Welcome!

News Feed Item

CannaVest Corp. Announces Fourth Quarter and Fiscal 2013 Financial Results

LAS VEGAS, April 3, 2014 /PRNewswire/ -- CannaVest Corp. ("CannaVest" or "the Company") (OTCBB: CANV) reported financial results for the fourth quarter and year ended December 31, 2013.

Logo - http://photos.prnewswire.com/prnh/20140403/LA98016LOGO

Financial highlights for fiscal year 2013 include the following:

  • Product sales of $2.154 million
  • Gross margin of 59.1%
  • Operating expenses of $2.891 million
  • Operating loss of $(1.617 million)
  • Net loss of $(2.3 million) representing a loss of $(0.23) per share
  • Invested $750,000 to purchase 24.97% of the outstanding equity in KannaLife Sciences, Inc., a leading phytomedical company specializing in the development of pharmacological products derived from plants
  • Purchased certain assets of PhytoSPHERE Systems in exchange for 5,825,000 shares of common stock and $950,000 in cash

CannaVest President and Chief Executive Officer, Michael J. Mona, Jr. commented on CannaVest 2013 performance, saying "I am pleased with our progress for 2013.  Product sales were initiated in the third quarter and began to gain traction throughout the year. I look forward to ongoing progress and growth in 2014 as we continue to broaden our product lines, expand our sales network and bolster our management team. We have been successful at securing large quantities of product that give us a myriad of expansion opportunities going forward."

The Company is not presenting an overview of its Q4 financial performance or comparison to prior quarters as it has concluded that those comparisons would be in error. Management has determined that the previously issued financial statements contained in the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2013, June 30, 2013 and September 30, 2013 (the "Forms 10-Q") should be restated because of errors associated with the purchase price allocation for the assets acquired related to PhytoSPHERE Systems. Specifically, management determined that the allocation of the purchase price as previously disclosed in the Forms 10-Q was not in accordance with Generally Accepted Accounts Principals ("GAAP"). 

The Company is in the process of preparing the restated Quarterly Reports on Form 10-Q for the quarters ended March 31, 2013, June 30, 2013 and September 30, 2013.  The decision to restate the disclosure was discussed with the Company's independent registered public accounting firm and was made after discovery of such errors relating to its disclosures. 

Financial results for the year ended December 31, 2013

  • Product sales of $2,154,063 and gross profit of $1,273,593, representing a gross profit percentage of 59.1% for the year ended December 31, 2013 versus no sales or cost of revenues during 2012. This is the result of the Company restructuring in late 2012 and implementing its new business strategy of producing and selling hemp-based health and wellness products based on natural cannabidiol (CBD).
  • Selling, general, and administrative expenses for the year ended December 31, 2013 were $2,366,450 compared to $43,018 for the year ended December 31, 2012. The increase of $2,323,432 was related to increases sales, marketing, administrative, legal and accounting expenses associated with the implementation of the Company's new business model throughout 2013. Expenses for the year ended December 31, 2013 also included a $400,000 provision for bad debts and $753,500 in amortization related to intangible assets purchased as part of the purchase of assets from PhytoSPHERE Systems, LLC that closed during 2013. The Company had no intangible assets during 2012.
  • Research and development costs for the year ended December 31, 2013 were $524,476. The Company incurred no research and development costs for the year ended December 31, 2012. These costs included the cost of our laboratory facility, supplies, personnel, inventory used in process development, and amounts paid to third parties for product and process development. The Company did not have those activities ongoing during 2012.
  • Interest expense was $372,109 for the year ended December 31, 2013 versus interest expense of $2,593 for the year ended December 31, 2012. Interest for the current year includes $161,583 interest accrued on the note payable to Roen Ventures plus $210,526 as amortization of the discount calculated on the note payable to Roen Ventures, LLC related to a beneficial conversion feature.
  • A loss of $310,754 on our investment in KannaLife Sciences, Inc. This represents our pro rata share of KannaLife's total loss for the year ended December 31, 2013.
  • An increase in cash by $2,243,239 to $2,243,670.
  • A total of $4,879,234 used in operating activities versus $64,084 for the year ended December 31, 2012. A total of $2,602,166 was used on increases in inventory and prepaid inventory. In addition, $174,317 was used on prepaid expenses, $1,744,064 was used due to an increase in accounts receivable. This was offset by an increase in accounts payable of $24,622 and accrued expenses of $222,703. For the year ended December 31, 2013, net loss less depreciation and amortization resulted in a use of cash of $1,532,942 versus $45,611 in the year ended December 31, 2012. Cash used in operating activities included a decrease in accounts payable and accrued expenses of $20,223, offset by a decrease of prepaid expenses of $1,750.
  • For the year ended December 31, 2013, the Company used $1,875,819 in investing activities. This included cash received from the acquisition of the assets of $50,775, less $226,594 used for the purchase of equipment, $950,000 paid to PhytoSPHERE Systems for the purchase of assets, and $750,000 invested in KannaLife Sciences. No cash was used in or provided by investing activities for the year ended December 31, 2012.
  • A total of $8,998,292 was provided by financing activities for the year ended December 31, 2013, which included proceeds from the loan from Roen Ventures, LLC of $6,192,069, $2,731,423 received from the sale of common stock, and $175,000 received for common stock issued in 2014. This was offset by repayment of $100,000 to Roen Ventures, LLC. For the year ended December 31, 2012, net cash flows from financing activities included $63,347 in proceeds from a related party loan.

