(all amounts expressed in Canadian dollars unless otherwise stated)
For the quarter, the Company’s German reportable segment achieved revenues of $11.9 million, gross profit of $0.7 million and net income of $0.2 million.
For the year-to-date period, the Company’s German reportable segment achieved revenues of $42.0 million, gross profit of $2.8 million and net income of $0.6 million.
VANCOUVER, BC, Nov. 29, 2022 /CNW/ – Franchise Global Health Inc. (“Franchise Global” or the “Company“) (TSXV: FGH) (FRA: WV4A) is pleased to announce its results for the third quarter of 2022.
Clifford Starke, Executive Chairman and Chief Executive Officer of Franchise Global, stated, “The third quarter was catalyst-rich for Franchise Global. We entered into an arrangement agreement with Flora Growth Corp. (“Flora”) (NASDAQ: FLGC) for Flora to acquire the Company, and the German government announced definitive plans to legalize recreational cannabis.”
Mr. Starke continued, “Sales in the quarter of $11.9 million and $42.0 million year-to-date speak to our potential in Germany. We remain attentive to regulatory developments in the country as the legalization mandate is solidified. We are ready for the road ahead.”
Mr. Starke concluded, “We are excited about our partnership with Flora. We are eager to create synergies and form a formidable player in the European market.”
FINANCIAL AND OPERATING HIGHLIGHTS FOR THE QUARTER
Revenues of $11.9 million, an increase of $11.7 million from the third quarter of 2021.
Gross profit of $0.7 million, an increase of $0.8 million from the third quarter of 2021.
Net loss of $3.2 million compared to $3.1 million in the third quarter of 2021.
The Company’s German reportable segment achieved net income of $0.2 million.
FINANCIAL AND OPERATING HIGHLIGHTS FOR THE YEAR-TO-DATE
Revenues of $42.0 million, an increase of $41.1 million from the comparative period of 2021.
Gross profit of $2.8 million, an increase of $2.6 million from the comparative period of 2021.
Net loss of $21.3 million. Excluding one-time listing expenses of $15.6 million, share-based compensation of $1.0 million and impairment expense of $0.8 million, net loss was $3.9 million.
The Company’s German reportable segment achieved net income of $0.6 million.
THIRD QUARTER 2022 FINANCIAL RESULTS
Revenues increased from $0.2 million in the third quarter of 2021 to $11.9 million in the third quarter of 2022. The increase is primarily due to the acquisition of Phatebo GmbH (“Phatebo”), which contributed $11.7 million to revenues in the third quarter of 2022. The Company acquired 100% of Phatebo on December 31, 2021.
Gross profit for the third quarter of 2022 was $0.7 million, up $0.8 million from a gross loss of $0.1 million for the same period in the prior year.
Net loss for the third quarter of 2022 was $3.2 million. Excluding corporate costs and other reportable segments, the Company’s German reportable segment achieved net income of $0.2 million.
After the close of markets on October 21, 2022, Flora and Franchise Global entered into an arrangement agreement (the “Arrangement Agreement”) pursuant to which Flora agreed to acquire all the issued and outstanding common shares of Franchise Global by way of a statutory plan of arrangement under the Business Corporations Act (British Columbia) (the “Arrangement“). Full details of the Arrangement are set out in the Arrangement Agreement, a copy of which has been filed by Franchise Global under its profile on SEDAR at www.sedar.com. In addition, further information regarding the Arrangement is contained in the management information circular of the Company dated November 14, 2022 (the “Circular”) in connection with the Special Meeting, a copy of which has been filed and is available under the Company’s profile on SEDAR at www.sedar.com. All shareholders of the Company are urged to read the Circular as it contains additional important information concerning the Arrangement.
The Company previously announced that it had obtained voting and support agreements from all of the directors and officers and certain shareholders of the Company who, collectively, own, control or direct over 73% of the issued and outstanding common shares of the Company. While voting and support agreements represent legally binding obligations to vote in favour of the Arrangement at the Company’s special meeting of shareholders (the “Special Meeting”), entering into a voting and support agreement is not a substitute for formally voting, in person or by proxy. All shareholders are encouraged to vote in person or by proxy at the Special Meeting to be held on December 13, 2022.
