Robust asset base, balance sheet strength and large talent pool lay foundation for continued growth
- Annual and fourth quarter revenues of $39.8 million and $20.6 million, respectively, led by California retail stores posting $6,257 average sales per square foot and 84% conversion rate for the fourth quarter.
- Enters Fiscal 2019 with leading US market position with 12 states, 67 retail stores and 14 factories with pending PharmaCann acquisition.
- Added eight store locations throughout California, New York and Nevada during the year. Entered Florida market and signed agreements to enter Arizona and Illinois markets subsequent to quarter end, with combined addressable adult population of over 40 million (assuming full adult-use).
- Launched [statemade], the Company’s first cannabis product line, which is focused on categories that represent 90% of products sold in MedMen stores.
- Raised over $250 million in gross proceeds through capital markets and financing activities since RTO in May.
MedMen Enterprises Inc. (“MedMen” or the “Company”) (CSE: MMEN) (OTCQX: MMNFF) (FSE: A2JM6N), today released its consolidated financial results for the fourth quarter and fiscal year 2018 ended June 30, 2018. All financial information in this press release is reported in US dollars, unless otherwise indicated.
Management Commentary
“Since becoming a public company in May of this year, we’ve been singularly focused on our vision to mainstream marijuana and I’m proud to say that our hard work and the significant investments we’ve made in building our operating platform and team are paying off. For fiscal 2018, we delivered solid revenues of almost $40 million and over half of that was in the fourth quarter alone, indicative of the strong momentum in our business and our growth potential,” said Adam Bierman, MedMen’s chief executive officer and co-founder. “2018 is a year of many milestones, including the pending PharmaCann acquisition; closed and pending expansions to Northern California, Illinois, Arizona and Florida; successes in accessing the capital markets; and the launch of our suite of [statemade] products and brand strategy. With our strengthened Board of Directors and management team, diverse asset base and strong balance sheet, we believe we are well positioned to capture the future potential of the evolving cannabis industry.”
Fourth Quarter and Fiscal Year 2018 Highlights
Financial:
- Fourth quarter 2018 systemwide revenue was $20.6 million, up 1,317% from $1.5 million in fourth quarter 2017 and 44% from $14.3 million in third quarter 2018. The increase was primarily due to the majority of MedMen’s stores coming on line during the quarter.
- Fiscal year 2018 systemwide revenue was $39.8 million, up 1,390% from $2.7 million in fiscal year 2017.
- Reported average sales per square foot of $6,257 including Abbot Kinney and customer conversion rate of 84% for all California stores for the fourth quarter.
- Reported over 700,000 sales transactions from all MedMen stores for fiscal year 2018.
Business Development:
- Acquired the assets of Nevada Wellness Project, LLC, including a dispensary license on June 29.
- Opened its store on Venice’s Abbot Kinney Boulevard on June 9.
- Opened Project Mustang, a state-of-the-art cultivation and production facility in Reno, Nevada.
- Acquired all of the assets of San Diego Health and Wellness Center, Inc., dba Apothekare, including a dispensary license on February 16.
- Acquired two Nevada dispensary licenses from LVMC, LLC and Just Quality, LLC in January 19 and February 9, respectively.
Reverse Takeover Transaction and Exchange Listings:
- Subordinate voting shares began to trade on the OTCQB Venture Market under ticker symbol “MMNFF” on June 18.
- Subordinate voting shares listed on the Canadian Securities Exchange (“CSE”) under the ticker symbol “MMEN” and began trading on May 29.
- Completed reverse takeover of a Canadian public company. In connection with this reverse takeover and the listing on the CSE, the Company raised gross proceeds of approximately C$143 million, or US$110 million, through a private placement at an implied enterprise valuation of C$2.14 billion, or US$1.65 billion on May 29.
Subsequent Events
Corporate Development:
- Up-listed the subordinate voting shares from the OCTQB Venture Market to the OCTQX Best Market on October 24.
- Announced binding letter of intent to acquire PharmaCann on October 11 in an all-stock transaction valued at $682 million (based on the closing price of the subordinate voting shares on October 9). The transaction will double the number of states where MedMen has licenses to 12, which accounts for over 50 percent of the total estimated 2030 U.S. addressable market of $75 billion as stated by the Cowen Group. Combined, MedMen and PharmaCann would be licensed for 67 retail stores and 14 factories, including pending acquisitions by MedMen. Closing is expected to occur in 6 to 12 months, following receipt of regulatory approvals.