For further discussion of the Company's financial results for the year ended December 31, 2013, please refer to the Company's consolidated financial statements and related Management Discussion and Analysis, which can be found at www.cannavest.com or EDGAR at www.sec.gov/edgar/searchedgar/webusers.htm

About CannaVest Corp.
CannaVest is in the business of investing and developing hemp-based cannabinoid companies.  CannaVest develops, produces, markets and sells end-consumer products to the nutraceutical industry containing the hemp plant extract, cannabidiol (CBD). Additionally, the company resells–to third parties–raw product acquired by CannaVest Corp. pursuant to its supply relationships in Europe. CannaVest Corp. seeks to take advantage of an emerging worldwide trend to re-energize the production of industrial hemp and to foster its many uses for consumers. Cannabinoids (cannabidiol/CBD) are natural constituents of the hemp plant, and CBD is derived from hemp stalk and seed. Additional information is available from OTCMarkets.com or by visiting www.cannavest.com.

FOOD AND DRUG ADMINISTRATION (FDA) DISCLOSURE
These statements have not been evaluated by the FDA and are not intended to diagnose, treat or cure any disease.

FORWARD-LOOKING DISCLAIMER
This press release may contain certain forward-looking statements and information, as defined within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. Such forward-looking statements by definition involve risks, uncertainties and other factors, which may cause the actual results, performance or achievements of CannaVest Corp. to be materially different from the statements made herein.

LEGAL DISCLOSURE
CannaVest Corp. does not sell or distribute any products that are in violation of the United States Controlled Substances Act (US.CSA). The company does grow, sell and distribute hemp-based products and are involved with the federally legal distribution of medical marijuana-based products within certain international markets. Cannabidiol is a natural constituent of hemp oil.

Corporate Contact:
CannaVest Corp.
2688 South Rainbow Avenue, Suite B
Las Vegas, NV 89146
Phone: 866-290-2157
www.cannavest.com

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Smart Cities are here to stay, but for their promise to be delivered, the data they produce must not be put in new siloes. In his session at @ThingsExpo, Mathias Herberts, Co-founder and CTO of Cityzen Data, will deep dive into best practices that will ensure a successful smart city journey.
Why do your mobile transformations need to happen today? Mobile is the strategy that enterprise transformation centers on to drive customer engagement. In his general session at @ThingsExpo, Roger Woods, Director, Mobile Product & Strategy – Adobe Marketing Cloud, covered key IoT and mobile trends that are forcing mobile transformation, key components of a solid mobile strategy and explored how brands are effectively driving mobile change throughout the enterprise.
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lea...
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
The Jevons Paradox suggests that when technological advances increase efficiency of a resource, it results in an overall increase in consumption. Writing on the increased use of coal as a result of technological improvements, 19th-century economist William Stanley Jevons found that these improvements led to the development of new ways to utilize coal. In his session at 19th Cloud Expo, Mark Thiele, Chief Strategy Officer for Apcera, will compare the Jevons Paradox to modern-day enterprise IT, e...
What are the new priorities for the connected business? First: businesses need to think differently about the types of connections they will need to make – these span well beyond the traditional app to app into more modern forms of integration including SaaS integrations, mobile integrations, APIs, device integration and Big Data integration. It’s important these are unified together vs. doing them all piecemeal. Second, these types of connections need to be simple to design, adapt and configure...
Let’s face it, embracing new storage technologies, capabilities and upgrading to new hardware often adds complexity and increases costs. In his session at 18th Cloud Expo, Seth Oxenhorn, Vice President of Business Development & Alliances at FalconStor, discussed how a truly heterogeneous software-defined storage approach can add value to legacy platforms and heterogeneous environments. The result reduces complexity, significantly lowers cost, and provides IT organizations with improved efficienc...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
SYS-CON Events announced today that CDS Global Cloud, an Infrastructure as a Service provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. CDS Global Cloud is an IaaS (Infrastructure as a Service) provider specializing in solutions for e-commerce, internet gaming, online education and other internet applications. With a growing number of data centers and network points around the world, ...
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...