27,001

$2,650

10%

Consumer cannabis net revenue (2)(3a)

$44,882

$29,577

$15,305

52%

Wholesale bulk cannabis net revenue (2)(3a)

$20,107

$2,074

$18,033

869%

Gross margin before FV adjustments on cannabis net revenue (2)(3b)

58%

55%

N/A

3%

Gross margin before FV adjustments on medical cannabis net revenue (2)(3b)

60%

60%

N/A

0%

Gross margin before FV adjustments on consumer cannabis net revenue (2)(3b)

55%

50%

N/A

5%

Gross margin before FV adjustments on wholesale bulk cannabis net revenue (2)(3b)

61%

60%

N/A

1%

Selling, general and administration expense

$72,869

$67,104

$5,765

9%

Adjusted EBITDA (4)

($11,737)

($36,572)

$24,835

68%

Balance Sheet

Working capital

$227,802

$469,729

($241,927)

(52)%

Cannabis inventory and biological assets (5)

$144,275

$118,023

$26,252

22%

Total assets

$5,502,830

$5,549,780

($46,950)

(1)%

Operational Results – Cannabis

Cash cost to produce per gram sold (2)(3c)

$1.14

$1.42

($0.28)

(20)%

Active registered patients

84,729

77,136

7,593

10%

Average net selling price of medical cannabis (2)

$8.51

$8.51

$0.00

0%

Average net selling price of consumer cannabis (2)

$5.14

$5.48

($0.34)

(6)%

Average net selling price of wholesale bulk cannabis (2)

$3.61

$3.52

$0.09

3%

Kilograms produced

29,034

15,590

13,444

86%

Kilograms sold

17,793

9,160

8,633

94%

(1)

Net revenue represents our total gross revenue cannabis products effective October 17, 2018.

(2)

These terms are defined in the “Cautionary Statement Regarding Certain Performance Measures” section of this MD&A

(3)

Refer to the following sections for reconciliation of non-GAAP measures to the IFRS equivalent measure:

a.

Refer to the “Revenue” section for a reconciliation of cannabis net revenue to the IFRS equivalent.

b.

Refer to the “Gross Margin” section for reconciliation to the IFRS equivalent.

c.

Refer to the “Cash Cost of Sales of Dried Cannabis and Cash Cost to Produce Dried Cannabis Sold – Aurora Produced Cannabis
section for reconciliation to the IFRS equivalent.

(4)

Adjusted EBITDA is calculated as net income (loss) excluding interest income (expense), accretion, income taxes, depreciation, amortization,
changes in fair value of inventory sold, changes in fair value of biological assets, share-based compensation, foreign exchange, changes in
fair value of financial instruments, gains and losses on deemed disposal, and non-cash impairment of equity investments, goodwill, and other
assets.

(5)

Represents total biological assets and cannabis inventory, exclusive of merchandise, accessories, supplies, and consumables.

(6)

During the three months ended June 30, 2019, the Company recorded non-material year-end corrections to: (i) capitalize certain payroll,
share-based compensation and borrowing costs, related to the construction of our production facilities that were incorrectly expensed in
prior periods; and (ii) reverse items that had been over-accrued in prior periods.  The net impact of these adjustments to Q4 2019 Adjusted
EBITDA was a $14.9 million reduction in reported operating expenses

($ thousands)

Three months ended

Year ended

June 30, 2019

March 31, 2019

June 30, 2019

June 30, 2018

June 30, 2017

Medical cannabis net revenue

Canada dried cannabis

14,438

14,501

58,101

24,231

14,679

EU dried cannabis

4,481

4,004

14,141

9,835

439

Canada cannabis extracts (1)

10,732

8,496

34,447

8,690

804

Total medical cannabis net revenue

29,651

27,001

106,689

42,756

15,922

Consumer cannabis net revenue

Dried cannabis

41,813

27,461

88,603

Cannabis extracts (1)

3,069

2,116

7,992

Total consumer cannabis net revenue

44,882

29,577

96,595

Wholesale bulk dried cannabis net revenue

20,107

2,074

22,181

Total cannabis net revenue

94,640

58,652

225,465

42,756

15,922

(1)  Cannabis extracts revenue includes cannabis oils, capsules, softgels, sprays, and topical revenue.

