MONTREAL, March 01, 2019 (GLOBE NEWSWIRE) -- Relevium Technologies Inc. (TSX.V:“RLV”, OTCQB:“RLLVF” and Frankfurt: “6BX”) (the “Company” or “Relevium”), is pleased to report second quarter results for fiscal 2019.
Financial highlights for the second quarter of 2019
During the second quarter ended December 2018, the Company’s revenue bounced back to $1,006,501 as compared to $968,474 in the second quarter of fiscal 2018. The Company also reported quarter-over-quarter increase in revenues from $985,051 reported for the first quarter of fiscal 2019.
Gross margin decreased by three percentage points primarily due to changes in the product mix.
Total expenses for the period were $1,571,558 an increase of 5% as compared $1,500,829 in the second quarter of 2018. The Company’s selling and marketing expenses increased to $569,150 for the quarter as compared to 302,580 in the comparable period primarily driven by market and product launches and higher digital advertising costs.
Total liabilities as at December 31, 2018 were $2,924,457 as compared to 3,468,499 as at June 30, 2018. The decrease was primarily the result of the conversion of the remaining $1,350,000 of the outstanding convertible debentures into commons shares at a strike price of $0.15. This amount was offset by an increase in the warrant liability to $343,500 from $109,500 as at June 30, 2018.
Working capital (current assets – current liabilities) increased to a surplus of $934,306 as compared to a working capital deficiency of 532,187 as at June 30, 2018.
The Company reported a net loss of $1,016,951 for the second quarter as compared to $904,565 in the comparable period last year.
Business and Corporate Development Highlights
During the reporting period BGX launched 30 new Bioganix® Gold Series products, which are offered exclusively to Walmart shoppers. The Company’s strategy includes increased brand recognition, marketplace visibility through increased market offerings, all of which are expected to generate new revenue streams from a completely new consumer audience.
The Company, through its wholly-owned subsidiary Biocannabix Health Corp., announced the acquisition of an exclusive Canadian license to Cannakids®, a pediatric focused line of medical cannabis formulations. The Company is waiting for final approval by the TSX Venture Exchange and expects to begin the process of building the business infrastructure to educate, obtain approvals, commercialize and conduct research during the 2019 year.
Financial highlights for the six-month period ended December 31, 2018
During the first six months of fiscal 2019 the Company reported revenues of $1,991,552 as compared to $2,121,468 last year. The decrease is primarily the result of changes in the product mix and lower conversions in the Amazon platform relating to changes in search algorithms and the marketing mix.
Total expenses for the reporting period were $2,748,132 as compared to $2,263,386 last year. The increase is primarily due to higher in sales and marketing expenses of $407,726 and changes in the fair value of warrants of $234,000.
The Company reported a net loss of $1,654,824 for the six-month period ended December 31, 2018 as compared to $1,032,341 for the comparable period last year.
The most significant drivers of Relevium’s revenue growth over the next twelve to eighteen months will be the Company's scale-up of new revenue streams from the Company’s expansion into nutri-cosmeceutical direct response sales, evidence-based and benefit focused nutraceutical products sold through social media and direct response channels.
Subject to the clarification of legislation for CBD as a supplement in Europe and the US, management expects to be in a position to fully commercialize its new LeefyLyfeTM formulations and become an important source of revenues for the Company.
The Company anticipates that Biocannabix Health Corp. will establish this year the necessary commercial, educational and research infrastructure in Canada to enable the commercialization of its pediatric licensed brand Cannakids®.
Ongoing disciplined cost management is expected to result in SG&A costs growing modestly as compared to revenue growth over the remainder of the fiscal year.
Management believes that the combination of new revenue streams and disciplined operating cost structure will position the Company to achieve sustained positive results for fiscal Q4 2019.
About Relevium Technologies
Relevium is a publicly-traded company that operates in the health and wellness industry, including legal cannabis, with a primary focus on online distribution. The principal business of the Company is the identification, evaluation, acquisition and operations of brands and businesses in the Health and Wellness markets and medical cannabis. The Company pursues its business strategy through an acquisition and partnership model in a holistic approach to encompass a wide range of health and wellness consumer products.
Relevium operates through two wholly-owned subsidiaries:
BGX E-Health LLC (BGX): Based in Orlando, Florida, BGX markets dietary supplements, nutraceuticals, sports nutrition and cosmeceuticals primarily through its Bioganix® brand portfolio in the US and Europe. Relevium’s brands such as Bioganix® are sold at some of the world’s largest retailers including such as Walmart.com and Amazon.com.
The Company’s strategy for growing its brands includes expanding its product offering, adding new distribution channels and developing partnerships that add value through exclusive ingredients. BGX is currently testing a complete line of dietary supplements derived from Cannabis with an initial focus on hemp derived, whole plant organic extract rich in CBD (cannabidiol). The product line will be marketed through its brand LeefyLyfe® and will be sold first in Europe and then North America. The Company uses cannabinoids and ingredients that have achieved GRAS status (generally accepted as safe) to create brands that are sold via wholesale channels, retail channels and online distribution.
Biocannabix Health Corporation (BCX): Based in Montreal, Quebec, BCX is an entrepreneurial venture to establish a vertically integrated medical cannabis company in the Nutraceutical space. Located in the city of Saint Laurent, the Company is in the process of licensing and retrofitting a facility that will host a genetically focused cannabis growth, extraction, formulation, research and development and encapsulation of proprietary Nutraceutical and Medical products.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
This release includes certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws. All statements in this news release, other than statements of historical facts, including statements regarding future estimates, plans, objectives, assumptions or expectations of future performance, including the timing and completion of the proposed acquisitions, are forward-looking statements and contain forward-looking information. Generally, forward- looking statements and information can be identified by the use of forward-looking terminology such as "intends" or "anticipates", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would" or "occur". Forward-looking statements are based on certain material assumptions and analysis made by the Company and the opinions and estimates of management as of the date of this press release, including the assumptions that the Company will be able to apply for and ultimately obtain an ACMPR licence, the proposed business of Biocannabix will develop as anticipated, that the Company will raise sufficient funds to develop the Biocannabix business, and that the Company will obtain all requisite regulatory approvals. These forward-looking 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 the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information. Important factors that may cause actual results to vary, include, without limitation, the risk that the proposed business developments may not occur as planned; the timing and receipt of requisite approvals and failure to raise sufficient funds.
Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or 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 statements 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 statements and forward-looking information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statement, forward-looking information or financial outlook that are incorporated by reference herein, except in accordance with applicable securities laws. We seek safe harbor.
On Behalf of the Board of Directors
RELEVIUM TECHNOLOGIES INC.
President and CEO
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