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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event
reported): August 13, 2024
Medicine Man
Technologies, Inc.
(Exact Name of Registrant as
Specified in Its Charter)
Nevada |
000-55450 |
46-5289499 |
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
865
N. Albion Street, Suite 300
Denver, Colorado |
|
80220 |
(Address of Principal Executive Offices) |
|
(Zip Code) |
|
|
|
(303) 371-0387 |
(Registrant’s Telephone Number, Including Area Code) |
|
|
|
Not Applicable |
(Former Name or Former Address, if Changed Since Last Report) |
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
Title of Each Class |
|
Trading Symbol(s) |
|
Name of Each Exchange On Which
Registered |
Not applicable |
|
Not applicable |
|
Not applicable |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02 Results of Operations and Financial Condition.
On August 13, 2024,
Medicine Man Technologies, Inc. (the “Company”) issued a press release announcing results for its second quarter ended
June 30, 2024. A copy of the press release is attached as Exhibit 99.1, and the information contained therein is incorporated
herein by reference.
The Company will host
a conference call and webcast to discuss its results for the second quarter ended June 30, 2024, on August 13, 2024 at 5:00
pm Eastern Time.
This Current Report on
Form 8-K and the press release attached hereto as Exhibit 99.1 are being furnished by the Company pursuant to Item 2.02. In
accordance with General Instruction B.2 of Form 8-K, the information contained in this Current Report on Form 8-K, including
Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934,
as amended, or otherwise subject to the liability of that section. In addition, this information shall not be deemed incorporated by reference
into any of the Company’s filings with the Securities and Exchange Commission, except as shall be expressly set forth by specific
reference in any such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
MEDICINE MAN TECHNOLOGIES, INC. |
|
|
|
By: |
/s/ Christine
Jones |
Date: August 13,
2024 |
|
Christine Jones |
|
|
Chief Legal Officer |
Exhibit
99.1
![](https://www.sec.gov/Archives/edgar/data/1622879/000110465924089060/tm2421582d1_ex99-1img002.jpg)
Schwazze
Announces Second Quarter 2024 Financial Results
Growth
and Restructuring Initiatives Lead to Quarter-over-Quarter Growth Across all Key Financial Metrics in Q2
Schwazze
Management to Host Conference Call Today at 5:00 p.m. Eastern Time
DENVER,
CO, August 13, 2024 – Medicine Man Technologies, Inc., operating as Schwazze, (OTC: SHWZ) (Cboe CA: SHWZ) ("Schwazze"
or the "Company"), today announced financial and operational results for the second quarter ended June 30, 2024.
“We
made solid progress on our growth and optimization initiatives in Q2 and generated sequential quarterly growth across all key financial
metrics while advancing our retail strategy,” said Forrest Hoffmaster, Interim CEO of Schwazze. “During the quarter,
we continued to deepen our customer understanding, sharpen our pricing and promotional strategy, enhance the in-store experience, and
improve our assortment and in-stock positions. These efforts drove increased store traffic and market share expansion in both Colorado
and New Mexico. In our wholesale business, we generated our second consecutive period of quarter-over-quarter growth in both states with
penetration growth and catalog expansion while improving wholesale margins.”
“To
drive growth in the competitive Colorado environment, we continued to elevate the retail experience and loyalty offerings to improve
customer acquisition and retention. As a result, we outpaced the market on a year-over-year basis and generated 6% growth in a market
that declined 11% during the same period. As part of our restructuring initiative, we shuttered our non-plant touching wholesale operation
in Denver and eliminated three underperforming stores that no longer met our high-margin expectations. We continue to evaluate our asset
base to ensure we’re running as efficiently as possible while maximizing output.”
“In
New Mexico, state cannabis sales were up 7% across a store base that was 20% higher year-over-year in Q2. The state’s regulatory
body continued to increase its enforcement, helping lead to a reduction in net new store openings, which we anticipate will flip from
positive to negative in the back half of the year. Our consistent efforts to optimize our pricing and promotional strategy, expand assortment
with high-quality flower, and deliver an enhanced customer experience is generating momentum. In the second quarter, we grew revenue
9% sequentially compared to the state’s 2%, demonstrating the effectiveness of our operating playbook to compete in challenging
environments.”
