Aurora Announces Q3 2016 Results

Aurora Cannabis operational update

VANCOUVER, British Columbia, May 30, 2016 /Weed Wire/ — Aurora Cannabis Inc. (CSE:ACB)(FRANKFURT:21P)(WKN:A1C4WM)(OTCQB:ACBFF) (“Aurora” or the “Company”) announced its financial and operational results for the three and nine month periods ended March 31, 2016. Aurora is a Licensed Producer of medical cannabis under Health Canada’s Marihuana for Medical Purposes Regulations (MMPR).

Q3 Financial and Operational Highlights:

  • The Company received its license from Health Canada to sell medical cannabis under the MMPR on November 27, 2015 and began product sales on January 5, 2016.
  • Revenue for the three months ended March 31, 2016 was $0.2 million, as compared to $nil in 2015.
  • Gross profit was $4.2 million and $6.4 million for the three and nine month periods ended March 31, 2016, respectively. The gross margin in excess of sales was primarily due to the unrealized gain related to accounting changes in the fair value of biological assets.
  • The Company received approval from Health Canada on February 16, 2016, to produce derivative cannabis products (cannabis oils) through a Section 56 exemption to the Controlled Drugs and Substances Act (“CDSA”).
  • Three additional Division 3 (cannabis present) rooms received full Health Canada approval, including a packaging room scalable to handle very large client capacity, and an additional extraction room for the production of derivative products (cannabis oils) via the Company’s GMP-compliant CO2 Supercritical Fluid Extraction unit.
  • The Company hired Cam Battley as Senior Vice-President, Communications and Medical Affairs. Mr. Battley is also a member of the Board of Directors of Cannabis Canada (formerly the Canadian Medical Cannabis Industry Association), and chairs the Association’s Advocacy Committee.

Events subsequent to Quarter-End:

  • On May 30, Aurora announced it had exceeded 3,000 patient registrations, reflecting an organic growth rate over the Company’s first five months of product sales that management believes is unsurpassed in the industry.
  • On May 24, the Company announced it had launched same-day delivery of cannabis in Calgary and adjacent areas, covering an urban area with over 1.2 million people. Expansion of same day delivery to Edmonton and Red Deer, Alberta is anticipated shortly.
  • Aurora announced the closing of a non-brokered private placement of $2.1 million principal amount of unsecured convertible debentures, with net proceeds to be used for working capital purposes.
  • Michael Singer, an experienced CFO in the pharmaceutical sector and former CFO of Bedrocan Cannabis Corp., was appointed to Aurora’s Board of Directors, to provide financial leadership and further strengthen corporate governance.

“Our results reflect an exceptionally strong start as we scaled up our commercial operations with the commencement of product sales, and demonstrate that we are executing successfully on our business strategies,” said Terry Booth, CEO. “Subsequent to quarter-end, patient registration and product sales further accelerated, making Aurora one of the fastest-growing licensed producers in Canada and one of the most well regarded brands in the industry. Based on our organic growth, we believe we are tracking well towards achieving cash flow positive operations in record time. Cannabis cultivation and harvests have delivered consistent yield and product quality. Furthermore, low electricity, water and other input costs have enabled us to achieve the lowest production costs per gram of cannabis in the industry. These factors combine to position us to pursue further expansion of our registered customer base, the transition to profitability, and to establish Aurora as a leader in the cannabis sector.”

Financial Highlights
A comprehensive discussion of Aurora’s financials and operations are provided in the Company’s Management Discussion & Analysis and Financial Statements filed with SEDAR and can be found on

For the three and nine month periods ending March 31, 2016, the Company recorded revenues of $0.2 million, as compared to $nil for the comparable periods in the prior year. The Company commenced commercial sales in January 2016, and has experienced exceptionally strong traction in signing up and maintaining new patients. From the end of the period under review and the date of this release, Aurora has more than tripled its registered customer base.

Gross Profit
Gross profit of $4.2 million and $6.4 million was achieved for the three and nine month periods ended March 31, 2016, respectively. The gross profit in excess of sales was attributable primarily to the unrealized gain related to accounting changes in the fair value of biological assets. This change in fair value resulted from increasing product inventories and strains available to service the Company’s growing number of registered patients.

