Cansortium Reports First Quarter 2024 Results

– Q1 Revenue up 14% YoY to $25.2 Million

– 10thConsecutive Quarter of Positive Cash Flow from Operations

TAMPA, Fla., May 30, 2024 (GLOBE NEWSWIRE) — Cansortium Inc. (CSE: TIUM.U) (OTCQB: CNTMF) (“Cansortium” or the “Company”), a vertically-integrated, multi-state cannabis company operating under the FLUENT™ brand, today announced financial and operating results for the first quarter ended March 31, 2024. Unless otherwise indicated, all financial results are presented in U.S. dollars.

“We delivered another quarter of year-over-year revenue growth and positive cash flow generation during the first quarter as we continued to execute on our growth objectives,” said CEO Robert Beasley. “We are making the critical investments needed to lay the foundation for growth and support our future plans and remain excited about the opportunities ahead.”

“In Florida, we continue to ramp our new dispensaries while driving cultivation improvements, leading to production of more high quality, high THC products. These operating improvements drove another quarter of higher retail prices and average basket size, carrying over the trends we saw in the fourth quarter.”

“Looking ahead, we are excited about the business combination with RIV Capital announced this morning, laying the groundwork for a presence in four of the five largest population states in the country upon closing. We remain laser focused on our existing portfolio in Florida, Pennsylvania and Texas and look forward to closing the RIV Capital agreement in the fourth quarter.”

Q1 2024 Financial Highlights (vs. Q1 2023)

  • Revenue increased 14% to $25.2 million compared to $22.1 million.
  • Florida revenue increased 16% to $21.1 million compared to $18.2 million.
  • Adjusted gross profit1 was $12.3 million or 48.6% of revenue, compared to $10.2 million or 46.4% of revenue.
  • Adjusted EBITDA was $6.8 million compared to $5.8 million, with the increase primarily driven by higher sales in Florida.
  • Cash flow from operations for the three months ended March 31, 2024 was $4.1 million compared to $5.1 million in the prior year.
  • At March 31, 2024 the Company had approximately $8.5 million of cash and cash equivalents and $62.9 million of total debt, with approximately 300 million shares outstanding.

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1 Adjusted gross profit is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. The Company calculates adjusted gross profit from gross profit plus (minus) the changes in fair value of biological assets, as presented in the consolidated statement of operations.

Recent Operational Highlights

  • The Company re-appointed Patricia Fonseca as Chief Financial Officer (“CFO”) of the Cansortium effective May 13, 2024. Ms. Fonseca previously served as the CFO of the Company from March 9, 2021 to November 21, 2022.
  • During the first quarter, the Company announced the commencement of a new cultivation facility, known as the “Rosa Facility” in Tampa, Florida along with the commencement of cultivation activities at its new facility in Ruskin.
  • In Florida, Cansortium currently operates 35 locations and anticipates opening 3 new locations in the state by the end of 2024.
  • The company announced it had entered a business combination agreement with RIV Capital on May 30, 2024.

About Cansortium Inc.

Cansortium is a vertically-integrated cannabis company with licenses and operations in Florida, Pennsylvania and Texas. The Company operates under the Fluent™ brand and is dedicated to being one of the highest quality cannabis companies for the communities it serves. This is driven by Cansortium’s unrelenting commitment to operational excellence in cultivation, production, distribution and retail. The Company is headquartered in Tampa, Florida.

Cansortium Inc.’s Common Shares trade on the CSE under the symbol “TIUM.U” and on the OTCQB Venture Market under the symbol “CNTMF”. For more information about the Company, please visit www.getFLUENT.com.

Forward-Looking Information
Certain information in this news release may constitute forward-looking information within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent the Company’s expectations, estimates, and projections regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control.

Forward-looking information is necessarily based on many opinions, assumptions, and estimates that, while considered reasonable by the Company as of the date of this news release, are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in the public documents of the Company available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this news release are made as of the date of this news release, and the Company expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.
For further information: www.getFLUENT.com.

Company Contact
Robert Beasley, CEO
(850) 972-8077
investors.getFLUENT.com

Investor Relations Contact
Morry Brown
Trailblaze
[email protected]

Cansortium Inc.
Consolidated Statements of Financial Position
As of March 31, 2024 and 2023
 
(Amounts expressed in thousands of United States Dollars unless otherwise stated)
       
  March 31,   December 31,
  2024   2023
Assets      
Current assets      
Cash $ 8,521     $ 10,521  
Trade receivable   232       215  
Inventory, net   9,818       9,244  
Biological assets   2,043       331  
Prepaid expenses and other current assets   1,456       1,882  
Total current assets   22,070       22,193  
       
Property and equipment, net   27,815       27,642  
Intangible assets, net   93,553       93,593  
Right-of-use assets, net   33,115       31,943  
Goodwill   1,525       1,525  
Other assets   997       907  
Total assets $ 179,075     $ 177,803  
       
Liabilities      
Current liabilities      
Trade payable $ 6,154     $ 5,525  
Accrued liabilities   5,587       9,779  
Income taxes payable   28,947       22,009  
Derivative liabilities   7,422       9,109  
Current portion of notes payable, net   476       213  
Current portion of lease liabilities   2,918       2,872  
Total current liabilities   51,504       49,507  
       
