LANGLEY, BC / ACCESSWIRE / December 14, 2020 – Adastra Labs Inc. (CSE: XTRX) (FRANKFURT: D2EP) (“Adastra”) a Health Canada Licensed cannabis processing and analytical testing services Company, is pleased to announce its financial and operating results for the third quarter financial results for the period ended September 30, 2020.
Key Financial Highlights
- Gross revenue increased year-over-year from $Nil in Q3 2019 to $1.25 million in Q3 2020
- Quarter-over-quarter gross revenue increased 190% to $825 thousand in Q3 2020
- Gross revenue was improved by the continuing relationship with CannMart Inc., combined with our biomass agreement with Pure Sunfarms which allows for a steady supply of quality input material.
- Adastra ended the quarter with a total cash balance of $2.3 million
- A non-brokered private placement for gross proceeds of $3.49 million was completed in Q3 2020
- Cash outflows for capital expenditures in the quarter were $1.2 million, compared to $595 thousand in Q2 2020
- Capital expenditures primarily consisted of the acquisition of an EV-Mass Cryo-Ethanol extractor system from Evolved Extraction Solutions
- Capital expenditures for the remainder of fiscal 2020 are expected to consist of its hydrocarbon extraction expansion plan which will include the ETS MeP XT70 system from ExtractionTek Solutions.
- Operating expenses, increased to $3.7 million from $553 thousand in Q2 2020, driven by an increase in share-based payments, professional fees and consulting, and advertising and promotion. These costs are as a result of the increased activity and implementation of Adastra’s planned operation model in Q3 2020 and are expected to be more fully reflected in Q4 2020.
The Company continues to realize efficiencies and retain its focus on cost efficiencies and near‐term revenue growth to achieve full capacity production.
“In our third quarter, we made considerable progress towards our first-year goal of revenue growth and product expansion. We have seen a substantial increase to our revenues and revenue generating opportunities which has exceeding our expectations. With a strong finished goods inventory of over $750K we are well-positioned to incorporate these into client orders in Q4,” said Stephen Brohman, Adastra CFO.
In September 2020, the Company installed and commissioned its cryo-ethanol extraction production line that triples the Company’s cannabis oil production capacity while reducing overall costs. This production line allows the repurposing of the CO2 supercritical extraction line for other cannabis concentrate products such as high terpene full spectrum extracts and live resins.
The Company continued processing its inventory of dried cannabis primary through its cryo-ethanol extraction line and secondary distillation lines for the purpose of selling the resulting bulk cannabis concentrates to licensed clients or using it to fulfill contract manufacturing orders, primarily for vaporizing cartridges.
Products and Brands
Adastra has made significant steps to further develop SoluCann, a technical innovation partnered with JOYN Botanicals LTD. This ground-breaking, disruptive THC and or CBD powder is applicable to the beverage, edibles, beauty, pet foods and supplement market.
Alongside our development with JOYN, Adastra furthers their agreement with Phyto extractions. The Phyto agreement, once complete, will leave Adastra with a substantial stake in one of Canada’s most iconic cannabis brands.
“Adastra will continue to focus on contract manufacturing, third party processing and brand development. As we move forward into 2021 we will commission our hydrocarbon extraction capability for the production of underserved cannabis concentrate products such as shatter and live resin. This along with our existing equipment will position Adastra as a leader in processing, SKU and brand development. We look forward with further expansion and brand development in 2021.” Andy Hale, CEO Adastra labs.
About Adastra Labs Inc.
Adastra Labs Inc. is a Langley, BC-based cannabis company with a co-located Health Canada Licensed Standard Processing Facility and Analytical Testing Laboratory. Adastra can produce cannabis extract through supercritical CO2 extraction and Cryo-Ethanol extraction with further molecular wiped-film distillation as well as conduct in-process quality testing. Adastra is currently expanding to provide hydrocarbon extraction. Such extracts can easily be incorporated into edibles, beverages, topicals, tinctures, vape cartridges and other products that will serve the Canadian medical and adult-use cannabis markets.
Chief Executive Officer
Adastra Labs Inc.
Phone: (778) 715-5011
Chief Financial Officer
Adastra Labs Inc.
Phone: (778) 715-5011Email: email@example.com
Address: 5451 275th Street, Langley, BC V4W 3X8
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION:
Except for statements of historic fact, this news release contains certain “forward-looking information” within the meaning of applicable securities law including statements relating to hydrocarbon extraction system performance, commencement of hydrocarbon extraction activities, expansion into alternative production lines, commencement of certain operations, installation of equipment, expected product quality and margins, development of new product lines and delivery to the market. Forward-looking information is frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on the opinions and estimates at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements including, but not limited to delays or uncertainties with regulatory approvals, including that of the CSE and Health Canada, economic, business, competitive, political and social uncertainties, failure to commission equipment, unexpected contamination of products, saturation of the market for the Company’s current and proposed future product offerings, failure of third parties to deliver on expected timelines, overestimation of competencies of third parties, termination of commercial engagements, termination of expected supply agreements and loss of key personnel. There are uncertainties inherent in forward-looking information, including factors beyond the Company’s control. There are no assurances that the business plans for the Company as described in this news release will come into effect on the terms or time frame described herein. The Company undertakes no obligation to update forward-looking information if circumstances or management’s estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. Additional information identifying risks and uncertainties that could affect financial results is contained in the Company’s filings with Canadian securities regulators, which are available at www.sedar.com.