TORONTO, May 30, 2023 (GLOBE NEWSWIRE) -- Blueberries Medical Corp. (CSE: BBM) (OTC: BBRRF) (FRA: 1OA) the Canadian parent of Blueberries S.A.S. (“BBSAS”), a leading player in the cannabis industry (together the “Company” or "Blueberries") is thrilled to announce its exceptional financial and business performance for the first quarter ended March 31, 2023. The company has demonstrated remarkable growth, doubling its revenue from the comparative period in 2022. Blueberries has filed today its unaudited condensed interim consolidated financial statements and related management's discussion and analysis, both of which are available on Blueberries’ profile at www.sedar.com. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.
"We have achieved remarkable growth, with revenue doubling compared to the same period last year. This accomplishment is a testament to our unwavering commitment to excellence and our strategic initiatives. Our team's dedication and hard work have been instrumental in driving our success, and we are excited about the future prospects of Blueberries Medical Corp." said Facundo Garreton, Chairman and Chief Executive Officer”
FINANCIAL AND BUSINESS HIGHLIGHTS – FIRST QUARTER 2023 AND AS OF THE DATE HEREOF:
- Total revenue for the first quarter of 2023 reached $77,894, representing a substantial increase of $44,179 (131%) compared to the comparative period. This growth reflects the company's unwavering commitment to excellence and strategic initiatives.
Business Expansion and Achievements:
1. Market Expansion:
- Blueberries Corporation has expanded its export sales of THC and CBD isolates to key markets such as Peru, Argentina, and Australia.
- The company successfully completed one of its largest THC Distilled exports from Colombia to Australia after rigorous quality validation. This achievement has paved the way for an upcoming second order to Australia, which will be three times larger and shipped before the end of the second quarter of 2023.
- Blueberries Corporation has also received new orders of THC value-added products, including bulk semi-elaborate products, resin, and distillate, from customers in Brazil and Chile.
2. Regulatory Milestones:
- In the first quarter of 2023, the company obtained authorization from the logistic hub's authority to export the first commercial shipment of CBD:THC balanced formulations. Blueberries Corporation is currently navigating regulatory requirements to finalize this operation and enter into a commercial arrangement with one of Brazil's largest Compassionate Use brands.
3. Joint Venture Agreement:
- Blueberries Corporation has signed a transformative joint venture agreement with Allied Corp, a renowned industry player, to expand its product offering and global market presence.
- By combining Allied's expertise in premium quality flower production with Blueberries' state-of-the-art extraction facilities, the companies will collaborate on sales efforts and optimize production capabilities.
- This strategic partnership enables Allied Corp to offer high-quality derivative-based products in the markets it currently distributes, expanding its global footprint. The companies' clients and supply channel partners span five continents, including Australia, Europe, Asia, South America, and North America.
4. Termination of Farmland Purchase Agreement:
- On April 5, 2023, the company made the decision to terminate the agreement to purchase farmland in Cogua (Zipaquira), Colombia. As part of the termination agreement, Blueberries Corporation will receive compensation totaling $380,776 (US$281,140), to be settled as follows: $243,792 (US$180,000) in cash on closing. Transfer of 3,905,000 shares of the Company owned by the seller to Terraflos, valued at $136,984 (US$101,140). In turn, Terraflos will pay the deemed value in cash to Blueberries Corporation by July 30, 2023.
These significant accomplishments and developments reflect Blueberries Corporation's commitment to strategic growth, innovation, and delivering exceptional value to its stakeholders. The company is well-positioned to seize future opportunities and maintain its trajectory of success.
| For the three months ended | March 31, 2023 | March 31, 2022 | ||||
| Revenues | ||||||
| Products revenue | $ | 77,115 | $ | 23,600 | ||
| Extraction services | 779 | 6,743 | ||||
| Cultivation and others | - | 3,372 | ||||
| Cost of Sales | ||||||
| Products revenue | (66,693 | ) | (10,888 | ) | ||
| Extraction services | (674 | ) | (6,929 | ) | ||
| Cultivation and others | - | (1,980 | ) | |||
| Direct cost of production - extraction services | (21,669 | ) | (23,940 | ) | ||
| Direct cost of production - cultivation | - | (29,647 | ) | |||
| Gross loss | $ | (11,142 | ) | $ | (39,669 | ) |
Revenue Breakdown and Improved Cost Efficiency Drive Strong Performance
Blueberries Corporation is pleased to report its outstanding financial performance for the three months ended March 31, 2023. During this period, the company achieved a total revenue of $77,894, representing an impressive increase of $44,179 or 131% compared to the comparative period. This remarkable growth can be attributed to several key factors.
