MPX Bioceutical Corp. (MPXEF) reported its third-quarter earnings with the caveat that comparing results to the previous year (2016) didn’t make sense since most of the assets were acquired in 2017. Instead, the earnings are being compared to the fiscal second quarter of 2018.
Dispensary cannabis sales for the quarter ending December 31, 2017, were C$266,182 up 2% sequentially over the previous quarter ending September 31, C$271,405. Total revenues increased 2% for the same time period with sales in the recent quarter of C$4.5 million over the previous quarter revenues of C$4.4 million.
The company delivered a net loss of C$13 million, which was a huge jump over last quarter’s loss of C$1.5 million. In the company statement, MPX said the loss was explained by saying, “In Q3 2018, $10 million of non-cash items were recorded including a loss of $9.2 million in Q3 2018 relating to the October 24, 2017 drawdown of US$10 million from revolving credit facility as the option component increase from date of drawdown to December 31, 2017 as the share price increased in value and share based compensation of $0.9 million versus $0.2 million in Q2 2018 driven by the change in of our Board of Directors approved at the Annual Meeting .” The funds were drawn down in order to make acquisitions, expansion and to develop new facilities in Massachusetts and Maryland.
Gross profits fell slightly from C$2.9 million to C$2.6 million for the December quarter. This was due to the gross margins falling from 65.3% in the previous quarter to 57% in the latest quarter.
MPX stock was lately trading at 57 cents, down from its 52-week high of 94 cents.
“We recorded another strong quarter with sales up to $4.5 million and are forecasting revenues of over $6 million for Q4 2018 with the addition of our newly acquired Nevada operations. We have had a busy third and fourth quarter executing our expansion strategy, with the acquisition of the Nevada cultivation facility, management an, options to acquire three dispensaries and one production facility in Maryland as well as continued expansion of our assets in Arizona and Massachusetts. Once all of our current expansion initiatives have been fully developed, we anticipate having a total of 10 dispensaries throughout four states, 9 million grams per annum in cultivation and 1.2 million grams per annum in concentrates production capacity. This gives us an excellent platform for further growth, especially considering our proven access to capital,” said W. Scott Boyes, Chairman, President and CEO of MPX. “As well, plans for our cultivation and production facility in Owen Sound, Ontario are rapidly evolving with full-construction now expected to commence during the second calendar quarter of 2018.”
Beth Stavola, COO and President of MPX’s U.S. operations, added, “It has been a uniquely busy quarter for us operationally with most initiatives coming online in the spring of 2018, including the building-out and opening of a third Health for Life dispensary in the Apache Junction suburb of Phoenix, the completion of three dispensaries that we manage in Maryland. As well, Phase 1 of the new processing facility in Maryland is now complete and has received state approval with production commencing in the near term. MPX’s construction of a 40,000 square foot cultivation/processing facility in Fall River, Massachusetts is targeted to be complete in the summer 2018 with cultivation commencing in the third quarter 2018. We have also commenced construction on the first of three dispensaries in Massachusetts. Finally, the relocation and expansion of our Arizona processing division are moving into its final stage and we anticipate it to be fully operational this coming spring. This addition is expected to more than double our production capability of MPX concentrates for sale in the Arizona market.”