Company Cites Other Positive Financial Developments Which Include Decrease in SG&A Expenses and Significant Improvements on Balance Sheet
ESCONDIDO, Calif., April 15, 2019 (GLOBE NEWSWIRE) -- via NetworkWire — MARIJUANA COMPANY OF AMERICA INC. (“MCOA” or the “Company”) (MCOA), a vertically integrated hemp and cannabis corporation, is pleased to announce its financial results for the year ended Dec. 31, 2018, as reported in its annual report on Form 10-K.
2018 Financial Highlights
- Total revenues of hempSMART™ products were $252,135 for the year ended Dec. 31, 2018, as compared to $26,830 from the prior year, representing a significant 840% increase year over year.
- Net loss from operations decreased by 82% from $21,262,798 for the year ended Dec. 31, 2017, to $3,814,949 from the prior year.
- Gross profit for 2018 increased to $170,885, a 68% gross margin, compared to a gross margin of $12,536 for 2017, a 47% gross margin.
- SG&A expenses, including non-cash items and one-time transactional expenses, for 2018 decreased substantially by $17,292,265, or 81%, to $3,980,493, compared to $21,272,758 for the prior year.
- For the year ended Dec. 31, 2018, the Company realized the following other one-time income items: Gain cancellation of debt of $1,500,000 and a gain of $560,000 from the change in value of its trading securities investment in Global Payout. The Company also settled a debt that resulted in a gain of $94,933.
- Total assets increased by 70% from $1,129,958 in 2017 to $1,919,781 in 2018. This increase is due primarily to the increase in value of the Company’s investment in Global Payout’s stock, which is accounted for using the trading security method of accounting as well as an increase in cash and inventory.
- Total liabilities decreased by 56% from $11,447,710 for 2017 to $5,053,887 for 2018. This decrease was largely due to the decrease in liabilities related to warrants and joint venture obligations.
- Cash used by operating activities for 2018 was $2,385,349, compared to cash used for operating activities of $895,743 for 2017. Cash used by investing was $686,458, compared to $1,176,919 for 2017. Cash provided by financing activities for 2018 was $3,181,553, compared to $2,175,007 for 2017.
“I could not be prouder of the growth and accomplishments our company and team members achieved in 2018,” said Don Steinberg, founder, chairman and CEO of Marijuana Company of America. “Our industry experienced unprecedented legislative developments, including Canada going full adult use and the Farm Bill passing in the U.S. We are now better positioned than ever to be a leader in the cannabis industry. Not only did we expand our team, but we also launched our hempSMART sales in Europe. We expect to complete and announce our acquisition of a California marijuana manufacturing and distribution license shortly. Upon completion, this acquisition will allow us to capture additional market share, implementing a fully integrated cannabis model that includes cultivation of hemp, distribution and manufacturing of cannabis, and the retail delivery of our new Viva Buds brand.”
Jesus Quintero, CFO of Marijuana Company of America, said, “We are very pleased with the strong financial results of 2018. Our financial results were better than many other cannabis public companies in our sector, which are still in the development stage and not yet producing revenue. Marijuana Company of America, through our hempSMART brand, has experienced a dramatic increase in sales, most of which occurred in fourth quarter. This trend is continuing to grow in first and second quarter of 2019. We think our shareholders are going to be very satisfied with the execution of our highly aggressive growth and restructuring plans in 2019.”
Further details about the Company’s financial results are available in its annual report on Form 10K, which will be available in the investor relations section of the Company’s website at www.marijuanacompanyofamerica.com.
About Marijuana Company of America, Inc.
MCOA is a corporation that participates in: (1) product research and development of legal hemp-based consumer products under the brand name “hempSMART™” that target general health and well-being; (2) an affiliate marketing program to promote and sell its legal hemp-based consumer products containing CBD; (3) leasing of real property to separate business entities engaged in the growth and sale of cannabis in those states and jurisdictions where cannabis has been legalized and properly regulated for medicinal and recreational use; and (4) the expansion of its business into ancillary areas of the legalized cannabis and hemp industry as the legalized markets and opportunities in this segment mature and develop.
About Our hempSMART Products Containing CBD
The United States Food and Drug Administration (FDA) has not recognized CBD as a safe and effective drug for any indication. Our products containing CBD derived from industrial hemp are not marketed or sold based upon claims that their use is safe and effective treatment for any medical condition as drugs or dietary supplements subject to the FDA’s jurisdiction.
This news release contains "forward-looking statements" that are not purely historical and may include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, the development, costs and results of new business opportunities, and words such as "anticipate," "seek," "intend," "believe," "estimate," "expect," "project," "plan," or similar phrases may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with new projects, the future U.S. and global economies, the impact of competition, and the Company's reliance on existing regulations regarding the use and development of cannabis-based products. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-12G, our quarterly reports on Form 10-Q and other periodic reports filed from time to time with the Securities and Exchange Commission. For more information, please visit www.sec.gov.