Vancouver, B.C. – July 30, 2021: Better Plant Sciences Inc. (CSE: PLNT) (OTCQB: VEGGF) (“Better Plant” or the “Company”), a wellness company that develops and sells sustainable, plant-based products that are better for health and better for the earth, reported its financial results for the three month and six month periods ended May 31, 2021. All amounts are in Canadian currency unless otherwise stated.
Complete, consolidated financial statements, along with related management discussion and analysis, can be found on SEDAR under the Company’s profile.
Key Financial Highlights of the Three Month and the Six Month Periods Ended May 31, 2021:
- 6 month revenues were $1,035,181, with gross profits of $748,308.
- Better Plant recorded a net income of $622,110 in the three months ended May 31, 2021 compared to a net loss of $2,462,858 in 3 months ended May 31, 2020.
- Better Plant recorded a net loss of $183,782 for the six months ended May 31, 2021 compared to a loss of $5,165,208 for the same period in the previous year.
- Total assets grew by 47.9% from year end at $4.7 million on November 30, 2020 to $6.9 million at May 31, 2021.
- Working capital increased to $1,281,463 at May 31, 2021 from $789,192 at November 30, 2020.
- Cash decreased to $104,250 at May 31, 2021 from $181,293 at November 30, 2020.
- Current ratio improved from 1.71 at November 30, 2020 to 2.95 at May 31, 2021.
- Negative adjusted EBITDA was $602,479 for the three month period ended May 31, 2021, a 66.8% reduction in negative adjusted EBITDA from the same period in the prior year of $1,816,360.
Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization, excluding certain non-operating amounts.
Growth in Product Sales Highlights:
- Product sales grew 6% from Q1 to Q2 2021, increasing from $151,679 to $160,683.
- Total revenue grew 11% from Q1 to Q2, increasing from $491,325 to $543,856.
- Product sales grew 216% for the three months ended May 31, 2020 from the three months ended May 31, 2021
- Product sales grew 310% for the six months ended May 31, 2020 from the six months ended May 31, 2021
During the year ended November 30, 2020, Better Plant achieved growth in product sales through ecommerce and retail channels. Better Plant achieved 422% growth from Q1 to Q4, averaging 141% growth per quarter. Its key product sales in fiscal 2020 were through direct-to-consumer Shopify enabled eCommerce platforms as well as distribution of plant-based products through retail stores.
Summary of Quarterly Results
(1) Current ratio is current assets divided by current liabilities.
(2) Working capital is current assets minus current liabilities.
(3) Debt is defined as any commercial debt and excludes Covid related government loan, CEBA.
Better Plant has two reporting segments: Licensing and product sales, and Corporate and consulting. Licensing and product sales are aggregated as one segment as they are focused around the same product line and share similar economic characteristics. Performance is measured based on operating income (loss) and net income (loss) before taxes, as management believes that this information is the most relevant in evaluating the results of the operating segments relative to other entities that operate within these industries. Operating income (loss) is calculated as revenue less operating expenses.
The following is a summary of the Company’s results by operating segment for the three and six months ended May 31, 2021 and 2020:
As of May 31, 2021, Better Plant’s total assets grew to $6.9 million from $4.7 million at November 30, 2020. The majority of the growth was due to the deconsolidation of a previously majority-owned subsidiary, NeonMind Biosciences Inc. (“NeonMind”) after its initial public offering (“IPO”) in December 2020, and the recognition of Better Plant’s investment in NeonMind as an associate under the equity method thereafter.
Total revenues were $543,856 and $1,035,181 for the three and six months ended May 31, 2021, and product sales were $160,683 and $312,362 for the same periods. Better Plant anticipates continued growth in revenue for Jusu branded products going forward. During the past year, Better Plant focused on increasing product sales, especially in the region of North America, through eCommerce and retail distribution. Licensing is no longer Better Plant’s strategic focus and the company recognized licensing revenues of $181,490 and $326,906 for the three and six months ended May 31, 2021. Better Plant also recognized consulting revenue of $201,683 and $395,913 for the three and six months ended May 31, 2021, most of which was from associated companies. Negative adjusted EBITDA was $602,479 and $1,616,765 for the three and six months ended May 31, 2021, a 67% and 60% reduction in negative adjusted EBITDA from the same periods of the prior year. Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization, excluding certain non-operating amounts.