“Looking
ahead, we will continue to refine our retail strategy while further driving operating efficiencies across our retail, cultivation, and
manufacturing assets. Our recent debt restructuring provides us with the financial flexibility to execute our strategic growth initiatives
in Colorado and New Mexico. Over the past year, our consistent efforts to optimize operations have established a solid foundation, positioning
us for continued growth and stronger levels of profitability in the second half of 2024.”
Second Quarter
2024 Financial Summary
$
in Thousands USD | |
Q2
2024 | |
Q1
2024 | |
Q2
2023 | |
Total Revenue | |
$ | 43,236 | |
$ | 41,601 | |
$ | 42,375 | |
Gross Profit | |
$ | 19,044 | |
$ | 17,934 | |
$ | 23,039 | |
Operating Expenses | |
$ | 21,788 | |
$ | 20,643 | |
$ | 18,082 | |
Income (Loss) from Operations | |
$ | (2,744 | ) |
$ | (2,709 | ) |
$ | 4,957 | |
Adjusted EBITDA1 | |
$ | 9,032 | |
$ | 7,341 | |
$ | 13,814 | |
Operating Cash Flow | |
$ | (108 | ) |
$ | (3,700 | ) |
$ | 2,683 | |
Recent Highlights
| · | In
July 2024, Schwazze extended the maturities of its original $15.0 million Altmore, LLC
Loan Agreement and its $17.0 million Reynold Greenleaf & Associates LLC Promissory
Note to November 2025 (both previously due in February 2025) in a step toward addressing
future debt obligations. |
| · | Announced
the grand opening of a medical and recreational dispensary in June under the R. Greenleaf
banner in Bernalillo, New Mexico, increasing the Company’s retail footprint to 35 stores
across the state. |
| · | Closed
the Company’s Colorado distribution center and shuttered its non-plant touching wholesale
operations, The Big Tomato, in Colorado to concentrate on core business operations. |
| · | Closed
three underperforming Colorado dispensaries and streamlined the Company’s corporate
office support structure to strengthen its retail forward strategy. |
| · | Increased
wholesale penetration during the quarter to approximately 34% and 35% of total doors in Colorado
and New Mexico, respectively. |
| · | Expanded
wholesale catalog in New Mexico with the launch of Lowell Farms pre-rolls. |
| · | Generated
28% sequential wholesale unit growth in New Mexico with Wana gummies. |
1 Adjusted EBITDA is
a non-GAAP measure as defined by the SEC, and represents earnings before interest, taxes, depreciation, and amortization, adjusted for
other income, non-cash share-based compensation, one-time transaction related expenses, or other non-operating costs. The Company uses
Adjusted EBITDA as it believes it better explains the results of its core business. See “ADJUSTED EBITDA RECONCILIATION (NON-GAAP)”
section herein for an explanation and reconciliations of non-GAAP measure used throughout this release.
Second Quarter
2024 Financial Results
Total revenue
in the second quarter of 2024 increased 2% to $43.2 million compared to $42.4 million for the same quarter last year. The increase was
primarily due to growth from new stores compared to the prior year period, partially offset by lower wholesale revenue and continued
pricing pressure from the proliferation of new licenses in New Mexico.
Gross profit
for the second quarter of 2024 was $19.0 million or 44.0% of total revenue, compared to $23.0 million or 54.4% of total revenue for the
same quarter last year. The decrease in gross margin was primarily driven by the aforementioned pricing pressure and greater mix of third-party
purchasing in New Mexico to broaden assortment in the state, as well as higher medical sales mix in Colorado.
Operating expenses
for the second quarter of 2024 were $21.8 million compared to $18.1 million for the same quarter last year. The increase was primarily
driven by four-wall SG&A costs associated with five additional stores in Colorado and New Mexico, as well as non-recurring professional
service fees related to prior period workpaper review stemming from work required to comply with SEC based on their Order against BF
Borgers.
Loss from operations
for the second quarter of 2024 was $2.7 million compared to income from operations of $5.0 million in the same quarter last year. Net
loss was $13.9 million for the second quarter of 2024 compared to $6.6 million for the same quarter last year.
