(Bloomberg) — China acted to cool the speculative frenzy in its $9.5 trillion stock market, ending a euphoric eight-day surge that had fueled worries of a new bubble in the making.Signs of Beijing’s unease over the rally’s speed emerged late Thursday, when a pair of government-owned funds announced College endowments, pooled funds of money that are crucial to fulfilling the ongoing financial demands of higher education institutions, might seem a little disconnected from the finances of the average retail investor at first glance. While the sums of money endowment funds handle are indeed far vaster Harborside Inc. ("Harborside" or the "Company") (CSE: HBOR), a California-focused, vertically integrated cannabis enterprise, is providing an update in respect of the filing of the Company's restated annual financial statements for the years ended December 31, 2017 and 2018 (the NOT FOR DISTRIBUTION TO NEWSWIRE SERVICES IN THE UNITED STATES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY… Shares of Royal Caribbean Cruises Ltd. undefined fell 2.4% in premarket trading Friday, after the cruise operator announced a stock deal to buy the remaining…
(Bloomberg) — China acted to cool the speculative frenzy in its $9.5 trillion stock market, ending a euphoric eight-day surge that had fueled worries of a new bubble in the making.
Signs of Beijing’s unease over the rally’s speed emerged late Thursday, when a pair of government-owned funds announced plans to trim holdings of stocks that soared this week. On Friday the state-run China Economic Times warned about the dangers of a “crazy” bull market, while Caixin reported that regulators had asked mutual fund companies to cap the size of new products.
Traders said the moves amounted to a warning from Chinese officialdom that the country’s world-beating equity boom has gone too far, too fast. While cheerleading from state-run media helped ignite gains at the end of last month, authorities appear keen to engineer a steady bull market rather than a repeat of the bubble that ended in a $5 trillion crash five years ago.
“The signal could not be clearer — stocks have just become too hot for the regulators’ liking,” said Niu Chunbao, a fund manager at Shanghai Wanji Asset Management Co. “A slight dip or so may put their minds more at ease at this point.”
The SSE 50 Index of Shanghai’s largest stocks ended the day 2.6% lower. The gauge had closed Thursday within 2 percentage points of its intraday peak in 2015.
Chinese officials have plenty of reasons to want a rising stock market. The wealth effect could help revive virus-crushed consumer demand, and higher share prices will make it easier for indebted companies to finance themselves. Investor optimism has also spilled into Hong Kong, helping to ease concern that China’s tightening political grip on the city will end its status as a financial hub.
But authorities also want to avoid a replay of 2015, when they were wrong-footed by both the scale of the stock market’s boom and severity of its bust. Beijing’s fumbled response to the crash eroded its reputation for competent economic management and saddled millions of individual investors with losses.
China’s National Council for Social Security Fund — the country’s national pension fund — said Thursday it intends to sell a stake of as much as 2% in People’s Insurance Company (Group) of China Ltd. The fund, which oversees about 2.2 trillion yuan ($314 billion) in assets, said the sale was part of its “regular divesting activities.” The stock dropped 7.4% in Shanghai, the most in five months.
The National Integrated Circuit Industry Investment Fund Co. — a far smaller state-backed semiconductor fund aimed at fostering China’s homegrown chipmakers — announced plans to offload shares in three firms. Textile maker Wuxi Taiji Industry Co., Shenzhen Goodix Technology Co., and Beijing BDStar Navigation Co. fell at least 3.8%.
Foreign-based funds turned net sellers of Chinese shares for the first time this month on Friday, dumping a net 4.4 billion yuan, the most since late March. They had pumped a net 63 billion yuan across the border via exchange links in July.
Chinese stocks had added about $1 trillion in value this week — far outpacing gains in every other market worldwide amid signs of euphoria among the nation’s investing masses. Turnover has soared, margin debt is rising at the fastest pace since 2015 and online trading platforms have struggled to keep up with demand.
While the reaction from Beijing has been swift this time, it pales in comparison to the heavy-handed trading restrictions imposed after the 2015 crash. As well as warnings from state media and caps on equity funds, China’s securities regulator took some concrete steps Wednesday to limit speculative behavior, publishing a list of 258 illegal margin financing platforms.