- Expanded footprint into Northern California with the pending acquisition of two licensed dispensaries in San Jose and Emeryville.
- Entered Illinois market through the pending acquisition of a licensed medical dispensary in Oak Park.
- Entered Arizona market through the pending acquisition of a medical marijuana wholesaler with licensed dispensary, cultivation and processing operations, as well as an exclusive co-manufacturing and licensing agreement.
- Closed major strategic acquisition of dispensary and cultivation in Florida, including a license that permits up to 30 medical marijuana dispensaries, as well as cultivation, delivery and manufacturing operations in Florida.
- Received approval from the State of New York to manufacture and sell cannabis-infused lotions and topical pain-alleviating sprays for medical marijuana patients on July 31. MedMen is one of only 10 companies licensed to manufacture and sell medical marijuana in New York.
- Opened first MedMen branded store in downtown Las Vegas on July 19. The store opening marked the Company’s 14th store nationwide.
Brand:
- Completed two strategic minority investments in Old Pal, a popular California-based brand that provides every day, high-quality cannabis flower, and in The Hacienda Company, a California-based brand known for its packs of pre-rolls named Lowell Smokes.
- Launched the Company’s first comprehensive suite of new cannabis products under the brand [statemade] during the opening of the second branded store in Las Vegas, MedMen Paradise, on October 5. The [statemade] product line includes tincture drops, vaporizer pens, flower and pre-rolls.
- Gained exclusive right to use the Woodstock name for cannabis products manufactured and sold in six states: California, Nevada, Massachusetts, Florida, Illinois and Arizona. Also obtained premium placement of cannabis products at Woodstock music festivals and promotions.
Capital Markets and Financing Activities:
In early October, MedMen closed a $77 million senior secured term loan (the “Facility”) with funds managed by Hankey Capital and an affiliate of Stable Road Capital. The principal amount under the Facility will accrue interest at a rate of 7.5 percent per annum, paid monthly, with a maturity date of 24 months following the date of closing. The proceeds from the Facility will be used for acquisitions, capital expenditures and other corporate expenses. For additional information on the terms of the Facility and the warrants issued in connection with the Facility, please refer to the footnotes in the annual financial statements of the Company.
On September 27, the Company completed a bought deal financing (the “Offering”) of 15,681,818 units at a price of C$5.50 per unit, which included the exercise in full by the underwriters of their over-allotment option, for aggregate gross proceeds of approximately C$86,250,000. Each unit consisted of one subordinate voting share and one-half of one share purchase warrant, with each whole warrant entitling the holder to purchase one subordinate voting share for C$6.37.
People:
Subsequent to fourth quarter 2018, MedMen expanded its executive team and continued to build its Board of Directors with the appointment of four seasoned outside directors.
Executive Team:
- Ben Cook as chief operating officer. Cook is a global supply chain veteran with 15 years of experience running logistics for retail giants Sam’s Club, Target and Apple.
- David Dancer as chief marketing officer. Dancer is a veteran marketing executive with more than 25 years of experience leading brands such as Teleflora, Charles Schwab, Visa and American Express.
- Clarence Foster as senior vice president of human resources. Foster is an accomplished human resource professional with over 20 years’ experience leading companies in the manufacturing, automotive and consumer products industries, including Nissan Motors and L’OREAL.
Board of Directors:
- Benjamin Rose (Chairman of the Board of Directors), chief investment officer of Wicklow Capital.
- Antonio Villaraigosa, former Mayor of Los Angeles and past president of U.S. Conference of Mayors.
- Stacey Hallerman, former vice president, chief legal counsel and corporate secretary at Richemont North America.
- Jay Brown, co-founder and chief executive officer of RocNation.
Fourth Quarter and Fiscal Year 2018 Review
Fourth Quarter 2018:
Beginning in the fourth quarter of 2018 and consistent with IFRS consolidation standards, the Company has included results from managed store locations in its consolidated financial results. Fourth quarter 2018 and fiscal year 2018 financial results presented herein have been adjusted to reflect this change. Additionally, the Company will refer to consolidated Company revenue as “systemwide revenue” hereafter. Further discussion can be found in the Company’s MD&A filed on SEDAR.
