Green Growth Brands Significant Revenue Growth Driven by CBD Retail Expansion – Yahoo Finance

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¹ eMarketer Retail, „Ecommerce trends and store sales for top retailers”

Unaudited Condensed Interim Consolidated Statements of Financial Position

As at September 28, 2019 and June 30, 2019

(Expressed in United States dollars)

September 28, 2019

June 30, 2019

Assets

Current Assets

Cash and cash equivalents

$

6,811,539

$

10,256,008

Receivables

2,240,238

580,529

Prepaid expenses

3,452,367

5,142,618

Inventories

11,282,915

10,244,804

Biological assets

1,321,379

1,352,097

Notes receivable

48,103

47,739

Other receivables

2,969,527

3,006,760

Deferred lease charges

–

727,518

28,126,068

31,358,073

Non-current assets

Deposits and other assets

604,414

2,880,186

Deferred lease charges

–

2,606,940

Notes receivable

166,724

17,999,224

Property and equipment, net

29,052,104

18,761,723

Right-of-use assets

69,114,716

–

Intangible assets

101,991,179

39,925,984

Goodwill

58,398,385

36,253,417

 Total assets

$

287,453,590

$

149,785,547

Liabilities

Current Liabilities

Accounts payable and accrued liabilities

27,370,962

16,028,807

Taxes payable

514,535

282,593

Due to related parties

8,464,855

317,535

Notes payable

34,878,986

45,762,540

Lease liabilities

10,512,065

–

Embedded derivative liabilities

618,774

1,496,214

Convertible debentures

46,922,616

41,623,041

129,282,793

105,510,730

Non-current liabilities

Long term accrued liabilities

1,205,010

299,977

Lease liabilities

57,012,239

–

Embedded derivative liabilities

1,188,467

–

Convertible debentures

8,758,271

–

Deferred tax liability

6,985,048

1,437,324

75,149,035

1,737,301

Shareholders’ Equity

Share capital

182,371,023

119,881,374

Reserve for warrants

16,538,786

9,054,624

Reserve for share-based compensation

3,813,158

3,147,110

Accumulated deficit

(122,566,395)

(92,453,943)

Accumulated other comprehensive income

148,286

148,286

Total equity attributable to shareholders of Green Growth Brands Inc

80,304,858

39,777,451

Non-controlling interest

2,716,904

2,760,065

Total equity

83,021,762

42,537,516

 Total liabilities and equity

$

287,453,590

$

149,785,547

Adjusted EBITDA

(Expressed in United States dollars)

September 28,

September 30,

2019

2018

Net loss after listing fees before income taxes

$ (29,886,676)

$   (2,846,537)

Fair value adjustment on sale of inventory

906,919

–

Fair value adjustment on biological assets

(507,284)

–

Stock based compensation

1,632,922

–

Depreciation and amortization

3,626,529

–

Pre-opening expenses

1,547,468

–

Non-operating expenses

6,264,165

156,102

Termination and severance

421,396

–

Writedown of developed technology

573,662

–

Other non-operating expenses

197,204

–

14,662,981

156,102

Adjusted EBITDA

$ (15,223,695)

$   (2,690,435)

Unaudited Condenseed Interim Consolidated Statements of Loss

For the 13 weeks ended September 28 2019 and for the three months ended September 30, 2018

(Expressed in United States dollars)

September 28,
2019

September 30,
2018

Sales

Revenue

$

12,701,958

$

–

Cost of goods sold

10,911,000

–

Gross profit before fair value adjustments

1,790,958

–

Fair value change in biological assets
included in inventory sold and other charges

906,919

–

Unrealized gain on changes in fair value of
biological assets

(507,284)

–

Gross profit

1,391,323

–

Operating Expenses

General and administrative

9,683,667

2,450,960

Sales and marketing

10,070,716

–

Share-based compensation

1,632,922

–

Depreciation and amortization

3,626,529

–

25,013,834

2,450,960

(23,622,511)

(2,450,960)

Other expenses (income)

Gain in fair value of derivative liabilities

(4,240,710)

–

Interest expense, net

3,761,477

217

Accretion on convertible debentures

1,409,583

–

Foreign exchange (gain) loss

(488,387)

155,885

Transaction costs

5,822,202

–

Net loss before listing fees and income taxes

(29,886,676)

(2,607,062)

Listing fees

–

239,475

Net loss after listing fees

(29,886,676)

(2,846,537)

 Income taxes

356,609

–

Net loss after income taxes

$

(30,243,285)

$

(2,846,537)

Less: Non-controlling interest

43,161

–

Net Loss attributable to owners of the parent

$

(30,200,124)

$

(2,846,537)

Net loss per Common Share attributable to the parent

$

(0.15)

$

(0.03)

Weighted average common shares

198,246,478

84,428,676

Unaudited Condensed Interim Consolidated Statement of Cashflow

For the 13 weeks ended September 28, 2019, and for the three months ended September 30, 2018

(Expressed in United States dollars)

September 28,
2019

September 30,
2018

Cashflow from Operating Activities

Net loss after income taxes for the period

$

(30,243,285)

$

(2,846,537)

Adjustments for:

Stock based compensation

1,632,922

–

Shares and warrants issued for services and fees

4,115,733

567,884

Depreciation and amortization

3,578,965

–

Writedown of developed software

409,022

–

Deferred tax expense

(225,333)

