UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 8, 2018
GENERAL CANNABIS CORP
(Exact Name of Registrant as Specified in Charter)
Colorado | 000-54457 | 20-8096131 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
6565 E. Evans Avenue |
| 80224 |
(Address of principal executive offices) |
| (Zip Code) |
Registrant’s telephone number, including area code: (303) 759-1300
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
[_]
Written communications pursuant to Rule 425 under the Securities Act
[_]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
[_]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
[_]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02
Results of Operations and Financial Condition
On August 8, 2018, General Cannabis Corp (the “Company”) issued a press release announcing results for the quarter ended June 30, 2018. A copy of the press release issued by the Company is furnished as Exhibit 99.1 hereto and incorporated herein by reference.
The information in this Item 2.02 of this Current Report on Form 8-K and the related Exhibit 99.1 attached hereto is being furnished and shall not be deemed “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 |
| Financial Statements and Exhibits |
(d) Exhibits
Exhibit No. |
Description | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: August 9, 2018
| GENERAL CANNABIS CORP | |
|
|
|
|
|
|
| By: | /s/ Robert L. Frichtel |
| Name: | Robert L. Frichtel |
| Title: | Chief Executive Officer |
Exhibit 99.1
General Cannabis Announces Record Revenues and 2018
Second Quarter Results
DENVER, August 8, 2018 – General Cannabis Corp (OTCQX: CANN), the comprehensive national resource to the regulated cannabis industry, today announced financial results for the quarter ended June 30, 2018.
Financial Highlights
The following table summarizes our results of operations:
|
| Three months ended June 30, |
| Percent | ||
|
| 2018 |
| 2017 |
| Change |
Segment Revenues |
|
|
|
|
|
|
Security | $ | 614,281 | $ | 364,306 |
| 69% |
Marketing |
| 97,973 |
| 69,535 |
| 41% |
Operations |
| 402,287 |
| 365,899 |
| 10% |
Finance |
| – |
| 33,865 |
| (100)% |
|
| 1,114,541 |
| 833,605 |
| 34% |
|
|
|
|
|
|
|
Total costs and expenses |
| 3,605,858 |
| 2,158,810 |
| 67% |
Operating loss |
| (2,491,317) |
| (1,325,205) |
| 88% |
|
|
|
|
|
|
|
Other expense |
| 1,177,980 |
| 272,499 |
| 332% |
Net loss | $ | (3,669,297) | $ | (1,597,705) |
| 130% |
|
|
|
|
|
|
|
Loss per share – Basic and diluted | $ | (0.10) | $ | (0.08) |
| 25% |
|
| Six months ended June 30, |
| Percent | ||
|
| 2018 |
| 2017 |
| Change |
Segment Revenues |
|
|
|
|
|
|
Security | $ | 1,166,258 | $ | 789,444 |
| 48% |
Marketing |
| 182,464 |
| 113,822 |
| 60% |
Operations |
| 708,301 |
| 583,095 |
| 21% |
Finance |
| – |
| 66,349 |
| (100)% |
|
| 2,057,023 |
| 1,552,710 |
| 32% |
|
|
|
|
|
|
|
Total costs and expenses |
| 7,714,822 |
| 5,065,037 |
| 52% |
Operating loss |
| (5,657,799) |
| (3,512,327) |
| 61% |
|
|
|
|
|
|
|
Other expense |
| 2,477,885 |
| 715,463 |
| 246% |
Net loss | $ | (8,135,684) | $ | (4,227,790) |
| 92% |
|
|
|
|
|
|
|
Loss per share – Basic and diluted | $ | (0.23) | $ | (0.22) |
| 7% |
The following provides a condensed version of our balance sheets:
|
| June 30, |
| December 31, |
| Percent |
|
| 2018 |
| 2017 |
| Change |
Total current assets | $ | 11,628,602 | $ | 6,190,411 |
| 88% |
Long-term assets |
| 1,633,713 |
| 1,413,515 |
| 16% |
Total assets | $ | 13,262,315 | $ | 7,603,926 |
| 74% |
|
|
|
|
|
|
|
Total liabilities | $ | 3,333,240 | $ | 4,097,929 |
| (19)% |
Stockholders’ equity |
| 9,929,075 |
| 3,505,997 |
| 183% |
Total liabilities and stockholders’ equity | $ | 13,262,315 | $ | 7,603,926 |
| 74% |
“We broke the $1 million revenue ceiling in the second quarter of 2018, with revenues of $1,114,541, an increase of 34% over 2017. Year to date revenues increased 32% in 2018 over 2017,” said Robert Frichtel, Chief Executive Officer of General Cannabis. “Our Operations segment continues to find opportunities from the expansion of legalized cannabis in numerous states, our Security segment is gaining traction in California, and Chiefton’s apparel business is achieving broader, national success,” continued Mr. Frichtel.
