TORONTO, Aug. 29, 2019 /CNW/ - Mimi's Rock Corp. (TSXV:MIMI) "The Company", an online dietary supplement and wellness company operating the Dr. Tobias brand, today announced its financial results for the quarter ended June 30, 2019.
For the three months ended June 30, 2019, the Company incurred a net loss of $1,240,051 compared to a net loss of $nil for the three months ended June 30, 2018. For the three months ended June 30, 2019, EBITDA was $460,008, compared to EBITDA of $nil for the three months ended June 30, 2018. Adjusted EBITDA, which excludes non-cash share based compensation expense, investment income and acquisition costs, was $1,382,117, compared to Adjusted EBITDA of $nil for the same period in the prior year. For the six months ended June 30, 2019, the Company incurred a net loss of $848,134 ($0.04 per share), compared to a net loss of $nil ($0.00 per share) for the six month period ended June 30, 2018. EBITDA for the six months ended June 30, 2019 was $1,557,921, compared to $nil EBITDA for the same period in the prior year. Adjusted EBITDA was $2,700,637 for the six months ended June 30, 2019, compared to $nil for the same period in 2018.
The Company reported a net loss for the three and six months ended June 30, 2019 primarily due to one-time costs related to its reverse takeover and public listing expenses as part of the Qualifying Transaction completed in May 2019, as well as non-cash share-based compensation expense. Tax expense in the period was also higher due to derecognition of tax loss carryforwards in Germany as a result of the reverse acquisition. During the second quarter, the Company began to generate sales from its own e-commerce site, drtobias.com, as well through additional online retail outlets. The Company also launched a private label brand in conjunction with its e-commerce channel partner.
Dave Kohler, CEO of Mimi's Rock commented, "We are pleased that during the quarter, we executed three important strategic initiatives as planned. We added a new product family and opened a new online channel, in addition to launching our own e-Commerce site. Together, these accomplishments position us well to execute our scaling and expansionary plans."
Revenues for the three months ended June 30, 2019 were $8,770,904, compared to $nil for the three months ended June 30, 2018, due to the acquisition of the DTI business in July 2018. Revenues represent sales of nutraceutical products in the U.S. market. Gross margin for the three months ended June 30, 2019 was $6,208,319 (70%) compared to $nil for the three month period ended June 30, 2018. Gross margin ratios have improved slightly on a quarter over quarter basis as the Company works with its supplier to obtain better pricing and efficiencies.
While the Company's sales do not experience significant seasonality, there is some fluctuation on a quarterly basis due to natural demand fluctuation as well as promotional impacts. The Company continues to redevelop its brand strategy. As online advertising in the period was scaled back to evaluate returns on investment, sales volumes were somewhat lower while margins remained consistent.
The Company incurred selling and marketing expenses of $3,523,242, or approximately 40% of revenue, for the three months ended June 30, 2019, compared to $nil for the three months ended June 30, 2018. Sales and marketing expenses for the period consist primarily of fulfillment costs related to delivering products to customers, direct online advertising placements, costs related to marketing the Dr. Tobias brand and other promotional and awareness initiatives. The Company will continue to actively monitor its selling and marketing expenses, particularly those directly related to advertising and expects that these will increase in relation to sales revenues going forward.
General and administrative expenses for the three months ended June 30, 2019 were $1,302,960, compared to $nil for the same period in 2018. General and administrative expenses consist primarily of salaries and benefits, professional fees, occupancy costs and insurance. General and administrative expenses in the current period have normalized somewhat now that one-time costs associated with operational start-up and time and efforts spent engaged in understanding and integrating the DTI business have diminished. Share based compensation expense for the three months ended June 30, 2019 was $194,800 compared to $nil for the three months ended June 30, 2018. Share based compensation expense relates to awards under the Company's incentive stock option plan and is based on the estimated number of awards that will eventually vest using the Black-Scholes option pricing model.
On May 27, 2019, the Company completed its Qualifying Transaction pursuant to an amalgamation agreement between the Company and Mimi's Rock Inc. The Qualifying Transaction constituted a reverse take-over ("RTO") for accounting purposes, as former MRI shareholders hold a majority of outstanding shares in the Company, the Board of Directors is comprised of MRI Board members and the senior management of MRI became senior management of the Company. Although the Company will be regarded as the legal parent, MRI is considered to be the acquirer for accounting purposes. Consequently, the Company is deemed to be a continuation of MRI. As a part of the Qualifying Transaction, the Company changed its name from "Commerce Acquisition Corp." to "Mimi's Rock Corp."
Listing expenses related to the acquisition and reverse takeover transaction for the three months ended June 30, 2019 were $697,787, compared to $nil for the same period in the prior year. Listing expenses consist primarily of legal, accounting and other professional fees associated with the reverse takeover and amalgamation, as well as non-cash costs related to equity instruments issued for the acquisition.
Interest and financing costs of $533,475 were incurred during the three months ended June 30, 2019, compared to $nil for the three months ended June 30, 2018. Interest and financing expenses in the current quarter include approximately $189,644 in non-cash charges related to amortization of expenses incurred in securing the Company's senior secured loan, as well as $88,212 related to dividends in kind paid on the Preferred B shares prior to conversion in connection with the reverse takeover transaction.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
About Mimi's Rock Corp.:
Mimi's Rock Corp. is an online dietary supplement and wellness company operating under the Dr. Tobias brand. The brand features over 30 products including the top selling colon cleansing product and the #1 selling Omega 3 Fish Oil on Amazon.com. Mimi's Rock currently serves customers in the United States and has rapid growth plans to expand into other markets. For more information, visit https://mimisrock.com.
This news release includes "forward-looking information," as such term is defined in applicable securities laws. Forward-looking information includes, without limitation, Mimi's Rock Corp.'s business and business results, goals or outlook, risks associated with financial results and stability, development projects such as those referenced herein, sales to foreign jurisdictions, engineering and construction, production (including control over costs, quality, quantity and timeliness of delivery), foreign currency and exchange rates, maintaining adequate working capital and raising further capital on acceptable terms or at all, and other similar statements concerning anticipated future events, conditions or results that are not historical facts. These statements reflect management's current estimates, beliefs, intentions and expectations; they are not guarantees of future performance. The Company cautions that all forward looking information is inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond the Company's control. Accordingly, actual future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. All statements are made as of the date of this news release and represent the Company's judgement as of the date of this new release, and the Company is under no obligation to update or alter any forward-looking information.
SOURCE Mimi’s Rock Corp.
For further information: please contact Mimi's Rock Corp. at: David Kohler, CEO, 905-330-5081, Dkohler@mimisrock.com; Jackie Kelly, Investor Relations, 416-301-2949, firstname.lastname@example.org