For the fourth quarter 2018, systemwide revenue was $20.6 million across the Company’s operations in California, Nevada and New York. This represents a 44% increase over the third quarter, driven primarily by the opening of additional retail stores and strong results from the California market. The Company operated 13 locations at the end of the fourth quarter as compared to 11 at the end of the third quarter. Southern California accounted for 92% of fourth quarter systemwide revenue and 8 out of the 13 open retail stores at quarter end.
Gross profit for the fourth quarter, before biological asset adjustment, was $5.9 million, being a gross profit margin of 29%, as compared to $6.1 million, or a gross profit margin of 43%, in the third quarter. The decline in gross profit margin was primarily due to a one-time liquidation of inventory in the Company’s California stores. As of June 30, the Company was legally required to stop selling certain products in connection with the state’s transition from a medical-only market to a recreational market, resulting in the liquidation.
During the fourth quarter, the Company made significant investments in building the corporate infrastructure and team required to execute its strategy for long-term growth. Operating expenses for the fourth quarter, including SG&A, was $72.6 million. SG&A expenses included $4.7 million in marketing and branding, $13.6 million for salaries and benefits, of which $3.9 million was retail related. SG&A expenses for the fourth quarter also included a one-time expense related to the Company’s RTO of $2.7 million, acquisition related costs of $3.5 million and a $30.8 million non-cash stock-based compensation and employee incentive plans expense.
Other expenses for the quarter was $12.1 million, of which $10.8 million relates to non-cash amortization of discounts on convertible debt and warrants offered under financing arrangements.
Total adjusted EBITDA loss, excluding one-time charges related to the RTO, acquisition related costs and non-cash share-based compensation expense, was $24.6 million for the fourth quarter.
Fiscal Year 2018:
For fiscal year 2018, the Company reported system-wide revenue of $39.8 million as compared to $2.7 million in fiscal year 2017, representing a 1,390% increase. Gross profit for the full year, before biological asset adjustment, was $13.1 million, as compared to gross profit of $868,000 in fiscal 2017. Increases in revenue and gross profit were primarily driven by the addition of eight new operating retail locations in fiscal year 2018 and the introduction of adult-use in the state of California, which is MedMen’s largest market. Gross profit for fiscal year 2018, was impacted by the aforementioned liquidation of inventory in the fourth quarter.
Operating expenses for fiscal year 2018, including SG&A, was $110.5 million. SG&A included $7.0 million in sales and marketing expenses, and $98.2 million in general and administrative expenses, of which $26.5 million was payroll expenses attributable to the Company’s 21 departments. $8.7 million of payroll expenses were attributable to retail. SG&A for the year included $2.7 million in one-time expense related to the RTO, $31.4 million in non-cash stock-based compensation expense and $7.7 million for acquisition-related costs.
Other expenses for fiscal year 2018, were $14.1 million, which consisted of interest expense of $5.3 million and $10.8 million of non-cash amortization of discounts on convertible debt and warrants offered under financing arrangements.
For the fiscal year 2018, the Company reported a net loss of $66.6 million, or $2.77 per basic and diluted share.
Total adjusted EBITDA loss, excluding one-time charges related to the RTO, non-cash share-based compensation expense and acquisitions related costs, was $47.1 million for the 2018 fiscal year. A full reconciliation of Adjusted EBITDA is available at the end of this press release.
Balance Sheet and Liquidity
As of June 30, 2018, total assets were $282.2 million, including cash and cash equivalents of $79.2 million. Total debt was $56 million.
In the fourth quarter 2018, the Company invested $40.7 million of cash into operations, $24.1 million into capital expenditures, and $8.4 million into acquisitions.
The number of subordinate voting shares outstanding on a fully diluted basis is approximately 441 million as of October 17th. This total is comprised of approximately 360 million redeemable shares of MM CAN USA, Inc., approximately 10 million redeemable units of MM Enterprises USA, LLC, and approximately 71 million subordinate voting shares in the public float.
ADDITIONAL INFORMATION
Additional information relating to the Company’s fourth quarter and full year 2018 results is available on SEDAR at www.sedar.com in the Company’s Annual Financial Statements and Management Discussion & Analysis (“MD&A”).
Non-IFRS Financial and Performance Measures
In this press release MedMen refers to certain non-IFRS financial measures such as Adjusted EBITDA, being Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) less certain non-cash equity compensation expense, including one-time transaction fees and all other non-cash items. These measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers.