Adjusted EBITDA
for the second quarter of 2024 was $9.0 million compared to $13.8 million for the same quarter last year. The decrease in Adjusted EBITDA
was primarily driven by lower gross margin and higher operating expenses.
As of June 30,
2024, cash and cash equivalents were $12.3 million compared to $19.2 million on December 31, 2023. Total debt as of June 30,
2024, was $163.4 million compared to $156.8 million on December 31, 2023.
Conference
Call
The
Company will conduct a conference call today, August 13, 2024, at 5:00 p.m. Eastern time to discuss its results for the second
quarter ended June 30, 2024.
Schwazze
management will host the conference call, followed by a question-and-answer period. Interested parties may submit questions to the Company
prior to the call by emailing ir@schwazze.com.
Date: Tuesday,
August 13, 2024
Time: 5:00 p.m. Eastern time
Toll-free dial-in: (844) 825-9789
International
dial-in: (412) 317-5180
Conference
ID: 10191294
Webcast: SHWZ
Q2 2024 Earnings Call
The
conference call will also be broadcast live and available for replay on the investor relations section of the Company’s website
at https://ir.schwazze.com.
Toll-free replay
number: (844) 512-2921
International
replay number: (412) 317-6671
Replay ID:
10191294
If
you have any difficulty registering or connecting with the conference call, please contact Elevate IR at (720) 330-2829.
About Schwazze
Schwazze (OTC:
SHWZ) (Cboe CA: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and
will continue to explore taking its operating system to other states where it can develop a differentiated regional leadership position.
Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale.
Schwazze is anchored
by a high-performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes.
The Company's leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as
well as in the cannabis sector.
Medicine Man Technologies, Inc.
was Schwazze's former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc. Schwazze
derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth. To learn more
about Schwazze, visit https://schwazze.com/.
Forward-Looking
Statements
This press release
contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking
statements include financial outlooks; any projections of net sales, earnings, or other financial items; any statements of the strategies,
plans and objectives of our management team for future operations; expectations in connection with the Company's previously announced
business plans; any statements regarding future economic conditions or performance; and statements regarding the intent, belief
or current expectations of our management team. Such statements may be preceded by the words "may," "will," "could,"
"would," "should," "expect," "intends," "plans," "strategy," "prospects,"
"anticipate," "believe," "approximately," "estimate," "predict," "project,"
"potential," "continue," "ongoing," or the negative of these terms or other words of similar meaning in
connection with a discussion of future events or future operating or financial performance, although the absence of these words does
not necessarily mean that a statement is not forward-looking. We have based our forward-looking statements on management's current expectations
and assumptions about future events and trends affecting our business and industry. Although we do not make forward-looking statements
unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Therefore, forward-looking statements
are not guarantees of future events or performance, are based on certain assumptions, and are subject to various known and unknown risks
and uncertainties, many of which are beyond the Company's control and cannot be predicted or quantified. Consequently, actual events
and results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include,
without limitation, risks and uncertainties associated with (i) regulatory limitations on our products and services and the uncertainty
in the application of federal, state, and local laws to our business, and any changes in such laws; (ii) our ability to manufacture
our products and product candidates on a commercial scale on our own or in collaboration with third parties; (iii) our ability to
identify, consummate, and integrate anticipated acquisitions; (iv) general industry and economic conditions; (v) our ability
to access adequate capital upon terms and conditions that are acceptable to us; (vi) our ability to pay interest and principal on
outstanding debt when due; (vii) volatility in credit and market conditions; (viii) the loss of one or more key executives
or other key employees; and (ix) other risks and uncertainties related to the cannabis market and our business strategy. More detailed
information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the
Company's filings with the Securities and Exchange Commission (SEC), including the Company's Annual Report on Form 10-K and its
Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC's website
at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result
of new information, future events or otherwise except as required by law.
