MPXOF - MPX International Provides Fiscal 2020 Year-End Financial Results and Investor Update
(TheNewswire)
TORONTO, ONTARIO – TheNewswire- January 29, 2021 – MPX International Corporation (“ MPXInternational ”, “ MPXI ” or the“ Corporation ”) (CSE:MPXI ) ; ( OTC :MPXOF); (CNSX:MPXI.CN) , amultinational diversified cannabis company, is pleased to provide thebelow update to investors.
“Calendar 2020 has been a challenging, yet excitingyear for MPXI,” noted W. Scott Boyes, Chairman, President and CEO ofMPX International. “We started the year with multiple projects underdevelopment in Canada, Switzerland, Malta, South Africa and Australia.A company that was pre-revenue on most of its initiatives faced thepotential of stagnation by the emergence of the COVID-19 pandemic andvarious and multiple lock-downs, staffing issues and interruptions inthe capital markets that went along with it, yet MPXI has managed tomove forward on all fronts. Notwithstanding the constraints in theCanadian capital markets for funding pre-revenue cannabis projects,investor confidence for the future prospects of MPXI have allowed itto prudently complete several small rounds of financing, each targetedat continuing the progress of specific projects and the furtherance ofinitiatives which, together, trend towards revenue and cash flowgrowth in 2021 and beyond. While revenues increased by over 95% infiscal 2020, most of these revenues occurred in the last quarter ofthe reporting period and revenue growth has continued to accelerate inQ1 of fiscal 2021 with that growth expected to grow in each quarterthrough the balance of the year.”
The Corporation issued a press release updatinginvestors on December 9, 2020 (a copy of which can be found at https://ir.mpxinternationalcorp.com ) but some of those highlights are summarized below:
Canadian Developments
Most importantly, the finalization of long-standingefforts with Canadian regulators on multiple projects, has permittedCanadian operations to advance significantly over the past five monthswith the pace of progress accelerating during calendar Q4. Thehighlights of that progress are described below:
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- Canveda Inc. (“ Canveda ”), a whollyowned subsidiary of MPXI and licence holder under the Cannabis Act (Canada), received a licence amendment from Health Canada authorizingCanveda to produce, sell, and export all categories of permittedCanadian cannabis products, including topicals, extracts and edibles.
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- Canveda introduced its recreational cannabis brand“Strain Rec™” in the Province of Saskatchewan.
- The “Strain Rec™” brand was also introducedinto the Province of Alberta through a recreational wholesale supplycontract with Alberta Gaming, Liquor & Cannabis (“ AGLC ”).
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- MPXI Alberta Corporation, a wholly-owned subsidiaryof MPXI, acquired all of the assets of Blaze 420Today Inc. (“ Blaze420 ”), including the leasehold interests tothree (3) locations across Alberta which each have receiveddevelopment permits to operate as retail cannabis stores (the“ Assets ”) in Alberta. The first of theseretail stores is scheduled to open in the spring of 2021.
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- Canveda entered into an agreement with PanaxiaPharmaceutical Industries Israel Ltd. (“ Panaxia ”), thelargest manufacturer and distributor of medical cannabis products inIsrael, for the packaging and distribution of cannabis which will bemarketed and sold in Israel under Canveda’s medical brand “SalusBioPharma” for sale into the Israeli market. Undertakings havecommenced for a second Israeli import permit.
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- Canveda entered into a supply agreement for medicaland recreational cannabis (the “ Zenabis Supply Agreement ”) with the Canadian licence holder, Zenabis Ltd.(“ Zenabis ”), a large-scale Canadian producer.
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- Spartan Wellness Corporation (“ Spartan Wellness ”),a wholly-owned subsidiary of MPXI, entered into a services agreementwith Medical Cannabis by Shoppers Drug Mart Inc. (“ Medical Cannabis by SDM ”), a subsidiary of Shoppers Drug Mart.
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- MCLN Inc. (formerly 2702148 Ontario Inc.)(“ MCLN ”), a wholly-owned subsidiary of MPXI and a leadingCanadian private web-based cannabis portal, has developed, inconjunction with Miramedia Retail Inc. (“ Miramedia ”), a newMCLN branded web-based portal, “MiraCBD” https://miracbd.ca (the“ MiraCBD Portal ”). Miramedia is utilizing its network of retailers,natural health practitioners and consumers to connect their customersto the MiraCBD Portal. The MiraCBD Portal provides retailers, naturalhealth practitioners and consumers with access to the Medical CannabisLearning Network platform which operates as a: (a) private networkeducational platform, providing information about the use of medicalcannabis; (b) telemedicine medium providing patient access to medicalpractitioners for advice and cannabis prescriptions from MCLN’saffiliate, Spartan Wellness; and (c) sales platform for Canadiancannabis licence holders.
