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StaffStaffDecember 12, 2017
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3min10970

Canadian-based ABcann Global Corp. (ABCCF) is acquiring medical marijuana clinic Harvest Medicine for approximately C$3 million. ABcann is a cultivator that holds production and sales licenses under the Canadian medical marijuana program. Harvest Medicine is an education-focused, customer-centric medical marijuana clinic that has added 8,500 patients since opening in February of this year.

Under the terms of the agreement, ABcann will pay Harvest Medicine C$1.5 million in cash and issue shares valued at roughly C$1.5 million based on a C$1.42 share price of ABcann stock. If certain milestones are met, there could be additional payments in the form of cash or stock.

“Harvest Medicine is a great partner for us, and the Acquisition will be immediately accretive to our shareholders,” said Barry Fishman, ABcann’s CEO. “Their professional, patient-focused approach is aligned with ABcann’s philosophy of quality and innovation. This represents one initial step of many as we begin the execution of our aggressive growth strategy.”

ABcann has also committed to investing $1,500,000 in expanding Harvest Medicine to several new clinics. Patients will remain on an open platform and can register with their licensed producer of choice.

In a statement, the company said that Harvest Medicine founder and CEO, Shekhar Parmar, is expected to join ABcann’s executive team as Chief Strategy Officer and remain CEO of HMED. Mr. Parmar, a lawyer and entrepreneur, brings to ABcann extensive knowledge of the medical cannabis market and a unique perspective on patient needs.

Parmar said, “Harvest Medicine was fortunate to have our choice of partners to help us grow and take the steps required to bring our patient-centric model to Canadians from coast-to-coast. ABcann impressed us with their quality focus and entrepreneurial culture. I look forward to joining ABcann’s executive team as Chief Strategy Officer, and to continuing in the role of CEO of Harvest Medicine as we scale-up our proven business model.”

ABCann shares were lately trading at $1.11, down from the company’s 52-week high of $1.42.


Debra BorchardtDebra BorchardtDecember 6, 2017
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4min5710

Zynerba Pharmaceuticals Inc. (ZYNE) stock tumbled 10% on Wednesday following a roller coaster ride on the share price after the company reported new clinical data. Zynerba announced that its data from the Phase 2 trial of its STAR 1 drug for epilepsy resulted in a meaningful reduction in seizures.

The 18-month open-label study of the ZYN002 cannabidiol transdermal gel found that patients who received 195 mg dose for six months saw their seizures reduced by 65%. Patients that got a 390 mg dose for three months in the Phase 1 trial and six months in the phase two trial experienced a 48% drop in seizures versus the baseline.

Zynerba Stock’s Volatile Ride

The stock jumped from $13.48 on Monday morning to a high of $15.14 before closing at $13.37. It closed even lower on Tuesday at $13.01 and has slipped to $11.22 on Wednesday. Canaccord Genuity raised its price target on Zynerba to $18.00 from its previous target price of $15 and kept the buy rating. The analyst Arlinda Lee cited the study results as a reason for increasing the price target.

“These new ZYN002 data are the first of their kind, showing that focal seizures in adults may be effectively treated by a transdermal gel delivery of pharmaceutically produced cannabidiol,” said Terri Browning Sebree, Zynerba’s president. “In this population of patients, continued treatment with ZYN002 was shown to significantly reduce seizure rates compared to baseline. Importantly, baseline seizure frequency appears to be an important indicator of response.”

Insys Therapeutics Slides

Insys Therapeutics (INSY) also slipped in trading by 2% to $5.23 even as the company announced that its New Drug Application (NDA) for buprenorphine as a sublingual spray for pain relief had been accepted for filing by the FDA (Food & Drug Administration). According to the company statement, the FDA set July 28 as the date to complete its review. Insys also plans to include data from a seven-day study with 100 patients to augment the NDA package.

