Radient Technologies Inc. Reports Record Revenue and Record Gross Profit for the Third Quarter of Fiscal 2020
February 28, 2020
Revenues of $11.2 Million in Fiscal Q3 2020, an Increase of 805% over the Previous Fiscal Quarter
EDMONTON, Alberta, Feb. 28, 2020 (GLOBE NEWSWIRE) -- Radient Technologies Inc. (“Radient” or the “Company”) (TSX Venture: RTI; OTCQX: RDDTF), a global commercial manufacturer of high quality cannabinoid-based ingredients, formulations and products, is pleased to report its financial results for the third quarter of its fiscal year 2020, ended December 31, 2019. The financial statements and Management’s Discussion & Analysis are available under the Company’s profile at www.SEDAR.com.
Key Financial Highlights - Fiscal Q3 2020:
Revenues of $11,205,961, an increase of 805% over fiscal Q2 2020.
Gross profit of $1.48 million, an increase of 966% over fiscal Q2 2020.
Significant inventory of dried cannabis: $17.4 million as at December 31, 2019, for future production.
“We are extremely pleased with this quarter’s financial results,” said Denis Taschuk, President & CEO of Radient. “This is the beginning of a significant growth period in which Radient will be embarking on a product commercialization phase. Our investment into technology, process and product development is ready to be leveraged into new product categories and expanded client relationships. Additionally, we will be ramping up operations in order to meet the demands of our current and future partners. We will also increase our ‘Cannabis 2.0’ product manufacturing capabilities in Canada, and enter the European market via the buildout of our facility in Germany. We expect this expansion in operational capacity, coupled with our ability to create novel products using our proprietary extraction and processing technology, to allow us to significantly increase our margins moving forward. Simultaneously, we will be focused on lowering expenditures and improving operating efficiency as we continue to grow.”
Corporate Highlights - Fiscal Q3 2020 and Post-Reporting:
Supply Agreement with Medical Cannabis by Shoppers, a Subsidiary of Shoppers Drug Mart Inc:
On February 11, 2020 Radient announced it had entered into a Supply Agreement with Medical Cannabis by Shoppers, the online medical cannabis platform of leading Canadian pharmacy retailer Shoppers Drug Mart Inc., for an initial three-year term and subject to future renewal.
Under the terms of the Supply Agreement, Radient will utilize its proprietary extraction and downstream processing platform to create a variety of cannabinoid formulations under a brand that will be sold exclusively to patients of Medical Cannabis by Shoppers.
Partnership to Develop CBD Ingredients with The Edlong Corporation:
On October 22, 2019, the Company entered into a Memorandum of Understanding to form a strategic joint arrangement with The Edlong Corporation (“Edlong”) to jointly create and market CBD flavour systems and product solutions for global food, beverage and pet food industries. Edlong has over 100 years of experience as a global manufacturer, marketer and provider of technology-driven natural flavour systems, ingredients and integrated solutions for the food and beverage industry.
Increased Working Capital:
Sale-Leaseback and Equipment Financing:
On January 14, 2020, the Company announced it had signed a Binding Letter of Intent for a Sale-Leaseback transaction in which 2238501 Alberta Ltd. would purchase from Radient the land and buildings comprising the Company’s Edmonton I, II, and III facilities for a total of $20 million. Please review the Company’s press release dated January 14, 2020 for further details of this transaction.
Up to $15.4 million in Debenture Financings:
On February 10, 2020, Radient announced a financing package totaling up to $15,400,000 through the issuance of up to $10.4 million unsecured convertible notes and up to $5 million of unsecured debentures. Please read the Company’s press release dated February 10, 2020 for further details of this Financing.
Commercialization of New Cannabinoid Ingredients and Formulations:
Leveraging its extensive natural health product formulation expertise, Radient’s product development team has created a broad range of proprietary cannabinoid-based product formulations for both medical and consumer markets. Attention has been given to the development of formulations that demonstrate evidence-backed physico-chemical stability, ensuring the highest quality and dosing consistency of final forms that will fully meet the industry’s current strict regulatory framework. Examples include: cannabis tinctures; water-soluble and water-dispersible formulations for beverage applications; solid and liquid forms suitable for a wide range of cannabis edible products; standardized powders for tablets, capsules, sachets and lozenges; formulated liquids for vaporizing devices; and various topical formulations including creams, ointments, lotions and gels. Radient will be bringing these formulations to its customers over the coming months.
