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Marketwired
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CannaRoyalty Announces its Third Quarter 2017 Financial Results

OTTAWA, ONTARIO -- (Marketwired) -- 11/28/17 -- CannaRoyalty Corp. (CSE: CRZ)(CSE: CRZ.CN)(CNSX: CRZ)(OTCQX: CNNRF) ("CannaRoyalty" or the "Company") today announced the Company's financial results for the three and nine-month periods ended September 30, 2017. All figures are reported in Canadian dollars ($), unless otherwise indicated. CannaRoyalty's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS").

"Q3 was a transitional period for our business as we focused on ramping up production of CR Brands products in California through River's distribution network," said Marc Lustig, CEO of CannaRoyalty. "Through our investees and wholly-owned subsidiaries, we now have a presence in seven key legal North American cannabis markets with specific exposure to value-added downstream segments including manufacturing, distribution, product development, technology, marketing and brands. The experience our team has gained over the past three years in most major North American markets has led us to phase two of our journey and to California."

Marc added, "This morning, we announced the signing of binding term sheets to acquire two leading California cannabis companies that generated approximately C$12 million(i) in consolidated revenue to the end of October 2017. These acquisitions are transformative for CannaRoyalty, and will provide the Company with foundational assets to execute on our California expansion strategy. Our plan over the next twelve months is to leverage our current asset base, expertise and portfolio of brands to build a leading downstream cannabis consumer products business and generate revenue growth, with a focus on California. We have outlined this strategy in a shareholder letter below and in our MD&A."

Recent Developments

For a comprehensive overview of CannaRoyalty's top holdings, please refer to the Company's Management's Discussion and Analysis of the Financial Condition and Results of Operations for the Three and Nine Months Ended September 30, 2017.

--  The Company recently launched its Soul Sugar Kitchen edibles products,
    which experienced rapid retail penetration in the initial launch and
    distribution period. Shortly after, the Company completed the first
    commercial production of its GreenRock Botanicals ("GRB") vape pens. The
    Company will continue ramping up production of these products, as well
    as other products within its existing and growing CR Brands portfolio.
--  CR Brands is currently retrofitting its new Santa Rosa facility (the
    "Facility") to produce the growing suite of CR Brands products for the
    California market. The Facility is located in a commercial complex with
    several tenants that have been licensed for cannabis production and
    distribution by the city of Santa Rosa, and the Company is in the
    process of applying for its own processing license. The Facility has
    significant capacity to accommodate growth in the CR Brands portfolio,
    and for the manufacture of additional products.
--  The Company executed a letter of intent to launch its CR Brands into the
    Nevada market, with a focus on Las Vegas. This was accomplished through
    a CR Advisory engagement with AEther Gardens that focuses on the
    production and launch of CR Brands products in the Nevada market. AEther
    Gardens is a vertically-integrated cannabis cultivator, extractor, and
    manufacturer based in Clark County, Nevada.
--  The Company's investee, Resolve Digital Health, signed major exclusive
    product deals with Aphria Inc., one of Canada's largest legal cannabis
    producers, and with Liberty Health Sciences Inc., an operator and
    investor in the medical cannabis market in Florida.
--  The Company's investee, AltMed, was recently awarded an authorization to
    commence medical cannabis cultivation in Florida. There are only 12
    other Medical Marijuana Treatment Center (MMTC) licensees in Florida,
    placing AltMed Florida in a uniquely competitive position, in a growing
    market that now has over 51,000 registered patients. Additionally,
    AltMed also opened its first Arizona dispensary during Q3, which has
    been ramping up its distribution and sales efforts.
--  On November 9, the Company announced that Mr. R. Wilkinson, the
    principal of Rich Extracts, was arrested in Nebraska for possession of
    marijuana with intent to distribute. The possession and distribution of
    marijuana are illegal in Nebraska. This development has accelerated the
    Company's efforts to enforce on its security interest in Rich Extracts
    and remove Mr. Wilkinson from the Rich Extracts extraction business.
--  On November 23, 2017, the Company received its first draw of $3,000,000
    from the Sprott Credit Facility and intends to use the funds for general
    corporate purposes.