Investor
Relations Contact
Sean Mansouri, CFA or Aaron D’Souza
Elevate IR
(720) 330-2829
ir@schwazze.com
MEDICINE MAN
TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED
BALANCE SHEETS
For the Periods
Ended June 30, 2024 and December 31, 2023
Expressed in
U.S. Dollars
| |
June 30, | |
December 31, | |
| |
2024 | |
2023 | |
| |
| (Unaudited) | |
| (Audited) | |
ASSETS | |
| | |
| | |
Current
Assets | |
| | |
| | |
Cash &
Cash Equivalents | |
$ | 12,266,507 | |
$ | 19,248,932 | |
Accounts
Receivable, net of Allowance for Doubtful Accounts | |
| 3,528,705 | |
| 4,261,159 | |
Inventory | |
| 24,867,900 | |
| 25,787,793 | |
Marketable
Securities, net of Unrealized Loss of $335,626 and Gain of $1,816, respectively | |
| 120,473 | |
| 456,099 | |
Prepaid
Expenses & Other Current Assets | |
| 5,480,899 | |
| 3,914,064 | |
Total
Current Assets | |
| 46,264,484 | |
| 53,668,047 | |
Non-Current
Assets | |
| | |
| | |
Fixed
Assets, net Accumulated Depreciation of $11,544,329 and $8,741,782, respectively | |
| 31,196,693 | |
| 31,113,630 | |
Investments | |
| 2,000,000 | |
| 2,000,000 | |
Investments
Held for Sale | |
| 1,000,000 | |
| 202,111 | |
Goodwill | |
| 60,685,699 | |
| 67,499,199 | |
Intangible
Assets, net Accumulated Amortization of $41,978,356 and $32,706,765, respectively | |
| 162,000,777 | |
| 166,167,877 | |
Other
Non-Current Assets | |
| 1,328,188 | |
| 1,263,837 | |
Operating
Lease Right of Use Assets | |
| 33,195,227 | |
| 34,233,142 | |
Deferred
Tax Assets, net | |
| 1,939,580 | |
| 1,996,489 | |
Total
Non-Current Assets | |
| 293,346,164 | |
| 304,476,285 | |
Total
Assets | |
$ | 339,610,648 | |
$ | 358,144,332 | |
| |
| | |
| | |
LIABILITIES &
STOCKHOLDERS' EQUITY | |
| | |
| | |
Current
Liabilities | |
| | |
| | |
Accounts
Payable | |
$ | 7,530,495 | |
$ | 13,341,561 | |
Accrued
Expenses | |
| 9,786,348 | |
| 7,774,691 | |
Derivative
Liabilities | |
| 63,324 | |
| 638,020 | |
Lease
Liabilities - Current | |
| 5,084,972 | |
| 4,922,724 | |
Current
Portion of Long Term Debt | |
| 29,586,959 | |
| 3,547,011 | |
Income
Taxes Payable | |
| 33,251,832 | |
| 25,232,782 | |
Total
Current Liabilities | |
| 85,303,930 | |
| 55,456,789 | |
Non-Current
Liabilities | |
| | |
| | |
Long Term
Debt, net of Debt Discount & Issuance Costs | |
| 133,813,630 | |
| 153,262,203 | |
Lease
Liabilities - Non-Current | |
| 29,705,779 | |
| 30,133,452 | |
Total
Non-Current Liabilities | |
| 163,519,409 | |
| 183,395,655 | |
Total
Liabilities | |
$ | 248,823,339 | |
$ | 238,852,444 | |
| |
| | |
| | |
Stockholders'
Equity | |
| | |
| | |
Preferred
Stock, $0.001 Par Value. 10,000,000 Shares Authorized; 81,562 Shares Issued and 81,562 Outstanding as of June 30, 2024 and 85,534
Shares Issued and 85,534 Outstanding as of December 31, 2023. | |
| 82 | |
| 86 | |
Common
Stock, $0.001 Par Value. 250,000,000 Shares Authorized; 81,076,907 Shares Issued and 80,156,757 Shares Outstanding as of June 30,
2024 and 74,888,392 Shares Issued and 73,968,242 Shares Outstanding as of December 31, 2023. | |
| 81,077 | |
| 74,888 | |
Additional
Paid-In Capital | |
| 203,519,460 | |
| 202,040,968 | |
Accumulated
Deficit | |
| (110,780,183 | ) |
| (80,790,927 | ) |
Common
Stock Held in Treasury, at Cost, 920,150 Shares Held as of June 30, 2024 and 920,150 Shares Held as of December 31, 2023. | |