“We look forward to working with the FDA in 2018 to add our buprenorphine sublingual spray to the range of treatment options available to physicians whose patients suffer from moderate-to-severe acute pain,” said Steve Sherman, senior vice president of regulatory affairs at INSYS. “We believe that this novel formulation and delivery method of buprenorphine holds great promise as an alternative to traditional opioids.”

Insys has struggled this year to overcome scandals regarding past executives and the company’s founder. The stock has plunged from a 52-week high of $15.02 to a year’s low of $4.10 and was lately trading at $5.23.

In Sympathy With GW?

Traders believe the stocks were sliding in sympathy with GW Pharmaceuticals (GWPH), which was tumbling 6% in trading on Wednesday. The stock had fallen after the company announced that it was offering more shares.


StaffStaffNovember 30, 2017
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5min13030

Toronto-based Golden Leaf Holdings Ltd. (GLDFF) delivered its earnings for the third quarter ending September 30 with revenues rising, but losses rising as well. Net revenue was $3.1 million versus last year’s $2.4 million for the same time period. The quarter included $240,000 in non-recurring royalty revenue. The jump in revenue was largely attributed to the acquisition of Chalice Farms this past July, which offset supply problems with other key products.

Golden Leaf still reported a net loss of $3.2 million or one cent per share, versus last year’s $2.3 million which also caused a loss of one cent per share. The company currently has 726 million shares on a fully diluted basis. Adjusted EBITDA loss was $3.1 million which was much higher than last year’s  loss of $1.7 million during Q3 2016. The company said it was “primarily driven by increases in legal costs, salaries, wages, and rents, which offset higher margins that resulted from sales of inventory produced in prior periods, and an enhanced product mix.”

“Our vision is to drive top-line growth by developing our retail brand across our target markets, starting with Portland, Oregon,” said William Simpson, Chief Executive Officer of Golden Leaf Holdings. “To this end, we are constructing three new Chalice Farm retail dispensaries. Construction efforts have progressed faster than expected and we anticipate one new location to be operational before the end of 2017, with a second expected to be up and running in Q1 2018.”

Gross profits were $731,000 or 23.7% of net revenue, higher than last year’s 21.3% of net revenue in Q3 2016, and 19.2% of net revenue in the second quarter of 2017. The company said in a statement that gross margins benefitted from better utilization of production staff and consistent margins across product categories. The gross margins also improved as a result of acquired dispensaries and the higher margins associated with retail products. Operating expenses rose to $4.7 million over last year’s $2.3 million due to higher wages, consulting costs and legal costs. The company said it plans to reduce its corporate overhead.

The Plans For Golden Leaf

The expansion in Oregon is underway as a result of the Chalice Farms acquisition. Golden Leaf now has five retail dispensaries in operation, with an additional three under construction, one of which Golden Leaf expects to have opened by the end of 2017, and a second expected to open in the first quarter of 2018.

In Nevada, the company was granted business licenses by the city of Henderson and Washoe County, Sparks and Las Vegas to sell cannabis to the adult-use markets in these locations. Sales throughout the state have begun and Golden Leaf also signed an agreement with a distributor in Reno to generate sales. Simpson said, “Although at a very early commercial stage, we generated revenues of approximately $100,000 USD in the third quarter of 2017 from Nevada, and are pleased with this early stage traction. Nevada is one of the leading markets for the cannabis industry, due to its more than 40 million yearly visitors and its sizable domestic market, and we are excited about this opportunity.”

In Canada, Golden Leaf completed its acquisition of MMGC in early November, which is expected to enable the company to expand sales of its branded oils and flowers in that marketplace. MMGC was granted a cultivation license by Health Canada for its Ontario cannabis grow facility and Golden Leaf expects to launch retail operations in Canada in the third quarter of 2018.

Cash

As of September 30, 2017, the Company had approximately $634,000 USD in cash, compared with $3.9 million USD at December 31, 2016. In a statement, the company said, “Subsequent to the end of Q3 2017, Golden Leaf received approximately $10.8 million USD in net proceeds from a private placement transaction. The Company is using these proceeds for the payment of outstanding accounts payable, inventory purchasing and general corporate purposes.”

