1933 Industries Inc. TGIFF TGIF third quarter 2022 revenue was C$4.3 million ($3.3 million), compared to C$3.4 million in Q3 2021.
Third Quarter 2022 Financial Highlights
Gross margin was C$2.0 million or 47% for Q3 2022 and C$2.5 million or 73% for Q3 2021. The decrease in gross margin percentage from the prior year is due to improvements in the Company’s inventory estimates, which resulted in the reclassification of certain inventory costs to cost of sales.
General and administrative expenses were CA$447,021, compared to CA$413,114 during Q3 2021.
Net loss was C$12.37 million compared to net profit of C$582,673 in the third quarter of 2021.
Adjusted EBITDA was CA$336,104 for Q3 2022 and adjusted EBITDA of CA$1.4 million for Q3 2021.
The company and Day One Beverages, Inc. by mutual agreement to terminate binding letter of intent between the parties for the company to acquire 100% of all authorized and issued shares of Day One. After full due diligence, the parties have mutually agreed that it would be in their best interests not to proceed with the acquisition. Under the terms of the mutual termination, Day One repaid all funds provided by the company through interim loans of approximately $500,000.
Q3 2022 Other Highlights
The company announced the resignation of Mark Baynes from its board of directors and the appointment of Ranson K. Shepherd as director of the company.
The company announced the sale of real estate assets in Nevada for total net proceeds of $1.27 million. The company has completed the sale of two parcels consisting of 2.78 acres of land zoned M1, located in Las Vegas. The company originally purchased the lots for $835,000 in 2017. Proceeds from the sale will be used for general working capital.
As part of the transaction with Day One, the company entered into a loan agreement in which the company agreed to lend up to $500,000 through a line of credit. The line of credit did not bear interest until January 31, 2022. After January 31, 2022, all borrowings will bear interest at a rate of 10% per year until fully repaid. All principal, together with all accrued interest and related costs, was due and payable no later than December 31, 2022. Until the principal, together with all accrued interest and related costs, is fully repaid, the company had the absolute right to convert all or part of the principal balance, and any amount of interest and accrued charges, into common stock of the borrower. This equity conversion will be based on the borrower’s valuation of $4.5 million.
The company issued 372,666 common shares following the conversion of CA$32,000 of convertible debentures and interest payable on the convertible debentures of CA$5,267.
Developments after April 30, 2022
Following the termination of the Day One transaction, the loan agreement was also terminated. Pursuant to the termination, the loan plus accrued interest in the amount of $480,515 was due and payable in full by June 30, 2022. In addition, by June 9, 2022, the company was to be repaid expenses incurred of $30,052. On June 28, 2022, the company received the reimbursement of the loan and the reimbursement of the costs incurred.
Photo by Thiago Patriota on Unsplash
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