Managing a slow bull run in China’s momentum-driven stock market has always been a challenge for Beijing. Whether current policies will achieve that goal remains to be seen. One retail investor said she made the most of Friday’s losses to load up on more shares.
“It’s still just the middle of the rally,” said 30-year-old Jess Huang, who works at a state-owned enterprise in Beijing.
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Author: Bloomberg News
7 Lessons to Learn From College Endowment Investing
Seven lessons taught by college endowments.
College endowments, pooled funds of money that are crucial to fulfilling the ongoing financial demands of higher education institutions, might seem a little disconnected from the finances of the average retail investor at first glance. While the sums of money endowment funds handle are indeed far vaster than any typical retirement portfolio — the top five U.S. university endowments run between around $20 billion to $40 billion — there are several helpful takeaways that investors of all types can use to manage their nest eggs more prudently. Here are seven important lessons to learn from how college endowments are managed.
Factor in withdrawals.
What investor wouldn’t like to turn their life savings into a portfolio that comfortably lasts their entire life? That’s how colleges look at their endowments, except universities never plan to die, so the endowment is meant to last into perpetuity. This means that over time, endowments need their spending to fall below rates of return. Portions of the endowment can have very strict rules around use, with a certain percentage of funds required to be spent on scholarships, fellowships, research and faculty positions. In recent years, college endowments have used around 4.5% of their funds annually on spending, according to the colleges and universities surveyed in The National Association of College and University Business Officers’2019 NACUBO-TIAA Study of Endowments released on Jan. 30. This is close to the 4% rule of retirement spending, which is meant to provide some much-needed income in investors’ golden years while still preserving as much capital as possible.
Factor in inflation.
The 4% rule of thumb for individual retirees has an important and oft-overlooked caveat. Following your first 4% withdrawal, you should adjust withdrawals each subsequent year to comport with inflation. Inflation, a notorious and largely invisible tax that eats away at purchasing power over time, is the second major cost — aside from actual spending — that successful college endowments must factor into their projections. Annual spending generally clocks in around 4.5% and the five-year average inflation as measured by the Commonfund Higher Education Price Index report is 2.4%. The 10-year average endowment return of 8.4%, as measured by the 2019 NACUBO-TIAA Study of Endowments, easily clears the typical bar seen in recent years. In other words, these obscure pools of money in higher education have easily met their fundamental long-term goal of preserving so-called “intergenerational equity” over that period.
Yale University’s chief investment officer David Swensen is arguably the most successful and well-regarded money manager in the industry — and it’s not because he’s a good stock picker. Instead, Swensen discovered the remarkable power asset allocation can provide for patient, long-term investors. In 1989, Yale’s endowment had almost 75% of assets in U.S. stocks, bonds and cash. Nowadays, those categories constitute only about 10% of the fund. Foreign equities, as well as the less liquid areas of real estate, venture capital, hedge funds, leveraged buyouts and natural resources, constitute the bulk of its portfolio. Swensen’s brilliance was in realizing that by sacrificing some liquidity, alternative assets would allow both higher expected returns and lower volatility. Average investors certainly don’t have all the same opportunities Yale is afforded, but the principles of asset allocation and diversification are very applicable.
Mind governance and have an investment policy.
“The biggest risk faced by endowment boards, and most investors, is not the economy or the Fed — it’s the board,” says Lucius McGehee, executive vice president at Argent Trust Co., which serves as the outsourced chief investment officer for several foundations, including many university foundations. “It’s the investors and their behavior. That’s why a well-crafted investment policy statement is so important. It can serve as your road map to help guide you through the challenges and unknowns that will always lie ahead,” McGehee says. While multibillion-dollar endowments clearly need some parameters, goals and rules in place, it’s not a bad idea for an individual investor to set up some long-term goals and guidelines, either. It’s also wise to consider the governance of any companies in which you invest.
Long time horizons are powerful advantages.
Berkshire Hathaway’s (ticker: BRK.B, BRK.A) CEO Warren Buffett has occasionally argued that his greatest competitive advantage as an investor is his limitless time horizon. It’s a potent point that some of the most successful university endowments — and individual investors, for that matter — use to their advantage. “Great managers, such as Yale’s David Swensen, understand endowments have a perpetual time horizon, with relatively little need for liquidity currently,” says Mike Romero, vice president and relationship manager with Heritage Trust Co. in Oklahoma City. “The manager doesn’t have to focus solely on spending needs over the next year or two, but can consider strategies with much longer time horizons. Consequently, great endowment managers — through prudent investment and spending policies — provide for current needs, along with creating equity among future generations.”
