2,400% YoY Revenue Growth
49% Growth in Gross Margins Over Q2
Reduced Losses, Positioned for further Growth
Earnings Conference Call Wednesday 2 March 2022 at 11am EST
LAS VEGAS, NV, March 1, 2022 – Australis Capital Inc. (CSE: AUSA) (OTC: AUSAF) (“AUSA”, “AUDACIOUS”, or the “Company”), today announced that the Company has filed its financials and management discussion and analysis for the three-month period ending December 31, 2021, its fiscal third quarter of fiscal 2022 (the year ending March 31, 2022). The Company’s results are filed on www.sedar.com.
Terry Booth, CEO of AUDACIOUS, commented, “The third quarter saw us expand internationally through our partnership with Green Triangle Health (“GTH”), where we have already started generating revenues. Our partner is exceptionally well-connected, which is translating into commercial arrangements with major regional and international distributors. In the U.S., we continue to make good headway too, with an important partnership with First Americans of the Saint Regis Mohawk Tribe, which sees us move into New York well ahead of statewide commencement of adult use sales, providing us with a significant early mover advantage. Our partnership with PBR has seen us launch our Wreck Relief brand, which is now starting to generate online sales, and our Provisions and LOOS brands continue to do very well in California, in part through our partnership with EAZE, the world’s largest legal cannabis delivery company.”
Jon Paul, CFO of AUDACIOUS, added, “The third quarter was an important pivot for us, as we spent heavily towards future growth opportunities while moving further from our past. We successfully launched the AUDACIOUS brand at our highly trafficked booth at MJBizCon and the Roll-Up Launch Event featuring Machine Gun Kelly. We had our first sales in California while also investing heavily in key raw materials to expand our capacity for future quarters. We began funding our relationship with PBR and built inventory in Wreck Relief for the Q4 release. Even with loss of revenue from past fintech and consulting lines, we still grew sales over Q2 and have multiple opportunities for even faster sales growth in the quarters ahead.”
Financial Highlights Q3 Fiscal 2022
In the months ahead, AUDACIOUS will continue to execute on its strategy with further growth in its current markets and anticipates entering new jurisdictions, including New York, New Jersey, and others, as well as further expansion of its product line portfolio. Additionally, the Company will be pursuing multiple initiatives to increase production volume, further driving growth. The Company is following rigorous financial discipline and anticipates reducing certain operating expenses in the coming months. Additionally, following conversations with the regulators in Nevada, the Company is confident the license transfers relating to the GT acquisition will be completed shortly, following which the Company can consolidate the GT results, further boosting growth.
3Q 2022 Financial Highlights
- Total revenues of $2.37 million, an increase of 2,623% year-over-year from $90,378 in the third fiscal quarter of 2021 and even grew 4% compared to the second quarter of fiscal quarter of 2022. During the quarter under review, the Company recorded its first billings in California, offset by lower kiosk income as the Cocoon business is wound down. Furthermore, as the Company had commenced exiting its investment in Body and Mind, no further consulting fees were generated from this relationship.
- Gross profit for the fiscal second quarter of 2022 was $1.84 million compared to a gross profit loss of ($166k) in the comparable period of 2021 and increased by 51% from the second fiscal quarter of 2022. The increase in gross profit is predominantly from stronger utilization rates in the Company’s high-margin ALPS business and management fees from Green Therapeutics.
- Operating expenses increased to approximately $6.16 million, or by 25.8%, as compared to the same period in the prior year, well below the recorded revenue growth rate of over 2,400% for the same period, showing the leverage built into the business as commercial activity increases. Cost increases driving this revenue growth were increases in personnel with the acquisition of ALPS and key management, the Company’s successful rebranding as Audacious launched at MJBizCon, annual governance meeting costs, and investment in the relationship with the Professional Bull Riders (PBR) association.
- A 16% reduction in operating loss was recorded $(4.3) million as compared to $(5.1) million for the prior year, with growth in margins offsetting increased operating costs.
