-- Rollout of TRUBAR$(TM)$ in CVS Pharmacy: On September 9, 2024, the Company announced a nationwide rollout of TRUBAR(TM) in 6,600 CVS store locations nationwide and on cvs.com. -- Rollout of TRUBAR(TM) in Walmart (U.S.): On September 16, 2024, the Company announced a nationwide rollout of TRUBAR(TM) in more than 700 Walmart store locations across the U.S., building on a successful initial launch of the brand online at walmart.com.
SIGNIFICANT EVENTS SUBSEQUENT TO SEPTEMBER 30, 2024
Subsequent to September 30, 2024 the Company announced the following distribution partners:
-- Walmart Canada: On October 9th, 2024, the Company announced the rollout
of TRUBAR(TM) in more than 300 Walmart stores across Canada, a key
strategic addition in expanding the brand's presence to more than 1,000
Walmart store locations across North America.
-- GPM Investments convenience store chains: On October 17, 2024, the
Company announced further distribution expansion of TRUBAR(TM) in the
convenience channel with the addition of more than 25 regional store
brands operating under GPM Investments, LLC, one of the largest
convenience store chains in the U.S. TRUBAR(TM) will soon be available
across more than 1,400 GPM locations in more than 33 states in a wide
range of well-known regional convenience chains including Fas Mart, E-Z
Mart, Roadrunner Markets, Village Pantry and Jiffi Shop.
-- Love's Travel Stops: On October 24, 2024, the Company announced the
launch of TRUBAR(TM) in over 600 Love's Travel Stops across 42 states,
the largest network of travel stops and convenience stores across the
U.S.
-- Albertsons Companies: On November 11, 2024, the Company announced the
launch of TRUBAR(TM) in more than 500 Albertsons Companies locations, the
second-largest supermarket chain in North America. TRUBAR(TM) will be
available in the following banners: Albertsons, Safeway, Shaw's, Star
Market, Jewel-Osco, Carrs, and Market Street.
UPDATE ON LIQUIDITY AND CAPITAL RESOURCES
The Company's primary liquidity and capital requirements are for inventory and general corporate working capital purposes. The Company had a cash balance of $3.7 million as of September 30, 2024, which will provide capital to support the planned growth of the business and for general corporate working capital purposes. The Company's working capital deficiency decreased from $12.4 million as of December 31, 2023, to a positive working capital of $2.9 million as of September 30, 2024 ($15.3 million increase). Additionally, if the warrant liabilities are excluded, there would be a working capital surplus of $5.4 million. Warrant liabilities do not require cash to settle, only the issuance of common shares. Significant liquidity and capital-related updates included:
-- Line of Credit Facilities: The Company has secured several lines of
credit facilities for three of its subsidiaries to support the financing
of purchase orders from key customers. These lines of credit have been
critical to finance the large retail purchase orders the Company's
subsidiaries have successfully generated during the three months ended
September 30, 2024. During the nine months ended September 30, 2024, the
Company raised over $5.7 million in funds from these lines of credit to
finance purchase orders from its large retail customers. Over the same
period, the Company repaid over $9.9 million of these credit facilities
to the lender. TRU was able to increase its primary line of credit with
this lender to $6 million in December 2022. The nature of these loans is
to turnover between 3-5 months from the time the money is advanced to
repayment.
-- Convertible Notes, Promissory Notes and Loans Payable: During the nine
months ended September 30, 2024, the Company reduced the balance of
promissory notes and loans payable outstanding by approximately $1.2
million. Also, during the third quarter the balance of the convertible
debentures were all converted into equity (CA$655,000 or US$481,618)
thereby reducing the amount of convertible debentures to currently $nil.
-- Promissory Notes: During the three months ended September 30, 2024, the
Company secured CA$3.0 million in promissory notes with a 12-month
maturity at 15% interest rate per annum. The notes were taken out with
two of the Company's Board Members and one of its shareholders. The funds
were used to finance the operations of the Company, specifically
TRUBAR(TM)'s growth.
