Yield Growth Reports Revenue of $800,714 in First Quarter Financial Results and Provides Operational Update
April 29th, 2019
VANCOUVER, British Columbia, April 26, 2019 (GLOBE NEWSWIRE) — The Yield Growth Corp. (CSE:BOSS) (OTC:BOSQF) (Frankfurt: YG3) on a consolidated basis (the “Company”, “us”, “we”) provides an operational update and releases financial and operational results for the first quarter ended February 28, 2019. These filings are available for review on the Company’s SEDAR profile at www.sedar.com.
We have made significant achievements in building our brand assets and we are well positioned for future growth with a comprehensive line up of our hemp and cannabis infused products.
Currently we own 100% of the following brand assets:
This is our flagship brand, a unisex skin and personal care line with hemp root extract as its main ingredient. We currently have 11 products on the market, being sold in the US and Canada through e-commerce and through retail stores in Canada. Over 70 retail stores in Canada have agreed to carry the line, and we are now signing retailers in the United States (the “US”). We are launching our products in Asia this spring, starting with e-commerce set up on Chinese messaging and mobile payment application WeChat. Urban Juve has been well received by the press since its launch in Q1, with positive write ups in Elle Canada Magazine, Zoomer and The Growth Op. Our Anti-aging serum made it into this year’s pre-Oscar event bags.
In addition to acquiring wellness formulas for body care, facial care and therapeutic products, we have also developed products through our in-house research and development team. To date we have filed 11 provisional patent applications in the US and one Patent Co-operation Treaty patent application which can be used as a basis for obtaining patent protection in over 170 countries. Our extraction technology is designed to preserve potentially therapeutic compounds in the cannabis root and enhance penetration into the skin.
Urban Juve is a bold brand rooted in the organic synthesis of ancient knowledge and modern techniques to create exceptional beauty and wellness solutions. Ayurvedic knowledge delineates three general categories or skin types, which Urban Juve has translated as Vitalize, Balance and Align, each with its own dedicated range of skin and body care formulations.
Urban Juve is in planning to launch over 30 additional products over the next year and these include: 3 Lip glosses, 3 body exfoliants, 3 facial masks, cream facial cleanser, Facial Cleansing Pads, micellar water, eye cream, 2 facial oils, deodorant, foot cream, a full men’s line and essential oil blends.
Wright & Well™
Wright & Well is our cannabis wellness brand that will be launching in Oregon, US in Q2 or Q3 2019. The products are intended to help relieve pain and anxiety. The initial nine products include analgesic topical gel with tetrahydrocannabinol (“THC”) and Cannabidiol (“CBD”), THC and CBD oils, pain balm with THC and CBD, massage oil with THC and CBD, and three types of capsules containing THC and Ayurvedic herbal formulations, blended with ingredients that have historically been used to treat arthritis and chronic pain.
Wright & Well branded products will be launching in the legal cannabis market in Oregon and will serve the growing number of wellness-minded people seeking new ways to take control of their health. Sophisticated, familiar and intelligent, the new brand aims to demystify the world of cannabis and make it more accessible for a wider audience.
We intend to license our brand and provide our formulas and packaging, as well as point of sales materials, to licensed cannabis manufacturers, distributors and retailers in various jurisdictions. We currently have discussions with cannabis license holders in the State of Washington, Nevada, California, New York, as well as Canada and other countries. Our plan is to roll out our brand internationally, one territory at a time.
We are developing a line of products for cannabidiol infusion with the primary target market being the US. With the adoption of the Farm Bill into law in late 2018, topical products containing CBD are now federally legal in the US, subject to state law and compliance with the FDA. We have engaged New York marketing agency The Design Spot to create a brand identity and initial packaging design for this CBD product line. The design spot is a design and branding company located in the heart of New York City with a team of award-winning designers and with a portfolio that includes L’Oreal, Revlon and Dove. Mad Wallaby has been set up as a California corporation and our intention is to use it to distribute our brands in the US.
We currently have a line of 8 fruit beverages in development and we have 10 tea formulas in our catalogue. The fruit beverage formulations were developed in India and are based on Ayurvedic medicine using botanicals, fruit extracts and natural botanical extracts, including hemp extracts. The main beverages are good on their own and can also be infused with cannabinoids such as CBD and THC. The formulas have been developed to offer various health benefits, including an energy boost, hangover treatment, brain function boost, anxiety reduction, improved immunity, toxin removal and reduced inflammation.