The stock is trading at 23 cents, which is a big drop from its 52-week high of 57 cents.


Debra BorchardtDebra BorchardtNovember 28, 2017
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4min7960

California-based Kush Bottles, Inc. (KSHB), reported its financial results for its fiscal year ended August 31, 2017 with revenues climbing 129% year over year to $18.8 million. Net income came in at $69,000 down from 2016’s $72,000. Gross profits were $6.2 million, a nice jump over last year’s $2.6 million. 

“Fiscal year 2017 was a pivotal year for the Company as we began a new and exciting chapter,” commented Nick Kovacevich, Chairman and Chief Executive Officer of Kush Bottles. “We implemented a series of growth initiatives intended to expand our product portfolio, strengthen our supply chain, increase our sales force and position Kush Bottles as the leading provider of ancillary products and solutions to the rapidly growing cannabis market. As a result of these initiatives, our sales growth steadily gained momentum throughout the year, resulting in record revenues of $18.8 million in fiscal year 2017, representing an increase of 129% compared with fiscal year 2016.”

Kovacevich noted that the company’s strong fourth quarter results were driven by the company’s acquisition of CMP Wellness that occurred in May of 2017. This enabled the company to take advantage of the explosive vape market.

“The acquisition brings significant revenue and growth opportunities in the vapor category, as well as synergies which expand our ability to grow the core packaging, supplies, and services business.  This acquisition was the latest of several initiatives implemented throughout the year to diversify our product offerings to capture additional market share in the cannabis sector,” said Kovacevich.  “We have made great strides to gain market share in new emerging cannabis markets such as Nevada and California, areas we expect to remain a large focus in fiscal year 2018.”

New Loan

The company also stated in its annual report that on November 16, 2017, Kush Bottles and Kush International Corporation (KIM) as borrowers, and all of its other subsidiaries, as credit parties, entered into a Loan and Security Agreementwith Gerber Finance Inc., as the lender, effective as of November 6, 2017. The loan provides a secured revolving credit facility with an aggregate principal amount of up to $2.0 million at any time outstanding, of which $1,500,000 was drawn as of November 24, 2017.  The proceeds of the loans under the Loan Agreement will be used for working capital and general corporate purposes. The revolving line has a maturity date of November 6, 2019.

Kush Bottles, Inc. markets and sells packaging products and solutions to customers operating in the regulated medical and recreational cannabis industries. Kovecevich told Green Market Report during the MJ Biz conference recently that California was a huge catalyst as the state embarks on new regulations that include new requirements for packaging.


Debra BorchardtDebra BorchardtNovember 24, 2017
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6min9970

Canadian-based Aurora Cannabis Inc. (ACBFF)  has gone a spending spree as the company continues to make acquisitions. Yesterday, while all of us Americans were bonding over turkey, Aurora announced it had entered into a binding share purchase agreement to acquire H2 Biopharma Inc.

The Lachute, Quebec-based H2 is currently completing a purpose-built 48,000 square foot cannabis production facility, less than an hour from Montreal, and near the Pierre-Elliott Trudeau International Airport. The Lachute Facility is expected to be completed by the end of the year and is projected to produce 4,500 kilograms of high-quality cannabis per year. The facility is located on 46 acres of land, which H2 has the right to acquire for $136,000. The Lachute facility has access to ample low-cost power, water and infrastructure to support a very significant capacity expansion – up to or beyond the scale of the Company’s 800,000 square foot Aurora Sky facility, currently under construction near Edmonton International Airport.

“This is another outstanding transaction that further extends Aurora’s lead in establishing advanced-technology, ultra-efficient, low-cost production via purpose-built facilities,” said Terry Booth, CEO. “The Lachute Facility, which is 80% complete and has the land and utilities required for significant additional expansion, is fully consistent with the Aurora Standard and will be instrumental in delivering high-quality products for the Quebec, Canadian and overseas markets.”