(i) Last twelve months' ("LTM") revenues to October 31st, 2017, based on unaudited financial statements. This figure represents a consolidation of the LTM revenues for Kaya and Alta. Converted at 1.2735 USD/CAD based on November 27, 2017 Bank of Canada noon rate.

Financial Highlights - Q3-2017

Revenue Components

----------------------------------------------------------------------------
                   Three months   Three months    Nine months    Nine months
                          ended          ended          ended          ended
                  September 30,  September 30,  September 30,  September 30,
                           2017           2016           2017           2016
----------------------------------------------------------------------------
Products         $      298,866 $            - $      703,193 $            -
Services                 41,451              -        314,594              -
Royalties               385,001        136,329        928,095        136,329
Interest                 18,984        (8,622)         59,688          3,796
----------------------------------------------------------------------------
Total            $      744,302 $      127,707 $    2,005,570 $      140,125
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Revenue by Operating Division

----------------------------------------------------------------------------
----------------------------------------------------------------------------
                   Three months   Three months    Nine months    Nine months
                          ended          ended          ended          ended
                  September 30,  September 30,  September 30,  September 30,
                           2017           2016           2017           2016
----------------------------------------------------------------------------
CR Holdings      $      403,985 $      127,707 $      987,783 $      140,125
CR Brands               298,866              -        703,193              -
CR Advisory              41,451              -        314,594              -
----------------------------------------------------------------------------
Total            $      744,302 $      127,707 $    2,005,570 $      140,125
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Income Statement

All comparisons below are to Q3-2016, unless otherwise noted

--  Revenues were $744,302 as compared to $127,707.
--  Gross margin was $128,010 as compared to $91,269.
--  Net loss per share of $0.08 as compared to $0.07.
--  Adjusted EBITDA(1) loss of $1,762,145 as compared to a loss of
    $1,198,522.
--  Adjusted EBITDA(1) loss per share of $0.04 as compared to a loss a
    $0.05.

Balance Sheet

All comparisons below are to December 31, 2016, unless otherwise noted

--  Total assets of $46,166,044 as compared to $32,197,938.
--  Total investments(2) of $19,960,949 as compared to $8,363,922.
--  Cash and cash equivalents of $2,593,914 as compared to $2,945,895.

(1)Adjusted EBITDA and Adjusted EBITDA per share are non-IFRS measures. See "Adjusted EBITDA" in the Company's Management's Discussion and Analysis for the three and nine-month periods ended September 30, 2017.

(2)This represents the sum of investments, royalty investments, and interests in equity method investees

Top Holdings - Recent Updates

For a comprehensive overview of CannaRoyalty's top holdings, please refer to the Company's Management's Discussion and Analysis of the Financial Condition and Results of Operations for the Three and Nine Months Ended September 30, 2017.

Regulatory Developments

Two key regulatory events also occurred subsequent to the end of Q3.

--  First, both the Canadian Securities Exchange ("CSE") and the Canadian
    Securities Administrators ("CSA") released statements (CSA: Staff Notice
    51-352; CSE: Press Release dated October 16) providing clarity and
    certainty for Canadian public companies with US cannabis activities,
    such as CannaRoyalty. Both the CSA and the CSE reinforced their rights
    to determine eligibility of listing companies that meet the relevant
    listing and eligibility requirements. The Company viewed both of these
    notices as favourable, as they provide increased transparency and
    certainty regarding the views of its exchange and its regulator of its
    existing operations and strategic business plan. On November 24, the TMX
    Group provided an update regarding issuers with U.S. marijuana-related
    activities. The update confirmed that the TMX Group will rely on the
    Canadian Securities Administrators' recommendation to defer to
    individual exchange's rules for companies that have U.S. marijuana-
    related activities and to determine the eligibility of individual
    issuers to list based on those exchanges' listing requirements. The TMX
    also confirmed there is no current CDS ban on the clearing of securities
    of issuers with marijuana-related activities in the U.S.

