CEO Marc Lustig said “During the quarter, we significantly expanded our balance sheet through an equity financing, the increase in value of certain holdings and the addition of new investments,”. “Moving forward, we expect to see a marked increase in revenues from several sources including royalty agreements, business units – most notably CR Brands, coming on-line and our strategic relationship with River, a leading California state-wide distribution company. Our focus in Q1 was on establishing infrastructure, opening our US office and engaging in soft- launch commercialization activities in preparation to fulfill the US$20mm revenue purchase commitment from River in California. With these key elements in place, we are well positioned to continue to deploy capital and build on initiatives that will enhance shareholder value.”
For communicating greater detail on financial performance and to provide updates on its key assets for stakeholders going forward, the Company plans to hold quarterly conference calls starting with its Q2/2017 quarterly results.
Financial and Operational Highlights for Q1-2017:
- Increased revenues to $301,111 from $nil in Q1-2016;
- Realized a net loss of $2,053,785 or $0.05 per share compared to a net loss of $1,736,165 or $0.13 per share compared to Q1-2016;
- Ended the quarter with cash and cash equivalents to $11,946,417;
- Closed a bought deal prospectus financing for aggregate gross proceeds of $15 million;
- Executed a binding term sheet with Rich Extracts LLC which provides CannaRoyalty the right to a 30% royalty stream on Rich Extracts’ gross revenues in perpetuity;
- Acquired a 20% equity interest in Anandia, a Canadian cannabis biotechnology company focused on providing analytical testing services and developing cannabis strains for safe and effective medical applications; and
- Launched the CR Brands Division under newly appointed U.S. executive, Mr. David E. Vautrin, to manage and commercialize CannaRoyalty’s portfolio of wholly-owned and licensed cannabis brands.
Subsequent to the Quarter End:
- Completed a strategic financing and related arrangements with River, the first medical cannabis distributor to receive local permits for medical cannabis wholesale logistics, distribution and transportation in California;
- Announced Rich Extracts’ receipt of a processing license from the Oregon Liquor Control Commission (“OLCC”), which allows Rich Extracts to commence commercial operations in Oregon;
- Launched “The Terpistry” in collaboration with Dr. Jörg Bohlmann, a wholly-owned venture of CannaRoyalty, to focus on the development and sale of cannabis products with innovative terpene formulations;
- Joined the OTCQX® Best Market, under the symbol “CNNRF,” upgrading to OTCQX from the OTCQB® Venture Market;
Update to Board of Directors
The Company has accepted the resignation of Chuck Rifici from the Board of Directors, effective immediately. “We thank Chuck for his contributions to our Board and wish him well as he pursues a new endeavor in the cannabis sector” stated CEO Marc Lustig. The Company intends to announce the new nominee to the Board ahead of its Annual General meeting which is being held on Friday, June 16th, 2017.
CannaRoyalty’s unaudited interim condensed financial statements and management’s discussion & analysis (“MD&A”), for the three-month period ended March 31, 2017, are available via CannaRoyalty’s website at www.cannaroyalty.com and have been filed on SEDAR at www.sedar.com.