This latest Aurora acquisition will be the Company’s fourth production facility in Canada – and the second site in Quebec, in addition to its 40,000 square foot production “Aurora Vie” facility in Pointe-Claire, on the island of Montreal.

Larssen Acquisition

Aurora also announced that it has signed a definitive agreement for the acquisition of 100% of the issued and outstanding shares of Larssen Ltd., a Canadian company that has consulted on the design, engineering, and construction oversight of many greenhouse cultivation facilities.  Larssen will be integrated into a newly incorporated subsidiary, Aurora Larssen Projects Ltd. and will focus on providing a turn-key service offering to Aurora and its domestic and international partners.

Booth added, “The acquisition of Larssen is an immediately accretive, high-margin revenue generating opportunity that also extends our technological leadership in the cannabis sector. We know Thomas and his team very well, as they have been instrumental in the design and engineering of our revolutionary Aurora Sky facility. This will help make the integration of Larssen with Aurora seamless. The establishment of ALPS will add significant capacity to our project execution team, enabling us to further accelerate the expansion of our global presence.”

Hempco Deal Completed

Aurora Cannabis announced that it has completed a non-brokered private placement with Hempco Food and Fiber Inc. for gross proceeds of $3.2 million that was originally announced in September. In relation to the placement, Hempco issued 10,558,676 units, at $0.3075 per unit, to Aurora. According to the company statement, “Each unit consists of one Hempco common share and one non-transferable common share purchase warrant. Each Warrant entitles Aurora to purchase one additional Hempco Share at a price of $0.41 until the second anniversary of the closing date. Each Warrant includes an acceleration clause, providing that if at any time beginning four months and one day after the date the warrant was issued the volume weighted average price per Hempco share on the TSX Venture Exchange (“TSXV”) exceeds $0.65 for a period of 30 consecutive calendar days, Hempco will have a limited right to accelerate the expiration date of the Warrants.”

This all comes as Aurora formally launched its hostile takeover bid for CanniMed Therapeutics. CanniMed had said earlier that while Aurora had expressed interest in a takeover, it hadn’t received a formal request. Aurora disputed that, but today issued a statement saying, “Notice and advertisement of the Offer was placed in the November 24, 2017 edition of the Globe & Mail, and a takeover bid circular will be mailed to CanniMed shareholders. In addition, Aurora will file the offer and takeover bid circular and related documents on SEDAR. The Offer Documents will also be available on Aurora’s website at www.auroramj.com and shareholders are invited to visit cannimed.auroramj.com for further information.”

 


Debra BorchardtDebra BorchardtNovember 21, 2017
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6min9151

Another day, another chapter in the saga of MassRoots (MSRT). Yesterday the Company filed a lawsuit against the former Chief Executive Officer Isaac Dietrich and Dietrich promptly retaliated. One can only feel sorry for these beleaguered shareholders – granted there aren’t that many left.

MJ Biz Daily posted a copy of the lawsuit filed by MassRoots against Dietrich that claimed he had used illegal drugs at the office and engaged in improper sexual activities at the workplace. If that wasn’t enough, the company also claimed that Dietrich misappropriated company funds to the tune of $250,000.

Dietrich was not about to be outdone. He’s a company founder who still owns 17 million shares of the company, has filed with the Securities and Exchange Commission a formal request for a shareholder vote. He wants to remove three shareholders and replace them with his board picks. The board members he’d like to toss include Vincent “Tripp” Keber, the CEO and Co-founder of Dixie Brands, Terri Fitch, the CEO and Co-founder of Drink Teck and Ean Seeb, the co-founder of Denver Relief Consulting.

Instead, he’d like to bring in people he was introduced to by another shareholder that don’t have any cannabis industry experience. Former QS Energy executives Nathan Shelton and Charles Blum and Rightscorp. CEO Cecil Kyte. Dietrich feels that the company is best run by its founder and that he should be reinstalled as CEO.