($ thousands)

Three months ended

Year ended

June 30, 2019

March 31, 2019

June 30, 2019

June 30, 2018

June 30, 2017

Net revenue

98,942

65,145

247,939

55,196

18,067

Design, engineering and construction services

(914)

(2,403)

(4,218)

Patient counseling services

(606)

(809)

(4,214)

(3,933)

(2,145)

Analytical testing services

(317)

(1,238)

(2,976)

Other cannabis segment revenues

(accessories, hemp, other)

(2,760)

(962)

(10,370)

(1,865)

Horizontally integrated business revenues

(619)

(2,570)

(2,511)

(2,424)

Cannabis net revenue

94,640

58,652

225,465

42,756

15,922

Consolidated net revenue increased 52% to $98.9 million in Q4 2019 as compared to $65.1 million in the prior quarter. Consumer cannabis revenues were $44.9 million in Q4 2019, an increase of 52% from the prior quarter and contributed 45% to total consolidated net revenue. Canadian medical cannabis net revenues increased to $25.2 million in Q4 2019, up 9% over the prior quarter. Revenue growth was primarily driven by additional production capacity and supply available for sale from Aurora Sky and Aurora River (Bradford).

Average net selling price of cannabis decreased by $1.08 per gram over the prior quarter from $6.40 in Q3 2019 to $5.32 in Q4 2019. This decrease is primarily attributable to the increase in sale volumes to consumer and bulk wholesale markets which yield lower average net selling prices as compared to medical markets.

Gross margin on cannabis net revenue increased to 58% in Q4 2019, compared to 55% in the prior quarter. Gross margin improvement was driven by the continued decline in cash cost to produce per gram and higher gross margins achieved on bulk sales.

During Q4 2019, Aurora produced 29,034 kilograms of cannabis as compared to 15,590 kilograms in the prior quarter. The 86.2% increase in production output was primarily due to the additional production capacity added by Aurora Sky, River (Bradford), and Ridge (Markham) facilities. Extraction capacity increased from 20,400 kilograms to 26,400 kilograms in Q4 2019.  Subsequent to the quarter end, Aurora’s annual extraction capacity further increased to 45,600 kilograms.

Q4 2019 SG&A increased by 9% to $72.9 million, compared to the prior quarter. The change was primarily driven by an increase in fulfillment and shipping costs related to the growth in consumer cannabis sales and continued investment in sales initiatives, distribution network, and partnerships to conduct research, develop products, and drive brand awareness. Aurora will continue to invest in infrastructure and talent required for market share growth in the global medical and consumer cannabis markets but will remain intensely focused doing this as efficiently as possible.

In Q4 2019, adjusted EBITDA loss improved 68% to $11.7 million from $36.6 million in the prior quarter. Developing a profitable and robust global cannabis company is extremely important to Aurora. In fiscal 2019 Aurora was focused on excellence in execution, and the Company’s KPIs show its success in this regard. Furthermore, Aurora has addressed previously identified production bottlenecks and continues to see strong sell-through of the Company’s products at the retail level. However, the Canadian consumer channel continues to experience challenges at the retail level in key markets and resolution of this issue is beyond the Company’s control. Aurora is working closely with all our regulatory and channel partners to streamline distribution as the Company continues to track toward positive adjusted EBITDA on a consolidated basis.

The Company’s operating facilities current annualized run-rate production capacity is in excess of 150,000 kg per annum, based on planted rooms. As the industry leader in purpose-built cultivation, Aurora is focused on producing a consistent supply of high-quality, low-cost product to meet evolving market demand. Aurora is well-positioned to respond to market conditions quickly with shorter lead times, increased harvest cycles and high plant yields.

Outlook 

The global cannabis and hemp markets represent a significant opportunity for Aurora and the Company will continue to make the necessary investments today to build long-term value for shareholders. However, Aurora will take a balanced approach to these investments with a focus on operating a sustainable and profitable business.

