Red White & Bloom Brands Inc. (OTC: RWBYF) posted its financial results for the first quarter ending March 31, 2023. The company posted revenues that ticked down over the year and opened newly re-branded stores in Florida, as it tries to stave off losses.
The Toronto-based firm reported revenues of $27 million, down from last year’s $28 million, with a gross profit of $9.4 million. Operating expenses amounted to $10.9 million, and the company posted a positive adjusted EBITDA of $95,000 versus last year’s $1.25 million.
Net losses were trimmed to $9.1 million versus $10.9 million in the previous year’s first quarter.
RWB saw several milestones in the first quarter of the fiscal year. In January, it said it successfully launched a new infused pre-roll offering, strengthening its presence in markets it is already established in.
The company made strides in its retail presence in February, launching its fourth medical-use retail store in Clearwater, Florida. It plans to open five more stores in Florida, with timelines currently under finalization.
Additionally, the Florida Office of Medical Marijuana Use gave the green light for the rebranding of the company’s vertical medical-use dispensary operations in Florida as “House of Platinum” — two years after RWB acquired Acreage Holdings’ Florida operations in 2021, which were known as “The Botanist” at the time.
The company said that the name change signals an important step as it plans to complete the expansion of its manufacturing and medical retail operations in the Sunshine State by the end of fiscal 2023.
In February, RWB started selling more types of products in Arizona for recreational use, such as its Platinum Vapes (PV) line. Over the course of the next fiscal year, the company plans to introduce more products from the PV line.
RWB also shared that it managed to sell and ship over a million vape cartridges from the PV line, marking the first time the company has ever sold that many cartridges.
Balance Sheet Moves
On the financial front, the company made changes on March 10 to a loan agreement it had with a lender. The agreement allowed the company to record loans given to them in U.S. dollars. To start with, it adjusted an existing loan it had that was worth $5.85 million. The change mainly affected the main sum principal that was loaned to them, while all the other conditions of the loan stayed the same.
On March 27, RWB secured a financing agreement with a lender who would provide loans in Canadian dollars. The agreement will end, or mature, on September 12, 2024. As a guarantee to the lender, RWB offered up its Michigan subsidiary, RWB Michigan, LLC, as collateral.
In other words, if RWB can’t pay back the loan, the lender could potentially take ownership of RWB Michigan, LLC. The loan will have an annual interest rate of 12%.
Also during the quarter, trading on the OTCQX for the company was suspended, pending the completion of form 20Fs for full-year 2021 and full-year 2022. The company said that it is working with its advisors to complete the required filings and will work in collaboration with the SEC and the OTCQX to confirm a timeline for reinstatement.