Revenue Growth Drivers:
The successful launch of our new product, CBD isolate, played a significant role in driving revenue growth. The market reception has been exceptional, contributing substantially to our increased revenue.
Expansion of CBD isolate exports to countries such as Peru, Argentina, and Australia, which began in the fourth quarter of 2022, has also significantly contributed to our revenue growth. We are delighted to see our products gaining traction in international markets.
Revenue Distribution:
CBD and THC derivatives, specifically our standard oil products, accounted for 99% of our total revenue. This highlights the strong demand for these high-quality derivatives in the market.
Extraction services contributed 1% to our revenue, showcasing the value and expertise we offer to our clients.
Cost of Sales and Direct Cost of Production:
Our cost of sales and direct cost of production encompasses various direct expenses related to extraction and agricultural operations, including strain management, cultivation supplies, personnel costs, and allocation of fixed operational costs.
For the three months ended March 31, 2023, we recorded costs of $67,367 for sales and $21,669 for direct production. Notably, the direct cost of production decreased by $31,918 compared to the previous year. This reduction was primarily due to strategic staffing adjustments as we realigned our focus from cultivation to CBD and THC isolate/derivatives and extraction services. The optimization of our operations has led to improved cost efficiency.
Blueberries Corporation's exceptional financial performance reflects our commitment to delivering innovative products, expanding our global reach, and streamlining our operations for enhanced profitability. We remain dedicated to driving growth and creating long-term value for our shareholders and stakeholders.
| Operating expenses | Operating expenses | ||||||
| Extraction services | Cultivation | Extraction services | |||||
| For the three months ended | March 31, 2023 | March 31, 2022 | |||||
| Salary, wages, and benefits | $ | 3,655 | $ | 411 | $ | 994 | |
| Supplies, spare parts and equipment | - | 87 | - | ||||
| Facilities | 4,979 | 8,103 | 5,673 | ||||
| Fuel and oil | - | 50 | - | ||||
| Transportation | 3,202 | 159 | 1,896 | ||||
| Utilities | - | 502 | 1,761 | ||||
| Leases | - | 2,122 | - | ||||
| Other | 13,946 | 16,032 | 25,900 | ||||
| Total | $ | 25,782 | $ | 27,466 | $ | 36,224 | |
Achievement: Significant Reduction in Operating Expenses Drives Financial Performance
Blueberries Corporation is thrilled to announce a remarkable achievement in our financial performance for the three months ended March 31, 2023. During this period, we successfully achieved a significant reduction in operating expenses, which had a profound positive impact on our overall results.
Operating Expense Reduction:
Our operating expenses for the three-month period amounted to $25,782, showcasing a substantial decrease of $37,908 compared to the comparative period's expenses of $63,690.
This achievement is primarily attributed to our strategic decision to temporarily cease cultivation operations. By focusing our efforts on other core areas, we have successfully minimized the associated operating expenses.
By optimizing our cost structure and reallocating resources, we have created a more efficient and streamlined operation, positioning Blueberries Corporation for enhanced financial performance and long-term success.
We remain committed to driving further improvements and maximizing value for our shareholders and stakeholders. We are confident that our prudent management of operating expenses will continue to generate positive results as we navigate the dynamic landscape of the cannabis industry.
General and Administrative (“G&A”) Expense
Substantial Reduction in General and Administrative Expenses Drives Cost Efficiency. Blueberries Corporation is delighted to announce a significant accomplishment in our ongoing pursuit of cost optimization and operational efficiency. During the reporting period, we achieved a remarkable reduction in general and administrative (G&A) expenses, underscoring our commitment to prudent financial management.
G&A Expense Reduction:
Total G&A expenses for the period amounted to $261,220, showcasing a substantial decrease of $59,853 or 19% compared to the expenses of $321,073 incurred in the comparative period.
This achievement is a testament to our diligent efforts in streamlining administrative operations, identifying cost-saving opportunities, and implementing efficient practices across our organization.