Please see the “Supplemental Information (Unaudited) Regarding Non-IFRS Financial Measures” at the end of this press release for more detailed information regarding non-IFRS financial measures and a reconciliation of Adjusted EBITDA to Net Income (Loss).
CONFERENCE CALL AND WEBCAST:
MedMen Enterprises will host a conference call and audio webcast with Chief Executive Officer and Co-Founder Adam Bierman and Chief Financial Officer James Parker today at 8:00 a.m. Eastern to discuss the financial results in further detail.
Webcast Information:
A live audio webcast of the call will be available on the Events and Presentations section of MedMen’s website at: https://investors.medmen.com/events-and-presentations/default.aspx.
Calling Information:
Toll Free Dial-In Number: (844) 559-7829
International Dial-In Number: (647) 689-5387
Conference ID: 8568778
ABOUT MEDMEN:
MedMen Enterprises is a leading cannabis company in the U.S. with assets and operations across the country. Based in Los Angeles, MedMen brings expertise and capital to the cannabis industry and is one of the nation’s largest financial supporters of progressive marijuana laws. Visit http://www.medmen.com
Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains certain “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. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only MedMen’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of MedMen’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information and forward-looking statements contained herein may include, but are not limited to, information concerning proposed acquisitions in Northern California, Arizona, Illinois and of PharmaCann LLC, expectations regarding whether such proposed acquisitions will be consummated, including whether conditions to the consummation of the proposed acquisitions will be satisfied and whether the proposed acquisitions will be completed on the current terms, the timing for completing the proposed acquisitions, expectations for the effects of the proposed acquisitions (including on the Company’s footprint and asset base) on the ability of the Company to successfully achieve business objectives, and expectations for other economic, business, and/or competitive factors.
By identifying such information and statements in this manner, MedMen is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of MedMen to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, MedMen has made certain assumptions. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: the ability to consummate the proposed acquisitions; the ability to obtain requisite regulatory approvals and third party consents and the satisfaction of other conditions to the consummation of the proposed acquisitions, which could impact closing or closing on the proposed terms and schedule; the potential impact of the announcement or consummation of the proposed acquisitions on relationships, including with regulatory bodies, employees, suppliers, customers and competitors; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; compliance with extensive government regulation; and the diversion of management time on the proposed acquisitions. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.
Although MedMen believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and MedMen does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to MedMen or persons acting on its behalf is expressly qualified in its entirety by this notice.
SOURCE: MedMen Enterprises
| MEDMEN ENTERPRISES INC. | |||||||||||
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | |||||||||||
| AS OF JUNE 30, 2018 AND 2017 | |||||||||||
| (Amounts Expressed in United States Dollars Unless Otherwise Stated) | |||||||||||
| 2018 | 2017 | ||||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash and Cash Equivalents | $ | 79,159,970 | $ | 5,720,026 | |||||||
