SAN MATEO, Calif., Aug. 30, 2019 (GLOBE NEWSWIRE) -- Plus Products Inc. (CSE: PLUS) (OTCQB: PLPRF) (the “Company” or “PLUS”), a leading cannabis branded products company in the U.S., today released its unaudited financial and operational results for the three and six months ended June 30, 2019, expressed in U.S. Dollars. These filings are available for review on the Company’s SEDAR profile at www.sedar.com and with the Canadian Securities Exchange (the “CSE”).



Q2 Financial Highlights (amounts are approximate and are stated in U.S. Dollars, unless stated otherwise):

Revenues climbed to $3.6 million in Q2 2019, representing a 125% year-over-year growth over Q2 2018 revenues of $1.6 million.

Gross margins have improved to $0.7 million, or 20%, in Q2 2019, compared with $0.2 million, or 14%, in Q2 2018, due to continued operating efficiencies at the Company’s Southern California plant opened in December 2017.

The Company continues to invest in building talent, market share, infrastructure and financial capacity to support its future growth. Spending on operating expenses was $5.3 million in Q2 2019 up from $1.3 million in Q2 2018 with the hiring of key top management personnel, consulting fees pertaining to future operational and marketing efforts and expenses pertaining to being a public company.

The Company’s cash balance rose to $34.1 million at June 30, 2019, up from $22.4 million as at December 31, 2018. The Company raised $23.68M from the sale of convertible debentures and as a result of warrant exercises in the first six months of 2019.

Net working capital was $38 million in Q2 2019 compared to $22.4 million in Q4 2018. Current liabilities as at June 30, 2019 were $1.6 million as compared to $2.2 million at December 31, 2018.

Shareholder equity reached $26.2 million at June 30, 2019, up from $25.7 million at December 31, 2018.

Q2 Operational Update:

Launched PLUS Mints, the Company’s second product line in California

Launched new “Mango CBD Relief” product and retired its previous “CBD Relief” product as part of a coordinated launch campaign with retailers

Announced expansion into Nevada through a definitive agreement to partner with TapRoot Holdings, Inc., a vertically integrated cannabis company operating cultivation and manufacturing facilities. The Company expects to market its top selling gummies in Nevada dispensaries in the second half of 2019.

Appointed Marc Seguin, former president and CMO of Popchips, as Chief Revenue Officer, and Jon Paul, a veteran senior corporate finance executive and certified public accountant, as Chief Financial Officer

Acquired an option to purchase California-based Emerald Bay Wellness LLC, one of the Company’s largest suppliers of cannabis oil

Upgraded to OTCQX® Best Market from the OTCQB® Venture Market

Management Commentary

“Our high product standards, growing brand recognition and the launch of our new line of mints drove strong demand for our products this quarter, cementing our position as a top selling cannabis brand in California,” said Jake Heimark, co-founder & Chief Executive Officer of the Company. “For the 5th consecutive quarter, PLUS “Uplift” was the #1 best-selling cannabis product in California in dollars sold, according to data from BDS Analytics.

“We also expanded our management team by appointing Jon Paul, a veteran senior corporate finance executive and certified public accountant, as Chief Financial Officer, and Marc Seguin, former president and CMO of Popchips, as Chief Revenue Officer, to lead our sales strategy. Mr. Seguin is one of the first executives to leave the food industry for a non-hemp, cannabis touching company and we are proud to be attracting such high calibre talent to the Company as we lay the framework for continued growth.

“Looking ahead to the second half of 2019, we are implementing several initiatives to drive our strategic growth plan, including ramping distribution of our new PLUS Mints line into more dispensaries in California, initiating sales of our gummies in Nevada supported by a comprehensive sales and marketing campaign in both states, and launching new SKUs.

“Beyond these initiatives, the Company is actively exploring entry into additional markets beyond California and Nevada. We see this as a key growth lever as we work to build a national brand, and are confident in our ability bring the winning formula we have developed in California to new markets,” concluded Mr. Heimark.

For further information, please refer to summary of unaudited financial information at the end of this press release as well as the Company’s unaudited financial statements along with the related MD&A (Management Discussion and Analysis) filed under the Company’s profile at www.sedar.com and with the CSE.

About PLUS

PLUS Products is a California edibles company focused on using nature to bring balance to consumers lives. PLUS’s mission is to make cannabis safe and approachable – that begins with high-quality products that deliver consistent consumer experiences. The PLUS Gummies and PLUS Mints are manufactured at PLUS’s own factory in Adelanto, CA, with strict internal and external testing to ensure accurate consistent dosage. PLUS is headquartered in San Mateo, CA with 80 employees.

For further information contact:

Jake Heimark

CEO & Co-founder

ir@plusproducts.com

Investors:

Blake Brennan

Chief of Staff

ir@plusproducts.com

The CSE does not accept responsibility for the adequacy or accuracy of this release.

The financial information included in this press release is not required for any regulatory purpose and is, therefore, provided solely for additional investor guidance. Where possible the information has been constructed by management from available unaudited interim financial information.