None of the securities to be issued pursuant to the Arrangement have been or will be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and any securities issuable pursuant to the Arrangement are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities.
About Flora Growth Corp.
Flora is building a connected, design-led collective of plant-based wellness and lifestyle brands, designed to deliver the most compelling customer experiences in the world, one community at a time. As the operator of one of the largest outdoor cannabis cultivation facilities, Flora leverages natural, cost-effective cultivation practices to supply cannabis derivatives to its commercial, house of brands, and life sciences divisions. Visit www.floragrowth.com or follow @floragrowthcorp on social media for more information.
About Franchise Global
Franchise Global Health Inc., through its subsidiaries, is a multi-national operator in the medical cannabis and pharmaceutical industries, with principal operations in Germany and with operations, assets, strategic partnerships and investments internationally. The Company’s business objective is to develop a fully integrated, leading European medical cannabis business, with the goal of providing high-quality pharmaceutical grade medical cannabis to distribution partners and, ultimately, to patients, at competitive prices. For more information, please visit www.franchiseglobalhealth.com or visit the Company’s SEDAR profile at www.sedar.com.
Cautionary Statement Regarding Forward-Looking Information
This news release contains “forward-looking information” within the meaning of applicable securities laws. Often, but not always, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or statements formed in the future tense or indicating that certain actions, events or results “may”, “could”, “would”, “might” or “will” (or other variations of the foregoing) be taken, occur, be achieved, or come to pass. Forward-looking information in this news release includes, without limitation, statements with respect to the completion of the Arrangement on the current terms thereof; the reasons to support the Arrangement; the Special Meeting expected to take place on December 13, 2022; and the percentage of common shares of the Company expected to vote in favour of the Arrangement at the Special Meeting.
Forward-looking information is based upon estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, and information currently available to them (including information obtained from third party industry analysts and other third-party sources), as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this news release including, without limitation, assumptions with respect to the Arrangement being completed on the timelines and on the terms currently anticipated; all necessary shareholder, court and regulatory approvals being obtained on the timelines and in the manner currently anticipated; the anticipated benefits of the Arrangement; the business and operations of the Company; and the ability of the Company to successfully implement its strategic plans and initiatives and whether such strategic plans and initiatives will yield the expected benefits.
While the Company considers these assumptions to be reasonable, the assumptions are inherently subject to significant business, social, economic, political, regulatory, competitive and other risks and uncertainties, contingencies and other factors that could cause action actions, events, conditions, results, performance or achievements to be materially different from those projected in the forward-looking information. Many assumptions are based on factors and events that are not within the control of the Company and there is no assurance they will prove to be correct. Actual results could differ materially from those currently anticipated due to a number of factors and risks including, without limitation, the risk that the Arrangement is not completed as anticipated or at all, including the timing thereof, and if completed, that the benefits thereof will not be as anticipated; the risk that the shareholder, court or regulatory approvals are not obtained as anticipated or at all, and the timing thereof; the risk that the conditions to closing of the Arrangement are not satisfied or waived; risks associated with general economic conditions; adverse industry events; and the ability of management to execute its business strategy, objectives and plans. Although the Company has attempted to identify important factors that could cause actual actions, events, conditions, results, performance or achievements to differ materially from those described in forward-looking information, there may be other factors that cause actions, events, conditions, results, performance or achievements to differ from those anticipated, estimated or intended. For further information of these and other risk factors, please see the “Risk Factors” section of the Company’s filing statement dated March 9, 2022, available on SEDAR at www.sedar.com. Readers are cautioned to not place undue reliance on forward-looking information. Any and all forward-looking information contained in this news release is expressly qualified by this cautionary statement, and the Company undertakes no obligation, and does not intend, to update any forward-looking information contained in this news release, whether as a result of new information, future developments, or otherwise, except as otherwise required by applicable law.
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 PRESS RELEASE.
SOURCE Franchise Global Health Inc.
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