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- Canveda personnel completed a tissue culture researchproject with the virtual aide of MPXI’s Australian horticulturalteam. Plants have been successfully rooted for tissue culture, allstandard operating procedures have been developed and this technologyis ready to be scaled on a commercial level in 2021.
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- Due to the rapid expansion of both completed andplanned cannabis cultivation in Canada and the resulting over-supplyand price compression for dried cannabis, the Corporation hasabandoned its planned cultivation development in Owen Sound, Ontarioand the 2020 financial results include a write-off of its investmentmade by its subsidiary BioCannabis Products Ltd in the amount of$735,770.
Swiss Developments
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- Despite the global COVID-19 pandemic, Holyworld SA(“ Holyworld ”), a wholly owned subsidiary of MPXI, has experienced astrong year in 2020. The team has overcome the many challengespresented by COVID-19 to foster growth and progress. Additionally, theHolyworld management team has undergone a transformation bringing onboard sales and management executives fromprominent European cannabis companies and, as with the rest of theMPXI corporate group has undergone significant cost reductions tobring spending in line with the Swiss business plan.
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- Holyworld is now capable of producing approximately30 kg of high-quality distillate per month operating a single shift.Adding an additional shift would bolster capacity to approximately 60kg per month.
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- The production from the Holyworld lab will be soldinto the wholesale market and will also be used in “Holyweed”branded products sold through the Holyweed retail store in Geneva and www.cbdetc.com , a new multi-brand European marketplace for CBD products.With the success of the Geneva flagship “Holyweed” branded retailstore, which has been consistently profitable, Holyworld is looking toexpand to other retail locations in and around Switzerland in2021.
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- Holyworld has also launched a new corporate website www.holyworld.ch to increase outreach, online presence and B2B sales.
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- The Court of Justice of the European Union hasrecently ruled that member states must not prohibit the marketing oflawfully produced cannabidiol, a decision that adds recognition forCBD’s health and wellness benefits and opens up the entiremulti-billion-dollar EU market to companies like Holyworld. We believethat Holyworld is well-positioned to ride this wave of relaxedrestrictions in Europe.
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- Covid-19 related delays in completing the MPXI lab inNyon, Switzerland resulted in some degradationof the Swiss biomass cultivated in 2019. This, combined with a recentlarge increase in cultivation throughout Europe and from hemp importsfrom other parts of the world, have significantly increased the supplyof biomass and resulted in a material erosion in hemp prices inSwitzerland and throughout Europe. Consequently, management elected toretain the Holyworld biomass for extraction, distillation andsubsequent sale of high-potency CBD distillate which it anticipatieswill provide much higher gross margins than could be achieved byselling biomass into a market over-supplied with raw hemp flower andtrim. As a result of these factors, the Corporation has taken awrite-down of inventory held at Holyworld in Switzerland for the threemonths and year ended September 30 , 2020 of $9,972,399 as well as a consequent write off ofgoodwill and intanglibles in the amount $14,471,543 which was alsoinfluenced by delays in completing the MPXI lab in Nyon and thestrategy shift from cultivation to production and distribution.
MPXI Malta Developments
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- MPXI’s Maltese operations have advancedsignificantly over the past five months substantially completing thebuildout of its “GMP-ready” facility located in Mriehel, just outside of Valletta, the capital city of Malta,including all site infrastructure required tosupport the attainment of an EU-GMP certification for flowerpackaging. The buildout entailed numerous structural alterations andreinforcements required to achieve the desired site security, EU-GMPcompliant layout and load-bearing capabilities. MPXI’s Maltese team,led by Karl Bartolo, used their long-standing experience in the highlycompetitive generic pharmaceutical manufacturing sector to design afacility that would meet the highest standards of EU-GMP whilstmaintaining a cost-effective capital expenditure and operational cost.
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- Following the completion of the facility , MPXI’s Maltese operation has now submitted itsapplication for an EU-GMP certification with the Maltase MedicinesAuthority triggering a successful preliminary inspection subsequent towhich the process of importing biomass material required forvalidation batches has been initiated. It is anticipated that EU-GMPcertification for the packaging and distribution of cannabisflower will occur during calendar Q2 2021followed by certification for the packaging of medical cannabis oilsin calendar Q4 2021.
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- MPXI’s Maltese operations will leverage the ZenabisSupply Agreement securing a stable supply ofhigh quality, high-THC medical cannabis to meet initial demand prior to the commencement of MPXI’s operationsin South Africa.
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- In anticipation of the receipt of EU-GMPcertification, MPXI has engaged with several European groups for thesupply of EU-GMP certified medical cannabis and expects to solidifyarrangements in the first half of calendar 2021.
