SANTA ROSA, CALIFORNIA and CALGARY, ALBERTA / ACCESSWIRE / August 29, 2019 / Gabriella’s Kitchen Inc. (“GABY” or the “Company”) (CSE:GABY) (OTCQB:GABLF), a U.S.-focused CPG company operating in the regulated cannabis sector in California and the national mainstream grocery channel, today announced financial results for the three-month period ended June 30, 2019. GABY’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). All financial information presented in this release is in Canadian dollars ($), unless otherwise noted.
“When we announced our target on May 7, 2019 of $35 million in pro-forma revenue for the fiscal year, we took into account that Q2 would be a slower quarter due to the delayed closing of our $20 million raise, the company’s short-term decision to allocate available capital to maintain relationships and shelf space with dispensaries, and the transitioning from a shared distribution model in Southern California to a sole distribution model, staffed with our internal salespeople,” said Margot Micallef, Founder, and CEO of GABY. “On the back of our transition to a sole distributor model, we increased the number of California dispensaries we distribute to from 80 to 170 in the quarter.”
Backed by $20 million in additional capital received in June, we acquired a 25,000 sq. ft. state of the art production facility in Sonoma, and we successfully completed the integration of Sonoma Pacific into GABY, aligning its platform with CPG best practices from inventory management to brand development, grassroots marketing, analytics-based decision making and relationship management at the retail level.
Margot Micallef, Founder, and CEO of GABY
We believe that the with our statewide distribution network, our newly expanded procurement team, our third-party brands currently being distributed and our state-of-the-art production capabilities, GABY is well positioned to rapidly scale revenue in the 2nd half of 2019 and into 2020.
Ms. Micallef continued, “Our team has a proven track record of building and scaling national CPG brands and I am particularly excited by the addition of Lulu’s Chocolates to our brand portfolio. Edibles are one of the fastest growing subsegments of the cannabis market in California and Lulu’s fulfils a specific customer need that is currently underserved. Lulu’s Chocolates shares GABY’s commitment to natural products, health and wellness, and diverse THC & CBD as well as uninfused products offerings. Lulu’s space in the market dovetails perfectly with GABY’s approach to growing brands in both the California regulated and national mainstream channels.”
Financial Highlights for the Second Quarter Ended June 30, 2019
The following are financial highlights of Gaby’s operating results for the three months ended June 30, 2019 compared to the three months ended June 30, 2018:
- Revenue was $2.5 million as compared to $319,737
- Gross loss was $49,712 as compared to $264,607
- Operating expenses were $4.5 million as compared to $1.1 million
The following is a summary of key balance sheet items at June 30, 2019, compared to December 31, 2018:
- Cash was $11.5 million as compared to $53,658
- Total assets of $37.3 million as compared to $4.6 million
- Total working capital[1] of $10.5 million as compared to ($319,112)
- Total debt excluding lease obligations of $1.9 million as compared to nil.
Corporate Highlights
- On April 1, 2019, GABY closed the acquisition of Sonoma Pacific Distribution
- On June 12, 2019, GABY closed a $20 Million Private Placement
- On July 25, 2019, GABY closed the acquisition of Lulu’s Chocolates, a California-Based Manufacturer of CBD and THC Infused Chocolates
- On July 26, 2019, GABY Acquired a 25,000 sq. ft. State-of-the-Art Production Facility enabling it to consolidate in due course all its current operating segments (manufacturing and distribution) and move into cultivation
- As of August 20, 2019, Lulu’s CBD infused chocolates are now sold in over 300 mainstream retail locations in California
About Gabriella’s Kitchen Inc.
GABY is a U.S.-focused, consumer packaged goods company operating a family of brands in the cannabis industry and in the mainstream grocery channel. Through its subsidiaries GABY indirectly holds a number of licenses and permits issued by the California Department of Health, the California Bureau of Cannabis Control and the County of Sonoma respectively, including manufacturing, distribution, cultivation and nursery licenses. With these licenses and permits to operate in the cannabis channel, and its existing infrastructure of major retailers and an extensive broker and distribution network in the mainstream channel, GABY has successfully brought a number of its proprietary, acquired and third-party brands to market in both the licensed and mainstream market.
Margot and her sister Gabriella co-founded GABY after Gabriella received a dire cancer diagnosis which spurred the sisters to prolong Gabriella’s life through a holistic approach to health. Today, GABY is a wellness company with a diverse range of products that use cannabis, hemp and hemp derived cannabinoids to address a variety of dietary and health concerns. Although Gabriella ultimately passed away from her illness, she lived exponentially longer than doctors predicted. Her memory and passion live on through GABY’s mission: to empower people to live healthy lives without compromise.
GABY’s shares trade on the CSE under the symbol “GABY” and on the OTCQB under the symbol “GABLF”. For more information, visit www.GABYInc.com
[1] *Excluding: related party payables, promissory notes, convertible debentures and contingent consideration
