KITCHENER, Ontario, Dec. 10, 2019 (GLOBE NEWSWIRE) — James E. Wagner Cultivation Corporation (“JWC” or the “Company”) (TSX VENTURE: JWCA; OTCQX: JWCAF), a premium cannabis brand focused on producing clean, consistent cannabis grown using its advanced and proprietary GrowthSTORM™ aeroponic platform, reported financial results for its fiscal fourth quarter and year ended September 30, 2019. Dollar amounts are in Canadian dollars.Fiscal Q4 2019 Corporate HighlightsOn June 28, 2019, JWC received a licence amendment from Health Canada that allowed the Company to double its flowering space at its second facility located at 530 Manitou Drive, Kitchener, Ontario (“JWC2”) to 22,000 square feet. On October 11, 2019, JWC received an additional licence amendment from Health Canada to double the flowering space again to 44,500 square feet. The Company anticipates that this increase will support an annualized production capacity of more than 9,000 kilos of dried cannabis.The average yield per plant increased to 260 grams in the fourth quarter of 2019, versus the average yield of 247 grams for the full fiscal year 2019.JWC increased its estimated annual production capacity for JWC2 by 17%. The Company anticipates that when JWC is fully operational, it will have the potential to produce more than 35,000 kilograms of cannabis flower per year, primarily due to the increased yield achieved through further enhancements of the Company’s advanced cultivation processes.On July 5, 2019, JWC received a licence amendment from Health Canada permitting the sale of formulated cannabis oil. Sales to medical patients began early in fiscal Q1 2020.On August 14, 2019, JWC signed a supply agreement with TerrAscend Corp. to provide dry cannabis flower and oils to TerrAscend Corp. JWC’s products are now being sold on Terrascend Corp.’s online medical marketplace, Solace Health (solacehealth.com).Financial HighlightsRevenues totaled a record $1.0 million in fiscal Q4 2019, up 40% sequentially from $730,000 in fiscal Q3 2019, and compared to $57,600 in fiscal Q4 2018.Revenues for fiscal 2019 totaled $2.8 million, compared to $57,600 in fiscal 2018.Loss and comprehensive loss for fiscal 2019 reduced 10% to $9.2 million or $(0.10) per share.Operating expenses in fiscal Q4 2019 were $1.7 million. Excluding one-time items, Q4 expenses were $2.5 million representing a 6% decrease from fiscal Q3 2019 and a 5% increase from fiscal Q4 2018.Management Commentary“Q4 was another strong quarter of growth and expansion at JWC,” commented Nathan Woodworth, JWC president and CEO. “It capped an exciting year where we demonstrated tremendous success in growing clean, consistent cannabis on an increasingly larger scale and with greater efficiency.“Our yield per plant continues to set industry records. For the full fiscal year, our average yield per plant was 247 grams — far above our closest competitors. In the fourth quarter, we did even better, averaging 260 grams per plant. This reflects how we have been able to increase our forecasted annual production capacity by 17% as the result of further refinements of our advanced GrowthSTORM aeroponic system. “Following a record harvest in September, our revenue growth continued to accelerate in Q4, up 40% sequentially, as we continued along a measured path toward profitability and full operational capacity. We have implemented a systematic plan to grow our capacity in phases and in accordance with market demand. So, as we continue to produce and sell more products and scale our operations, we plan to do so with only incremental increases in expenses.“Combined with our industry-leading yields and lower cost of production due to our unique GrowthSTORM system, we believe we can achieve and sustain highly favorable margins and drive strong profitability over the long term like no other company in the industry. These advantages support our plans to licence our proprietary, patent pending technology to other producers on a global scale.“As we begin our new fiscal year, we will remain focused on further refining our cultivation process, forging new partnerships, creating new revenue streams and scaling our business. We believe this will continue to drive revenue growth and profitability over the coming quarters, and keep us on track for another year of record growth in 2020.”Summary Financial ResultsFor the fourth quarter of fiscal 2019, net revenue from sales totaled a record $1.0 million, up 40% sequentially from $730,000 in the previous fiscal quarter, and compared to $57,600 in the same year-ago quarter.Revenues for the fiscal full year increased to a record $2.8 million from $57,600 in fiscal 2018.Net and comprehensive loss was $3.1 million or $(0.03) per share in fiscal Q4 2019, compared to $434 thousand or $(0.01) per share in the previous fiscal quarter and $2.3 million or $(0.03) per share in fiscal Q4 2018.Net and comprehensive loss totaled $9.2 million or $(0.10) per share in fiscal 2019, improving from $10.3 million or $(0.14) per share in fiscal 2018.Cash and equivalents at September 30, 2019, totaled $1.3 million compared