Radient Technologies Inc. Reports Second Quarter 2020 Financial Results and Provides Corporate Update and Guidance for the Remainder of Fiscal Year 2020
EDMONTON, Alberta, Nov. 29, 2019 (GLOBE NEWSWIRE) -- Radient Technologies Inc. (“Radient” or the “Company”) (TSX Venture: RTI; OTCQX: RDDTF), a global commercial manufacturer of high quality cannabinoid-based ingredients, formulations and products, has released its financial results for its second fiscal quarter ended September 30, 2019. The financial statements and Management’s Discussion & Analysis are available under the Company’s profile at www.SEDAR.com.
Financial & Operational Highlights During Fiscal Q2 2020:
-- After thoroughly validating its proprietary extraction technology and processes, Radient is pleased to report revenues of CAD $1,238,350 in Q2 2020, representing an increase of 696% over revenues for the comparative quarter in the previous fiscal year. -- Radient’s cannabis biomass inventory totaled CAD $25.0 million as at September 30, 2019. As previously disclosed in a press release dated August 27, 2019, timing of shipments and third-party testing and analysis limited the processing of purchased biomass during the quarter. -- The Company expects the majority of its current inventory will be processed and revenues recorded over the next two fiscal quarters (fiscal Q3 2020 and fiscal Q4 2020), as supply chain backlogs including biomass pre-processing and third-party testing continue to improve. Please see the section of this press release titled “Guidance for the Remainder of Fiscal Year 2020” for the Company’s expected revenue projections in the coming two fiscal quarters.
Operational Progress: Edmonton I and II:
-- Scale-up of Edmonton I has exceeded expectations for both recovery and quality of extracts. Recovery of cannabinoids was shown to be consistently above 90% and as much as 99%. Products have shown high levels of quality and demonstrated extended “shelf life,” with negligible cannabinoid degradation over multiple months. -- Significant progress was made on the retrofit of Edmonton II, a dedicated hemp extraction line with an expected throughput capacity of 420,000 kg/ year, with completion of construction on track for the end of calendar 2019. Additional commissioning and validation work is expected to commence in early calendar 2020, after licensing is granted by Health Canada.
Guidance for the Remainder of Fiscal Year 2020:
Radient expects to achieve the following revenues for the remaining two quarters of its fiscal year 2020, ending March 31, 2020.
-- Fiscal Q3 2020 (ending December 31, 2019): Radient expects to report revenues of between CAD $10.0 million – CAD $12.0 million. -- Fiscal Q4 2020 (ending March 31, 2020): Radient expects to report revenues of between CAD $12.0 million - CAD $14.0 million. -- This guidance is based on extraction operations at the Company’s Edmonton I facility during its fiscal Q3 2020 and fiscal Q4 2020 periods only, and does not account for the Company’s entire CAD $25.0 million of cannabis inventory. Throughput capacity at this facility is expected to be 56,000 kg per year of cannabis.
Denis Taschuk, President & CEO of Radient, commented: “Throughout fiscal 2019, Radient achieved several key milestones which allowed us to begin cannabis extraction operations at our Edmonton I cannabis processing facility, and subsequently to scale up our capacity at this location. During the first two quarters of fiscal 2020 we have made significant progress on our extraction operations, while also executing on strategic initiatives to create a focused and efficient company that can meet the demands of the world’s largest consumer packaged goods companies. As we move forward we plan to build on this success while continuing to expand our facilities and our capacity in both Canada and Germany.”
Sale-Leaseback and Equipment Financing Agreement to secure additional working capital:
-- The Company announces today that it has signed a Non-Binding Letter of Intent (the “LOI”) to enter into a Sale-Leaseback Agreement and Equipment Financing (the “Agreement”) with RealCanna Investment Trust (“RealCanna”), which would allow Radient access to additional capital totaling approximately CAD $41 million. This Agreement will incorporate the land and buildings on which Edmonton I, II and III have been built, as well as the machinery and equipment located on/within the land and buildings. The Agreement is subject to final due diligence by RealCanna, and the completion of definitive documentation. The anticipated close date is early calendar Q1, 2020.
Partnership to develop CBD ingredients with The Edlong Corporation:
-- On October 22, 2019 the company entered into a Memorandum of Understanding to form a strategic joint arrangement with The Edlong Corporation (“Edlong”) to jointly create and market CBD flavor systems and product solutions for global food, beverage (alcoholic and non-alcoholic) and pet food industries. Edlong has over 100 years of experience as a global manufacturer, marketer and provider of technology-driven natural flavor systems, ingredients and integrated solutions for the food and beverage industry.
