Radient Technologies Inc. (“Radient” or the “Company”) (TSX Venture: RTI; OTCQX: RDDTF), a manufacturer of high quality cannabinoid-based formulations and products, today announced its fiscal results for the quarter and year ended March 31, 2020 and provided an update on recent corporate developments.
EDMONTON, Alberta, Sept. 14, 2020 (GLOBE NEWSWIRE) -- Radient Technologies Inc. (“Radient” or the “Company”) (TSX Venture: RTI; OTCQX: RDDTF), a manufacturer of high quality cannabinoid-based formulations and products, today announced its fiscal results for the quarter and year ended March 31, 2020 and provided an update on recent corporate developments.
“Despite the many headwinds for the cannabis industry, Radient’s fiscal 2020 included several major milestones that have laid the foundations for future growth and profitability,” said Denis Taschuk, CEO of Radient. “We have invested a great deal in our infrastructure, intellectual property and technology. Looking ahead we see increased opportunities to monetize our development work in higher margin white label business, while also being able to reduce spending. The strategic shift has begun to take hold and is evident in our success over the past two months.”
Fiscal 2020 Corporate Highlights and Recent Developments
- Received a license amendment for the Edmonton II expansion, adding licensed space critical to the launch of an expanded line of white label products including cannabis vapes, drink formulations and powders
- Successful launch of the bioU brand; Radient’s first commercial product launch and the first exclusive brand carried by Medical Cannabis by Shoppers as part of the partnership agreement signed February 2020
- Closed a fully subscribed equity offering for gross proceeds of $5.75 million in May 2020 and raised an additional $880,000 through the Company’s At-The-Market (“ATM”) offering
- Received a sales license amendment in June 2020, allowing for the sale of extracts, edibles and topicals directly to provincial distributors. Radient has already successfully registered with four provincial distribution bodies and is expecting new purchase orders imminently
- Signed multiple supply and white label agreements including Premium 5, Fluum and Medical Cannabis by Shoppers
- Successfully commissioned a vape and liquids filling line in August 2020, substantially increasing white label manufacturing capabilities
Fiscal 2020 Summary
- Generated revenue of $18.4 million compared to $214,060 in fiscal 2019. The increase was a result of the Company’s first cannabis extract sales and an increase in capacity
- Gross profit of $447,947 million for the year reflecting the use of high-priced legacy inventory
- The Company recognized impairment losses of $5.8M on inventory and $4.5M on plant and equipment contributing significantly to the increase in losses for the year
- Net profit (loss) of ($37.4) million compared to ($27.9) million the previous year, primarily driven by total write-downs of $10.3 million and the investments associated with capacity expansions and product development
Corporate Update
The cannabis market has seen an increasing number of challenges and is in the midst of structural change. The largest cultivators in the country have shuttered millions of square feet of grow space, bringing the market closer to near term equilibrium of supply and demand.
The reduced production of cannabis and slower rollout of 2.0 products has had a follow-on effect of reducing extraction requirements. Bulk extraction prices are expected to remain under pressure as extractors work through excess biomass in the near term.
Radient is taking a prudent approach, given current demand for bulk extraction, to slow capital spending on expansion and focus resources on white label manufacturing and commercializing its significant formulation library. Licensed space in Edmonton II is now being utilized for manufacturing and packaging activities, both critical to the Company’s white label offerings. These lines are being used for current white label products and will be increasingly valuable as Radient diversifies its product offerings and customer base.
Additional equipment is now being installed into the plant that will allow for the production of proprietary powder and liquid based formulations. Manufacturing space is being designed for flexibility that will allow for multi use rooms and higher utilization rates. Strategically adding unique product offerings will position the Company for higher margin work and leverage our years of research and development experience.
Radient anticipates having manufacturing capabilities in place by the end of calendar 2020 to offer clients various types of powder and liquid products, including formulations that incorporate nano emulsification and water compatibility. These proprietary formulations have been developed and tested internally and hold the potential for significantly higher margins.
With the Company committed to product formulations and white label manufacturing, the timelines for future expansions have been pushed out. This will have an added benefit of reducing capital expenditures and allowing for more financial and strategic flexibility.
The completion of the Edmonton III plant will be deferred until at least calendar 2021, with the Company able to service its current extraction needs and manufacturing from Edmonton I and II. Edmonton III is expected to serve future growth and any further spending will be directed to increasing product manufacturing capabilities.
European cannabis markets and regulation have also faced challenges and are experiencing slower than expected growth. In order to preserve capital and focus on domestic opportunities, the Company will defer the completion of the German facility at least until the end of 2021.
The management’s discussion and analysis for the period and the accompanying financial statements and notes are available under the Company’s profile on SEDAR at www.sedar.com.
About Radient
Radient Technologies is a commercial manufacturer of high quality cannabinoid based formulations, ingredients and products. Utilizing a proprietary extraction and downstream 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.
SOURCE: Radient Technologies Inc.
For further information please contact:
Radient - Investor Relations, ir@radientinc.com
Forward Looking 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 Company’s financial results; the Company’s ability to complete the construction of facilities and expected timing thereof; the various uses of the Company’s facilities; the growth of the cannabis market; the Company’s product offerings; 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.
