Green Rise Capital Corporation Announces Third Quarter 2019 Financial and Operating Results
Toronto, Ontario--(Newsfile Corp. - November 26, 2019) - Green Rise Capital Corporation (TSXV: GRCC.P) ("Green Rise" or the "Company") today released its financial and operating results for the three and nine months ended September 30, 2019. Green Rise's unaudited condensed consolidated financial statements (the "Financial Statements") and related management's discussion and analysis (the "MD&A") for the three and nine months ended September 30, 2019 are available on SEDAR.
On September 30, 2019, the previously announced reverse takeover of Green Rise by Bull Market Farms Inc. ("Bull Market") was completed (the "RTO Transaction"), which represented the Company's qualifying transaction as defined by the policies of the TSX Venture Exchange ("TSXV"). Accordingly, the current period and comparative figures in the MD&A and Financial Statements are reflective of Bull Market's operating activities, and should be read in conjunction with the unaudited condensed interim financial statements as of September 30, 2019 of Green Rise and the annual audited consolidated financial statements of Bull Market Farms Inc. and the notes to those statements as at December 31, 2018 which are available on SEDAR. All figures referred to in this news release are denominated in Canadian dollars, unless otherwise noted.
KEY BACKGROUND INFORMATION
Part way through the 2018 growing season, Bull Market acquired an 81-acre farm with an existing 51-acre producing greenhouse in Leamington, Ontario, and as such, Bull Market's 2018 production represents approximately 60% of 2019 levels on a comparable basis.
On September 30, 2019, the Company completed the acquisition of all of the issued and outstanding shares of Bull Market through the RTO Transaction. The Company is considered to be a continuation of Bull Market with the net assets of the Company at the date of the RTO Transaction deemed to have been acquired by Bull Market. The RTO Transaction was approved by the TSXV.
THIRD QUARTER AND YEAR-TO-DATE 2019 HIGHLIGHTS
For the first nine months of 2019, EBITDA of $4.0 million was twice the amount generated during the same period in 2018, due to the impact of the Company's operations running for the full period in 2019 compared to 2018, combined with decreased operating costs and higher production yields as a result of improved operating efficiencies. Third quarter 2019 EBITDA1 was $2.0 million compared to $2.4 million in Q3 2018, largely attributable to the impact of higher salaries offset by increased operating efficiencies captured with continued business growth.
Revenue totaled $5.9 million in Q3 2019, a 15% increase over the same period in 2018, while year-to-date 2019 revenue of $11.3 million was 81%, or $5.1 million, higher than the first nine months of 2018, directly related to the timing of Bull Market's 2018 acquisition of the producing greenhouse.
Operating cash flows contributed $3.5 million in the first nine months of 2019, compared to $1.4 million in 2018. At the end of Q3 2019, Green Rise had cash of $3.4 million, current liabilities of $2.9 million and working capital of $2.7 million.
Net loss was $1.5 million and $1.2 million for the three and nine months ended September 30, 2019, compared to net earnings of $0.7 million and $4.7 million for the same periods in 2018. The loss in 2019 is primarily due to $2.3 million of non-recurring listing fees related to completion of the RTO Transaction. Net earnings for the nine months ended September 30, 2018 reflect the impact of a bargain purchase gain of $3.8 million.
Prior to the RTO Transaction, Green Rise completed a brokered private placement financing issuing 18,343,000 subscription receipts at a price of $0.20 per subscription receipt for gross proceeds of $3.67 million. On September 30, 2019, each subscription receipt was exchanged for one Green Rise common share.
The Company also announces today that Sandy Basolini has resigned as a director from the Green Rise Board effective November 26, 2019. The Board would like to thank Sandy for his valuable service and contributions over the last two years.
With the success of its acquisitions and demonstrated operational capabilities over the past 18 months, Green Rise is poised to establish its business as the "best-in-class" provider of greenhouse grown fresh produce. By prioritizing assets to align with the growing demand by consumers for locally grown fresh produce, the Company plans to continue executing its growth strategy. Management expects to generate sufficient cash flow from operations to meet its debt servicing, principal payment, and working capital requirements over both the short and long term by focusing on increased profitability, strong working capital management and prudent capital expenditures. The Company regularly reviews all of its assets to ensure appropriate returns on investment are being achieved and fit with the Company's long-term strategic objectives.
ABOUT GREEN RISE
Green Rise is a grower of fresh produce with a producing, 51-acre greenhouse on its 81-acre farm located in Leamington, Ontario. Poised to be the "best-in-class" contract grower of fresh produce, the Company takes pride in providing high-quality, consistent and reliable product to meet the growing consumer demand for locally grown fresh produce. By leveraging innovative growing solutions and embracing technology, Green Rise seeks to optimize its operations to generate improved product quality and shelf life, expand profit margins, and provide investors with meaningful and growing returns.
For further information, please contact:
Vincent Narang, Chief Executive Officer
This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the Transaction and associated transactions, including statements regarding the terms and conditions of the Transaction and associated transactions. Any such forward-looking statements may be identified by words such as "expects", "anticipates", "believes", "projects", "plans" and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements. The statements in this news release are made as of the date of this release. Green Rise undertakes no obligation to update any such forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on any such forward-looking statements. Green Rise undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Green Rise and Bull Market, or their respective financial or operating results or (as applicable), their securities.
This news release contains references to certain measures that do not have a standardized meaning under International Financial Reporting Standards ("IFRS") as prescribed by the International Accounting Standards Board and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing a further understanding of operations from management's perspective. Accordingly, non-IFRS measures should not be considered in isolation nor as a substitute for analysis of financial information reported under IFRS. The Company believes that non-IFRS measures, specifically EBITDA and Adjusted EBITDA, are frequently used by securities analysts, investors and other interested parties as measures of financial performance and to provide supplemental measures of operating performance and thus highlight trends that may not otherwise be apparent when relying solely on IFRS financial measures.
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