| (2,033,127 | ) |
| (2,033,127 | ) |
Total
Stockholders' Equity | |
| 90,787,309 | |
| 119,291,888 | |
Total
Liabilities & Stockholders' Equity | |
$ | 339,610,648 | |
$ | 358,144,332 | |
MEDICINE MAN
TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME AND (LOSS)
For the Periods
Ended June 30, 2024 and 2023
Expressed in
U.S. Dollars
| |
For the Three
Months Ended | |
For the Six
Months Ended | |
| |
June 30, | |
June 30, | |
| |
2024 | |
2023 | |
2024 | |
2023 | |
| |
(Unaudited) | |
(Unaudited) | |
(Unaudited) | |
(Unaudited) | |
Operating Revenues | |
| | |
| | |
| | |
| | |
Retail | |
$ | 39,114,405 | |
$ | 38,098,957 | |
$ | 76,747,657 | |
$ | 73,919,068 | |
Wholesale | |
| 3,994,466 | |
| 4,274,483 | |
| 7,892,786 | |
| 8,333,408 | |
Other | |
| 126,877 | |
| 1,660 | |
| 196,298 | |
| 123,560 | |
Total Revenue | |
| 43,235,748 | |
| 42,375,100 | |
| 84,836,741 | |
| 82,376,036 | |
Total Cost of Goods &
Services | |
| 24,191,559 | |
| 19,335,845 | |
| 47,858,878 | |
| 37,387,074 | |
Gross Profit | |
| 19,044,189 | |
| 23,039,255 | |
| 36,977,863 | |
| 44,988,962 | |
Operating Expenses | |
| | |
| | |
| | |
| | |
Selling, General and Administrative
Expenses | |
| 12,604,835 | |
| 7,359,141 | |
| 24,440,653 | |
| 16,492,093 | |
Professional Services | |
| 971,643 | |
| 487,860 | |
| 2,643,523 | |
| 1,675,224 | |
Salaries | |
| 7,783,492 | |
| 7,389,172 | |
| 14,664,480 | |
| 13,154,165 | |
Stock Based Compensation | |
| 427,779 | |
| 2,845,691 | |
| 681,695 | |
| 3,060,235 | |
Total Operating Expenses | |
| 21,787,749 | |
| 18,081,864 | |
| 42,430,351 | |
| 34,381,717 | |
Income from Operations | |
| (2,743,560 | ) |
| 4,957,391 | |
| (5,452,488 | ) |
| 10,607,245 | |
Other Income (Expense) | |
| | |
| | |
| | |
| | |
Interest Expense, net | |
| (8,387,075 | ) |
| (7,890,439 | ) |
| (16,694,444 | ) |
| (15,636,294 | ) |
Unrealized Gain (Loss) on Derivative
Liabilities | |
| 1,256,521 | |
| 1,468,083 | |
| 574,696 | |
| 9,969,768 | |
Other Loss | |
| (5,000 | ) |
| - | |
| 5,500 | |
| - | |
Loss on Investment | |
| - | |
| - | |
| (33,382 | ) |
| - | |
Unrealized Gain on Investment | |
| 11,890 | |
| - | |
| (335,626 | ) |
| 1,816 | |
Total Other Income (Expense) | |
| (7,123,664 | ) |
| (6,422,356 | ) |
| (16,483,256 | ) |
| (5,664,710 | ) |
Pre-Tax Net Income (Loss) | |
| (9,867,224 | ) |
| (1,464,965 | ) |
| (21,935,744 | ) |
| 4,942,535 | |
Provision for Income Taxes | |
| 4,069,357 | |
| 5,142,559 | |
| 8,053,511 | |
| 9,804,737 | |
Net Income (Loss) | |
$ | (13,936,581 | ) |
$ | (6,607,524 | ) |
$ | (29,989,255 | ) |
$ | (4,862,202 | ) |
| |
| | |
| | |
| | |
| | |
Less: Accumulated Preferred
Stock Dividends for the Period | |
| (2,258,534 | ) |
| (2,353,883 | ) |
| (4,413,793 | ) |
| (4,383,277 | ) |
Net Income (Loss) Attributable
to Common Stockholders | |
$ | (16,195,115 | ) |
$ | (8,961,407 | ) |
$ | (34,403,048 | ) |
$ | (9,245,479 | ) |
| |
| | |
| | |
| | |
| | |
Earnings (Loss) per Share Attributable
to Common Stockholders | |
| | |
| | |
| | |
| | |
Basic Earnings (Loss) per Share | |
$ | (0.20 | ) |
$ | (0.15 | ) |
$ | (0.44 | ) |
$ | (0.16 | ) |
Diluted Earnings (Loss) per Share | |
$ | (0.20 | ) |
$ | (0.15 | ) |
$ | (0.44 | ) |
$ | (0.16 | ) |
| |
| | |
| | |
| | |
| | |
Weighted Average Number of Shares Outstanding
