HempNova Reports 2019 Financial Results and Provides 2020 Plan

/THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/

VANCOUVER, Feb. 24, 2020 /CNW/ - HempNova Lifetech Corporation, (the "Company" or "HempNova"), is pleased to report its financial and operating results for the year ended December 31, 2019 and provides 2020 plan.  All amounts are expressed in Canadian Dollars, except otherwise noted.

YEAR 2019 HIGHTLIGHTS

• Leased the first hemp processing facility in Eugene, Oregon, USA;
• Closed $3.9 million equity financing;
• Built and fully permitted a 10,000 sq. ft. hemp drying workshop in Eugene, Oregon, USA;
• Successfully provided drying and storage services to local hemp growers and dried 1.4 million pounds dired biomass in 2019 season;
• Generated $7,042,932 revenue by providing drying and storage services;
• Gross profit of $5,836,992 with 83% gross profit margin;
• Generated EBITA of $4,728,721;
• Net income of $2,842,200 or $0.08 per share; and
• As of December 31, 2019, net working capital of $5,034,872.

In June 2019, the Company leased and started building up its first hemp processing facility (the "Oscar Facility") in Eugene, Oregon, USA. The Oscar Facility, a previous USDA certified food processing facility, is a 1.7-acre commercial property with 23,000 sq. ft. factory and warehouses.

At the Oscar Facility, outside the existing building, the Company built and fully permitted a 10,000 sq. ft. hemp drying workshop and installed four commercial dryers therein. During 2019 drying season, the Company provided drying services to local hemp growers and dried 1.4 million pounds dried biomass in its 49 days drying operation.

In addition, the Company built up an analytical laboratory inside the Oscar Facility. The laboratory was extensively used during 2019 drying season.

In 2019, the Company generated $7,042,932 revenue from its drying and storage services for Oregon hemp growers. Cost of goods sold was $1,205,940. As a result, gross profit was $5,836,992 or 83% gross profit margin. Administrative expenses were $1,528,748, which included whole year admin expenses prior to as well as during 2019 drying season. The Company generated $4,728,721 EBITA from the operation. Net income was $2,842,200 or $0.08 per share.

For detailed audited financial statements of the Company, please visit the Company's filings on SEDAR.

YEAR 2020 PLAN

In 2020, the Company will continue its strategy and objective to become a leading vertical integrated one-stop service provider to hemp growers, including germination, propagation, flower drying & processing, biomass drying & processing, and marketing & sales of hemp products. In 2020, the Company will focus on upgrading and further building up its Oscar Facility, major expansion into Southern Oregon, and marketing & sales of hemp flowers, biomass and other products. 

Oscar Facility

At the Oscar Facility, the Company will upgrade its four existing commercial dryers to increase the drying capacity by 30% to 40%. In 2020, the Company will also complete its build-up of and obtain required permits for the refinery workshop to produce full spectrum CBD distillates, isolates, THC-free distillates and other CBD products. The Company has started Oregon Department of Agriculture (ODA) food safety certification and GMP certification processes for the Oscar Facility.

Expansion into Southern Oregon, USA

The hemp industry has grown rapidly in USA since 2018 Farm Bill.  During 2019, there was about 500% increase in hemp growing, compared to 2018 in Oregon. As a result, the Company expects continual shortage of various hemp related services due to such strong growth. The Company plans to aggressively expand its business in Southern Oregon in a cost-efficient way. Two large commercial dryers have already been purchased for Southern Oregon. The Company will construct or acquire major facilities with large capacity for hemp germination, propagation, flower drying & processing, biomass drying & processing in Southern Oregon. For this purpose, the Company is actively looking for acquisition opportunities.

ON BEHALF OF THE BOARD

"Ken Z. Cai", President

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION AND CAUTIONARY NOTE TO US INVESTORS

Certain of the statements and information in this news release constitute "forward-looking information" within the meaning of applicable Canadian provincial securities laws. Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "is expected", "anticipates", "believes", "plans", "projects", "estimates", "assumes", "intends", "strategies", "targets", "goals", "forecasts", "objectives", "budgets", "schedules", "potential" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements or information.

Forward-looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks relating to: fluctuating equity prices, bond prices, commodity prices, foreign exchange risks, interest rate risk, foreign investment risk; loss of key personnel; conflicts of interest; dependence on management and others.

This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements or information. Forward-looking statements or information are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements or information due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in the Company's various SEDAR filings under the heading "Risk Factors". Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward- looking statements or information.

The Company's forward-looking statements or information are based on the assumptions, beliefs, expectations and opinions of management as of the date of this news release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements or information if circumstances or management's assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking statements or information.

SOURCE HempNova Lifetech Corporation

For additional information on the Company, please contact Jennifer Trevitt at 604-688-8002