HICKSVILLE, NY / ACCESSWIRE / November 5, 2021 / Can B Corp. (OTCQB:CANB) ("Can B" or the "Company"), a health and wellness company specializing in developing, producing and selling hemp derived cannabinoid products, today announced the Company's financial results for the third quarter ended September 30, 2021 ("Q3 2021").
Key Financial Highlights during Q3 2021
- Revenue increased 316% in 3rd quarter 2021 to $1.9 million compared to Q3 2020- (a trend expected to continue into subsequent quarters into 2023
- Gross profit increased 261% to $1.4 million compared to Q3 2020
- Total assets increased to 14.2 million
- Total stockholders' equity increased to $5.7 million
Key Business Highlights during Q3 2021
- Provided acquisition opportunities to produce 13,000 liters of Delta-8 and other isomers with potential $10 million revenue
- Secured lease for 300,000 square foot facility in McMinnville, Tennessee
- Closed acquisition of assets from TWS Pharma in Colorado to significantly expand capabilities in converting hemp biomass to isolate used in our CBD and isomer product lines
- Closed acquisition of assets from Music City Botanicals to strengthen its vertical processing capabilities
- Partnered with group of professional Hollywood stuntmen and world champion action sports athletes for CBD products.
- Company reassessing potential of NASDAQ up-listing
Management Commentary
Marco Alfonsi, Can B's Chief Executive Officer, stated, "Our moves over the past few months are paying off and have put us in great position to accelerate our revenue growth and strengthen our balance sheet. We believe this quarter's results are just the beginning as we just recently acquired these additional assets. Our team is hard at work integrating and ramping up the various operations to continue this momentum into the future. These dramatic revenue improvements, coupled with our acquisitions and asset base increases, position us solidly to continue our application process for a NASDA up listing."
Alfonsi, continued, "By securing our own processing and extraction facilities, we for the first time control our supply chain from biomass through end products for both retail and wholesale customers. The real property assets acquired by Can B in the past two quarters are in alignment with our growth strategy and are of exceptional caliber and highlight our commitment to build out the proper way. Can B is now a full-service hemp-derived cannabinoid company that can facilitate servicing the large box types as well as the boutique vape and smoke store.We have completed our hemp isomer pipeline fulfillment, a major milestone for our Company. At today's market price, one million pounds of hemp biomass, that when full processed into Delta 8 isomer has a potential wholesale value of approximately $10 million. We look forward to reporting our progress as we execute our plan with all of these new assets, which strengthens our vertical processing capabilities."
Recent Highlights
Plans to Produce 13,000 Liters of Delta-8 and Other Isomers with Potential $10 Million Revenue
Plans to fulfill new hemp processing agreements after securing hemp biomass and winterized crude to create over 13,000 Liters (1 Liter = 1.05 Quarts) of isomers, including Delta-8, with a potential wholesale value exceeding $10 million at today's market price. The biomass Can-B has secured is harvested hemp that is the core ingredient to make hemp isolate which is the CBD component of Can B's CBD tinctures, salves, gels, as well as its line of isomers such as Delta-8.
Hemp derived isomers are increasing rapidly in popularity as more hemp companies realize hemp-derived CBD can be used to create isomers such as CBN, CBC, and Delta 8. Can B believes it is on the forefront of Delta 8 production and it has the capacity to complete an increasing number of wholesale orders, as well as providing Delta 8 for its own retail products. Can B's newly acquired facilities in Colorado will receive harvested hemp biomass and convert it to winterized crude. These same facilities will then process it to distillate, then to isolate which will be shipped to Company-owned facilities in Florida and Tennessee to produce Delta-8 or other isomers, or to its manufacturing facility in Lacey, Washington for its line of CBD tinctures, salves, gels, and drops. This processing is expected to take 5-6 months to monetize the revenue.
Secured Lease for 300,000 Square Foot Facility in McMinnville, Tennessee
Secured a lease for a 300,000 square foot facility to support the operations of its recently acquired assets from Music City Botanicals, in McMinnville, Tennessee. Can B has also has the right of first refusal and an option to outright purchase the facility during the term of the lease. The facility is located halfway between Nashville and Chattanooga in central Tennessee, approximately seventy-five miles from each city, and provides space for expansion for additional operations.
Currently, the facility has two sub-tenants utilizing under 20% of the building, including hemp storage and hemp drying. It also encompasses TN Botanicals' R&D department, isomer lab, and extraction facilities. Additionally, the property is already equipped with a rail spur to its loading doors. The facility has backup generators at one-megawatt capacity.
Acquisition of Assets from TWS Pharma
The 15,000 square foot facility located in Mead, Colorado is a state-of-the-art extraction operation which converts hemp biomass and unwinterized crude to winterized crude and high-quality CBD crude oil. The 18,000 square foot operation in Fort Morgan, Colorado, a former Budweiser facility, will be used to convert winterized crude to CBD distillate. The ICS facility located in a 30,000 square foot building also located in Fort Morgan, Colorado, will be used to convert distillate to isolate. All of the facilities are tied to long-term leases. All of these newly acquired assets will feed the Company's Nutraceutical lab in Lacey, Washington facility and the two isomer (Delta-8- CBD- CBG) operations in Miami Florida and McMinnville Tennessee.
Acquisition of Assets from Music City Botanicals
The addition of Music City Botanicals ("MCB") assets adds additional volume in extraction, isomer lab production, and R&D into the evolving isomer market with such products a Delta-10, CBG, CBN, and CBDA. New retail products will include pharmaceutical-grade CBD and related manufactured goods. In-house labeling and packaging now available to the Company will create a chain of custody and compliance process that is uncommon in the industry.