--  The second regulatory event was the release of Health Canada's Proposed
    Approach to the Regulation of Cannabis (the "Proposed Regulations"),
    which was released to the public on November 22, 2017. The Proposed
    Regulations contemplate a variety of cannabis product forms not
    currently allowed under the Access to Cannabis for Medical Purposes
    Regulations (the "ACMPR"), including: edible products containing
    cannabis (like food or beverages), pre-rolls, and cannabis concentrates
    including vaporizing solutions. The Proposed Regulations suggest these
    product forms are to be permitted after one year of the proposed
    Cannabis Act coming into effect, which is expected on or before July
    1st, 2018. Accordingly, the Proposed Regulations provide a platform for
    CannaRoyalty to commercialize a significant portion of its products,
    brands, intellectual property, and know-how into the Canadian market.

Results of Operations (Summary)

The following tables set forth consolidated statements of financial information for the three and nine- month periods ending September 30, 2017 and September 30, 2016. For further information regarding the Company's financial results for these periods, please refer to the Company's Management's Discussion and Analysis for the periods ended September 30, 2017 and September 30, 2016 and the Company's Financial Statements for the periods ended September 30, 2017, published on CannaRoyalty's issuer profile on SEDAR at www.sedar.com and the Company's website at www.cannaroyalty.com.

Cost of sales by revenue type

----------------------------------------------------------------------------
                   Three months   Three months    Nine months    Nine months
                          ended          ended          ended          ended
                  September 30,  September 30,  September 30,  September 30,
                           2017           2016           2017           2016
----------------------------------------------------------------------------
Products         $      327,986 $            - $      688,917 $            -
Services                 23,961              -         61,656              -
Royalties               264,345         36,438        460,833         48,422
----------------------------------------------------------------------------
Total            $      616,292 $       36,438 $    1,211,406 $       48,422
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Gross margin amounts and percentages by revenue type

----------------------------------------------------------------------------
                   Three months   Three months    Nine months    Nine months
                          ended          ended          ended          ended
                  September 30,  September 30,  September 30,  September 30,
                           2017           2016           2017           2016
----------------------------------------------------------------------------
Products         $     (29,120) $            - $       14,276 $            -
Services                 17,490              -        252,938              -
Royalties               120,656         99,891        467,262         87,907
Interest                 18,984        (8,622)         59,688          3,796
----------------------------------------------------------------------------
Total            $      128,010 $       91,269 $      794,164 $       91,703
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
                   Three months   Three months    Nine months    Nine months
                          ended          ended          ended          ended
                  September 30,  September 30,  September 30,  September 30,
                           2017           2016           2017           2016
----------------------------------------------------------------------------
Products                  (10%)            n/a             2%            n/a
Services                    42%            n/a            80%            n/a
Royalties                   31%            73%            50%            64%
Interest                   100%           100%           100%           100%
----------------------------------------------------------------------------
All Types                   17%            71%            40%            65%
----------------------------------------------------------------------------

Operating Expenses

----------------------------------------------------------------------------
                                      Three months ended                   %
                                 Sept 30, 2017  Sept 30, 2016         Change
----------------------------------------------------------------------------
Sales and marketing             $      422,362 $       86,190           390%
Research and development               275,839        168,498            64%
General and administrative           1,943,675      1,670,264            16%
Amortization of intangibles            193,063              -            n/a
----------------------------------------------------------------------------
Total                           $    2,834,939 $    1,924,952            47%
----------------------------------------------------------------------------
----------------------------------------------------------------------------