Nature of G&A Expenses:
Our G&A expenses encompass various administrative costs associated with the day-to-day operations of the company, including but not limited to office rent, utilities, professional services, software licenses, and other administrative overheads.
By diligently managing our G&A expenses, we have created a leaner and more cost-efficient operational framework, enabling us to allocate resources strategically and focus on core business activities.
We remain steadfast in our commitment to driving further cost efficiencies while maintaining the highest standards of operational effectiveness and financial discipline.
The nature of G&A expenses is as follows:
| For the three months ended | March 31, 2023 | March 31, 2022 | |||
| Audit and accounting | $ | 37,000 | $ | 62,923 | |
| Consulting | 7,906 | 31,001 | |||
| Director and management fees | 42,488 | - | |||
| Filing and transfer agent fees | 11,300 | 11,561 | |||
| General office | 3,788 | 9,278 | |||
| Insurance | 26,447 | 22,864 | |||
| Legal | 11,600 | 892 | |||
| Other | 11,813 | 278 | |||
| Salary, wages, and benefits | 88,184 | 137,798 | |||
| Share based compensation expense | 20,694 | 44,478 | |||
| Total | $ | 261,220 | $ | 321,073 | |
Salary, wages and benefits
Strategic Cost Management Leads to Significant Reduction in Salary, Wages, and Benefits
Blueberries Corporation is proud to highlight a significant achievement in our ongoing efforts to optimize our cost structure and enhance financial performance. During the three months ended March 31, 2023, we successfully implemented strategic measures that resulted in a substantial reduction in salary, wages, and benefits expenses.
Cost Reduction:
Total salary, wages, and benefits for the period amounted to $88,184, demonstrating a remarkable decrease of $49,614 compared to the comparative period.
This achievement is a direct outcome of our focused cost management initiatives, which include careful control of headcount and resource allocation. By streamlining our workforce and aligning resources with commercial and revenue-generating activities, we have achieved significant savings in personnel-related costs.
Our commitment to prudent financial management and strategic resource allocation allows us to effectively allocate resources towards activities that drive revenue and enhance our overall business performance.
Audit and accounting
Audit and accounting fees include cost of audit, accounting and taxation services provided by the Company’s external auditor and other third parties. The decrease is due to the under accrual of fiscal 2021 audit fees of $23,000 which was recorded in the first quarter of 2022.
Director and management fees
Director and management fees are incurred specifically for certain directors and officers of the Company for services provided to Blueberries either from themselves personally or through a related entity. For the three months ended March 31, 2023, the Company incurred an increase of $42,488 in director and management fees expenses, respectively, compared to the comparative period. The overall increase was due to the savings measures implemented during COVID-19 pandemic in which the management’s compensation was paused and recommenced in the last two quarters in 2022.
Share based compensation
For the three months ended March 31, 2023, the Company recognized a total of $20,694 of share-based compensation recovery, a decrease of $23,784 compared to the comparative period. The decrease is primarily due to the lower valuation of each option granted and vested in the period compared to the comparative period.
Other matters
Board Appointments and Key Leadership Changes Drive Growth and Expansion
Blueberries Corporation is pleased to announce significant developments in its board of directors and leadership team, reflecting our commitment to fostering growth and maximizing our global potential. These achievements highlight the wealth of expertise and experience that will drive the company's international development.
Board Appointment:
We are delighted to welcome Jose Maria Forero to our board, effective May 19, 2023. Mr. Forero brings a wealth of experience and a proven track record of success in sales and commercial development. As the former President of Latin American Operations and a C-level executive with over 17 years of regional and global sales experience, including at Clever Leaves, Colombia's largest medical cannabis licensed producer, Mr. Forero possesses extensive knowledge of the global cannabis industry.
Mr. Forero holds an Executive MBA degree from INALDE Business School and is an Industrial Engineer. With his operational and sales expertise, he will play a vital role in guiding our company's international expansion and driving growth in new markets.
The Board Member Sebastian Hochbaum has resigned to his position on May 30, 2023 due to personal and professional new challenges.
Board and Leadership Changes:
With the appointment of Mr. Forero, our board of directors now consists of five members, including Chairman and Interim CEO Facundo Garretón, Patricio Villalba, Catherine Lathwell, and Joaquin Barrera. The Audit Committee of the Board is composed of Catherine Lathwell, Patricio Villalba, and Facundo Garretón.