Contribute, contribute, contribute.
Many common sense laws of personal finance and investing also overlap with the practices seen in successful endowments, and the enormous long-term benefits that regular cash injections provide are no exception. “Organizations that can count on the consistent cash flows of a donor base can often extend their investment time horizon and take more risk,” says Kristin Reynolds, the co-leader of NEPC’s Endowment and Foundation practice and an NEPC partner. Individual investors who need their portfolios to provide a certain amount of regular passive income clearly face a smaller universe of suitable securities to choose from — and generally, this will mean more conservative, lower-return asset classes that individuals without those needs wouldn’t be constricted to.
Not all opportunities are created equal; use the tools you have.
The 10-year returns among the largest college endowments — those with assets of more than $1 billion — were higher than all the smaller tranches of college endowments. Institutional endowments of more than $1 billion returned 9% annually over 10 years in the decade ending in 2019, while college endowments of $25 million and less earned just 7.7% during the same period, according to the most recent NACUBO-TIAA Study of Endowments. This is because larger endowments have investment opportunities that smaller schools don’t, including access to private equity and venture capital deals that can prove enormously rewarding. Stanford University in California made more than $300 million from an early stake in Alphabet (GOOG, GOOGL), for instance. While individuals don’t have all the investment opportunities larger investors do, exchange-traded funds increasingly offer easy access to commodities, real estate, foreign stocks and other asset classes. Regardless of your net worth, investors of all sizes can be successful by simply utilizing some principles mentioned here and other widely accessible tools of modern finance.
Seven investing lessons to learn from successful college endowments:
— Factor in withdrawals.
— Factor in inflation.
— Mind governance and have an investment policy.
— Long time horizons are powerful advantages.
— Contribute, contribute, contribute.
— Not all opportunities are created equal; use the tools you have.
Author: John Divine
Harborside Inc. Provides Update on Financial Statement Filings
OAKLAND, CA and TORONTO, July 10, 2020 /PRNewswire/ – Harborside Inc. (“Harborside” or the “Company”) (CSE: HBOR), a California-focused, vertically integrated cannabis enterprise, is providing an update in respect of the filing of the Company’s restated annual financial statements for the years ended December 31, 2017 and 2018 (the “Restated Audit”), restated interim financial reports for the periods ended March 31, 2019, June 30, 2019, and September 30, 2019 (collectively, the “Restated Interims”), audited annual financial statements and corresponding management’s discussion and analysis for the year ended December 31, 2019 (collectively, the “Annual Filings”), and interim financial report for the three months ended March 31, 2020 and related management’s discussion and analysis (collectively, the “Interim Filings” and together with the Restated Audit, Restated Interims and Annual Filings, the “Financial Statements”).
The Company continues to work diligently and expeditiously with its auditors to finalize the Financial Statements. Despite significant effort and progress to date, the Company does not expect to complete the filing of the Restated Audit and Annual Filings by its previously expected filing date of July 10, 2020. As previously disclosed, the delay in completing the filing of the Financial Statements is due to the unprecedented impact of the COVID-19 pandemic on the Company, its employees, and its ability to rely on timely information in relation to its financial reporting obligations.
In the interim, the Company continues to be subject to the previously disclosed cease trade order (the “CTO”). The Company expects trading to resume on the CSE shortly after the revocation of the CTO.
After careful consideration, the Company has also decided to postpone its annual meeting of shareholders to a later date in 2020. The Company intends to rely on the temporary blanket relief provided by the Canadian Securities Administrators, including the exemptive relief contained in Ontario Instrument 51-504 – Temporary Exemptions from Certain Requirements to File or Send Securityholder Materials of the Ontario Securities Commission to postpone the public filing of its executive compensation disclosure until such time as it is filed and delivered to shareholders as part of the Company’s information circular relating to its 2020 annual meeting of shareholders. The Company will provide further information on its annual meeting when an appropriate date has been determined.