----------------------------------------------------------------------------
                                       Nine months ended                   %
                                 Sept 30, 2017  Sept 30, 2016         Change
----------------------------------------------------------------------------
Sales and marketing             $    1,068,443 $       97,132          1000%
Research and development               900,932        848,153             6%
General and administrative           6,058,597      3,409,395            78%
Amortization of intangibles            601,413              -            n/a
----------------------------------------------------------------------------
Total                           $    8,629,385 $    4,354,680            98%
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Adjusted EBITDA(1)

----------------------------------------------------------------------------
                       Three months ended             Nine months ended
                   September 30   September 30   September 30   September 30
                           2017           2016           2017           2016
----------------------------------------------------------------------------

Net loss for the
 period          $  (3,295,477) $  (1,866,945) $  (7,816,773) $  (4,646,283)
Add (Subtract)
  Amortization
   of property
   and equipment         46,532         36,438        137,730         48,422
  Amortization
   of intangible
   assets               193,063              -        601,413              -
  Amortization
   of royalty
   investments          245,753              -        411,145              -
  Interest
   expense               85,935         41,097        122,054        314,904
  Interest
   income              (18,984)          8,622       (59,688)        (3,796)
  Deferred
   income tax
   recovery            (73,649)              -      (230,702)              -
----------------------------------------------------------------------------
EBITDA           $  (2,816,827)  $ (1,780,788) $  (6,834,821) $  (4,286,753)
  Listing
   expense                    -              -         38,193              -
  Penalties from
   non-
   completion of
  transactions          (6,498)              -        214,555              -
  Gain on
   disposal of
   equipment            (3,000)              -       (91,674)              -
  Share based
   compensation         695,144        582,266      2,499,356        671,651
  Unrealized
   loss on
   embedded
   derivatives          369,036              -        369,036              -
  Gain on
   dilution of
   equity
   accounted
   investment                 -              -    (1,132,107)              -
----------------------------------------------------------------------------
TOTAL ADJUSTED
 EBITDA          $  (1,762,145) $  (1,198,522) $  (4,937,462) $  (3,615,102)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Weighted average
 number of
 common shares
 outstanding -
 basic and
 diluted             42,156,344     25,814,087     40,961,436     19,247,759
ADJUSTED EBITDA
 per share -
 basic and
 diluted         $       (0.04) $       (0.05) $       (0.12) $       (0.19)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(1) EBITDA,Adjusted EBITDA and Adjusted EBITDA per share are non-IFRS measures. See "Adjusted EBITDA" in the Company's Management's Discussion and Analysis for the three and nine-month periods ended September 30, 2017.

Message from the CEO

Fellow Shareholders,

Three years ago, as interest in the Canadian cannabis capital markets grew, CannaRoyalty was formed to pursue investment opportunities in the legal cannabis industry. It was clear that the use of cannabis was going to be legalized in many jurisdictions around the world and many U.S. states already had active and thriving cannabis industries. This provided us with plentiful opportunities to invest in a well-established, albeit historically illicit sector that existing consumer goods companies and traditional providers of capital, such as banks, would have difficulty entering and exploiting. We determined that there was an opening for a nimble finance company to take advantage of investment opportunities in an industry poised for explosive growth in North America.

The one investment option to which we chose to significantly limit exposure was the financing of undifferentiated pure-play cannabis cultivation. We believe mass produced cannabis flower will become an agricultural commodity in the long-term, which will eventually be subject to relatively low average margins and commodity-based pricing. We feel that investors will be better served in the long term by the return potential of a basket of key value-added cannabis assets, and recent capital market activity suggests to us that other investors are beginning to share this view.

In Phase 1 of our growth plan, we set about executing on this view, investing in a basket of companies in value-added areas of the legal cannabis market in North America: manufacturing, marketing, technology, research and development, products, brands, and distribution. Under this plan, we've deployed over $30 million into equity, debt and royalty investments.

The experience our team has gained over the past three years in the North American cannabis markets, and in particular the launch of our CR Brands division earlier this year, has led us to Phase 2 of our journey and a focus on California.