The Back Story

So, how did the “Facebook of Cannabis” turn into MySpace? This past summer, things were looking up for MassRoots. Even though revenues were slipping, Dietrich was making acquisitions to right the ship. One of those acquisitions. Odava (check) brought him the man, Scott Kveton who would eventually throw him out. The last acquisition of CannaRegs would have been immediately accretive and would have quickly delivered that much needed revenue. However, some of the board members felt that the agreed upon price of $12 million was too rich.

From that point on, things took a turn for the worse and the death spiral began. CannaRegs CEO Amanda Ostrowitz was pushed to justify the price that Dietrich agreed to pay for her company. It was implied at that time of the acquisition that she while she was coming in as a President of MassRoots, she was expected to be named CEO of MassRoots in a relatively short amount of time. So, there was an active conversation that Dietrich was going to be replaced by someone with more structure and professionalism. Dietrich was clearly choosing Ostrowitz over Kveton as his successor. That never happened.

The Board Coup

Dietrich got wind of a board coup and set about canvassing shareholders to rally them to his side. Team Dietrich didn’t move fast enough and Kveton outmaneuvered him. According to Dietrich, Kveton asked for his resignation after making serious drug allegations. The deal was that Dietrich would resign and quietly leave his position as CEO. If he didn’t, the alleged drug use would be made public.

Dietrich didn’t go quietly and instead continued to speak to the press. One of these conversations led MassRoots to claim that he was disparaging the company something he had agreed not to do. Kveton followed through with his threat and filed the lawsuit exposing the drug use along with the claim of sex in the workplace and the misuse of company funds.

Company Health

The stock has fallen from a 52-week high of $8.25 to 16 cents. MassRoots doesn’t have sufficient cash to fund operations and stated in its last earnings report on November 14, that it will need additional financing to fund future operations. The company only recorded $11,516 during the last quarter in revenues, while losing $7 million. MassRoots has liabilities of $2.6 million. Rather than focusing on bringing in revenue, MassRoots purchased cryptocurrencies at a discount with the idea it could potentially sell this asset.

There are only six remaining employees and the company said it needs $2.5 million to stay alive. CannaRegs terminated its deal and is no longer associated with MassRoots. CannaRegs has actually hired some of the MassRoots employees that were laid off as Ostrowitz’s company continues to add more clients and has demonstrated it strength.

MassRoots is trying to turn itself into a cannabis software company like MJ Freeway, BioTrack THC or even Flowhub – a company it once owned stock in. Yet, what customer would sign on with a company that is such a mess and so toxic. The two company leaders are employing a scorched earth policy that will only lead to the end of MassRoots. Dietrich has not proven himself to be a reliable company leader and Kveton’s handling of this very messy and public divorce has not done the shareholders any favors.


StaffStaffNovember 15, 2017
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4min7100

Massachusetts-based MariMed Inc. (MRMD) delivered its third quarter financial results for the quarter ending September 30, 2017, with revenue increasing 96% to $1.7 million last year’s $873,000. Gross profits popped to $1.2 million over last year’s $422,000 for the same time period.

Still, MariMed reported a loss of $314,000 versus last year’s loss of $6,800. The company took a $222,000 loss on the write-off of deferred revenue. This wasn’t mentioned at all in the press release and requires a trip to the SEC filing to find out exactly what happened here. According to the filing, “Deferred revenue represented the conversion of a promissory note issued to a third party by the Company’s former parent, which was assumed by the Company in 201l, for future products and services of the Company’s online portal business segment.” The filing went on to say, “In the third quarter of 2017, the Company wrote off the entire carrying amount of deferred revenue in accordance with an agreement with the third party whereby the Company was released from all of its obligations to the third party and any actions or demands related thereto.” Had the company not had this one-time event, net income would have been $208,000.

Assets increased to $21 million, a 149% increase over last year’s $8.5 million and a 28% increase sequentially. The company has raised $9 million over the past nine months.