As required under Canadian securities laws, the Company will provide a further update on or about July 24, 2020. Additionally, to the knowledge of the Company, there have been no material business developments as of the date of this news release that have not been generally disclosed.
For the latest news, activities, and media coverage, please visit the Harborside corporate website at www.investharborside.com or connect with us on LinkedIn, Facebook, and Twitter.
Harborside Inc. is one of the oldest and most respected cannabis retailers in California, operating three of the major dispensaries in the San Francisco Bay Area, a dispensary in Desert Hot Springs outfitted with Southern California’s only cannabis drive-thru window, a dispensary in Oregon and a cultivation facility in Salinas, California. Harborside has played an instrumental role in making cannabis safe and accessible to a broad and diverse community of California consumers. Co-founded by Steve DeAngelo and dress wedding in 2006, Harborside was awarded one of the first six medical cannabis licenses granted in the United States. Harborside is currently a publicly listed company on the Canadian Securities Exchange (“CSE”) trading under the ticker symbol “HBOR”. Additional information regarding Harborside is available under Harborside’s SEDAR profile at www.sedar.com.
Cautionary Note Regarding Forward-Looking Information
This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward looking-statements relate to, among other things, the timing of filing the Financial Statements, and revocation of the MCTO and the CTO.
These forward-looking statements are based on reasonable assumptions and estimates of management of the Company at the time such statements were made. Actual future results may differ materially as forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors, among other things, include: management’s perceptions of the anticipated timeline in which the Financial Statements can be completed and filed, and the MCTO and CTO can be revoked; implications of the COVID-19 pandemic on the Company’s operations; fluctuations in general macroeconomic conditions; fluctuations in securities markets; expectations regarding the size of the California cannabis market and changing consumer habits; the ability of the Company to successfully achieve its business objectives; plans for expansion; political and social uncertainties; inability to obtain adequate insurance to cover risks and hazards; the presence of laws and regulations that may impose restrictions on cultivation, production, distribution and sale of cannabis and cannabis related products in the State of California; litigation risk; and employee relations. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Readers should not place undue reliance on the forward-looking statements and information contained in this news release. The Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
The Company is indirectly involved in the manufacture, possession, use, sale and distribution of cannabis in the recreational and medicinal cannabis marketplace in the United States. Local state laws where the Company operates permit such activities however, these activities are currently illegal under United States federal law. Additional information regarding this and other risks and uncertainties relating to the Company’s business are contained under the heading “Risk Factors” in the Listing Statement dated May 30, 2019, filed under the Company’s profile on SEDAR at www.sedar.com.
The CSE has neither approved nor disapproved the contents of this news release. Neither the CSE nor its Market Regulator (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
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MPX International Announces Second Quarter 2020 Financial Results
NOT FOR DISTRIBUTION TO NEWSWIRE SERVICES IN THE UNITED STATES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAWS.
TORONTO, July 10, 2020 (GLOBE NEWSWIRE) — MPX International Corporation (“MPX International”, “MPXI” or the “Corporation”) (CSE:MPXI; OTCQX:MPXOF) today reports financial results for its second quarter, the three and six month period ended March 31, 2020. All figures are presented in Canadian dollars unless otherwise indicated.
The Corporation is focused on developing and operating assets across the global cannabis industry with an emphasis on cultivating, manufacturing and marketing products which include cannabinoids as their primary active ingredient.
- On July 2, 2020, the Corporation announced that it had successfully closed the first tranche of its previously announced non-brokered private placement offering (the “Offering”) of units (the “Units”) of the Corporation. The closing of the first tranche of the Offering resulted in the issuance of 3,348 Units at a price of US$1,000.00 (C$1,360) for aggregate gross proceeds of US$3,348,000 (C$4,553,280). Each Unit consists of one 12% secured convertible debenture of the Corporation (a “Debenture”) in the principal amount of US$1,000.00 (C$1,360) and 7,000 common share purchase warrants. The Corporation intends to use the proceeds from the Offering to fund product and facility development in Switzerland and retail expansion in Canada as well as for working capital and other general corporate purposes.