Forward-Looking Statements:

This press release includes statements containing certain “forward-looking information” within the meaning of applicable securities law (each, a “forward-looking statement”). Forward-looking statements are frequently characterized by words such as “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “potential”, “proposed” and other similar words, or statements that certain events or conditions “may” or “will” occur and include, but are not limited to, statements relating to: (i) the Company’s investments in building out its operational platform (including the option to acquire the Company’s largest supplier), and the extent to which (if at all) such investments (and such option) is able to support the scaling of the Company and the expansion of the Company’s in-house cannabis extraction capabilities, the improvement of the Company’s quality control and the provision to the Company of additional capacity to expand; and (ii) the Company’s implementation of initiatives to drive the Company’s strategic growth plan, including the ramping up of distribution of the new PLUS Mints line into new dispensaries in California, initiating sales of the Company’s gummies in Nevada (supported by a sales and marketing campaign in both states) and the exploration of new potential SKUs and the extent to which the implementation of such initiatives will achieve such a strategic growth plan and the Company’s ability to achieve such implementation.

These forward-looking statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this press release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These risks include, but are not limited to, the success of the Company’s investments, the ability to retain key personnel, the ability to continue investing in infrastructure to support growth, the ability to obtain financing on acceptable terms, the continued quality of the Company’s products, customer experience and retention, the continued development of adult-use sales channels, managements estimation of consumer demand in in jurisdictions where the Company exports, expectations of future results and expenses, the availability of additional capital to complete capital projects and facilities improvements, the ability to expand and maintain distribution capabilities, the impact of competition, the ability of the Company to implement initiatives and the possibility for changes in laws, rules, and regulations in the industry. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

Non-GAAP Measures:

Adjusted uncompressed weighted average shares outstanding and loss per share.

The Company has additionally determined the adjusted uncompressed weighted average shares outstanding and loss per share, basic and diluted. The Company believes these measures to be representative of loss and comprehensive loss on a per share basis; however, these performance measures have no standardized meaning. As such, there are likely to be differences in the method of computation when compared to similar measures presented by other issuers. Management believes that, in addition to conventional measures prepared in accordance with GAAP, some investors use this information to evaluate the Company’s performance. Accordingly, they are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.





PLUS PRODUCTS INC.

Condensed Interim Consolidated Statements of Financial Position

(Expressed in U.S. Dollars - Unaudited)

As at June 30, As at December 31, 2019 2018 $ $ Assets Current Cash and cash equivalents 34,107,470 22,398,587 Trade receivables 2,308,414 1,379,066 Prepaids and note receivable 1,144,396 172,128 Inventory 2,062,950 630,337 39,623,230 24,580,118 Non-current Deposits 142,901 586,354 Property and equipment 4,658,361 1,875,401 Intangible assets 741,863 741,863 Goodwill 61,296 61,296 Total assets 45,227,651 27,845,032 Liabilities Current Accounts payable and accrued liabilities 1,582,230 2,009,412 Income taxes payable 63,534 155,714 1,645,764 2,165,126 Non-current Lease liabilities 1,207,129 - Convertible debentures 16,153,434 - Total liabilities 19,006,327 2,165,126 Shareholders' equity Share capital 40,810,288 34,065,191 Reserves 5,128,517 2,391,055 Deficit (19,717,481) (10,776,340) Total shareholders' equity 26,221,324 25,679,906 Total liabilities and shareholders' equity 45,227,651 27,845,032







PLUS PRODUCTS INC.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

(Expressed in U.S. Dollars - Unaudited)

Three months ended

June 30, Six months ended

June 30, 2019 2018 2019 2018 $ $ $ $ Revenue 3,576,847 1,582,132 6,821,805 2,450,335 Cost of sales 2,855,224 1,353,448 5,408,325 2,152,241 Gross margin 721,623 228,684 1,413,480 298,094 Operating expenses Advertising and promotion 483,260 47,716 710,560 65,923 Amortization 1,078 292 1,078 584 Consulting fees 384,877 10,000 1,079,360 10,000 General and administrative 568,326 105,834 1,028,627 187,582 Meals and travel expenses 217,750 57,096 416,310 87,256 Professional fees 746,693 388,432 1,620,994 607,128 Regulatory fees 2,699 4,741 6,035 4,853 Research and development 131,032 - 137,019 - Salaries and benefits 1,797,423 380,970 2,853,110 584,398 Share-based compensation 997,170 263,250 1,176,799 762,157 Loss from operations (4,608,685) (1,029,647) (7,616,412) (2,011,787) Other (income) expense Other expense 1,088 - 1,038 - Accretion expense 222,779 - 571,807 - Interest expense 345,495 12,000 516,204 26,341 Loss (gain) on foreign exchange 90,740 - (66,839) - Loss before income taxes (5,268,787) (1,041,647) (8,638,622) (2,038,128) Income tax expense 106,271 67,773 181,295 86,607 Loss and comprehensive loss for the period (5,375,058) (1,109,420) (8,819,917) (2,124,735) Weighted average equivalent uncompressed proportionate shares outstanding: Basic and diluted 30,751,437 11,102,034 27,814,002 9,276,446 Loss per equivalent uncompressed proportionate share: Basic and diluted $ (0.17) $(0.10) $(0.32) $(0.23)