- Basic | |
| 79,073,381 | |
| 60,538,317 | |
| 77,576,614 | |
| 57,999,461 | |
Weighted Average Number of Shares Outstanding
- Diluted | |
| 79,073,381 | |
| 60,538,317 | |
| 77,576,614 | |
| 57,999,461 | |
Comprehensive Income (Loss) | |
$ | (13,936,581 | ) |
$ | (6,607,524 | ) |
$ | (29,989,255 | ) |
$ | (4,862,202 | ) |
MEDICINE MAN
TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
For the Periods
Ended June 30, 2024 and 2023
Expressed in
U.S. Dollars
| |
For the Six
Months Ended | |
| |
June 30, | |
| |
2024 | |
2023 | |
| |
(Unaudited) | |
(Unaudited) | |
Cash Flows from Operating Activities: | |
| | |
| | |
Net Income (Loss)
for the Period | |
$ | (29,989,256 | ) |
$ | (4,862,202 | ) |
Adjustments to Reconcile Net
Income (Loss) to Cash for Operating Activities | |
| | |
| | |
Depreciation & Amortization | |
| 12,074,138 | |
| 10,826,289 | |
Non-Cash Interest Expense | |
| 2,073,174 | |
| 1,992,280 | |
Non-Cash Lease Expense | |
| 5,203,722 | |
| 3,316,171 | |
Deferred Taxes | |
| 56,909 | |
| (324,039 | ) |
Loss on Investment | |
| 30,636 | |
| - | |
Change in Derivative Liabilities | |
| (574,696 | ) |
| (9,969,768 | ) |
Amortization of Debt Issuance
Costs | |
| 843,025 | |
| 843,025 | |
Amortization of Debt Discount | |
| 4,682,351 | |
| 4,088,319 | |
(Gain) Loss on Investments,
net | |
| 335,626 | |
| (1,816 | ) |
Stock Based Compensation | |
| 681,695 | |
| 3,060,235 | |
Changes in Operating Assets &
Liabilities (net of Acquired Amounts): | |
| | |
| | |
Accounts Receivable | |
| 902,555 | |
| (923,614 | ) |
Inventory | |
| 1,171,159 | |
| (5,937,100 | ) |
Prepaid Expenses &
Other Current Assets | |
| (1,566,835 | ) |
| (909,663 | ) |
Other Assets | |
| (64,349 | ) |
| 304,451 | |
Change in Operating Lease Liabilities | |
| (4,706,454 | ) |
| (2,661,202 | ) |
Accounts Payable &
Other Liabilities | |
| (2,981,194 | ) |
| (3,853,458 | ) |
Income
Taxes Payable | |
| 8,019,050 | |
| 6,815,662 | |
Net
Cash Provided by (Used in) Operating Activities | |
| (3,808,744 | ) |
| 1,803,570 | |
| |
| | |
| | |
Cash Flows from Investing Activities: | |
| | |
| | |
Collection of Notes Receivable | |
| - | |
| 10,631 | |
Cash Consideration for Acquisition
of Business, Net of Cash Acquired | |
| - | |
| (15,834,378 | ) |
Purchase
of Fixed Assets | |
| (2,148,720 | ) |
| (4,704,093 | ) |
Net
Cash Provided by (Used in) Investing Activities | |
| (2,148,720 | ) |
| (20,527,840 | ) |
| |
| | |
| | |
Cash Flows from Financing Activities: | |
| | |
| | |
Payment on Notes Payable | |
| (1,007,175 | ) |
| (750,000 | ) |
Proceeds from Issuance of Common
Stock, Net of Issuance Costs | |
| - | |
| 397,116 | |
Payment
for Statutory Withholdings on Equity Awards | |
| (17,786 | ) |
| - | |
Net
Cash Provided by (Used in) Financing Activities | |
| (1,024,961 | ) |
| (352,884 | ) |
| |
| | |
| | |
Net (Decrease) in Cash &
Cash Equivalents | |
| (6,982,425 | ) |
| (19,077,154 | ) |
Cash &
Cash Equivalents at Beginning of Period | |
| 19,248,932 | |
| 38,949,253 | |
Cash &
Cash Equivalents at End of Period | |
$ | 12,266,507 | |
$ | 19,872,098 | |
| |
| | |
| | |
Supplemental Disclosure of Cash
Flow Information: | |
| | |
| | |
Cash Paid for Interest | |
$ | 8,957,030 | |
$ | 10,931,090 | |
Cash Paid for Income Taxes | |
| - | |
| 3,500,000 | |
MEDICINE MAN
TECHNOLOGIES, INC.