Notes payable, net   62,381       61,189  
Lease liabilities   38,597       37,242  
Deferred tax liability   18,615       17,398  
Other long-term liabilities   3,507       3,882  
Total liabilities   174,604       169,218  
       
Shareholders’ equity      
Share capital   183,690       183,690  
Share-based compensation reserve   6,788       6,739  
Equity conversion feature   6,677       6,677  
Warrants   29,634       29,634  
Accumulated deficit   (221,984 )     (217,821 )
Foreign currency translation reserve   (334 )     (334 )
Total shareholders’ equity   4,471       8,585  
       
Total liabilities and shareholders’ equity $ 179,075     $ 177,803  
       
       
Cansortium Inc.   
Statement of Operations   
For the three months ending March 31, 2024 and 2023   
(Amounts expressed in thousands of United States Dollars unless otherwise stated)   
       
  For the three months ended March 31,
  2024   2023
Revenue, net of discounts $ 25,227     $ 22,056  
Cost of goods sold   12,966       11,827  
Gross profit before fair value adjustments   12,261       10,229  
       
Fair value adjustments on inventory sold   1,628       2,341  
Unrealized gain (loss) on changes in fair value of biological assets   1,047       (5,057 )
Gross profit   14,936       7,513  
       
Expenses      
General and administrative   3,963       2,312  
Share-based compensation   49       238  
Sales and marketing   5,434       3,998  
Depreciation and amortization   1,730       1,848  
Total expenses   11,176       8,396  
       
Income (loss) from operations   3,760       (883 )
       
Other expense (income)      
Finance costs, net   4,711       4,249  
(Gain) loss on change in fair value of derivative liability   (1,687 )     278  
Loss on disposal of assets   212       70  
Other miscellaneous (income) expense   2       (11 )
Total other expense   3,238       4,586  
       
Income (loss) before income taxes   522       (5,469 )
       
Income tax expense   4,685       1,914  
       
Net comprehensive income (loss) $ (4,163 )   $ (7,383 )
       
       
Net loss per share      
Basic and diluted – continuing operations $ (0.01 )   $ (0.03 )
       
Weighted average number of shares      
Basic number of shares   299,529,367       276,556,965  
Diluted number of shares   342,504,514       325,342,276  
       
Cansortium Inc.
Consolidated Statements of Cash Flow
For the three months ended March 31, 2024 and 2023
(Amounts expressed in thousands of United States Dollars unless otherwise stated)
               
  For the three months ended March 31,
    2024       2023  
Operating activities              
Net loss from continuing operations $ (4,163 )   $ (7,383 )   
Adjustments to reconcile net loss to net cash provided by operating activities:              
Unrealized loss (gain) on changes in fair value of biological assets   (1,047 )     5,057  
Realized gain on changes in fair value of biological assets   (1,628 )     (2,341 )
Share-based compensation   49       238  
Depreciation and amortization   3,703       3,717  
Accretion and interest of convertible debentures   110       132  
Accretion and interest of term loan   3,365       3,086  
Interest of equipment loan         8  
Loss on disposal of assets   212       70  
Change in fair market value of derivative   (1,687 )     278  
Interest on lease liabilities   1,211       1,021  
Deferred tax expense   1,216       (1,198 )
Changes in operating assets and liabilities:              
Trade receivable   (17 )     (5 )
Inventory   3,939       3,981  
Biological assets   (3,551 )     (4,566 )
Prepaid expenses and other current assets   747       358  
Right of Use Assets/Liabilities   (1,317 )     67  
Other assets   (90 )     (39 )
Trade payable   630       598  
Accrued liabilities   (4,192 )     (963 )
Other long-term liabilities   (375 )     (83 )
Income taxes payable   6,938       3,111  
Net cash provided by operating activities   4,053       5,144  
               
Investing activities              
Purchases of property and equipment   (2,948 )     (2,949 )
Net cash used in investing activities   (2,948 )     (2,949 )
               
Financing activities              
Net proceeds from issuance of shares and warrants         2,993  
Payment of lease obligations   (765 )     (1,585 )
Principal repayments of notes payable   (2,340 )     (2,494 )
Net cash used in financing activities   (3,105 )     (1,086 )
Net increase (decrease) in cash   (2,000 )     1,109  
Cash, beginning of period   10,521       8,359  
Cash, end of period $ 8,521     $ 9,468  
               
Cansortium Inc.      
Adjusted EBITDA Calculation      
(Amounts expressed in thousands of United States Dollars unless otherwise stated)      
       
` Three months ended
  March 31, 2024 March 31, 2023 Variance
Net loss $ (4,163 ) $ (7,383 ) $ 3,220  
Interest expense   4,711     4,249     462  
Income taxes   4,685     1,914     2,771  
Depreciation and amortization   3,702     3,774     (72 )
EBITDA $ 8,935   $ 2,554   $ 6,381  
       
       
  Three months ended
  March 31, 2024 March 31, 2023 Variance
EBITDA $ 8,935   $ 2,554   $ 6,381  
Change in fair value of biological assets   (2,675 )   2,716     (5,391 )
Change in fair market value of derivative   (1,687 )   278     (1,965 )
Professional fees(1)   1,789         1,789  
One-time employee costs(2)   160         160  
Share-based compensation   49     238     (189 )
Loss on disposal of assets   212     70     142  
Other non-recurring expense (income)   2     (11 )   13  
Adjusted EBITDA $ 6,785   $ 5,845   $ 940  


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