CRAFT 1861 Global FY22 Revenue Grows 18%, What About Profit?

CRAFT 1861 Global Holdings Inc. HUMN HUMN released its audited annual financial statements for the year ended December 31, 2022, and unaudited interim consolidated financial statements for the period ended March 31, 2023.

FY 2022 Financial Highlights

• Revenue of $2 million, an increase of 18%, compared to revenue of $1.7 million in FY 2021.

• Gross profit of $3.2 million an increase of 34% compared to gross profit of $2.4 million for the year ended December 31, 2021.

• Net loss was $21.9 million, an increase in loss of 1,329%, compared to a $9.4 million loss for the year ended December 31, 2021.

Q1 2023 Financial Highlights

• Revenue of $482,319, an increase of $291,926, or 153%, compared to revenue of $190,393 in Q1 2022.

• Gross profit of $865,416, an increase of $773,396, or 884% compared to gross profit of $92,020 in Q1 2022.

• Net loss was $60.4 million, an increase in loss of $50.9 million, or 537%, compared to a $9.4 million loss in the Q1 2022.

Project Timing for Launch of Business Segments

As a result of the delay in the receipt of and access to the Brott Funds, the company is experiencing related delays in the achievement of certain business objectives and milestones previously set out in BGP Acquisition Corp.'s final prospectus filed December 2, 2022. In particular, the company now expects to ramp up sales in its CBD operations in Q1, 2024, the launch of its e-commerce business in Q1, 2024, the launch of business-to-business sales in Q1, 2024, and the full launch of its strategic partnerships in Q1, 2024.

Management Update

On March 8, 2023, the company's auditor resigned, with GreenGrowth CPAs Inc. being appointed as successor auditor. The company worked diligently with GreenGrowth to complete the reviews necessary for the release and filing of the annual filings. In addition to the delays related to the company's preparation of the annual filings, the company experienced difficulties in receiving and accessing the cash proceeds of the investment made by Brott LCC. The Brott investment, which will be used to fund the company's growth strategy, is comprised of a $100 million equity investment and a $900 million line of credit. The delays in receiving and accessing the Brott Funds are the result of restrictions in the U.S. banking industry regarding the cannabis industry. The company continues to work with its banking partners to resolve these issues and will update the market on any further developments.

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