Expanding Product Development at Edmonton I Facility:
In response to the increasing market demand for products such as resins and distillates, Radient is adding additional equipment to complement current extraction and processing operations at its Edmonton I facility. This additional equipment will increase evaporation capacity, facilitating the production of such products and increasing Radient’s product pipeline.
Flexible Capacity - Edmonton II Facility:
Radient’s Edmonton II Facility, which the Company has been retrofitting to accommodate the extraction and downstream processing of CBD from hemp, is still awaiting a license amendment from Health Canada and is now expected to begin commercial operations in the second half of calendar 2020. In the interim, the Company has the ability to process hemp through the Edmonton I facility and is able to take advantage of any commercial opportunities using the existing extraction line. The Edmonton II facility has the flexibility to utilize hemp or cannabis as an input material. Radient will leverage the flexibility of its extraction platform to allocate production runs to the most economic production of high quality cannabinoid extracts.
Expanded Product Pipeline and Manufacturing Capabilities: - Edmonton III Facility:
Radient’s Edmonton III facility, currently under construction, is expected to begin operations in the second half of calendar 2020. The Edmonton III facility will be approximately 89,000 square feet of purpose built space dedicated to cannabinoid extraction, purification, isolation, and product manufacturing. The facility is adjacent to the existing Edmonton production facilities and has been designed with a flexible footprint, allowing Radient to scale its extraction capabilities along with housing multiple production lines for white label production of formulated products. Edmonton III will combine Radient’s large-scale proprietary extraction platform with scientifically derived product development and extensive manufacturing capabilities.
Expansion into Germany:
Radient’s Germany facility has been designed with the same flexibility and potential scale as its Edmonton III facility. Development work is being done in phases to align with market demand and the regulatory framework in Germany and the rest of Europe. This measured development will reduce the capital expenditures needed in the near term, while maintaining Radient’s strategic advantage of building an EU GMP compliant extraction facility inside of Europe’s largest legal medical cannabis market. The Company now expects initial commissioning of its Germany facility to occur in the first half of calendar 2021.
Shares for Services During Fiscal Q3 2020:
The Company issued common shares to third-party consultants for services provided, pursuant to the shares for service agreement previously approved by the TSX Venture Exchange. The common shares were issued at the TSX Venture Exchange 15-day VWAP share price as follows:
October: 143,173 common shares at CAD $0.58.
November: 190,257 common shares at CAD $0.44.
December: 209,308 common shares at CAD $0.40.
Shares for Debt - Fiscal Q3 2020:
Subsequent to the Company’s proposed shares-for-debt transaction announcement dated December 13, 2019, the TSXV accepted the Company’s proposal to issue 192,907 common shares at a price of CAD $0.41 per share to an arm’s length third party creditor of the Company, to settle outstanding debt of USD $60,000.
Radient also announces today the grant of 500,000 incentive stock options to two directors of the Company, pursuant to the Company’s Stock Option plan. The options are exercisable for a period of 5 years at a price of $0.365 per share.
About Radient Radient Technologies is a commercial manufacturer of high quality cannabinoid based formulations, ingredients and products. Utilizing a proprietary continuous-flow extraction and processing platform that recovers up to 99% of cannabinoids from the cannabis plant, Radient develops specialty products and ingredients that contain a broad range of cannabinoid and terpene profiles while meeting the highest standards of quality and safety. Please visit www.radientinc.com for more information.
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, without limitation, statements regarding the growth of the Company’s business operations; the construction of the Company’s facilities; the Company’s future revenues and timing of such revenues; the Company’s future products and formulations; the Company’s ability to sell its products and attract new customers; the impact of the supply agreement with Medical Cannabis by Shoppers; the MOU with The Edlong Corporation; the Company’s ability to raise additional capital; the future recovery and quality of the Company’s extracts; the Company’s ability to expand its business internationally; the Company’s ability to grow its business in the cannabis sector and the Company’s future plans. Generally, forward-looking information 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 state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Radient, as the case may be, to be materially different from those expressed or implied by such forward-looking information. Although Radient has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Radient does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
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 RELEASE.