California is a global entertainment and cultural hub, which shapes consumer perceptions for a multitude of commercial products and services. The state is transitioning to a full adult-use cannabis market in January 2018. It is the largest cannabis market in the world (currently estimated to be $5.2 billion USD in 2018 according to Forbes magazine) and has a history of over 20 years of medical legalization. California has a broad range of permitted cannabis products for use and as a result, it is home to some of the most sophisticated and discerning cannabis consumers in the marketplace today. In our view, only superior products and brands will be able to succeed in this market over the long term. We believe that a company that wins in California will have a unique advantage competing not only in other U.S. jurisdictions, but also in Canada and across the globe.

In Phase 2 of our business, we will focus on leveraging our current asset base, expertise and portfolio of brands to build a leading cannabis consumer products business, centered in California. We have already begun this journey. Through CR Brands, we recently announced the commercial manufacture and launch, through River Distribution, of two in-house brands, Soul Sugar Kitchen™ gourmet edibles and GreenRock Botanicals™ vape pens.

Specifically, we are focused on three primary opportunities over the next 12 months in California:

1.  Continue to drive growth of CR Brands product portfolio and points of
    distribution through River and other distribution channels;
2.  Make prudent acquisitions of promising products or leading brands; and
3.  Increase commercial production in our Santa Rosa facility and gradually
    drive efficiencies.

At this early stage in our growth trajectory, we are primarily focused on continuing to set a strong foundation for the future. We are making investments in the most exciting cannabis market in the world. Our team has substantial experience developing and commercializing successful brands and we are confident that our business will generate substantial and lasting shareholder value.

Many thanks for your support as we enter this exciting next phase for our business.

Marc Lustig, CEO

Share Capital

The Company's authorized share capital is an unlimited number of common shares of which 42,391,900 were issued and outstanding as at September 30, 2017 (December 31, 2016 - 36,006,956 common shares). The Company has issued 3,093,150 RSUs that have not been exercised as at September 30, 2017 including 1,546,920 that have vested (December 31, 2016 - 2,774,800 including 1,065,637 that had vested). As of September 30, 2017, there are share purchase warrants and broker warrants outstanding that can potentially be converted to 5,475,212 shares (December 31, 2016 - 1,113,633).

Conference Call and Slide Presentation

CannaRoyalty will host a conference call on, Thursday, November 28, 2017 at 8:30 a.m. (Eastern Time) to discuss its 2017 third quarter financial results. The call will be chaired by Marc Lustig, Chief Executive Officer and Francois Perrault, Chief Financial Officer.

The conference call will include a slide presentation and webcast. A link to the slide presentation and webcast is below, and slides will also be available 30 minutes prior to the call in the Investors section of CannaRoyalty's website at: cannaroyalty.com.

----------------------------------------------------------------------------
                    Participant Dial-  Webcast            Reference Number
                    in
----------------------------------------------------------------------------
Conference Call     647-427-7450; or   http://bit.ly/2xYB
                                       DJQ
                    1-888-231-8191
----------------------------------------------------------------------------
Replay              416-849-0833;                         97386572
(available for 2    613-667-0035; or
weeks)
                    1-855-859-2056
----------------------------------------------------------------------------

About CannaRoyalty

CannaRoyalty is an active investor and operator in the legal cannabis sector. Our focus is building and supporting a diversified portfolio of growth-ready assets in high-value segments of the cannabis sector, including research, consumer brands, devices and intellectual property. Our management team combines a hands-on understanding of the cannabis industry with seasoned financial know-how, assembling a platform of holdings via royalty agreements, equity interests, secured convertible debt, licensing agreements and its own branded portfolio.

Forward Looking Statements

Statements in this news release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed here and elsewhere in CannaRoyalty's periodic filings with Canadian securities regulators. When used in this news release, words such as "will, could, plan, estimate, expect, intend, may, potential, believe, should," and similar expressions, are forward- looking statements.