Q3 Highlights and Subsequent Events
- LDA Funding – securing growth capital
- The Company announced a term sheet on staged funding with LDA Capital, a U.S. based investment firm. Subsequent to the quarter, the Company announced it had closed its financing facility with LDA, bringing, initially, up to $10 million in funding, with the option to extend the facility with an additional $10 million. Much of the facility will be used towards working capital for high growth activities and initiatives.
- The Company hosted a booth at MJBizCon in October 2021. MJBizCon is the largest industry trade show. At the event, the Company was able to showcase its products and operations to a broad audience of industry professionals, consumers, capital markets professionals, investors and potential partners. At the event, the Company signed an LOI with Thailand based Golden Triangle Health (GTH), a spinoff of $400m+ public Thai food company Instant Produce PCL.
- Excellent start to global activities – GTH partnership in Thailand
- Subsequent to the quarter, the Company completed a definitive agreement with GTH, pursuant to which the Company will acquire, in stock, 25% of GTH. GTH is a spin off from $400M+ Thai public company NR Instant Produce PCL (“NRF”), who sell ethnic foodstuffs around the globe. Through NRF, GTH can access major distribution channels, ensuring wide availability of AUDACIOUS products, increasing brand awareness and sales opportunities.
- Bringing APIS to a new and significant audience – Priva partnership
- ALPS signed a partnership with Priva, the global pre-eminent environment control company for the horticultural industry. With over 12,500 projects worldwide, Priva is exceptionally well positioned to help market ALPS’ APIS solution to its customers.
- Speeding up high-quality cultivation – The AUDACIOUS ACHIEVE series
- At MJBizCon, the Company announced the launch of its turn-key all-in grow solution, the AUDACIOUS ACHIEVE series. The ACHIEVE facilities benefit from faster time to market, enabling customers to start generating revenues more quickly, especially through the Company’s QuickGrow solution, which are prefab grow solutions ready to be installed. The Company has received significant interest in its ACHIEVE series and the first projects are under development.
- From the desert to the arctic – ALPS develops profitable facilities anywhere – Pure Harvest $1.4M Kuwait deal
- ALPS, thew world leader in sustainable agriculture greenhouse design, entered a contract with Pure Harvest of the United Arab Emirates for project work concerning a large greenhouse facility in Kuwait, in itself a partnership between Pure Harvest and TCS, the largest public grocery chain in the Middle East. The Company indicates it anticipates further projects with Pure Harvest, a leading innovator in the region.
- Making waves in California – Herbs + EAZE
- The Company launched its LOOS brand in the California market through its pending acquisition of the Herbs dispensary in San Jose, and an accompanying partnership with EAZE, the world’s largest legal cannabis delivery company with over 2 million registered customers. The Company also launched a limited product line under its Provisions brand in California. First batches of both brands sold out in short order, with LOOS products ranking second in popularity in California in their category, achieved without advertising or a large marketing spend.
- PBR partnership off to successful start
- As part of its partnership agreement with PBR, the Company launched its CBD infused pain relief brand, Wreck Relief, on Thursday February 10th. The launch was successful and customer orders are coming in through the Company’s eCommerce site wreckrelief.com
- As the PBR Spring Season has kicked off, we’ve been seeing an increase in traffic to our website. In less than one week, close to 2,000 unique users visited our site from all over the United States.
- On March 5, Wreck Relief will be providing product samples and will be taking orders at the highly attended PBR Global Cup in Arlington Texas.
- License applications
- The Company announced it is applying for a variety of licenses in several jurisdictions, including Ohio, New Jersey and New Mexico.
- Award streak continues
- The Company’s Tsunami brand won the inaugural NuWu cup in Las Vegas for best extract, further validating the exceptional quality of the AUDACIOUS product line.
Conference Call Details
The Company will be hosting a conference call to discuss its results for the quarter on Wednesday, March 2, 2022, at 11am ET.
Conference call details