South African Developments
First Growth Holdings (PTY) Ltd. (“ First Growth ”), anindirect subsidiary of MPXI, together with a prominent group of SouthAfrican agriculturalists and investors, has made significant progresstowards the construction of a half-hectare (53,000 sq. ft.) high-techgreenhouse in the wine producing Stellenbosch region of the WesternCape. Whilst the project has been delayed by COVID-19, the FirstGrowth team recently completed the second inspection by South African Health Products Regulatory Authority(“ SAHPRA ”) , the South African cannabisregulatory body, and has received positive results. Actual cultivationof cannabis, with subsequent export intended for the Corporation’sMaltese facility, could commence as early as calendar Q3 2021.
Australian Developments
MPX Australia Pty Ltd. (“ MPXI Australia ”), awholly-owned subsidiary of MPXI, has been awarded licenses tocultivate, manufacture, import and export cannabinoid-based medicinesto/from Australia, from the Australian ODC, the Australian cannabisregulatory body. However, t he opportunity toimport products into Australia from Malta, Canada and South Africa hasprompted the Corporation to pivot from domestic production inAustralia to developing an import and distribution capability based inSydney and now plans to import and introduce the “Salus BioPharma”branded products to the Australian market. As a result of this changein the Corporation’s operational strategy for Australia and Oceania,MPXI Australia has negotiated the cancellation of its lease for theLaunceston site and written-off its entire $2,962,117 investment inthat project.
Overall
Despite the COVID-19 pandemic the Corporation’sforward momentum has not changed. MPXI has successfully managed tomove ahead on multiple fronts and management is anticipatingsignificant growth in revenues and earnings in fiscal 2021. Inaddition, there are potential new opportunities in the offing thatcould be transformative to MPXI’s global expansion. We will informthe market, if and when these new ventures move forward.
Full disclosure of the Corporation’s financialresults, including copies of the financial statements for the yearending September 30, 2020 and the Management Discussion and Analysis,can be found on the Corporation’s website https://mpxinternationalcorp.com and on SEDAR at https://sedar.com
About MPX InternationalCorporation
MPX International Corporation is a multinational diversified cannabis company focused on developing and operating assets across theinternational cannabis industry with an emphasis on cultivating,manufacturing and marketing products which include cannabinoids astheir primary active ingredient. With current operations spanning fourcontinents in Canada, Switzerland, South Africa, Malta and Australiaas well as evolving partnership and distribution opportunities inother jurisdictions, MPXI continues to position itself as an emergentglobal participant in the cannabis industry.
Cautionary Statement RegardingForward-Looking Information
This news release includes certain“forward-looking statements” under applicable Canadian securitieslegislation that are not historical facts. Forward-looking statementsinvolve risks, uncertainties, and other factors that could causeactual results, performance, prospects, and opportunities to differmaterially from those expressed or implied by such forward-lookingstatements. Forward-looking statements in this news release include,but are not limited to, MPX International’s objectives andintentions. Forward-looking statements are necessarily based on anumber of estimates and assumptions that, while considered reasonable,are subject to known and unknown risks, uncertainties and otherfactors which may cause actual results and future events to differmaterially from those expressed or implied by such forward-lookingstatements. Such factors include, but are not limited to: generalbusiness, economic and social uncertainties; litigation, legislative,environmental and other judicial, regulatory, political andcompetitive developments; delay or failure to receive board,shareholder or regulatory approvals; the Corporation’s ability toeffectively deal with the restrictions, limitations and health issuespresented by the COVID-19 pandemic; future cannabis pricing; cannabiscultivation yields; costs of inputs; its ability to market productssuccessfully to its anticipated clients; reliance on key personnel andcontracted relationships with third parties; the regulatoryenvironment in Australia, Canada, Malta, South Africa, Switzerland andother international jurisdictions; the application of federal, state,provincial, county and municipal laws; and the impact of increasingcompetition; those additionalrisks set out in MPX International’s public documents filed on SEDARat www.sedar.com , including its audited annualconsolidated financial statements for the financial years endedSeptember 30, 2020 and 2019, and the corresponding management’sdiscussion and analysis; and other matters discussed in this newsrelease. Although MPX International believes that the assumptions andfactors used in preparing the forward-looking statements arereasonable, undue reliance should not be placed on these statements,which only apply as of the date of this news release, and no assurancecan be given that such events will occur in the disclosed time framesor at all. Except where required by law, MPX International disclaimsany intention or obligation to update or revise any forward-lookingstatement, whether as a result of new information, future events, orotherwise.
For further information about MPXI,please contact:
MPX International Corporation
W. Scott Boyes, Chairman, President andCEO
T: +1-416-840-4703
info@mpxinternationalcorp.com
Or visit one our websites:
https://mpxinternationalcorp.com
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