“With a suite of goods and services for customers across the cannabis industry, we are realizing the benefit of providing a synergistic set of solutions to help cannabis businesses realize their growth potential,” said Joe Hodas, Chief Operating Officer of General Cannabis. “Our revenue growth reflects the effectiveness of our focus on driving sales and the quality of our deliverables. “In addition, I am proud to share that we became founding members of the Cannabis Trade Federation in the second quarter, which is a tangible demonstration of our belief in the importance of supporting the industry by driving legislation favorable to its continued expansion,” continued Mr. Hodas.
“I am confident that breaking the $1 million quarterly revenue level in the second quarter is a proof of concept for our ability to be the comprehensive national resource to the regulated cannabis industry. Our access to capital, our strong balance sheet and our infrastructure expertise allow us to partner with companies throughout the industry, while positioning us to continue to expand through acquisitions,” said Michael Feinsod, Executive Chairman of General Cannabis. “We are ready to explore investments and acquisitions of companies in the regulated cannabis industry. Our team of experts will respond quickly to serious inquiries. Access to capital and thought leadership is difficult in the cannabis industry. Our proven track record of integrating entrepreneurial cannabis start-ups and positioning them with the resources and capital needed to succeed, however, is working,” continued Mr. Feinsod.
“California is allowing each county and city to develop its own licensing system. While California presents a tremendous opportunity for us, their regulatory environment is a challenge to cannabis businesses,” said Mr. Frichtel. “We are proceeding cautiously and establishing a presence in California. With our diversified platform of goods and services, we will be ready to take advantage of the opportunity when businesses determine how to overcome California’s regulatory challenges,” continued Mr. Frichtel.
Our full results can be found at www.generalcann.com.
About General Cannabis Corp
General Cannabis Corp is the comprehensive national resource for the highest quality service providers available to the regulated cannabis industry. We are a trusted partner to the cultivation, production and retail sides of the cannabis business. We do this through a combination of strong operating divisions such as security, marketing, operational consulting and products, real estate and financing. As a synergistic holding company, our divisions are able to leverage the strengths of each other, as well as a larger balance sheet, to succeed. Our website address is www.generalcann.com.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include statements regarding future events or our future performance or financial condition; statements regarding the scalability of the Company’s team and infrastructure; statements regarding the continued evolvement of the California state regulated market; statements regarding the Company’s work with well capitalized clients that are rolling out large scale cultivation centers; statements regarding the Company’s plan to grow revenue through the rest of 2018; statements regarding the Company’s acquisition opportunities; statements regarding the Company positioning itself to be a strong partner; and statements regarding the Company’s continued focus on growth through acquisition.
Any statements that are not statements of historical fact, such as the statements described above, should be considered forward-looking statements. Some of these statements may be identified by the use of the words “may,” “will,” “believes,” “plans,” “anticipates,” “expects” and similar expressions. General Cannabis has based these forward-looking statements on current expectations and projections about future events as of the date of this press release. These forward-looking statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as result of a number of factors, including those described from time to time in General Cannabis’s most recent Annual Report on Form 10-K under the heading “Risk Factors” and in subsequent filings with the Securities and Exchange Commission. General Cannabis undertakes no duty to update any forward-looking statements made herein.
Contact
Robert Frichtel
CEO, General Cannabis Corp
(303) 759-1300