–

Accretion expense

1,409,583

–

Gain in fair value of embedded derivative liabilities

(4,240,710)

–

Net fair value adjustment on biological assets

399,635

–

Foreign exchange on translation

(488,387)

–

Changes in working capital balances

Receivables

(1,646,660)

–

Prepaid expenses

1,690,251

–

Other receivables

1,994,059

(185,874)

Inventories

(27,538)

–

Biological assets

(368,917)

–

Accounts payable and accrued liabilities

8,815,006

(787,634)

Taxes payable

231,942

–

(12,963,712)

(3,252,161)

Cashflow from Investing Activities

Purchase of property and equipment

(9,723,474)

–

Purchase of software

(723,738)

–

Acquisition of business and assets, net of cash acquired

(12,703,263)

–

Proceeds from sale of equity investment

11,792

–

Advances on acquisitions

–

(32,347,500)

(23,138,683)

(32,347,500)

Cashflow from Financing Activities

Cash received on warrants exercised

298,420

–

Proceeds from bought deal financing

36,513,665

–

Repayment of notes

(15,485,000)

–

Principal payments of lease liabilities

(1,589,689)

–

Proceeds from promissory notes

12,794,844

–

Proceeds from convertible debentures, net of issuance costs

–

66,061,829

32,532,240

66,061,829

Effect of exchange rates on cash

125,686

–

Increase in cash

(3,444,469)

30,462,168

Cash, beginning of period

10,256,008

4,688,311

Cash, end of period

$

6,811,539

$

35,150,479

Supplemental disclosure of cash flow information

Interest paid

445,232

–

Income taxes paid

350,000

–

Other non-cash investing and financing activities

Change in accrual for construction in progress

861,479

–

Acquisition of business for non-cash

47,107,913

–

Issuance of shares for underwriter fees on bought deal financing

2,080,494

–

Segmented statement of operations for the 14 weeks ended September 28, 2019 and three months ended September 30, 2018

(Expressed in United States dollars)

MSO

CBD

Head office

Allocations

Total

2019

2018

2019

2018

2019

2018

2019

2018

2019

2018

Sales

Revenue

$

7,555,102

$

–

$

5,146,856

$

–

$

–

$

–

$

–

$

–

$

12,701,958

$

–

Cost of goods sold

4,575,274

–

4,576,384

–

–

–

1,759,342

–

10,911,000

–

Gross profit before fair value adjustments

2,979,828

–

570,472

–

–

–

(1,759,342)

–

1,790,958

–

Fair value change in biological assets included in
inventory sold and other charges

906,919

–

–

–

–

–

–

–

906,919

–

Unrealized gain on changes in fair value of biological
assets

(507,284)

–

–

–

–

–

–

–

(507,284)

–

Gross profit

2,580,193

–

570,472

–

–

–

(1,759,342)

–

1,391,323

–

Operating Expenses

General and administration

–

–

–

–

11,433,502

2,450,960

(1,749,835)

–

9,683,667

2,450,960

Sales and marketing

1,710,707

–

8,360,009

–

–

–

–

–

10,070,716

–

Stock based compensation

–

–

–

–

1,632,922

–

–

–

1,632,922

–

Depreciation and amortization

142,564

–

2,865,550

–

627,922

–

(9,507)

–

3,626,529

–

1,853,271

–

11,225,559

–

13,694,346

2,450,960

(1,759,342)

–

25,013,834

2,450,960

726,922

–

(10,655,087)

–

(13,694,346)

(2,450,960)

–

–

(23,622,511)

(2,450,960)

Non-operating expenses

Gain in fair value of derivative liabilities

–

–

–

–

(4,240,710)

–

–

–

(4,240,710)

–

Interest expense, net

21,712

–

1,117,964

–

2,621,801

217

–

–

3,761,477

217

Accretion expense

–

–

–

–

1,409,583

–

–

–

1,409,583

–

Foreign exchange (gain) loss

–

–

–

–

(488,387)

155,885

–

–

(488,387)

155,885

Transaction costs

–

–

–

–

5,822,202

–

–

–

5,822,202

–

Net income (loss) before listing fees and income taxes

705,210

–

(11,773,051)

–

(18,818,835)

(2,607,062)

–

–

(29,886,676)

(2,607,062)

Listing fees

–

–

–

–

–

239,475

–

–

–

239,475

Net income (loss) after listing fees

705,210

–

(11,773,051)

–

(18,818,835)

(2,846,537)

–

–

(29,886,676)

(2,846,537)

 Income taxes

356,609

–

–

–

–

–

–

–

356,609

–

Net income (loss) after income taxes

$

348,601

$

–

$

(11,773,051)

$

–

$

(18,818,835)

$

(2,846,537)

$

–

$

–

$

(30,243,285)

$

(2,846,537)

Net income (loss) and comprehensive loss attributable to:

Owners of the parent

391,762

–

(11,773,051)

–

(18,818,835)

(2,846,537)

–

–

(30,200,124)

(2,846,537)

Non-controlling interest

43,161

–

–

–

–

–

–

–

43,161

–

348,601

–

(11,773,051)

–

(18,818,835)

(2,846,537)

–

–

(30,243,285)

(2,846,537)

Supplemental segemented information

Assets

173,818,672

–

101,694,365

–

11,940,553

67,702,122

–

–

287,453,590

67,702,122

Liabilities

32,201,594

–

79,177,273

–

93,052,961

66,925,655

–

–

204,431,828

66,925,655