Shiny Health & Wellness Corp. (the “Company”) (TSXV: SNYB) is pleased to release its second quarter fiscal year 2024 financial results for the three months ended July 31, 2023 (the “second quarter”) and announce the closing of the Turbo Holdings partnership. The full results are available on www.sedarplus.ca.
“We would like to welcome Team Turbo, Lloyd, Jarred, Luis and Serge to the ShinyBud Family, increasing our licensees to 16 with 3 more signees on the way. It has been a slower than usual quarter for us; strategically shifting our corporate offices to Kitchener and focusing on acquisition targets that mesh with our current corporate stores, all while fielding inquiries for new licensees from current smaller stores looking to join our partner program and new applicants. We are still building after our first year and a half experiencing typical growing pains. We are very proud to have over 43,000 loyalists increasing each month. We appreciate all the support of our shareholders and customers.” Said Michael Nadeau, CEO.
Overall Performance Q2
Sales decreased during the period ending July 31, 2023 from the retail operations and data program driven primarily by the reduction of the Company’s cannabis retail store count from 31 to 26 stores; closing underperforming stores with higher than usual monthly rental payments.
Shiny Health’s overall results for the three months period ended July 31, 2023 show a net comprehensive loss of $2.1 million based on sales of $6.2 million and a gross profit of $2.1 million, operating expenses of $3.1 million, other expenses of $1.1 million, and other comprehensive gain of $0.04 million. Shiny Health’s overall results for the six months period ended July 31, 2023 show a net comprehensive loss of $2.8 million based on sales of $12.6 million, gross profit of $4.5 million, operating expenses of $6.2 million and other expenses of $1.4 million, and other comprehensive gain of $0.3 million.
Salaries and benefits expense decreased by 18.0% for the three months period ended July 31, 2023 compared to the same period in 2022. The large decrease in salaries this quarter was due mainly to the significant reduction of the Company corporate and management head count and the reduction of the share-based compensation. These positive cost cutting initiatives will enable the Company to refocus cash from asset sales and equity financing directly to the dispensaries’ operations’ level and assist the Company in building a stronger cannabis brand.
The sale of 4 corporate stores (2 of which transferred to licensee status) during this quarter were for cash proceeds for debt repayment, whereas potential acquisitions are being contemplated as a combination of cash and the Company’s equity securities. As the sector consolidation continues in Canada, the Company is actively looking at potential retail store chains and single store acquisitions to replace these stores to add to the corporate store footprint. The Company is reviewing opportunities beyond just Ontario to other provinces, as well as hopes of expansion to the USA and Europe. Management does not expect to develop brand new greenfield locations, because the opportunities to acquire revenue producing established stores is abundant and the risk and cost factors much less for the Company.
The Company executed 19-trademark license agreements with 16 currently operating and 3 expected to be operating within the next 3 months.
Turbo Partnership Closing Update
The Company is proud to announce the closing today of the previously announced Asset Purchase Agreement of May 29th 2023 with an affiliate of Turbo Holdings Canada Inc. combined with a NEW Trademark License Agreement for the sale of two of Shiny Health’s retail locations for an estimated total purchase price of $800,000. Under the Trademark License Agreement, the affiliate of Turbo Holdings will be granted the right to operate the stores under the “ShinyBud” trademark. Turbo Holdings has received their Alcohol Gaming Commission of Ontario (“AGCO”) approvals and the adult use dispensaries are open for business. The Company has applied a portion of the proceeds to debt repayment.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
About Shiny Health & Wellness:
Shiny Health & Wellness Corp. is on a mission to help people never settle, live fully by being a trusted source for health and wellness solutions and services. The Company recently broadened its retail growth strategy beyond adult-use cannabis by establishing mīhī Health & Wellness, a new line of business focused on building a network of community pharmacies, with its first pharmacy in Cornwall, Ontario. Striving to provide a more diverse and accessible cannabis experience for adult consumers, the Company also operates ShinyBud Cannabis Co., a well-established brand in Ontario strategically located in markets less saturated with cannabis retailers. The Company’s board of directors and management team hold extensive retail operating experience, a key competitive differentiator in leading its growth strategy. Shiny Health trades on the TSX Venture Exchange (TSXV) under the ticker symbol SNYB. For more information, please visit www.shinyhealthandwellness.com.