Consolidated revenues increased 11% to $4.2 million for the third quarter
Continued cost optimization results in a 33% reduction in quarter-over-quarter operating expenses
IRVINE, Calif., Nov. 1, 2023 /PRNewswire/ — ManifestSeven Holdings Corporation (CSE: MSVN; OTCMKTS: MNFSF) (“M7” or the “Company“), California’s first integrated omnichannel platform for legal cannabis, announced financial results for its fiscal third quarter ended August 31, 2023 on October 29, 2023. M7’s third-quarter financial results reflect the continued demand for the Company’s integrated regulated operations in major metropolitan markets throughout California.
All financial information in this press release is provided in U.S. dollars unless otherwise indicated.
Third Quarter 2023 Fiscal Quarter Financial Highlights
- Generated consolidated revenue of $4.2 million during the third fiscal quarter, representing an increase of 11% from $3.8 million during the second fiscal quarter. During the third fiscal quarter, M7 continued to place a greater emphasis on generating revenue from its regulated operations, with regulated product sales increasing by 25% quarter-over-quarter and expected to yield more significant long-term revenue growth.
- M7 continued to optimize its cost structure, resulting in operating expenses (excluding depreciation and amortization and stock-based compensation expense) of $2.3 million during the fiscal third quarter, representing a decrease of 33% from $3.5 million during the second fiscal quarter.
- Reported consolidated gross profit of $1.17 million during the third first quarter, representing a decrease of 6% from $1.24 million during the second fiscal quarter. The decrease in gross profit is primarily attributable to a decline in revenue generated from ancillary product sales and a shift in product mix from ancillary to regulated products as described above, while gross profit generated by the Company’s regulated segment increased by 5% year-over-year.
Operational Updates
- In July 2023, the Company entered into a Master Services Agreement with a licensed third-party cannabis distribution company, focused primarily on the rapidly growing beverage product category, to carry out finished goods distribution operations on behalf of Highlanders. The contract consolidates a client portfolio that includes some of California’s highest-selling beverage products, a database of nearly 400 active licensed retailers throughout California, and a robust fleet of 16 distribution vehicles, allowing for efficient statewide long-haul transportation and last-mile fulfillment of regulated products. The agreement is expected to result in significant operational synergies and maximize the Company’s ability to monetize its regulated distribution infrastructure by generating incremental and accretive revenue and optimizing operating margins.
- The Company continues to explore, review and evaluate a broad range of potential strategic alternatives focused on maximizing shareholder value. The Company is evaluating options around its strategic direction and drivers, operations and operating model, geographic footprint, value-driven elements of the supply chain, and resourcing.
- The Company continues to be in default of certain debt obligations. The Company and certain of its debt holders are in discussions about possible solutions. Further, the Company is working closely with its major creditors, vendors, and landlords as it continues to pursue a range of strategic and financing alternatives.
About ManifestSeven Holdings Corporation
ManifestSeven Holdings Corporation (CSE: MSVN; OTCMKTS: MNFSF) (“M7” or the “Company“) disrupts the California cannabis landscape by seamlessly integrating proprietary distribution, retail, and delivery operations into a unified statewide platform that supports compliant and efficient commerce, both for cannabis enterprises and consumers. M7 offers local on-demand delivery and a storefront dispensary through its direct-to-consumer division, Weden. Through its business-to-business division, Highlanders Distribution, the Company provides a comprehensive suite of commercial and compliant services to licensed cannabis cultivators, manufacturers, distributors, and retailers operating throughout California. M7’s 1-800-CANNABIS portal ties the Company’s integrated operations together with a centralized gateway through which businesses and consumers can access M7’s comprehensive suite of products and solutions. M7 is a publicly listed company on the Canadian Securities Exchange (“CSE“) trading under the ticker symbol “MSVN”. Additional information is available under the Company’s SEDAR profile at www.sedar.com.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS:
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company’s beliefs and assumptions regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. This forward-looking information is based on certain assumptions made by management and other factors used by management in developing such information. Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include, regulatory actions, market prices, and continued availability of capital and financing, and general economic, market or business conditions. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to the Company or persons acting on its behalf are expressly qualified in its entirety by this notice.
The Company’s securities referred to in this press release have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws. Accordingly, the Company’s securities may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or a solicitation of any offer to buy any Company’s securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Neither the CSE nor its Market Regulator (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
SOURCE ManifestSeven