ADJUSTED EBITDA
RECONCILIATION (NON-GAAP)
For the Periods
Ended June 30, 2024 and 2023
Expressed in
U.S. Dollars
| |
For the Three Months Ended | |
For the Six Months Ended | |
| |
June 30, | |
June 30, | |
| |
2024 | |
2023 | |
2024 | |
2023 | |
Net Income (Loss) | |
$ | (13,936,581 | ) |
$ | (6,607,524 | ) |
$ | (29,989,255 | ) |
$ | (4,862,202 | ) |
Interest Expense, net | |
| 8,387,075 | |
| 7,890,439 | |
| 16,694,444 | |
| 15,636,294 | |
Provision for Income Taxes | |
| 4,069,357 | |
| 5,142,559 | |
| 8,053,511 | |
| 9,804,737 | |
Other (Income) Expense, net of Interest Expense | |
| (1,263,411 | ) |
| (1,468,083 | ) |
| (211,188 | ) |
| (9,971,584 | ) |
Depreciation & Amortization | |
| 7,037,644 | |
| 3,865,190 | |
| 12,656,354 | |
| 10,478,004 | |
Earnings Before Interest, Taxes, Depreciation and | |
| | |
| | |
| | |
| | |
Amortization (EBITDA) (non-GAAP) | |
$ | 4,294,084 | |
$ | 8,822,581 | |
$ | 7,203,866 | |
$ | 21,085,249 | |
Non-Cash Stock Compensation | |
| 427,779 | |
| 2,845,691 | |
| 681,695 | |
| 3,060,235 | |
Deal Related Expenses | |
| 337,868 | |
| 733,718 | |
| 996,389 | |
| 1,964,588 | |
Inventory Adjustment to Fair Market Value for | |
| | |
| | |
| | |
| | |
Purchase Accounting | |
| 251,266 | |
| - | |
| 251,266 | |
| - | |
Pre-Operating & Dark Carry Expenses | |
| 729,892 | |
| 373,065 | |
| 1,783,729 | |
| 764,169 | |
Restructuring Expenses | |
| 1,187,062 | |
| 300,681 | |
| 2,479,122 | |
| 699,749 | |
One-Time Legal Settlements & Expenses | |
| 284,898 | |
| 100,000 | |
| 702,551 | |
| 100,000 | |
Other Non-Recurring Items | |
| 1,519,458 | |
| 638,408 | |
| 2,274,333 | |
| 665,034 | |
Adjusted EBITDA (non-GAAP) | |
$ | 9,032,307 | |
$ | 13,814,144 | |
$ | 16,372,951 | |
$ | 28,339,024 | |
Revenue | |
| 43,235,748 | |
| 42,375,100 | |
| 84,836,741 | |
| 82,376,036 | |
Adjusted EBITDA Percent | |
| 20.9 | % |
| 32.6 | % |
| 19.3 | % |
| 34.4 | % |
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Medicine Man Technologies (CE) (USOTC:SHWZ)
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