| Restricted Cash | 6,163,599 | 2,190,067 | |||||||||
| Accounts Receivable | 318,159 | - | |||||||||
| Current Portion of Prepaid Rent - Related Party | 1,898,863 | 1,850,000 | |||||||||
| Prepaid Expenses | 9,387,047 | 689,652 | |||||||||
| Biological Assets | 1,952,580 | - | |||||||||
| Inventory | 6,248,754 | 231,277 | |||||||||
| Other Current Assets | 2,790,772 | 722,962 | |||||||||
| Due from Related Party | 3,509,035 | 2,198,688 | |||||||||
| Total Current Assets | 111,428,779 | 13,602,672 | |||||||||
| Prepaid Rent - Related Party, Net of Current Portion | 2,652,149 | 4,726,012 | |||||||||
| Property and Equipment, Net | 88,748,447 | 10,325,293 | |||||||||
| Intangible Assets, Net | 48,792,757 | 24,626,508 | |||||||||
| Goodwill | 18,165,161 | 6,164,161 | |||||||||
| Other Assets | 12,403,049 | 986,756 | |||||||||
| TOTAL ASSETS | $ | 282,190,342 | $ | 60,431,402 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
| LIABILITIES: | |||||||||||
| Current Liabilities: | |||||||||||
| Accounts Payable and Accrued Liabilities | $ | 18,001,505 | $ | 1,659,550 | |||||||
| Other Current Liabilities | 1,186,148 | 437,755 | |||||||||
| Current Portion of Notes Payable | 52,353,625 | 6,597,806 | |||||||||
| Due to Related Party | 9,858,445 | 5,482,817 | |||||||||
| Total Current Liabilities | 81,399,723 | 14,177,928 | |||||||||
| Notes Payable, Net of Current Portion | 3,593,334 | 12,673,609 | |||||||||
| TOTAL LIABILITIES | 84,993,057 | 26,851,537 | |||||||||
| SHAREHOLDERS’ EQUITY: | |||||||||||
| Subordinate Voting Shares | 129,145,994 | - | |||||||||
| Class A/B/C/D/P Units | - | 18,685,290 | |||||||||
| Additional Paid-In Capital | 47,091,271 | - | |||||||||
| Accumulated Deficit | (66,647,221 | ) | 14,894,575 | ||||||||
| Total Equity Attributable to Shareholders of MedMen | 109,590,044 | 33,579,865 | |||||||||
| Non-Controlling Interest | 87,607,241 | - | |||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 197,197,285 | 33,579,865 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 282,190,342 | $ | 60,431,402 | |||||||
| MEDMEN ENTERPRISES INC. | ||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| FOR THE YEARS ENDED JUNE 30, 2018 AND 2017 | ||||||||||||
| (Amounts Expressed in United States Dollars Unless Otherwise Stated) | ||||||||||||
| 2018 | 2017 | |||||||||||
| Revenue | $ | 39,783,102 | $ | 2,671,812 | ||||||||
| Cost of Goods Sold | 26,653,267 | 1,803,677 | ||||||||||
| Gross Profit Before Fair Value Adjustment | 13,129,835 | 868,135 | ||||||||||
| Unrealized Gain on Changes in Fair Value of Biological Assets | 720,390 | - | ||||||||||
| Gross Profit | 13,850,225 | 868,135 | ||||||||||
| Expenses: | ||||||||||||
| General and Administrative | 98,180,978 | 14,138,166 | ||||||||||
| Sales and Marketing | 7,014,849 | 323,346 | ||||||||||
| Depreciation and Amortization | 5,257,862 | 1,196,103 | ||||||||||
| Total Expenses | 110,453,689 | 15,657,615 | ||||||||||
| Loss from Operations | (96,603,464 | ) | (14,789,480 | ) | ||||||||
| Other Expense (Income): | ||||||||||||
| Interest Expense | 5,312,433 | 512,441 | ||||||||||
| Change in Fair Value of Derivative Liabilities | (2,869,942 | ) | - | |||||||||
| Amortization of Debt Discount | 10,802,358 | - | ||||||||||
| Other Expense | 877,477 | 73,218 | ||||||||||
| Total Other Expense | 14,122,326 | 585,659 | ||||||||||
| Loss Before Provision for Income Taxes | (110,725,790 | ) | (15,375,139 | ) | ||||||||
| Provision for Income Taxes | 1,539,054 | 43,169 | ||||||||||
| Net Loss and Comprehensive Loss | (112,264,844 | ) | (15,418,308 | ) | ||||||||
| Net Loss and Comprehensive Loss Attributable to | ||||||||||||
| Non-Controlling Interest | 45,617,623 | - | ||||||||||
| Net Loss and Comprehensive Loss Attributable to | ||||||||||||