For more information of the line of credit facilities please refer to note 8 in the interim Third Quarter 2024 financial statements for the period ended September 30, 2024. The Company's ability to fund operating expenses will depend on its future operating performance which will be affected by general economic, financial, regulatory, and other factors including factors beyond the Company's control (See "Risk and Uncertainties").
Management continually assesses liquidity in terms of the ability to generate sufficient cash flow to fund the business. Net cash flow is affected by the following items: (i) operating activities, including the level of accounts receivable, other receivable, accounts payable, accrued liabilities and unearned revenue and deposits; (ii) investing activities (iii) financing activities.
WEBCAST and CONFERENCE CALL DETAILS:
SBBC will be holding a conference call and simultaneous webcast to discuss its financial results on Monday, November 18, 2024, at 5:00 pm EST (2:00 pm PST). The call will be hosted by Kingsley Ward, Chief Executive Officer, and Brian Meadows, Chief Financial Officer, as well as Erica Groussman, Co-founder & Chief Executive Officer of TRUBAR(TM) . Please dial-in 10 minutes prior to the start of the call.
Date: Monday, November 18, 2024
Time: 5:00 pm EST (2:00 pm PST)
For attendees who wish to join by webcast, the event can be accessed at:
https://bit.ly/SBBC-Q324
Dial in by phone
+1 778 907 2071 (Vancouver Local)
+1 647 558 0588 (Toronto Local)
Click here to find local numbers
Meeting ID: 848 7310 5859
Non-IFRS Measures (EBITDA and Adjusted EBITDA)
EBITDA and Adjusted EBITDA are non-IFRS measures used by management that are not defined by IFRS. EBITDA and Adjusted EBITDA do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. Management believes that EBITDA and Adjusted EBITDA provide meaningful and useful financial information as these measures demonstrate the operating performance of the business excluding non-cash charges.
"EBITDA" is calculated as earnings before interest, taxes, depreciation, depletion, and amortization. "Adjusted EBITDA" is calculated as EBITDA adjusted for non-cash, extraordinary, non-recurring, and other items unrelated to the Company's core operating activities.
The most directly comparable measure to EBITDA and Adjusted EBITDA calculated in accordance with IFRS is net loss. The following table presents the EBITDA and Adjusted EBITDA for the three months ended September 30, 2024, and 2023, and a reconciliation of same to net income (loss).
For the three months ended
September 30, September 30, Change in
2024 2023
$ $ $ %
Income (loss) for the year from
continuing
operations 4.14 0.38 3.76 91 %
Amortization 0.38 0.70 (0.32) (84 %)
Finance costs 0.21 0.28 (0.07) (33 %)
EBITDA 4.73 1.36 3.37 (26 %)
Fair value adjustment of
derivative liability 0.04 (0.33) 0.37 925 %
Impairment of receivable 0.01 - 0.01 100 %
Gain on remeasurement of warrant
liabilities (4.18) (1.27) (2.91) 70 %
Share-based payments 0.38 0.45 (0.07) (18 %)
Warrants issues for services 0.02 - 0.02 100 %
Adjusted EBITDA 1.00 0.21 0.79 376 %
For the nine months ended
September 30, September 30, Change in
2024 2023
$ $ $ %
Income (loss) for the period
from continuing operations (3.26) (4.79) 1.53 (47 %)
Amortization 1.15 2.11 (0.96) (83 %)
Finance costs 0.84 0.99 (0.15) (18 %)
EBITDA (1.27) (1.69) 0.42 (148 %)
Fair value adjustment of
derivative liability 0.71 (0.10) 0.81 114 %
Impairment (recovery) of
receivable 0.01 (0.02) 0.03 300 %
Loss on remeasurement of
warrant liabilities 1.84 0.32 1.52 83 %
Share-based payments 0.32 1.61 (1.29) (403 %)
Warrants issued for services 0.02 - 0.02 100 %
Non-recurring expenses 0.30 - 0.30 100 %
Adjusted EBITDA 1.93 0.12 1.81 1508 %
(MORE TO FOLLOW) Dow Jones Newswires
November 18, 2024 16:00 ET (21:00 GMT)
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