Flower One Revenue Spikes 373%, Exceeds Guidance, Partners With CBD Brand ALTWELL

Cannabis company Flower One Holdings Inc. FONE FLOOF (FSE: F11) announced its financial and operating results for the second quarter of fiscal 2021 after the market close on Wednesday.

Q2 2021 Financial Highlights

• Revenue amounted to $18.3 million, up 32% from the first quarter 2021 revenue of $13.9 million and more than five times its second-quarter 2020 revenues of $3.4 million, exceeding its guidance of $16 million - $18 million.
• Cost of sales totaled $11.1 million, 45% higher than first quarter 2021 and increased by $9.2 million over second quarter 2020.
• The cash component of cost of sales increased to 46% from 43% in the first quarter of 2021
• General and administrative expenses totaled $7.7 million, including more than $0.5 million of audit and tax-related expenses.
• Gross profit amounted to $6.2 million, or 33% of revenues, compared to $0.5 million, or 1% of revenue.
• Gross profit prior to fair value adjustments (non-cash adjustments based on the fair value of biological inventory and inventory) was $7.2 million, or 39% of revenues.
• Net loss was $15.2 million, as compared to a net loss of $21.3 million for the same period of the prior year.
• Adjusted EBITDA loss was $0.6 million compared with Adjusted EBITDA loss of $1.9 million in the same period of the prior year and an adjusted EBITDA loss of $1.3 million during the first quarter of 2021.

Capital Markets & Financing

In April, the company completed restructuring its convertible debentures, which reduced its debt from approximately $40.7 million to roughly $16.3 million.

Balance Sheet

As of June 30, the company had $2.2 million in cash and equivalents and $0.9 million of net working capital.

"We have improved our capital structure due to the successful debt restructuring completed in April 2021, as well as the many operational changes made throughout the organization," Kellen O'Keefe, Flower One's president and CEO, commented.

O'Keefe was named interim CEO in January, simultaneously with Mitchell Kahn and Eliza Gairard assuming their roles on the company's board of directors.

The Las Vegas and Toronto-based company currently holds two of Nevada's top three flower brands, including Cookies and in-house brand NLVO.

Flower One Partners With California-Based CBD Brand ALTWELL, Taps Nikki Brown to Advisory Board

Separately, the company announced its strategic brand partnership with ALTWELL, a California-based health and wellness cannabinoid-based brand owned by Alternative Biologics.

As part of the deal, Nikki Brown, ALTWELL co-founder was tapped as the first member of the company's advisory board.

"We're excited to launch ALTWELL + with Flower One in Nevada. We're inspired by this emerging, more natural channel of wellness products," Brown said Tuesday.

Photo: Courtesy of Avery Meeker on Unsplash