| MedMen Enterprises Inc. | $ | (66,647,221 | ) | $ | (15,418,308 | ) | ||||||
| Earnings (Loss) Per Share - Basic and Diluted | $ | (2.77 | ) | |||||||||
| Attributable to MedMen Enterprises Inc. Shareholders | $ | (1.65 | ) | |||||||||
| Attributable to Non-Controlling Interest | $ | (1.13 | ) | |||||||||
| Weighted-Average Shares Outstanding - Basic and Diluted | 40,480,284 | |||||||||||
| MEDMEN ENTERPRISES INC. | ||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| FOR THE YEARS ENDED JUNE 30, 2018 AND 2017 | ||||||||||||
| (Amounts Expressed in United States Dollars Unless Otherwise Stated) | ||||||||||||
| 2018 | 2017 | |||||||||||
| CASH FLOW FROM OPERATING ACTIVITIES: | ||||||||||||
| Net Loss | $ | (112,264,844 | ) | $ | (15,418,308 | ) | ||||||
| Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||||||||||||
| Depreciation and Amortization | 6,030,947 | 1,641,311 | ||||||||||
| Amortization of Debt Discount | 10,802,358 | - | ||||||||||
| Share-Based Compensation | 31,360,669 | 1,602,422 | ||||||||||
| Change in Fair Value of Derivative Liabilities | (2,869,942 | ) | - | |||||||||
| Write-Off of Intangible Assets | 19,003 | - | ||||||||||
| Issuance to Shareholders of Ladera - Common Shares and Subscription Receipts | 4,899,215 | - | ||||||||||
| Changes in Operating Assets and Liabilities: | ||||||||||||
| Accounts Receivable | (318,159 | ) | - | |||||||||
| Prepaid Rent - Related Party | 2,025,000 | (3,076,012 | ) | |||||||||
| Prepaid Expenses and Other Current Assets | (7,326,261 | ) | (622,877 | ) | ||||||||
| Biological Assets | (720,390 | ) | - | |||||||||
| Inventory | (7,249,667 | ) | (231,277 | ) | ||||||||
| Due from Related Party | 456,102 | (1,752,782 | ) | |||||||||
| Other Assets | (11,226,093 | ) | (512,271 | ) | ||||||||
| Accounts Payable and Accrued Liabilities | 15,685,561 | (568,831 | ) | |||||||||
| Other Current Liabilities | (789,193 | ) | - | |||||||||
| Due to Related Party | 2,609,179 | 786,274 | ||||||||||
| NET CASH USED IN OPERATING ACTIVITIES | (68,876,515 | ) | (18,152,351 | ) | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
| Purchases of Property and Equipment | (59,589,669 | ) | (6,224,959 | ) | ||||||||
| Purchase of License from Advanced Patients' Collective | - | (4,000,000 | ) | |||||||||
| Purchase of Management Agreement | (3,999,999 | ) | - | |||||||||
| Acquisition of Businesses, Net of Cash Acquired | (28,425,000 | ) | (31,394,678 | ) | ||||||||
| Restricted Cash | (3,973,532 | ) | (2,190,067 | ) | ||||||||
| NET CASH USED IN INVESTING ACTIVITIES | (95,988,200 | ) | (43,809,704 | ) | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
| Private Placement in Connection with Reverse Take-Over | 101,802,288 | - | ||||||||||
| Issuance of MM CAN USA, Inc. Class B Shares for Exercise of MedMen Corp Warrants | 1,289,010 | - | ||||||||||
| Contributions from Members | 21,904,035 | 34,882,972 | ||||||||||
| MM Enterprises USA, LLC Formation and Rollup | 5,206,023 | - | ||||||||||
| Proceeds from Issuance of Notes Payable | 75,283,358 | 26,815,122 | ||||||||||
| Principal Repayments of Notes Payable | (23,363,562 | ) | (7,040,895 | ) | ||||||||
| Debt Issuance Costs | - | (375,000 | ) | |||||||||
| Non-Brokered Private Placement | 36,011,152 | - | ||||||||||
| Cash Received from Issuance of Class C Units | - | 1,086,431 | ||||||||||
| Cash Received from Issuance of Class D Units | 9,850,000 | 6,150,000 | ||||||||||
| Loans from Related Parties | - | 4,413,964 | ||||||||||
| Contributions - Non-Controlling Interest | 10,322,355 | - | ||||||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 238,304,659 | 65,932,594 | ||||||||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 73,439,944 | 3,970,539 | ||||||||||
| Cash and Cash Equivalents, Beginning of Year | 5,720,026 | 1,749,487 | ||||||||||
| CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 79,159,970 | $ | 5,720,026 | ||||||||
| CASH PAID DURING PERIOD FOR: | ||||||||||||
| Interest | $ | 3,861,548 | $ | 273,650 | ||||||||
| OTHER NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||||||
| Net Assets Acquired through Management Agreement | $ | 4,690,506 | $ | - | ||||||||
| Derivative Liability Incurred on Issuance of Debt | $ | 16,112,880 | $ | - | ||||||||
| Derivative Liability Converted to Equity | $ | 13,242,938 | $ | - | ||||||||
| Debt Discount Recognized Upon Issuance of Warrants | $ | 1,771,711 | $ | - | ||||||||
| Conversion of Convertible Notes into Equity | $ | 32,052,363 | $ | 4,829,031 | ||||||||
| Issuance of Note Payable Related to Purchase of Management Agreement | $ | 2,000,000 | $ | - | ||||||||
| Issuance of Notes Payable Related to Purchase of Property and Equipment | $ | 15,905,000 | $ | - | ||||||||
| Issuance of Members' Equity in Exchange for Prepaid Rent | $ | - | $ | 3,500,000 | ||||||||
| MEDMEN ENTERPRISES INC. | ||||||||||||||||||||||
| RECONCILIATION FOR NON-IFRS FINANCIAL MEASURES | ||||||||||||||||||||||
| (Amounts Expressed in United States Dollars Unless Otherwise Stated) | ||||||||||||||||||||||
| Year-Ended June 30, | Quarter-Ended June 30, | |||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
| Total Net Income (Loss) (IFRS) | ($112,264,843 | ) | ($15,418,308 | ) | ($78,739,439 | ) | ($7,347,872 | ) | ||||||||||||||
| Add (Deduct) Impact of: | ||||||||||||||||||||||
| Transaction Costs | $ | 9,203,143 | $ | 2,328,840 | $ | 5,099,137 | ($5,053 | ) | ||||||||||||||
| Share-Based Compensation | $ | 31,360,669 | $ | 1,602,422 | $ | 30,820,753 | $ | 1,156,127 | ||||||||||||||
| Other Non-Cash Operating Costs | $ | 890,000 | $ | 0 | $ | 890,000 | $ | 0 | ||||||||||||||
| Total Adjustments | $ | 41,453,812 | $ | 3,931,262 | $ | 36,809,890 | $ | 1,151,074 | ||||||||||||||
| Total Adjusted Net Loss (Non-IFRS) | ($70,811,031 | ) | ($11,487,046 | ) | ($41,929,550 | ) | ($6,196,798 | ) | ||||||||||||||
| Total Net Income (Loss) (IFRS) | ($112,264,843 | ) | ($15,418,308 | ) | ($78,739,439 | ) | ($7,347,872 | ) | ||||||||||||||
| Add (Deduct) Impact of: | ||||||||||||||||||||||
| Net Interest and Other Financing Costs | $ | 5,312,434 | $ | 512,444 | $ | 3,283,296 | $ | 415,945 | ||||||||||||||
| Income Tax Expense (Recovery) | $ | 1,539,053 | $ | 43,169 | $ | 674,820 | $ | 43,169 | ||||||||||||||
| Amortization and Depreciation | $ | 16,833,303 | $ | 1,641,311 | $ | 13,339,503 | $ | 1,601,588 | ||||||||||||||
| Total Adjustments | $ | 23,684,790 | $ | 2,196,924 | $ | 17,297,619 | $ | 2,060,702 | ||||||||||||||
| TOTAL EBITDA (Non-IFRS) | ($88,580,053 | ) | ($13,221,384 | ) | ($61,441,821 | ) | ($5,287,170 | ) | ||||||||||||||
| TOTAL EBITDA (Non-IFRS) | ($88,580,053 | ) | ($13,221,384 | ) | ($61,441,821 | ) | ($5,287,170 | ) | ||||||||||||||
| Add (Deduct) Impact of: | ||||||||||||||||||||||
| Transaction Costs | $ | 9,203,143 | $ | 2,328,840 | $ | 5,099,137 | ($5,053 | ) | ||||||||||||||
| Share-Based Compensation | $ | 31,360,669 | $ | 1,602,422 | $ | 30,820,753 | $ | 1,156,127 | ||||||||||||||
| Other Non-Cash Operating Costs | $ | 890,000 | $ | 0 | $ | 890,000 | $ | 0 | ||||||||||||||
| Total Adjustments | $ | 41,453,812 | $ | 3,931,262 | $ | 36,809,890 | $ | 1,151,074 | ||||||||||||||
| Total Adjusted EBITDA (Non-IFRS) | ($47,126,241 | ) | ($9,290,122 | ) | ($24,631,931 | ) | ($4,136,096 | ) | ||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181025005380/en/
MedMen Enterprises Inc.
OFFICER:
Adam Bierman, 855-292-8399
Chief Executive Officer
info@medmen.com
or
MEDIA CONTACT:
Briana Chester, 424-888-4260
Senior Publicist
briana.chester@medmen.com
or
INVESTOR RELATIONS CONTACT:
Stéphanie Van Hassel, 323-705-3025
Head of Investor Relations
investors@medmen.com