The introduction of new product formats to the Canadian consumer market this fall represents a significant opportunity for the Company. Aurora expects to have a robust product line-up ready to launch in December. Given the very early stage of development of the consumer market in Canada and international medical markets, management anticipates that quarter to quarter sales volumes and revenues may be volatile. The Company expects adjusted EBITDA to continue to improve in the future due to expected revenue growth, improvements in gross margin and prudent SG&A growth.

The passing of the U.S. Farm Act presents new opportunities in the largest cannabis and hemp-derived CBD market globally, and as such Aurora is committed to establishing a substantial operating footprint in the U.S. As part of the U.S. market strategy, the Company is considering its stakeholders and how various state and federal regulations will affect its business prospects. A number of alternatives to grow Aurora’s presence in the U.S. market are under evaluation and the Company is committed to only engage in activities which are permissible under both state and federal laws. Management believes there are currently market opportunities that are legal at both state and federal levels that can add operating cash flows and be critical pillars of Aurora’s strategy and long-term success.

 

SOURCE Aurora Cannabis Inc.

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SLANG Worldwide to Participate in Investor Events

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Toronto, Ontario–(Newsfile Corp. – August 7, 2020) – SLANG Worldwide Inc. (CSE: SLNG), (“SLANG” or the “Company“), a leading global cannabis consumer packaged goods (CPG) company with a diversified portfolio of popular brands, today announced its participation in upcoming investor conferences.

August 12: Canaccord Genuity 40th Annual Growth Conference

SLANG CEO Chris Driessen will present at 10:00am EDT and be available for investor meetings, along with other members of the executive team.

August 18: Benzinga Virtual Cannabis Capital Conference

SLANG CEO Chris Driessen will participate in a fireside chat at 1:05pm EDT titled “Adaptability in Business – When and Where to Apply Capital or Pull it Back.”

Mr. Driessen has also joined the Benzinga Cannabis Advisory Council, comprised of thought leaders from different segments in the industry who come together to share their knowledge, connections and expertise with the Benzinga community.

The Company will post details of these and other events on its website, including links to any available webcasts, when they become available. Investors who wish to receive SLANG news releases, monthly newsletters and other information are encouraged to subscribe to the Company’s investor email list though its website.

Media and Investor inquiries

Investors@SLANGww.com

About SLANG Worldwide Inc.

SLANG Worldwide Inc. is a global leader in the cannabis CPG sector with a diversified portfolio of popular brands distributed across the United States. The Company specializes in acquiring and developing market-proven regional brands as well as launching innovative new brands to seize global market opportunities. SLANG is listed on the Canadian Securities Exchange under the ticker symbol SLNG. For more information, please visit www.slangww.com.

Forward-Looking Statements

This news release contains statements that constitute “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements, or developments in the industry to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects,” “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management of SLANG at this time, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies that could cause actual results to differ materially from those expressed or implied in such statements. Investors are cautioned not to put undue reliance on forward-looking statements. Applicable risks and uncertainties include, but are not limited to regulatory risks, risks related to the COVID-19 global pandemic, changes in laws, resolutions and guidelines, market risks, concentration risks, operating history, competition, the risks associated with international and foreign operations and the other risks identified under the headings “Risk Factors” in SLANG’s final long form prospectus dated January 17, 2019 and “Risks and Uncertainties” in the management discussion and analysis for the year ended December 31, 2019 and three months ended March 31, 2020, each as filed on SEDAR at www.sedar.com. SLANG is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

The Canadian Securities Exchange has not reviewed, approved or disapproved the content of this news release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/61312

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PAOG CEO Interview: Cannabis Pharmaceutical Development; Acquired Revenue; Updated Financials; Why PPS Is Undervalued and Timing of Anticipated Correction

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Sandusky, Ohio–(Newsfile Corp. – August 7, 2020) – PAO Group, Inc. (OTC Pink: PAOG) today announced an interview of CEO James C. DiPrima on MoneyTV with Donald Baillargeon. The interview is available on the MoneyTV website discussing new cannabis pharmaceutical developments, a recently acquired revenue stream, upcoming financial reports bringing the company current with OTC Markets and discussing why the current price per share (PPS) of PAOG is undervalued and what event is anticipated to correct the valuation . Mr. DiPrima also appeared on MoneyTV last week following PAOG’s acquisition of two medical cannabis companies.