“Successful development of our consumer and medical brands is one of our key strategies for long-term profitable growth,” said Robert Fireman, MariMed Chairman, and Chief Executive Officer. “In Q3, we achieved significant distribution gains and saw significant market uptake for Kalm Fusion, our new Betty’s Eddies, and the Tikun Olam clinically-proven medical strains.  We are aggressively pursuing expansion to markets where we have facilities coming online and to other markets in distribution agreements, where we assure manufacturing to uniform quality standards.”

Company Milestones

  • In October 2017, the Company received a certificate of occupancy for its recently completed facility in Hagerstown, MD, which is leased to a third party that has been awarded a medical marijuana license in the state.
  • In November 2017, the Company purchased a 137,500 square foot industrial building in New Bedford, MA, a portion of which is tenant-occupied, and a portion of which will be renovated into a state-of-the-art medical cannabis facility to be leased to a cannabis licensee in the state.
  • In November 2017, the Company entered into an exclusive licensing agreement for the production and distribution of its branded cannabis products in the state of Nevada, which is expected to commence in the fourth quarter of 2017.

“MariMed is one of the few companies in the U.S. cannabis industry delivering on a commitment for rapid, high quality, multi-state expansion,” said Jon Levine, MariMed Chief Financial Officer. “Our business model and strong financial results enable us to secure the necessary capital to build our national presence in owned facilities and production agreements for licensed brands.  In Q3, the Company delivered milestone achievements on multiple state facilities and expanded brand distribution that will translate to significant new revenue streams in calendar 2018.”

Shares ballooned to 163 million over last year’s 64 million and the shares are trading at roughly 40 cents, down from the 52-week high of 83 cents.


StaffStaffNovember 14, 2017
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4min6150

Canadian-based Canopy Growth (TWMJF) delivered a 107% jump in revenues for the second quarter ending September 30, 2017. Revenues of C$17.6 million increased over last year’s C$8.5 million for the same time period. This was also an 11% increase sequentially over the fiscal first quarter revenues of C$15.9 million.

Canopy Growth still reported a net loss of C$1.6 million for the quarter or one cent per diluted share, but that figure is much lower than last year’s C$5.4 million or five cents per diluted share. The company said that management believes ongoing spending to expand the production platform is a prudent investment in the company’s long-term health.

The company sold 2,020 kilograms of cannabis product for the quarter, which was a 74% increase over last year and a 10% increase sequentially. The average cost per gram before shipping and fulfillment was $1.25, a drop from the previous cost of $1.27 per gram. The company statement read, “The cost per gram also reflects value-add processing for cannabis oils and sector-exclusive Softgel capsules, both carrying significantly higher margins than dried flower product. The weighted average cost per gram to the point of harvest fell to only $0.72 per gram, the fifth consecutive quarter when the cost to the point of the harvest was less than $1 per gram and declined from the previous quarter.”

Constellation Brands Investment Was The Biggest News

Of course, the biggest news of the quarter was the new strategic relationship with Constellation Brands (STZ). The beverage giant has invested C$245 million ($190 million) in exchange for a 9.9% stake in Canopy Growth to develop new cannabis-infused beverages.

“With our objective to win and retain significant future market share, and backed by the recent $245 million investment from Constellation, we remain focused on the expansion of our cultivation capacity, the extraction platform and finished branded products programs,” said Bruce Linton, Chairman & CEO. “The historic cannabis supply MOU that we signed during the second quarter with the province of New Brunswick confirmed our long‑held belief that investment in brands, quality, and scale coupled with investing in the people and communities we believe in across Canada would leave us well positioned to serve provincial supply needs. We are hopeful to see more and more provinces make similar decisions to pursue the most reliable, varied and high-quality products available in the sector.”

The stock was rising by 1% to trade at $15.99, near its 52-week high of $16.98. According to Yahoo! Finance, 10 analysts cover Canopy Growth with an average target price of $14.99. All of the analysts have buy ratings except one with a sell and one person has a hold rating.

 


StaffStaffNovember 14, 2017
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3min4290

Carson, California-based Solis Tek Inc. (SLTK) delivered third-quarter 2017 revenues of $1.9 million an increase of 6% over $1.8 million for the same period in 2016. Gross profits rose 5% to $671,000 versus last year’s $640,000.