to $3.8 million at June 30, 2019, and $8.5 million at September 30, 2018. The decrease in cash is attributable to purchase of capital assets and cash used in operations.Subsequent to the end of the fourth quarter, JWC entered into an amended and restated loan agreement with Trichome Financial Corp. dated November 6, 2019, pursuant to which Trichome Financial Corp. agreed to loan JWC $4 million in two tranches. The Company has received the first tranche in the amount of $2.85 million. The second tranche in the amount of $1.15 million will be advanced to the Company upon completion of certain conditions precedent set out in the loan agreement.OutlookInventories totaled approximately 561 kg of dried cannabis and 149 liters of formulated oil at the end of fiscal Q4 2019. These products will be sold in the first and second quarter of fiscal 2020.The Company expects to begin selling cannabis products through recreational channels in Q2 of fiscal 2020, to further develop customer demand, as it continues scaling JWC2 towards full production capacity.In fiscal Q2 2020, the Company expects to be revenue positive (cash flow positive), along with positive net and comprehensive income. By Q3 2020, management expects revenue growth to drive strong gross margins, positive cash flow, and net and comprehensive income.Additional InformationAdditional details of the Company’s financial results are available in the financial statements and the management’s discussion and analysis as filed under JWC’s profile on SEDAR (www.sedar.com) and available on the Company’s website at www.jwc.ca.Conference CallOn December 10, 2019, the Company will host a conference call to discuss these results, followed by a question and answer period, as specified below:Date: Tuesday, December 10, 2019
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in number: 1-877-407-9208
International dial-in number: 1-201-493-6784
Conference ID: 13697211The call will be webcast live and available for replay here, as well as via a link in the “Investors” section of the Company’s website at www.jwc.ca/investors.Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact CMA at 1-949-432-7566.A telephone replay of the call will be available from 8:00 p.m. Eastern time on December 10, 2019, until December 24, 2019:Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13697211About James E. Wagner Cultivation CorporationJames E. Wagner Cultivation Corporation’s wholly owned subsidiary is a Licenced Producer under the Cannabis Regulations, formerly the Access to Cannabis for Medical Purposes Regulations (“ACMPR”). JWC is a premium cannabis brand, focusing on producing clean, consistent cannabis. JWC uses its advanced and proprietary Dual Droplet™ aeroponic platform named GrowthSTORM™.JWC was founded as a family company and is based on family values. JWC began as a collective of patients and growers under the Marihuana Medical Access Regulations (the precursor to ACMPR). Since its inception, JWC has remained focused on providing the best possible patient experience. JWC’s operations are based in Kitchener, Ontario. Learn more at www.jwc.ca.Notice Regarding Forward-Looking StatementsThis press release contains statements including forward-looking information for purposes of applicable securities laws (“forward-looking statements”) about JWC and its business and operations which include, among other things, statements regarding increased production capacity at JWC’s facilities, the financial impact of additional licenced flowering space at JWC’s facilities, increased yield of cannabis flower, the availability of debt financing, sales of cannabis in the recreational market, increasing customer demand, the financial growth of JWC, management’s expectation of JWC achieving break-even, turning net and comprehensive income positive and turning revenue positive and the timing for the achievement of such milestones. The forward-looking statements can be identified by the use of such words as “will”, “expected”, “approximately”, “may”, “could”, “would” or similar words and phrases. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those implied in the forward-looking statements. For example, risks include risks regarding the cannabis industry, economic factors, the equity markets generally, building permit related risks and risks associated with growth and competition as well as the risks identified in JWC’s Annual Information Form dated April 3, 2019, available under the JWC’s profile at www.sedar.com. Although JWC has attempted to identify important factors that could result in actual actions, unanticipated events may cause results to differ materially from those described in forward-looking statements, and there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release and are based on current assumptions which management believes to be reasonable. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.Company Contact
Nathan Woodworth
President & CEO
Tel: (519) 594-0144 x421
Email: nathan@jwc.caInvestor Relations
Jonathan Leuchs
CMA
Tel: (949) 432-7566
Email: jwca@cma.team
Bay Street News