Successful proof of concept testing for large-scale tobacco companies:
-- Radient announces today it has recently undergone successful proof of concept testing with several large-scale tobacco companies in order to prove the capabilities of its proprietary technology to remove nicotine from tobacco at industrial scale, while retaining desirable qualities of the tobacco, such as taste and smell. -- A bi-annual update released on November 20, 2019 by the US Food and Drug Administration (the ”FDA”) on the state of its proposed policies in the near term did not include mention of immediate action to reduce nicotine content in tobacco products. However, the FDA subsequently clarified that its previously disclosed plan to reduce nicotine content in tobacco products to minimally-addictive levels had not been removed from its agenda. Radient will continue to explore nicotine reduction opportunities with tobacco companies unless the FDA makes a definitively decision not to pursue its previously proposed nicotine reduction plans.
Expansion into Germany:
-- Radient’s Germany facility (“Germany”) will be commissioned in two phases. The first phase, a leased production facility that is being built to suit cannabis extraction, is now under way. Phase one capacity and throughput will be equal to the design capacity of Edmonton I, at 200 kg/ day processing either hemp or cannabis biomass. The second phase will be the expansion of capacity on a site adjacent to the facility noted in the aforementioned first phase, scaling up to a throughput capacity of 280,000 kg/ year of cannabis, and 2.8 million kg/ year of hemp.
Expanded throughput capacity in Canada - Edmonton III:
-- Radient’s Edmonton III facility (“Edmonton III”), currently under construction, is expected to begin operations in the second half of calendar 2020, scaling up to its intended full capacity of 280,000 kg/ year of cannabis and 2.8 million kg/ year of hemp thereafter. Please refer to the Company’s AGM presentation, located in the “Investors” section of its website, to view recent pictures of the progression of Edmonton III.
Shares for Services – Fiscal Q2 2020:
During Fiscal Q2 2020 the Company issued the following shares for services:
-- July: Radient issued an aggregate of 6,000 common shares to a third-party consultant for services provided during the quarter ended June 30, 2019, pursuant to the shares for service agreement previously approved by the TSX Venture Exchange. The common shares were issued at the TSX Venture Exchange closing share price on June 28, 2019 of CAD $0.82. -- August: Radient issued an aggregate of 101,570 common shares to a third-party consultant for services provided during the month ended July 31, 2019, pursuant to the shares for service agreement previously approved by the TSX Venture Exchange. The common shares were issued at the TSX Venture Exchange 15-day VWAP share price of CAD $0.77. -- September: Radient issued an aggregate of 111,129 common shares to a third party consultant for services provided during the month ended August 31, 2019, pursuant to the shares for services agreement previously approved by the TSX Venture Exchange. The common shares were issued at the TSX Venture Exchange 15-day VWAP share price of CAD $0.71.
Additional Shares for Services (not previously announced):
-- Radient issued an aggregate of 8,000 common shares to a third-party consultant for services provided during the quarter ended March 31, 2019, pursuant to the shares for service agreement previously approved by the TSX Venture Exchange. The common shares were issued at the TSX Venture Exchange closing share price on April 30, 2019 of CAD $1.02.
Shares for debt:
-- Radient also announces a proposed shares-for-debt transaction in which the Company would issue 213,364 common shares, at a price of CAD $0.465 per share, to an arm’s length third party creditor of the Company in connection with the settlement an aggregate of USD $73,206 of debt. The shares for debt transaction is conditional on TSX Venture Exchange approval. All securities to be issued pursuant to this settlement will be subject to a 4-month hold period.
About Radient Radient Technologies is a commercial manufacturer of high quality cannabinoid based formulations, ingredients and products. Utilizing a proprietary continuous-flow extraction and processing platform that recovers up to 99% of cannabinoids from the cannabis plant, Radient develops specialty products and ingredients that contain a broad range of cannabinoid and terpene profiles while meeting the highest standards of quality and safety. Please visit www.radientinc.com for more information.
SOURCE: Radient Technologies Inc.
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Forward Looking Information:This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, without limitation, statements regarding the growth of the Company’s business operations; the construction of the Company’s facilities; the Company’s future revenues and timing of such revenues; the Company’s future products; the Company’s ability to sell its products and attract new customers; the expected throughput capacities at its facilities as set out in the “Corporate Update” section above; the future recovery and quality of the Company’s extracts; the Company’s ability to expand its business internationally; the Company’s ability to grow its business in the cannabis sector and the Company’s future plans. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Radient, as the case may be, to be materially different from those expressed or implied by such forward-looking information. Although Radient has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Radient does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
Forward-looking statements and information are designed to help shareholders understand Management’s current views of its near and longer term prospects, and it may not be appropriate for other purposes.
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