Forward-looking statements may include, without limitation, statements including the Company's expectations with respect to pursuing new opportunities and its future growth and other statements of fact.

Although CannaRoyalty has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: dependence on obtaining regulatory approvals; investing in target companies or projects which have limited or no operating history and are engaged in activities currently considered illegal under US Federal Laws; changes in laws; limited operating history; reliance on management; requirements for additional financing; competition; hindering market growth and state adoption due to inconsistent public opinion and perception of the medical-use and adult-use marijuana industry and; regulatory or political change.

There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. As a result of these risks and uncertainties, the results or events predicted in these forward-looking statements may differ materially from actual results or events.

Accordingly, readers should not place undue reliance on forward-looking statements. The forward- looking statements in this news release are made as of the date of this release. CannaRoyalty disclaims any intention or obligation to update or revise such information, except as required by applicable law, and CannaRoyalty does not assume any liability for disclosure relating to any other company mentioned herein.

Unaudited Condensed Interim Consolidated Statements of Loss and
 Comprehensive Loss
In Canadian dollars
----------------------------------------------------------------------------
                       Three months ended             Nine months ended
                  Sept 30, 2017  Sept 30, 2016  Sept 30, 2017  Sept 30, 2016
----------------------------------------------------------------------------

Revenue          $      744,302 $      127,707 $    2,005,570 $      140,125

Cost of sales         (616,292)       (36,438)    (1,211,406)       (48,422)
                ------------------------------------------------------------

Gross margin            128,010         91,269        794,164         91,703

Operating
 expenses
Sales and
 marketing              422,362         86,190      1,068,443         97,132
Research and
 development            275,839        168,498        900,932        848,153
General and
 administrative       1,943,675      1,670,264      6,058,597      3,409,395
Amortization of
 brands and
 technologies           193,063              -        601,413              -
                ------------------------------------------------------------

Loss from
 operations         (2,706,929)    (1,833,683)    (7,835,221)    (4,262,977)

Other income
 (expenses)
Gain (loss) on
 disposal of
 equipment                3,000              -         91,674              -
Profit (loss)
 from equity
 accounted
 investees, net
 of tax               (137,093)          2,023        706,821          2,023
Unrealized loss
 on embedded
 derivatives          (369,036)              -      (369,036)              -
Adjustment from
 non-completion
 of share swap
 transaction              6,498              -      (214,555)              -
Listing expense               -              -       (38,193)              -
Foreign exchange
 gain (loss)           (79,631)          5,098      (266,911)       (70,642)
Interest expense       (85,935)       (41,097)      (122,054)      (314,904)
                ------------------------------------------------------------

Net loss before
 tax                (3,369,126)    (1,867,659)    (8,047,475)    (4,646,500)

Deferred tax
 recovery                73,649              -        230,702              -
                ------------------------------------------------------------

Net loss for the
 period          $  (3,295,477) $  (1,867,659) $  (7,816,773) $  (4,646,500)
                ------------------------------------------------------------
                ------------------------------------------------------------

Other
 comprehensive
 loss for the
 period
Foreign currency
 translation
 differences          (323,484)            714      (860,619)            217
                ------------------------------------------------------------

Total
 comprehensive
 loss for the
 period          $  (3,618,961) $  (1,866,945) $  (8,677,392) $  (4,646,283)
                ------------------------------------------------------------

Net loss per
 common share -
 basic and
 diluted         $       (0.08) $       (0.07) $       (0.19) $       (0.24)
Total
 comprehensive
 loss per common
 share - basic
 and diluted     $       (0.09) $       (0.07) $       (0.21) $       (0.24)

Weighted average
 number of
 common shares
 outstanding         42,156,344     25,814,087     40,961,436     19,247,759
- basic and
 diluted