With this acquisition, TN Botanicals is now a complete producer of high-quality CBD products using in-house extraction, distillation, isolate production, and final product fulfillment to complete a vertical chain of custody in all its products. Products are manufactured under Good Management Practices, ISO 9000 compliance. All products are tested by primary and independent third-party labs.
The transaction is valued at well over a million dollars for processing and extraction assets encompassing equipment, inventory, and intellectual property, including all of MCB's product offerings and trademarks. The Company also leases the facility in McMinnville, Tennessee, and has engaged its seasoned and professional employees to produce and sell products under the TN Botanicals LLC division of CANB. The processing lab is twice the size of Can B's Miami operation and has the capacity to produce six hundred liters of quality Delta 8 and other isomers per week.
Financial Results for the Three Months Ended September 30, 2021:
- Revenue: For the three months ended September 30, 2021, revenue was $1.9 million, an increase of $1.5 million, or 316%, compared with $0.5 million for the three months ended September 30, 2020. The increase was due to the resumption of elective surgeries in 2021 which were temporarily paused through Q2 of 2020 due to the impact of the COVID-19 outbreak. Medical durable equipment utilized in elective surgeries is the Company's primary medical device revenue. In addition, the increase was related to operations of the Company's delta-8 synthesizing business which began in March 2021 as well as revenues from the Company's initial operations in Tennessee.
- Gross Profit: For the three months ended September 30, 2021, gross profit was $1.4 million, an increase of $1.0 million, or 261%, compared with $0.4 million for the three months ended September 30, 2020. The resulting gross margin was 73.6%, compared with 84.7% for the same quarter last year. The decrease in gross margin is due to an increase in medical durable equipment contribution to revenue and an increase in inventory pricing.
- Total Operating Expenses: For the three months ended September 30, 2021, total operating expenses were $3.8 million, an increase of $2.7 million, or 231%, compared with $1.2 million for the same quarter last year. The increase in operating expenses was primarily due to professional fees incurred and attributable to the Company's asset acquisitions and Regulation A offering.
- Operating Loss: For the three months ended September 30, 2021, operating loss was $2.4 million, an increase of $1.8 million, compared with an operating loss of $0.8 million for the same quarter last year.
- Net Loss: For the three months ended September 30, 2021, net loss was $3.1 million, or ($0.10) per share, compared with a net loss of $1.2 million, or a net loss of ($0.37) per share, for the three months ended September 30, 2020.
Financial Results for the Nine Months Ended September 30, 2021:
- Revenue: For the nine months ended September 30, 2021, revenue was $2.6 million, an increase of $1.4 million, or 112%, compared with $1.2 million for the same period last year. The increase was due to the resumption of elective surgeries in 2021 which were temporarily paused through Q2 of 2020 due to the impact of the COVID-19 outbreak. Medical durable equipment utilized in elective surgeries is the Company's primary medical device revenue. In addition, the increase was related to operations of the Company's delta-8 synthesizing business which began in March 2021 as well as revenues from the Company's initial operations in Tennessee.
- Gross Profit: For the nine months ended September 30, 2021, gross profit was $1.8 million, an increase of $0.8 million, or 79%, compared with $1.0 million for the same period last year. The resulting gross margin was 67.9%, compared with 80.1% for the same period last year.
- Total Operating Expenses: For the nine months ended September 30, 2021, total operating expenses were $8.6 million, an increase of $4.6 million, or 115%, compared with $4.0 million for the same period last year.
Of note, $2.8 million of the Company's operating expenses for the nine months ended September 30, 2021, were non-cash expenses, including depreciation, amortization, and stock-based compensation. - Operating Loss: For the nine months ended September 30, 2021, operating loss was $6.8 million, an increase of $3.8 million, compared with an operating loss of $3.0 million for the same period last year.
- Net Loss: For the nine months ended September 30, 2021, net loss was $8.1 million, or ($0.36) per share, compared with $3.6 million, or ($1.16) per share, for the same period last year.
About Can B Corp.
Can B Corp. (OTCQB: CANB) is a health & wellness company providing the highest quality hemp derived cannabinoid products, including under its own brands of Canbiola, Seven Chakras, NuWellness, Pure Leaf Oil and Duramed. Can B utilizes multi-channel distribution to reach consumers, including medical facilities, doctor offices, retailers, online and direct. Can B Corp. operates R&D and production facilities in Lacey, WA, and Florida. To learn more about Can B Corp. and our comprehensive line of high quality products, please visit: Canbiola.com and www.CanBCorp.com, follow Can B Corp on Instagram and Facebook, or visit one of the 1,000+ retail outlets that carry Can B Corp. products.
For more information about Can B Corp., please visit: CanBCorp.com
Forward-Looking Statements
Forward-looking statements and risks and uncertainties discussed in this release contain forward-looking statements. The words "anticipate," "believe," "estimate," "may," "intend," "expect," and similar expressions identify such forward-looking statements. Expected, actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements contained herein. Forward-looking statements are subject to a number of risks and uncertainties, including but not limited to, risks and uncertainties associated with, among other things, the impact of economic, competitive, and other factors affecting our operations, markets, products, and performance. The matters discussed herein should not be construed in any way, shape or manner of our future financial condition or stock price. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of latest information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
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SOURCE: Can B Corp.
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