In line with these structural changes, we are thrilled to announce the appointment of Gustavo Gutierrez as the new Country Manager of Blueberries SAS in Bogota, Colombia. Previously serving as the company's Chief Operating Officer, Gustavo is a highly motivated Pharmaceutical Chemist with a master's degree in Biotechnology. His experience in pharmaceutical quality control and his leadership within the company make him an ideal choice to lead our operations in Colombia.
About Blueberries Medical Corp.
Elevating the Cannabis Industry with Innovative Ingredients. Blueberries is a distinguished Latin American licensed producer and a prominent international supplier of high-quality cannabis-derived ingredients across various industries. Our core focus lies in developing and commercializing a wide range of cannabis-derived ingredients, including high and low THC, CBD, and other cannabinoids, in compliance with the regulations of each destination country and specific application requirements.
As a part of Terraflos, a comprehensive holding company that excels in producing biocomponents and integrating the production value chain from plant molecules to people, Blueberries leverages the synergies among our scientific expertise and other Terraflos companies to create exceptional value for people's health and well-being.
Blueberries possesses a team of experts at the forefront of cannabis research and development. Their deep understanding of the plant's properties, coupled with their scientific acumen, enables us to create innovative and effective cannabis-derived ingredients. As an international supplier, we ensure that our ingredients adhere to the regulations of each destination country. By integrating our supply chain with precision and expertise, we guarantee consistent quality and compliance.
Blueberries actively collaborates with other Terraflos companies to maximize the value we bring to people's health. By combining our strengths and resources, we unlock new possibilities and achieve groundbreaking advancements in cannabis-derived ingredient development.
At Blueberries, we are dedicated to making a positive impact on people's lives by providing high-quality, safe, and compliant cannabis-derived ingredients. We understand the diverse needs of various industries, and our goal is to meet and exceed their expectations by delivering exceptional solutions backed by scientific rigor and meticulous quality control.
With our relentless pursuit of innovation, commitment to excellence, and close collaboration within the Terraflos ecosystem, Blueberries is positioned as a pioneering force in the cannabis industry. Together, we strive to create transformative cannabis-derived ingredients that add significant value to the health and well-being of individuals worldwide.
For more details about our company, please visit our website at www.blueberriesmed.com. If you have any inquiries or require further information, feel free to reach out to:
Facundo Garreton
Chairman of the Company
Email: fgarreton@blueberriesmed.com
Phone: +54 911 6015 2227
Guillermo Rodriguez
Chief Financial Officer
grodriguez@blueberriesmed.com
Tel: +54 911 6015 2227
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward looking statements relate, among other things, to: commencement of commercial production of CBD-dominant oils and products, successful implementation of full GMP standards at its extraction facility to allow for additional export potential to international markets, achieving additional milestones is contemplated, or at all, ability to expand distribution networks, ability to expand and upgrade the Company’s cultivation facilities in Colombia, internal expectations, expectations regarding the ability of the Company to access new Latin American and international markets, the ability to attract and retain new customers, and future expansion plans including development of the cultivation, production, industrialization and marketing of cannabis for commercial and scientific purposes.
These forward-looking statements are based on reasonable assumptions and estimates of management of the Company at the time such statements were made. Actual future results may differ materially as forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors, among other things, include: fluctuations in general macroeconomic conditions; fluctuations in securities markets; expectations regarding the size of the Colombian and international medical cannabis market and changing consumer habits; the ability of the Company to successfully achieve its business objectives; plans for expansion; political and social uncertainties; inability to obtain adequate insurance to cover risks and hazards; and the presence of laws and regulations that may impose restrictions on cultivation, production, distribution and sale of cannabis and cannabis related products in Colombia, Argentina and elsewhere; and employee relations. Although the forward-looking statements contained in this news release are based upon what management of the Company believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Readers should not place undue reliance on the forward-looking statements and information contained in this news release. The Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
Additional information regarding the Company, and other risks and uncertainties relating to the Company's business are contained under the heading "Risk Factors" in the Company's Listing Statement dated January 31, 2019 filed on its issuer profile on SEDAR at www.sedar.com.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