Total
 comprehensive
 loss for the
 period
 attributable
 to:
Owners of the
 company         $  (3,610,203) $  (1,866,945) $  (8,641,017) $  (4,646,283)
Attributable to
 non-controlling
 interest               (8,758)              -       (36,375)              -
                ------------------------------------------------------------
                 $  (3,618,961) $  (1,866,945) $  (8,677,392) $  (4,646,283)
                ------------------------------------------------------------
                ------------------------------------------------------------

Unaudited Condensed Interim Consolidated Statements of Financial Position
In Canadian dollars
----------------------------------------------------------------------------
                                      September 30, 2017   December 31, 2016
----------------------------------------------------------------------------

ASSETS


Current
Cash and equivalents                $          2,593,914 $         2,945,895
Amounts receivable                             1,606,374             556,170
Inventory                                        788,561             641,350
Prepaid and other assets                         267,628             110,834
Loans receivable                               4,208,174           2,943,161
                                   -----------------------------------------
                                               9,464,651           7,197,410


Convertible notes receivable                     866,999             864,806
Derivative assets                                 95,006             114,505
Interest in equity accounted
 investees                                     8,463,603           3,541,281
Investments                                    2,478,750           2,228,750
Royalty investments                            9,018,596           2,593,891
Warrants issued with secured credit
 facility                                      1,853,931                   -
Property and equipment                         1,114,113           1,393,112
Intangible assets and goodwill                12,810,395          14,264,183
                                   -----------------------------------------
                                              36,701,393          25,000,528
                                   -----------------------------------------

                                    $         46,166,044 $        32,197,938
                                   -----------------------------------------
                                   -----------------------------------------

LIABILITIES


Current
Amounts payable and accrued
 liabilities                        $          3,789,656 $         1,886,189
Loan payable                                     421,330             451,618
                                   -----------------------------------------
                                               4,210,986           2,337,807


Convertible debt                               1,426,118           1,414,414
Derivative liabilities                           507,453             100,586
Deferred tax liability                         2,588,528           3,001,766
                                   -----------------------------------------


                                    $          8,733,085 $         6,854,573
                                   -----------------------------------------

SHAREHOLDERS' EQUITY


Share capital                       $         44,974,883 $        30,636,253
Shares and contingent shares to be
 issued                                        2,010,000           4,520,000
Warrants reserve                               5,180,305             628,623
Contributed surplus                            7,541,256           3,154,582
Accumulated other comprehensive
 loss                                          (963,381)           (102,762)
Accumulated deficit                         (21,270,725)        (13,490,327)
Non-controlling interest                        (39,379)             (3,004)
                                   -----------------------------------------
                                              37,432,959          25,343,365
                                   -----------------------------------------

                                    $         46,166,044 $        32,197,938
                                   -----------------------------------------
                                   -----------------------------------------

Unaudited Condensed Interim Consolidated Statements of Cash Flows
In Canadian dollars
----------------------------------------------------------------------------
                       Three months ended             Nine months ended
                  Sept 30, 2017  Sept 30, 2016  Sept 30, 2017  Sept 30, 2016
----------------------------------------------------------------------------