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Interview Highlights:

Mr. DiPrima discusses PAOG’s partnership with a Contract Research Organization (CRO) and a formal agreement in the works to advance an Investigational New Drug Application (IND) to ultimately achieve Food and Drug Administration (FDA) approval for RespRx (one of the two acquisitions executed by PAOG last week) as a COPD treatment.

Based on positive results from an informal trial of RexpRx with 25 COVID-19 patients, PAOG also plans to make Coronavirus Treatment Acceleration Program (CTAP) application after entering into a CRO agreement.

The COPD treatment, RespRx, is derived from a patented cannabis extraction method – U.S. Patent No. 9,199,960 entitled, “METHOD AND APPARATUS FOR PROCESSING HERBACEOUS PLANT MATERIALS INCLUDING THE CANNABIS PLANT.”

Mr. DiPrima confirms a recently published new PAOG website and the coming publication of PAOG’s financial reports. He further confirms the company now has a revenue base with the acquisition of a cannabis cultivation operation from Puration, Inc. (PURA). Mr. DiPrima concludes the interview with a discussion of why he believes the PPS is undervalued and that he anticipates a PPS correction when the PAOG financials are published.

MoneyTV with Donald Baillargeon is the internationally syndicated television program all about money and what makes it happen, featuring informative interviews with company CEOs and executives, providing insights into their operations and outlooks for their futures. MoneyTV is seen in over 200 million TV households in more than 75 countries.

The MoneyTV Interview is available at www.moneytv.net and will be syndicated across multiple channels and platforms.

www.paogroupinc.com

Forward-Looking Statements: Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Technical complications, which may arise, could prevent the prompt implementation of any strategically significant plan(s) outlined above. The Company undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.

CONTACT INFORMATION

Contact Us:
Jim DiPrima
888-272-6472
info@pao.group

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/61293

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PURA Announces Dividend Declaration Date and Anticipated Date of Record

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Dallas, Texas–(Newsfile Corp. – August 7, 2020) – Puration, Inc. (OTC Pink: PURA) today announced plans for a formal declaration of a dividend distribution this coming Monday, August 10, 2020. The dividend declaration is expected to be announced the following day, on Tuesday, August 11, 2020. The plan is for the dividend distribution date of record, or the day on which a shareholder must own stock to be eligible for the dividend to promptly follow the declaration date. The declaration date is subject to regulatory approval and the specific date will be released accordingly. The plan is also to pay the dividend promptly. The payment execution is subject to the payment process which involves the transfer agent(s) for the distributed stock and the broker network.

The planned dividend distribution to PURA shareholders results from the recent sale of PURA’s cannabis cultivation operation to PAO Group, Inc. (OTC Pink: PAOG).

The cannabis cultivation operation was sold last week in exchange for PAOG common stock. The stock is slated to be distributed to PURA shareholders in a dividend distribution. The planned distribution ratio is 1 for 1. Accordingly, PURA shareholders will receive one share of PAOG stock in exchange for every PURA share held.

For more information on Puration, visit http://www.purationinc.com

Disclaimer/Safe Harbor:

This news release contains forward-looking statements within the meaning of the Securities Litigation Reform Act. The statements reflect the Company’s current views with respect to future events that involve risks and uncertainties. Among others, these risks include the expectation that any of the companies mentioned herein will achieve significant sales, the failure to meet schedule or performance requirements of the companies’ contracts, the companies’ liquidity position, the companies’ ability to obtain new contracts, the emergence of competitors with greater financial resources and the impact of competitive pricing. In the light of these uncertainties, the forward-looking events referred to in this release might not occur. These statements have not been evaluated by the Food and Drug Administration. These products are not intended to diagnose, treat, cure, or prevent any disease.

Contact:
Puration, Inc.
Brian Shibley,
info@aciconglomerated.com
(800) 861-1350

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/61295

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