Net Income (loss)
The Company recorded net income of $2.5 million and $1.8 million for the three and nine month periods ended March 31, 2016 respectively, due mainly to the unrealized gain on changes in the fair value of biological assets. For the comparable periods in the prior year, the Company recorded a net loss of $0.8 million and a net loss of $9.0 million respectively. The losses recorded in fiscal 2015 were related predominantly to the construction of the Company’s production facility, development of its medical cannabis operations, branding and product development, and completed RTO transaction. During the quarter ended December 31, 2014, the Company recorded a listing expense of $5.1 million in relation to the RTO.

Cash and Liquidity
As at March 31, 2016, the Company had working capital of $2.4 million, as compared to a working capital deficiency of $6.3 million as at June 30, 2015. The $8.7 million increase in working capital was primarily attributable to increases in inventory of $3.8 million and biological assets of $4.4 million, and decreases in payables of $0.3 million and short-term loans of $0.2 million.

Net cash and cash equivalents on hand were relatively stable at $0.3 million. Subsequent to the quarter, the Company completed a non-brokered private placement for gross proceeds of $2.1 million.

Outstanding Share Data:
As at May 31, 2016, there were 135,663,865 common shares issued and outstanding, in addition to 5,559,834 stock options to purchase common shares, 28,750,590 warrants to purchase shares, 309,434 compensation options to purchase shares and warrants, 20,000,000 performance shares and $2,170,000 convertible into common shares reserved for future issuance.

Going Concern Assumption
The Company’s unaudited interim condensed consolidated financial statements (“Interim Financial Statements”) for the three and nine month periods ended March 31, 2016 have been prepared on a going concern basis which assumes that the Company will continue to operate for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business.

The Company had financed its working capital requirements primarily through equity and debt financings. The Company’s ability to continue as a going concern is dependent upon its ability to generate funds from profitable operations and raise additional financing in order to meet current and future obligations. While the Company has been successful in raising financing in the past, there is no assurance that it will be able to obtain additional financing or that such financing will be available on reasonable terms. These conditions combined with the accumulated losses to date indicate the existence of a material uncertainty that may cast doubt on the Company’s ability to continue as a going concern.

The Interim Financial Statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

Aurora’s business strategy is to continue and accelerate its penetration of the Canadian cannabis market, achieve its Health Canada sales license for derivative products (cannabis oils) and launch derivatives sales, transition to profitability in the short-term, and begin a major expansion of production capacity. When the federal government passes legislation legalizing the consumer use of cannabis, the Company anticipates participating in the non-medical consumer market, and will envision further production capacity expansion to meet future market demand for cannabis products.

Investor Relations
Effective April 21, 2016, the Company engaged NATIONAL Equicom Inc. to provide investor relations services, complementing internal investor relations resources, for a period of 6 months at a monthly rate of $6,000.

About Aurora
Aurora’s wholly-owned subsidiary, Aurora Cannabis Enterprises Inc., is a licensed producer of medical marijuana pursuant to Health Canada’s Marihuana for Medical Purposes Regulations (MMPR) and operates a 55,200 square foot, expandable, state-of-the-art production facility in Mountain View County, Alberta, Canada. Aurora trades on the Canadian Securities Exchange under the symbol “ACB”.

On behalf of the Board of Directors, AURORA CANNABIS INC.

Terry Booth, CEO

This news release contains statements about the Company’s expectations regarding production capacity, production yields, patient growth, product sales, profitability, positive operating cash flow and other aspects of its anticipated future operations and financial performance that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them as actual results may differ materially from the forward-looking statements. Such forward-looking statements are estimates reflecting the Company’s best judgment based upon current information and involve a number of risks and uncertainties, and there can be no assurance that other factors will not affect the accuracy of such forward-looking statements. Such factors include but are not limited to the Company’s ability to obtain the necessary financing and the general impact of financial market conditions, the yield from marijuana growing operations, product demand, changes in prices of required commodities, competition, government regulations and other risks set out in the Company’s management’s discussion and analysis filed on SEDAR. The forward-looking statements contained in this news release are made as of the date hereof, and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, except as required by law.

The CSE or other regulatory authority has not reviewed, approved or disapproved the contents of this press release. We seek Safe Harbour.

Aurora Cannabis Inc.
Cam Battley
Senior Vice President

Marc Lakmaaker

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