SANTA ANA, Calif., November 14, 2022 — Unrivaled Brands, Inc. (OTCQX: UNRV) (“Unrivaled” or the “Company”), a multi-state vertically integrated cannabis company with operations in California and Oregon, today reported its third quarter 2022 financial results for the quarter ended September 30, 2022.
Financial Update
- During the three months ended September 30, 2022, the Company generated revenue from continuing operations of $10.76 million composed of retail revenue of $8.77 million and cultivation/distribution revenue of $2.00 million. This compared to revenue from continuing operations of $20.05 million for the quarter ended September 30, 2021, which included retail revenue of $7.24 million and cultivation/distribution revenue of $12.81 million. This was a decrease of $9.29 million or 46.3% in revenue from continuing operations.
- The Company’s gross loss from continuing operations for the three months ended September 30, 2022 was $(0.06) million compared to a gross profit of $0.33 million for the three months ended September 30, 2021, a decrease of $0.39 million or 119.5%.
- The merger with UMBRLA and the acquisitions of People’s First Choice and SilverStreak Solutions in 2021 led to more operations with additional facilities, employees, and costs to support them. Selling, general and administrative expenses for the three months ended September 30, 2022 were $13.24 million, compared to $12.03 million for the three months ended September 30, 2021, an increase of $1.21 million or 10.0%. For the three months ended September 30, 2022, amortization and depreciation expenses increased by $1.67 million and facilities related expenses, such as rent, utilities, repairs and maintenance, security, and insurance, increased by $2.33 million over third quarter of 2021. Those increases were partially offset by decreases in third quarter 2022 of the following items: taxes, licensing and permitting decreased by $0.51 million and stock compensation expenses decreased by $1.14 million.
- The Company realized an operating loss from continuing operations of $122.80 million for the three months ended September 30, 2022 compared to $11.70 million for the three months ended September 30, 2021, an increase of $111.10 million or 949.5%. This increase was primarily attributable to a $107.97 million impairment of intangible assets and goodwill related to the UMBRLA, People’s, and SilverStreak acquisitions. As part of the Company’s strategic restructuring in fiscal year 2022, the Company terminated its third-party distribution operations in California and its retail and delivery operations at SilverStreak Sacramento, which resulted in a loss on disposal of assets of $1.53 million during the current period.
About Unrivaled Brands
Unrivaled Brands is a multi-state vertically integrated company focused on the cannabis sector with operations in California and Oregon. In California, Unrivaled Brands operates three dispensaries with direct-to-consumer delivery, two cultivation facilities, and several leading company-owned brands. In Oregon, we operate a state-wide distribution network, company-owned brands and outdoor and greenhouse cultivation. Unrivaled Brands is home to Korova, the market leader in high potency products across multiple product categories, currently available in California, Oregon, Arizona, and Oklahoma, as well as Sticks and Cabana.
For more info, please visit: https://unrivaledbrands.com.
Cautionary Language Concerning Forward-Looking Statements
Certain statements contained in this communication regarding matters that are not historical facts, are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. These include statements regarding management’s intentions, plans, beliefs, expectations, or forecasts for the future, and, therefore, you are cautioned not to place undue reliance on them. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law. We use words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and similar expressions to identify these forward-looking statements that are intended to be covered by the safe-harbor provisions of the PSLRA. Such forward-looking statements are based on our expectations and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements due to a number of factors.
New factors emerge from time-to-time and it is not possible for us to predict all such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. These risks, as well as other risks associated with the combination, will be more fully discussed in our reports with the SEC. Additional risks and uncertainties are identified and discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed from time to time with the SEC. Forward-looking statements included in this release are based on information available to the Company as of the date of this release. The Company undertakes no obligation to update such forward-looking statements to reflect events or circumstances after the date of this release.
