CROP Completes Purchase of 1,012-Acre Nevada Property with Newly Awarded Recreational Cannabis Licenses

CROP Completes Purchase of 1,012-Acre Nevada Property with Newly Awarded Recreational Cannabis Licenses

TORONTO–(BUSINESS WIRE)–PRESS RELEASE–FSD Pharma Inc. has reported its financial and operational results for the fourth quarter and fiscal year-ended Dec. 31, 2018. These filings are available for review on the company’s SEDAR profile at

“2018 was a year of major accomplishments for FSD Pharma,” said Executive Co-Chairman and Founder Anthony Durkacz, “in which we are pleased to report:

  • Strategic investments were valued at $18 million with a mark-to-market unrealized gain of $10 million;
  • Total net assets in excess of $52 million with no long-term liabilities; and
  • Cash position on Dec. 31, 2018 of $22 million.”

“FSD has fully complied with all Required Filings with Canadian securities regulators. It’s unfortunate that we missed the filing deadline and I take full responsibility for the delay,” said Dr Raza Bokhari, executive co-chairman and CEO. “I’m grateful to all shareholders for their patience and forbearance. We are working with a new auditing firm that started its work in the beginning of April 2019 in advance of our listing on the New York Stock Exchange and other factors were simply beyond our control. It was important that they took the time they needed to finalize the audit. I want to personally assure all shareholders and regulators that we fully realize that such delays are unacceptable and we have strengthened all internal controls and governance processes to ensure that all future filings are completed on time.

“Looking ahead, FSD Pharma continues to make progress in its efforts to being a global leader in cannabinoid pharmaceutical based treatments and will continue to invest heavily in milestone based research and development to unlock the promise the cannabinoid molecule offers in alleviating the pain and suffering of countless around the world. In addition, after receiving the sales license for medicinal cannabis in April 2019, we are tightly focused on developing a robust expansion plan at our Cobourg, Ontario facility under the leadership of Dr. Sara May. Finalizing the next phase of expansion, with drawings, a construction budget and timeline is our top priority,” concluded Bokhari.

Financial Highlights

At this point in the company’s development, management continues to expend required capital on the development of its business, the continued renovation and build out of its Cobourg facility, salaries and wages for employees and ongoing operating expenses relating to the management of a public reporting issuer.

Without a sales license in place in 2018, the company generated revenue during the year from a sublease in its facility in the amount of $86,656 (2017 – $25,943). The company purchased its facility in November 2017 and continues to expand and build out the facility.

For the year ended Dec. 31, 2018, total expenses increased to $32,863,937 (2017 – $3,550,458), primarily due to increases in costs of being a public company, in legal fees and fees being paid to support its build out and transition to becoming a licensed producer. Included in those expenses was a charge of $7,991,791 for listing fees, $6,440,406 for share based compensation and an allowance for loss of $7,499,977 due to a former vendor. Net loss for the year ended Dec. 31, 2018 was $32,775,174 (2017 – $3,524,515). After accounting for its other investments, the company recorded an unrealized gain of $10,064,550 for the year ended Dec. 31, 2018 (2017 – nil) which led to a net comprehensive loss of $22,710,624 (2017 – $3,524,515).

Liquidity and Capital Resources

During the year ended Dec. 31, 2018, the company used net cash of $18,489,903 in operating activities (2017 – $149,865). This is due to substantially increased activity on the build out of the Cobourg facility, increasing public awareness and preparing to and applying for the numerous licenses the company requires to produce and sell cannabis.

During the year ended Dec. 31, 2018, the company generated net cash of $44,876,169 from its financing activities.

The company had a net increase in cash of $16,394,944 during the year ended Dec. 31, 2018 (2017 – $4,709,907).

The company has a working capital balance of $20,826,211 in 2018 compared to a working capital balance of $4,121,660 as at the fiscal year ended Dec. 31, 2017.

Published at Mon, 06 May 2019 21:04:00 +0000

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