We have completed the taste profiling on the 8 fruit beverages and we are now in negotiations with several beverage manufacturers to complete stability testing and manufacture the drinks. One of the key ingredients in all of these beverages is cannabis leaf extract, which we produce using our patent pending sonic and nano emulsion technology. We are engaged in developing the brand and packaging for a hemp version and a cannabis version of our beverage line.
We realized revenue of $800,714 for the three months ended February 28, 2019 as compared to $1,808,813 for the same period of the prior year. The decline in revenues was primarily due to a consulting contract in the prior year which generated revenue of $1,800,000 as a one-time revenue. Licensing revenues are primarily driven by licensing contracts which do not have a pattern in timing. We expect to continue to generate licensing revenues for years to come but the timing of the licensing revenue is mainly determined by the timing of such contracts.
We launched our first product sales in this Quarter, with our lip balm launching in December, 2018, our anti-aging serum in January 2019 and our 3 moisturizers launching near the end of the of the quarter in February 2019. The revenues for our products sales increased by 85% from the first month in the quarter to the third month. Since our financial quarter ended February 28, 2019, we have launched 6 more Urban Juve products, bringing the total number of SKUs for sale to 11.
We anticipate launching 9 new products through the Wright and Well brand in Q2 and Q3, and with our aggressive marketing and sales efforts we expect our product revenues to increase substantially in Q2 and Q3.
We incurred a net loss of $3,789,780 for the three months ended February 28, 2019 as compared to $638,347 for the same period of the prior year. The increase in loss was primarily driven by a decrease in licensing revenues and increased expenses. We incurred significant marketing expenses, which included marketing and packaging design for our brands with over 200 products in development, new websites in development for Urban Juve and Yield Growth launching in Q2, point of sales materials for our products, sales and educational materials to sign up retailers and support them in retail sales, preparation and attendance at cannabis focused events such as LIFT, social media, programmatic advertising, influencer programs, publicists, investor events, investor relations and digital marketing. We went public on stock exchanges in 3 countries in Q1 – including the CSE in Canada in December, the OTCQB in the United States in January and The Frankfurt Stock exchange in Germany in February, requiring significant investment into market awareness to launch into those markets
As at February 28, 2019, we had cash of $3.7 million.
The Company is authorized to issue an unlimited number of common shares. As at February 28, 2019, there were 87,054,140 common shares issued and outstanding. The Company also had 30,402,976 share purchase warrants with weighted average exercise price of $0.99 and 11,043,500 stock options with weighted average exercise price of $0.34.
The Company’s objective is to maintain a strong capital base to support the development of the business including the commercialization of 200 hemp and cannabis products through our existing brands and through licensing and continued development of our omnichannel international distribution platform.
About The Yield Growth Corp.
The Yield Growth Corp. develops, manufactures and distributes cannabis and hemp infused luxury product brands Urban Juve and Wright & Well and has a catalogue of over 200 wellness and beauty products in development. It intends to disrupt the international wellness market, which is a $4.2 Trillion Global Economy, according to the Global Wellness Institute, by connecting ancient healing with modern science and technology. Its management team has deep experience with global brands including Johnson & Johnson, Procter & Gamble, M·A·C Cosmetics, Skechers, Best Buy, Aritzia, Coca-Cola and Pepsi Corporation. Yield Growth serves mainstream luxury consumers who seek sophisticated wellness products. Its flagship consumer brand, Urban Juve, has proprietary, patent-pending hemp root oil extraction technology and formulas. Yield Growth is building sophisticated international distribution channels and has multiple revenue streams including licensing, services and product sales.
Investor Relations Contacts:
Penny Green, President & CEO
Kristina Pillon, Investor Relations
The Canadian Securities Exchange has not reviewed, approved or disapproved the content of this news release.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking information and statements (collectively, “forward looking statements”) under applicable Canadian securities legislation. Forward-looking statements are necessarily based upon a number of estimates, forecasts, beliefs and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to: risks related to the development, testing, licensing, intellectual property protection, and sale of, and demand for, Urban Juve and UJ Topicals products, general business, economic, competitive, political and social uncertainties, delay or failure to receive board or regulatory approvals where applicable, and the state of the capital markets. Yield Growth cautions readers not to place undue reliance on forward-looking statements provided by Yield Growth, as such forward-looking statements are not a guarantee of future results or performance and actual results may differ materially. The forward-looking statements contained in this press release are made as of the date of this press release, and Yield Growth expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.
A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/51bed967-f59e-414f-adc1-77eebfb276dd
Yield Growth First Quarter Financials 2019
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