- On July 6, 2020, the Corporation announced that its wholly-owned subsidiary, Spartan Wellness Corporation (“Spartan”), has entered into a services agreement dated July 1, 2020 (the “Services Agreement”) with Medical Cannabis by Shoppers Drug Mart Inc., a subsidiary of Shoppers Drug Mart. The Services Agreement calls for Spartan to utilize its network of volunteers and professionals to perform clinical services for Shopper Drug Mart patients which will include prescribing cannabinoid combination and strength, delivery methods and general education about cannabis use as well as conducting follow-up medical appointments to monitor efficacy and patient well-being.
In Canada, the Corporation is transitioning its principal business model away from cultivation to one of intermediation between buyers and sellers, accessing or facilitating the sale of cannabis products from third party License Holder’s (a “License Holder” or “LH”) and arranging or facilitating sales to medical cannabis consumers domestically or, increasingly, to international buyers. This strategy reduces or eliminates the need for large capital investment, while generating fees and margins with equivalent net returns to those generally available from seed-to-sale operations. The Corporation is currently involved in late-stage negotiations to facilitate several export opportunities to Europe and Australia, through its fully licenced and wholly-owned subsidiary, MPX Australia Pty Ltd.
Domestically, Spartan and the Medical Cannabis Learning Network (the “MCLN”) are currently working with a combined 13 License Holders to educate and market cannabinoid-based medicines to Canadian patients. As well, MPXI is anticipating the addition of several additional LH’s to the platform over the next several weeks. The Corporation generates transactional and/or hourly-based consulting fees from LH’s for sales generated over the network on behalf of the LH’s. The Spartan/MCLN platform acts as both a telemedicine medium providing patient access to medical practitioners for advice and cannabis prescriptions and as a sales platform for License Holders. The MCLN operates in much the same manner as Amazon or Shopify by providing on-line sales facilitation between consumers and suppliers.
While Canveda Inc. (“Canveda”), a wholly-owned subsidiary of the Corporation and License Holder, will continue to operate its 12,000 sq. ft. cultivation facility (the “Canveda Facility”) in Peterborough, Ontario, MPXI has shelved plans for any acquisition or expansion of additional cultivation in Canada and will market its estimated 1,200 kg of annual production through its Spartan and MCLN channels as well as to various provincial cannabis distribution agencies.
The MCLN and its integration with the Spartan platform will play a significant role in our growth in Canada this coming year. Spartan is a leading medical cannabis clinic dedicated to assisting Veterans of the Canadian Armed Forces, RCMP and other First Responders since 2017. Spartan has also expanded its services to helping Canadians seeking medical cannabis education, prescriptions, and advice on a wide selection of reputable Health Canada approved product offerings at its premier virtual clinic. Spartan prides itself on its 3 key measures for aligning clients with reputable suppliers: customer services, product availability, and product quality. Spartan attributes its continued growth to its 4 Pillars of Success: (1) Honesty; (2) Integrity; (3) Respect; and (4) Giving Back to the Community.
Over 40 countries, including 24 in Europe, have legalized cannabis in some form and medicinal use is by far the primary focus of legalization. Success in the medical cannabis marketplace is largely determined by the number of patients being served and the MCLN is a leading edge “patient acquisition” technology which can be adapted for use in many countries.
MPXI continues to explore opportunities to enter the retail (dispensary) arena in Canada and expand in Switzerland and the United Kingdom. With the opening of the first “beleaf” branded outlet in Central London in December 2019 and the first “HolyWeed” branded locations in Geneva in January 2020. The Corporation intends to continue the creation and expansion of a retail footprint for its products in Canada, Europe and elsewhere.
In Switzerland, a harvest of approximately 90,000 kilograms of high-CBD, organic “cannabis-light” biomass offers the Corporation the ability to process substantial amounts of CBD distillate, isolate and smokable product for sale into the global market throughout the coming months. MPXI has entered into a lease for a facility in the Geneva area and while delayed by the advent of the COVID-19 Pandemic, it is currently being converted into a mid-scale extraction and processing facility which is expected to commence operations later in 2020.
With the ultimate goal of creating a global supply chain of low-cost biomass, efficiently-scaled production of GMP quality cannabinoid products for sale into high-value markets, the Corporation will also continue to develop its projects in Malta, Australia and South Africa. While again plagued with COVID-19 induced delays, the Corporation continues to expect each of these projects to commence operations during the early part of the 2021 calendar year.
