Auxly Reports $66 Million Net Loss For 2018
Auxly Cannabis Group Inc. (TSX.V: XLY) (OTCQX: CBWTF) released its fourth quarter and full year 2018 financial results. Auxly report $747k of research revenues from the recently completed acquisition of KGK in the third quarter of 2018. This compares to no revenues in 2017.
For the year 2018, Auxly delivered a net loss of $66 million with a net loss of $0.14 per share on a basic and diluted basis. This compares to a net loss of $18 million for 2017 with a net loss of $0.11 per share on a basic and diluted basis. The decrease in net income was primarily driven by an increase in expenses, compounded by non-cash expenses and losses during the period, partially offset by increased income tax recoveries of $1,641,000.
Chuck Rifici, CEO and Chairman of Auxly commented: “2018 was an important year for us, as we made substantial progress towards our objective to become a vertically integrated cannabis company. We were successful in building a diverse and robust cultivation pipeline, have made progress on adding value through the research and development of derivative cannabis products through Dosecann, and expanded our distribution channels for bringing cannabis products to market. We added key strategic assets and partnerships to our portfolio, have over $200 million of cash and cash equivalents, and are well positioned to execute on our objectives for this year.”
Auxly recorded share-based expenses of $20 million for 2018, an increase of $17,082, over 2017. Wages and benefits were $9 million for 2018 an increase of $7 million over 2017, primarily due to an increase in Auxly employees to support the scaling of the business of $5 million and workforce costs associated with the four acquisitions completed in 2018.
Professional fees were $7 million for 2018. This compares to $2 million in 2017. The increase in professional fees was attributed to ongoing services related to Auxly’s investment opportunities, due diligence, and costs associated with four acquisitions.
Auxly said its priorities for 2019 were as follows:
- complete product R&D, formulation and manufacturing activities at the Dosecann facility in preparation for the legalization of derivative cannabis products;
- complete construction of all ongoing cultivation assets, while continuing to work with the Company’s joint venture partner Sunens’ as it completes the state-of-the-art greenhouse facility in 2019, with expected supply of over 100,000 kg of cannabis in 2020;
- continue to support the rollout of Kolab and Robinsons and build brand awareness; and
- opportunistically expand the Company’s footprint in international markets to facilitate the sale of CBD, derived from its large-scale hemp cultivation operation in Uruguay.