“We’ve significantly expanded our product portfolio in the third quarter and the increased demand for our products has continued,” commented Dennis G. Forchic, Chief Executive Officer of Solis Tek. “We are particularly excited about the response to our new Digital Lighting Controller. This device complements our existing upgraded product line and enables cultivators to schedule and monitor their grow rooms, thus increasing the grower’s yield and ROI. Initial demand for the Controller exceeded expectations. With the recent funding round now complete we are excited to be able to increase inventory levels across the board to meet projected demands.”

The increases in revenues were driven by increased market penetration among hydroponic customers and commercial facilities. The company’s cost of revenues rose 7% versus last year and resulting in modestly lowering gross margin to 33.7% from last year’s 34.1%. Selling, general, and administrative expenses were $2.05 million in the third quarter of 2017, up 167% over the same period in 2016. The higher expenses were attributed to “cash and stock-based compensation expenses to support a broad campaign to increase Solis Tek’s industry and investment community visibility and, to a lesser extent, increased marketing and payroll related expenses.”

Solis Tek also announced on Monday that it has closed on a recent round of financing by securing $2.5 million of which $1.75 million came through a secured convertible debenture with a single institutional investor. “The proceeds will enable the Company to assure our supply chain execution and maintain inventory levels that can meet customer demand for our industry-leading lighting products,” said Forchic. “In particular, we are excited to ramp commercial activities, fulfill initial orders, and build inventory for our recently-launched Controller, which enables growers to customize their growing experience by mimicking the conditions of natural sunlight, and to automate production for our Nutrient Line, from which we soon plan to launch our second commercial product.”

The stock was lately trading at $1.38 down sharply from its 52-week high of $3.44.


StaffStaffNovember 14, 2017
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4min4530

Pennsylvania-based Zynerba Pharmaceuticals, Inc. (ZYNE),  reported its third-quarter earnings for the period ending September 30, 2017. The biotech company delivered a net loss of $8.3 million with basic and diluted net loss per share of $0.63. This is greater than last year’s loss of $5.9 million.

The company has no revenues to report yet as the company’s drugs are not yet available for sale. The expenses rose as well with total operating expenses rising to $8.5 million for the quarter from $5.9 million for the same period from last year. The company’s earnings announcement barely touched on the financials and instead focused on the company’s drug study highlights. Zynerba did not have a very positive year for study results and as a result, the stock has fallen over 20% since the beginning of the year. Yet, investors would not know this from the rosy outlook delivered by the CEO.

“We announced important data during the third quarter, including remarkable Phase 2 data from our FAB-C study of ZYN002 in children and adolescents with Fragile X syndrome,” said Armando Anido, Chairman, and Chief Executive Officer. “We achieved the primary endpoint and numerous secondary endpoints with statistical significance compared to baseline, and anticipate moving into a pivotal program in Fragile X in the first half of 2018. Additionally, we look forward to outlining our path forward in Epilepsy, and meeting with the FDA to discuss our OA pivotal program in the first quarter of 2018.”

As of September 30, 2017, cash and cash equivalents were $66.3 million, compared to $70.2 million as of June 30, 2017. The company says it has enough cash to make it through 2019.

On June 9, 2017, Zynerba entered into an Open Market Sales Agreement offering program, with Jefferies LLC, pursuant to which it may sell up to $50 million of its common stock. In a statement, the company said, “From September 28, 2017 through October 26, 2017, the Company has sold and issued 296,594 shares under its ATM program, at a weighted average selling price of $10.74 per share, for gross proceeds of $3.2 million. Net proceeds after deducting underwriting and commissions and offering expenses were $3.0 million. None of the proceeds were settled prior to September 30, 2017, and therefore the cash for the sale of these common shares will be recorded in the fourth quarter.”

Shares outstanding almost doubled from 8.9 million shares last year to 13 million in this latest quarter. The stock was lately trading at $12.44, down from its 52-week high of $25.95.

 



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