Ms. Rosy Mondin reports
WORLD CLASS EXTRACTIONS REPORTS OPERATING AND FINANCIAL RESULTS FOR THE NINE-MONTH PERIOD ENDED JANUARY 31, 2020
World Class Extractions Inc. has released the operating and financial results for its third quarter ended Jan. 31, 2020.
- The company had cash at Jan. 31, 2020, of $7,469,714 (April 30, 2019: $16,002,152) to settle current liabilities of $1,352,657 (April 30, 2019: $325,281).
- Working capital as at Jan. 31, 2020, is $13,363,057.
- The company does not have any loans, convertible debt or long-term debt.
- Revenue was $75,562 for the quarter ended Jan. 31, 2020, compared with nil revenue for the quarter ended Jan. 31, 2019.
- Gross margin for the quarter ended Jan. 31, 2020, was 40 per cent.
- The net loss and comprehensive loss for the three months ended Jan. 31, 2020, were $33,144,217 (as compared with Jan. 31, 2019, of $3,585,161). The increased loss for the quarter is mainly attributed to the following:
- Due to uncertainty in the realization of future economic benefits from the intellectual property (intellectual property rights for a proprietary technology), as well as uncertainty in market conditions, in general and the cannabis sector, the company assessed and recognized a $7,773,287 impairment loss for this asset, which is equivalent to 100 per cent of its carrying amount.
- Considering uncertainty in market conditions, in general and the cannabis sector, management assessed uncertainty in the recoverability of goodwill pursuant to the Quadron Cannatech Corp. business combination. As such, the company fully impaired the goodwill and recorded an impairment loss amounting to $21,591,369.
- In addition, the loss includes amortization expense of $729,128; bad debt of $290,637; consulting fees of $141,777; development and research expenses of $830,180; general and administrative expenses of $173,280; professional fees of $195,315; investor relations fees of $90,669; management fees of $48,000; marketing and research expenses of $25,957; remuneration and benefits of $640,550; share-based payments of $241,131; and travel expenses of $27,966.
Rosy Mondin, chief executive officer of World-Class, stated: "Given market conditions and challenges faced by the cannabis industry during 2019, along with the impact of the COVID-19 pandemic event, we have taken a very conservative accounting approach, resulting in the impairment of our intangible assets. World-Class's strong balance sheet, with a large cash position, provides us the flexibility to navigate this uncertain time while also enabling us to realize on the inevitable opportunities that will present during this volatility. Senior management remain focused and highly motivated in the pursuit of shareholder value."
About World Class Extractions Inc.
World-Class develops, deploys and manages custom-built extraction centres for licensed cannabis and hemp processors. Utilizing its custom technology and processes, World-Class enables its licensed partners to efficiently produce high-margin cannabis and hemp concentrates and oils. Through its relationships with licensed partners, World-Class also has the ability to offer toll processing of cannabis and hemp to licensed third parties that lack the expertise and equipment required to produce high-quality cannabis and hemp concentrates and end products. With over half of a decade spent in research and development, the company allows licensed producers to access the technology required to create value-added products in the expanding concentrate market.
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