CASH FLOWS FROM
 (USED IN)
 OPERATING
 ACTIVITIES
Total
 comprehensive
 loss for the
 period          $  (3,618,961) $  (1,866,845) $  (8,677,392) $  (4,646,283)
Items not
 affecting cash:
  Bad debts
   expense
   (recovery)             5,951         94,363        (7,268)         94,363
  (Income) loss
   from equity
   accounted
   investees            137,093        (2,023)      (706,821)        (2,023)
  Amortization
   of property
   and equipment         46,532         36,438        137,730         48,422
  Amortization
   of
   intangibles          193,063              -        601,413              -
  Amortization
   of royalties         245,753              -        411,145              -
  Amortization
   of warrants
   issued for
   credit
   facility              68,469              -         68,469              -
  Share based
   compensation         695,144        582,266      2,499,356        671,651
  Consulting
   fees paid via
   issuance of
   shares                30,000              -         30,000              -
  Transaction
   adjustment
   paid via
   issuance of
   shares               204,060              -        204,060              -
  Deferred tax
   recovery            (73,649)              -      (230,702)              -
  Loss related
   to change in
   fair value of
   embedded
   derivatives          369,036              -        369,036              -
  Gain on
   disposal of
   equipment            (3,000)              -       (91,674)              -
  Foreign
   currency
   translation
   differences          323,484          (714)        860,619          (217)
                ------------------------------------------------------------
                    (1,377,025)    (1,156,515)    (4,532,029)    (3,834,087)
Changes in non-
 cash items
 relating to
 operations:
  Increase in
   amounts
   receivable         (317,148)      (304,060)    (1,064,247)      (316,560)
  Increase in
   inventory           (74,703)              -      (147,211)              -
  Decrease
   (increase) in
   prepaid and
   other assets        (60,774)          5,829      (156,794)       (57,832)
  Increase
   (decrease) in
   accounts
   payable and
   accruals           (227,632)        874,823    (1,021,754)      1,756,979
                ------------------------------------------------------------
                    (2,057,282)      (579,923)    (6,922,035)    (2,451,500)
                ------------------------------------------------------------

CASH FLOWS FROM
 (USED IN)
 INVESTING
 ACTIVITIES
Purchase of
 property and
 equipment             (19,847)       (14,620)      (151,861)      (155,234)
Increase in
 share
 subscription
 receivable                   -              -              -        (2,500)
Purchase of
 equity
 investments          (316,666)      (827,250)    (1,917,884)    (1,511,010)
Royalty
 financing
 arrangements       (1,211,500)         12,222    (3,962,131)      (181,966)
Purchase of
 Intangible
 assets                       -       (51,776)              -       (68,838)
Loans advanced
 to debtors, net
 of repayment         (347,218)    (1,283,148)    (1,488,018)    (2,084,605)
Convertible
 loans advanced
 to debtors, net
 of repayment                 -      (638,592)              -      (934,861)
                ------------------------------------------------------------
                    (1,895,231)    (2,803,164)    (7,519,894)    (4,939,014)
                ------------------------------------------------------------

CASH FLOWS FROM
 (USED IN)
 FINANCING
 ACTIVITIES
Proceeds from
 shares in
 private
 placements, net
 of issuance
 costs                        -      2,126,261              -      7,627,414
Proceeds from
 shares in
 bought deal
 financing, net
 of issuance
 costs                        -              -     10,958,243              -
Proceeds from
 issuance of
 warrants,
 including
 broker warrants              -      1,125,000      2,787,000      1,125,000
Proceeds from
 exercise of
 warrants               112,500              -        404,592              -
Proceeds from
 issuance of
 stock options                -              -         25,000              -
Net advances /
 (repayment to)
 lenders                      -        131,826              -      (426,412)
Tax withholding
 paid on
 exercise of
 restricted
 share units            (7,376)              -       (84,887)              -
Decrease in
 share
 subscriptions
 payable                      -              -              -      (684,486)
                ------------------------------------------------------------
                        105,124      3,383,087     14,089,948      7,641,516
                ------------------------------------------------------------

INCREASE
 (DECREASE) IN
 CASH               (3,847,389)              -      (351,981)        251,002

CASH AND CASH
 EQUIVALENTS,
 BEGINNING OF
 PERIOD               6,441,303        309,925      2,945,895         58,923
                ------------------------------------------------------------

CASH AND CASH
 EQUIVALENTS,
 END OF PERIOD   $    2,593,914 $      309,925 $    2,593,914 $      309,925
                ------------------------------------------------------------

Contacts:
Marc Lustig
CEO
info@cannaroyalty.com
1-844-556-5070
www.cannaroyalty.com

Jonathan Ross
LodeRock Advisors Inc.
jon.ross@loderockadvisors.com
416-283-0178

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