The business interruption created by the global shutdowns and travel restrictions has had a negative impact on the progress of the multiple domestic and international projects initiated by the Corporation in late 2019 and early 2020. Unlike most other cannabis ventures, virtually all of MPXI’s operations were still in the pre-revenue stage when the virus emerged. As a result, the Corporation embarked on plan of cost containment, including wage reductions, the cancellation of several consulting arrangements, the delay of construction of facilities in Switzerland and South Africa and the abandonment of selected infrastructure projects in Canada and Australia. MPXI will extend many of these cost-saving initiatives in the post-COVID period and, combined with concentrating on the development of revenues in Canada, Switzerland, and elsewhere, the Corporation continues its drive towards becoming EBITDA positive.
Finally, the Corporation continues to investigate other international expansion opportunities that can provide lower-cost cultivation, new genetics, innovative production technologies and, most importantly, new markets for its products.
The key financial measures indicated below were used by management in evaluating and assessing the performance of MPXI’s business for the fiscal second quarter of 2020. A more detailed discussion of these and other metrics, as well as operational events, can be found in the Corporation’s Financial Statements and Management Discussion & Analysis (“MD&A”) filed on www.sedar.com.
For the three months ended March 31, 2020, MPXI reported net revenue of $798,516, up 29.5% from $616,309 for the three months ended December 31, 2019 and up 276% from $212,201 for the three months ended March 31, 2019. Revenue was mainly driven by sales in Spartan, Canveda, and HolyWorld SA (“HolyWeed”).
For the six months ended March 31, 2020, MPXI reported net revenue of $1,414,825, up 202% from $468,773 for the six months ended March 31, 2019. Revenue was mainly driven by sales in Spartan, Canveda, and HolyWeed.
Gross profit for the three months ended March 31, 2020, before adjustment for the unrealized gain in the fair value of biological assets was $613,103 which represents a gross margin of 77.3%. Gross profit after adjustment for the unrealized gain in the fair value of biological assets was $993,296 calculated at 125.2% of sales. The unrealized gain in fair value of biological assets relates to cannabis plants at the Canveda Facility and in Switzerland.
Gross profit for the three months ended December 31, 2019, before adjustment for the unrealized gain in the fair value of biological assets was $551,605, which represents a gross margin of 88.2%. Gross profit after adjustment for the unrealized gain in the fair value of biological assets was $1,416,848 calculated at 226.5% of sales. The unrealized gain in fair value of biological assets relates to cannabis plants at the Canveda Facility.
Gross profit for the three months ended March 31, 2019, before adjustment for the unrealized gain in the fair value of biological assets, was $203,832, which represents a gross margin of 96.1%. Gross profit after adjustment for the unrealized gain in the fair value of biological assets was $267,992 calculated at 126.3% of sales. The unrealized gain in fair value of biological assets relates to cannabis plants at the Canveda Facility.
Gross profit for the six months ended March 31, 2020, before adjustment for the unrealized gain in the fair value of biological assets was $1,164,708 which represents a gross margin of 82.1%. Gross profit after adjustment for the unrealized gain in the fair value of biological assets was $2,410,144 calculated at 169.9% of sales. The unrealized gain in fair value of biological assets relates to cannabis plants at the Canveda Facility and in Switzerland.
Gross profit for the six months ended March 31, 2019, before adjustment for the unrealized gain in the fair value of biological assets was $443,153, which represents a gross margin of 94.5%. Gross profit after adjustment for the unrealized gain in the fair value of biological assets was $793,057 calculated at 169.2% of sales. The unrealized gain in fair value of biological assets relates to cannabis plants at the Canveda Facility.
General and administrative expenses decreased to $3,372,799 for the three months ended March 31, 2020, a reduction of 12.6% or $490,582 as compared to $3,863,381 for the three months ended December 31, 2019. The decrease in general and administrative expenses was primarily due to cost saving measures introduced by the Corporation in salaries, consulting fees and office and general expenses during the three months ended March 31, 2020.
General and administrative expenses were $3,372,799 for the three months ended March 31, 2020 as compared to $1,916,284 for the three months ended March 31, 2019.
General and administrative expenses were $7,236,180 for the six months ended March 31, 2020 as compared to $2,731,358 for the six months ended March 31, 2019.