| UNRIVALED BRANDS, INC. | |||||||
| CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
| (in thousands, except for shares) | |||||||
| September 30, 2022 | December 31, 2021 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Current Assets: | |||||||
| Cash and Cash Equivalents | $ | 1,989 | $ | 6,891 | |||
| Accounts Receivable | 573 | 4,677 | |||||
| Inventory | 2,684 | 7,179 | |||||
| Prepaid Expenses & Other Assets | 1,564 | 1,272 | |||||
| Notes Receivable | 375 | 750 | |||||
| Assets Held for Sale | 23 | 4,495 | |||||
| Total Current Assets | 7,208 | 25,264 | |||||
| Property, Equipment and Leasehold Improvements, Net | 19,576 | 23,728 | |||||
| Intangible Assets, Net | 3,360 | 129,637 | |||||
| Goodwill | 3,585 | 48,132 | |||||
| Other Assets | 16,212 | 26,915 | |||||
| Investments | 721 | 164 | |||||
| Deferred Tax Asset | 608 | — | |||||
| Long-Term Assets Held for Sale | 2,579 | 17,984 | |||||
| TOTAL ASSETS | $ | 53,849 | $ | 271,824 | |||
| LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | |||||||
| LIABILITIES: | |||||||
| Current Liabilities: | |||||||
| Accounts Payable & Accrued Liabilities | $ | 37,037 | $ | 31,904 | |||
| Current Portion of Notes Payable | 26,454 | 45,749 | |||||
| Income Taxes Payable | 9,394 | 7,969 | |||||
| Liabilities Held for Sale | 1,653 | 2,087 | |||||
| Total Current Liabilities | 74,538 | 87,708 | |||||
| Notes Payable, Net of Discounts | 7,964 | 10,006 | |||||
| Deferred Tax Liabilities | — | 6,123 | |||||
| Lease Liabilities | 12,101 | 21,316 | |||||
| Long-Term Liabilities Held for Sale | 1,357 | 184 | |||||
| TOTAL LIABILITIES | 95,960 | 125,337 | |||||
| COMMITMENTS AND CONTINGENCIES | — | — | |||||
| STOCKHOLDERS’ (DEFICIT) EQUITY: | |||||||
| Common Stock, par value $0.001: | |||||||
| 990,000,000 shares authorized, 560,353,549 and 498,546,291 shares outstanding as of September 30, 2022 and December 31, 2021, respectively | 584 | 521 | |||||
| Treasury Stock: 2,308,408 shares of common stock as of September 30, 2022 and December 31, 2021 | (808 | ) | (808 | ) | |||
| Additional Paid-In Capital | 401,729 | 392,930 | |||||
| Accumulated Deficit | (443,616 | ) | (250,015 | ) | |||
| Total Equity Attributable to Stockholders of Unrivaled Brands, Inc. | (42,111 | ) | 142,628 | ||||
| Non-Controlling Interest | — | 3,859 | |||||
| TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY | (42,111 | ) | 146,487 | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | $ | 53,849 | $ | 271,824 | |||
| UNRIVALED BRANDS, INC. | |||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||||
| (in thousands, except for shares and per share data) | |||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||
| Revenue | $ | 10,762 | $ | 20,052 | $ | 49,042 | $ | 24,980 | |||||
| Cost of Goods Sold | 10,826 | 19,724 | 34,404 | 21,737 | |||||||||
| Gross (Loss) Profit | (64 | ) | 328 | 14,638 | 3,243 | ||||||||
| Operating Expenses: | |||||||||||||
| Selling, General & Administrative | 13,236 | 12,029 | 51,074 | 29,376 | |||||||||
| Impairment Expense | 107,972 | — | 163,698 | — | |||||||||
| Loss on Disposal of Assets | 1,529 | — | 1,872 | — | |||||||||
| Total Operating Expenses | 122,737 | 12,029 | 216,644 | 29,376 | |||||||||
| Loss from Operations | (122,801 | ) | (11,701 | ) | (202,006 | ) | (26,133 | ) | |||||
| Other Income (Expense): | |||||||||||||
| Interest Expense, Net | (384 | ) | (515 | ) | (2,594 | ) | (627 | ) | |||||
| Gain (Loss) on Extinguishment of Debt | — | 185 | 542 | (5,976 | ) | ||||||||
| Gain on Investments | — | — | — | 5,337 | |||||||||
| Unrealized (Loss) Gain on Investments | (493 | ) | — | 470 | — | ||||||||
| Other Income | 251 | 5 | 1,729 | 367 | |||||||||
| Total Other (Expense) Income | (626 | ) | (325 | ) | 147 | (899 | ) | ||||||
| Loss from Continuing Operations Before Provision for Income Taxes | (123,427 | ) | (12,026 | ) | (201,859 | ) | (27,032 | ) | |||||
| Provision for Income Tax Benefit for Continuing Operations | 3,449 | — | 5,585 | — | |||||||||
| Net Loss from Continuing Operations | (119,978 | ) | (12,026 | ) | (196,274 | ) | (27,032 | ) | |||||
| Net Income from Discontinued Operations | 72 | 6,561 | 4,051 | 4,898 | |||||||||
| NET LOSS | (119,906 | ) | (5,465 | ) | (192,223 | ) | (22,134 | ) | |||||
| Less: Net (Loss) Income from Discontinued Operations Attributable to Non-Controlling Interest | — | (118 | ) | 275 | (604 | ) | |||||||
| NET LOSS ATTRIBUTABLE TO UNRIVALED BRANDS, INC. | $ | (119,906 | ) | $ | (5,347 | ) | $ | (192,498 | ) | $ | (21,530 | ) | |
| Net Loss from Continuing Operations per Common Share Attributable to Unrivaled Brands, Inc. – Basic and Diluted | $ | (0.21 | ) | $ | (0.03 | ) | $ | (0.33 | ) | $ | (0.09 | ) | |
| Net Loss per Common Share Attributable to Unrivaled Brands, Inc. – Basic and Diluted | $ | (0.21 | ) | $ | (0.01 | ) | $ | (0.33 | ) | $ | (0.07 | ) | |
| Weighted-Average Shares Outstanding – Basic and Diluted | 579,942,517 | 457,745,655 | 588,887,945 | 317,491,979 | |||||||||
