Denver, Colorado (PRWEB) November 14, 2014
CannLabs, Inc. (OTCQB: CANL,) the leading provider of proprietary, cloud-based analytics, and scientific testing methodologies relating to cannabis, today announced financial results for the third quarter ended September 30, 2014, and provided a business update.
Third Quarter 2014 Highlights
- CannLabs – Nevada, Inc. granted license for an 8,000-sq.-ft. facility in Las Vegas, Nevada.
- CannLabs – Connecticut, Inc. opened a 4,000-sq.-ft. facility in Hartford, Connecticut. Secures contracts with two of the four licensed growers in Connecticut.
- Expanded testing capabilities at the Denver, Colorado, legacy lab to offer heavy metal, microbial contaminant, pesticides, and residual solvents tests. The CannLabs, Inc. licensed laboratory in Denver is on track to reach full capacity in four-six months.
- CANL was added to MJIC Marijuana Index and the THCbiz stock directory.
“During this quarter we saw the initial affect of industry wide-market and mandated testing growth impact our business,” said Mark Mirken, Chief Executive Officer of CannLabs. “With existing and anticipated legislative mandates aimed at cannabis health and safety, our licensed technology has made our laboratory partners the premier checkpoint in the seed to sale supply chain. Clients are experiencing steady growth, and we are committed to keeping our competency, capacity, and state-of-the art solutions ahead of the rapidly growing national market.”
CannLabs recently entered two new markets, Connecticut and Nevada. “In Connecticut, we have signed multi-year contracts with two of the four licensed commercial growers, to have their products tested using CannLabs’ licensed technology,” Mirken continued. “The facility in Nevada, which is expected to secure 30 percent market share upon market maturity, will be operational in the third quarter of 2015 to leverage an estimated 200 metric tons of cannabis production for the medical marijuana market in this state.”
Both states adhere to the American Herbal Pharmacopoeia® (AHP) guidelines. These guidelines include stringent limits for specified bacteria, fungi, heavy metals, and pesticides and require every lot of cannabis be tested for potency and safety. The Company will look for accretive acquisitions to enhance and expand on its multiple revenue channels. Consumers will benefit from the highest quality and safety and CannLabs, will continue to enjoy rising demand for testing and consulting services.
For the third quarter ending September 30, the Company reported:
- $474,000 in revenue, an increase over the previous quarter of $204,000 due to increased testing volumes, growing client demand, mandated testing and the anticipated expansion in mandated testing requirement.
- $1,283,000 in operating expenses, which consisted of $644,748 in administrative payroll, $426,000 in G&A and $213,000 in sales and marketing expenses. Of these expenses $440,000 related to non-cash compensation.
- Net loss (GAAP) was $(1,126,096).
- Adjusted EBITDA (non-GAAP) loss of $(130,000).
For the nine months ended September 30, 2014, the Company reported:
- $1,932,000 in operating expenses, which consisted of $818,000 in administrative payroll, $742,000 in G&A and $373,000 in sales and marketing expenses. Of these expenses $446,000 related to non-cash compensation.
- Net loss (GAAP) was $(1,596,477).
- Adjusted EBITDA (non-GAAP) loss of $(213,000).
The Company had $64,000 in cash and cash equivalents on its balance sheet as of September 30, 2014.
In 2015, capital expenditures are expected to increase. The capital investments will primarily be focused on expanding the capacity of the labs the Company licenses, to meet the increase in demand for testing in multiple jurisdictions, as well as the Company’s other revenue segments.
Currently, holding 50 percent of the Colorado market, the Company expects the Colorado facility to grow their market share significantly in 2015. Revenues for the Colorado facility are projected to be $3-5 million annual run rate by the end of next year. Management believes the payback period for future labs could decrease when factoring in higher margins from the addition of product formulation and development and consulting services. Normalized operating margins of 40 percent or higher are expected from fully mature licensed laboratories.
In addition, CannLabs will be able to solidify its leadership position due to the following industry-wide growth drivers:
- Compliance testing will be mandated by new states
- Increased testing volumes from existing clients responding to growing consumer demand
- New market entrants as more growers are granted state-issued licenses
- Education that will influence consumers to seek out tested products at a higher quality level that they know and trust
CannLabs, Inc., is a respected authority and advisor to commercial, governmental and educational entities focused on the Cannabis industry. The company leverages its propriety scientific, testing processes, cloud-based business intelligence and data/analytics as well as consulting services to garner revenues from legalized Cannabis states and their constituents.
Through Carbon Bond Holdings Inc. and the state certified labs it has relationships with, CannLabs delivers best practices around products, services and business intelligence focused on the Cannabis industry.
CannLabs customers include states that currently have legalized medical or recreational Cannabis along with their associated growers, dispensaries, manufacturers of edibles, and residential consumers seeking information on cannabis.
For more information visit http://www.cannlabs.com.
Safe Harbor Statement
All statements herein other than statements of historical facts are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are based upon our current expectations and speak only as of the date hereof. Such statements are not guarantees of future performance and are subject to known and unknown risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements. Such factors include, but are not limited to, our ability to raise additional capital, our limited operating history and revenue, our ability to attract and retain qualified personnel, our ability to develop new services, market acceptance of our services, legislative, regulatory and competitive developments in our industry, general economic conditions, as well as other factors set forth in our filings with the SEC.
Senior Vice President – MZ North America
For Full Balance Sheet and Income Statement: please click here : CannLabs Balance Sheet and Income Statement