Overall, the increase in general and administrative for the six months ended March 31, 2020, as compared to the six months ended March 31, 2019, was primarily due to increases in salaries and benefits, consulting fees and office and general expenses relating to acquisitions during the period and the Corporation’s continued growth.
Professional fees decreased to $444,216 for the three months ended March 31, 2020, a reduction of 47.4% or $400,835 as compared to $845,051 for the three months ended December 31, 2019 as a result of cost saving measures introduced by the Corporation during the three months ended March 31, 2020.
Professional fees increased to $444,216 for the three months ended March 31, 2020 as compared to $435,292 for the three months ended March 31, 2019.
Professional fees increased to $1,289,267 for the six months ended March 31, 2020 as compared to $752,822 for the six months ended March 31, 2019.
This increase in professional fees for the six months ended March 31, 2020 as compared to the six months ended March 31, 2019 is mainly due to the change in volume and complexity of accounting and legal services required by the Corporation driven by acquisitions and growth. These fees include expenses related to audit, advisory, legal work, government and investor relations, consulting and costs associated with the board of directors.
As part of the Corporation’s incentive stock option plan, the Corporation recognized $30,130 of share-based compensation for the three months ended March 31, 2020 as compared to $40,712 for the three months ended December 31, 2019 and $1,034,694 for the three months ended March 31, 2019.
As part of the Corporation’s incentive stock option plan, the Corporation recognized $70,302 of share-based compensation for the six months ended March 31, 2020 as compared to $1,230,376 for the six months ended March 31, 2019.
The Corporation granted stock options to employees, consultants, directors and officers of the Corporation under the Corporation’s stock option plan on February 26, 2019, May 29, 2019, September 19, 2019, and February 11, 2020.
Amortization and depreciation expenses increased to $2,398,799 for the six months ended March 31, 2020 as compared to $368,657 for the six months ended March 31, 2019. The increase in amortization and depreciation relates primarily to the amortization of MCLN licence commencing in December 2019, and the additional amortization from the adoption of IFRS 16 during the six months ended March 31, 2020.
Other income and expenses
Other income was $1,146,898 for the three months ended March 31, 2020 as compared to other income of $85,707 for the three months ended December 31, 2019 and other expenses of $194,451 for the three months ended March 31, 2019.
Other income was $1,232,605 for the six months ended March 31, 2020 as compared to other expenses of $778,334 for the six months ended March 31, 2019.
Net Loss After Tax
Net loss after tax was $2,528,169 for the three months ended March 31, 2020 as compared to a loss of $4,456,065 for the three months ended December 31, 2019 and a loss of $3,600,923 for the three months ended March 31, 2019.
Net loss after tax was $6,984,234 for the six months ended March 31, 2020 as compared to a loss of $5,079,768 for the three months ended March 31, 2019.
Adjusted EBITDA was a loss of $3,503,492 for the three months ended March 31, 2020, a 22% or $1,010,444 improvement as compared to a loss of $4,513,936 for the three months ended December 31, 2019. Prior year was a loss of $2,012,973 for the three months ended March 31, 2019.
Adjusted EBITDA was a loss of $8,017,428 for the six months ended March 31, 2020 as compared to a loss of $2,962,767 for the six months ended March 31, 2019.
About MPX International Corporation
MPX International Corporation is a multinational diversified cannabis company focused on developing and operating assets across the global cannabis industry with an emphasis on cultivating, manufacturing and marketing products which include cannabinoids as their primary active ingredient.
Cautionary Statement Regarding Forward-Looking Information
This news release includes certain “forward-looking statements” under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, MPX International’s objectives and intentions. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic and social uncertainties; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; delay or failure to receive board, shareholder or regulatory approvals; those additional risks set out in MPX International’s public documents filed on SEDAR at www.sedar.com, including its audited annual consolidated financial statements for the financial years ended September 30, 2019 and 2018 and the corresponding annual management’s discussion and analysis; and other matters discussed in this news release. Although MPX International believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, MPX International disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
For further information, please contact:
MPX International Corporation
W. Scott Boyes, Chairman, President and CEO
For additional information on MPXI visit our website www.mpxinternationalcorp.com or http://mpxi.tv.
MPX International Corporation
Author: MPX International Corporation
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