Unrealized Gain (Loss) on Marketable Securities and Investments
During the three and six months ended May 31, 2021, Better Plant incurred unrealized loss on marketable securities of $656 and unrealized gain of $3,104, as compared to unrealized loss of $46,186 and $49,389 for the same periods of the prior year.
Share of net loss of equity accounted investees
During the three and six months ended May 31, 2021, Better Plant incurred loss from investment in associates of $762,846 and $1,500,852, as compared to $43,578 and $82,279 for the same periods of the prior year. The increase in share of net loss of equity accounted investees was due to the deconsolidation of a previously majority-owned subsidiary, NeonMind, after its IPO in December 2020, and the recognition of the Company’s investment in NeonMind as an associate under the equity method thereafter.
Gain on loss of control of subsidiary
During the three and six months ended May 31, 2021, Better Plant recognized a gain on loss of control of subsidiary of $2,128,959 and $3,682,788 relating to the deconsolidation of NeonMind.
Better Plant’s control over our former subsidiary, NeonMind, had been lost after NeonMind closed its IPO on December 30, 2020. As a result, the Company deconsolidated NeonMind on December 30, 2020. The deconsolidation consisted of derecognizing the assets and liabilities of NeonMind at the date when control was lost, derecognizing the carrying amount of the non-controlling interest in NeonMind, recognizing the fair value of the investment retained in NeonMind, and recognizing the resulting difference as a gain on loss on control of subsidiary. The fair value of the investment retained in NeonMind was calculated at the fair value at the date when control was lost.
About Better Plant Sciences Inc.
Better Plant harnesses plant intelligence and leverages modern science to offer sustainable, plant-based products that are better for health and better for the earth. It makes and sells over 75 proprietary products, all made with 100% natural ingredients, under the brands Jusu, Urban Juve and Wright & Well. It has a direct-to-consumer platform for refrigerated goods that offers easy online ordering and convenient home delivery in select cities in Alberta and BC. Better Plant operates Jusu Bar, a quick serve restaurant alternative in Victoria, BC, which serves up fresh, healthy and nutritious options with a focus on Jusu cold-pressed juices. Jusubar.com offers home delivery of refrigerated plant-based beverages consisting of cold-pressed juices and packaged juice cleanses. Through its Shopify enabled eCommerce sites getjusu.com and urbanjuve.com, Better Plant sells plant-based personal care products, including skin care, hair care, body care and baby care. Jusu also has a line of plant-based all natural home cleaning products that are sold to cleaning companies, retailers and directly to consumers. Better Plant also offers operational, financial and other services to companies with businesses that align with Better Plant’s mission to help create a better world. Better Plant incubated NeonMind Biosciences Inc., which sells medicinal mushroom infused coffees and is developing drugs with psychedelic ingredients to treat obesity and to suppress appetite. Better Plant owns approximately 26.6% of NeonMind Biosciences, which trades separately as a public company under the tickers CSE: NEON, OTCQB: NMDBF and FFE: 6UF.
Penny White, President & CEO
The Canadian Securities Exchange has not reviewed, approved or disapproved the contents of this news release.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking information and statements (collectively, “forward looking statements”) under applicable Canadian securities legislation. Forward-looking statements are necessarily based upon a number of estimates, forecasts, beliefs and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to: risks related to the development, testing, licensing, brand development, availability of packaging, intellectual property protection, reduced global commerce and reduced access to raw materials and other supplies due to the spread of COVID-19, the potential for not acquiring any rights as a result of the patent application and any products making use of the intellectual property may be ineffective or the company may be unsuccessful in commercializing them; and other approvals will be required before commercial exploitation of the intellectual property can happen. Demand for the company’s products, general business, economic, competitive, political and social uncertainties, delay or failure to receive board or regulatory approvals where applicable, and the state of the capital markets. Better Plant cautions readers not to place undue reliance on forward-looking statements provided by Better Plant, as such forward-looking statements are not a guarantee of future results or performance and actual results may differ materially. The forward-looking statements contained in this press release are made as of the date of this press release, and Better Plant expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.