Unrivaled Brands Reports Fourth Quarter and Year End 2021 Financial Results

Reports Year Over Year Fiscal Year Revenue Growth of 674%

SANTA ANA, Calif., April 18, 2022 (GLOBE NEWSWIRE) -- Unrivaled Brands, Inc. (OTCQX: UNRV) ("Unrivaled" or the "Company"), a multi-state vertically integrated company focused on the cannabis sector with operations in California and Oregon, today reported its financial results for the quarter and fiscal year ended December 31, 2021.

Tiffany Davis, Chief Executive Officer of Unrivaled Brands stated, “Our strategy throughout 2021 was focused on building scale. As a result, we were able to leverage numerous sector opportunities, successfully positioning Unrivaled as a dominant West Coast MSO.”

“While the board and I are pleased that these efforts resulted in 2021 fiscal year revenue growth of approximately 674%, market conditions continue to shift and it’s important we pivot to capitalize on these changes. As a result, I will be shifting our focus from acquisitions to integration to ensure more profitable and sustainable growth over the long term.

“Our plans over the coming weeks and months include further refining both our strategy and structure. This includes additions to our leadership team, establishing synergies across our portfolio companies, and creating operational efficiencies through shared services. We believe these moves will effectively right size the business, improve margins, and ensure our acquisitions are accretive to strengthen our overall balance sheet. 

“We continue to work diligently to strengthen our collective future. We are incredibly grateful to our team members who remain hard at work, fully focused on our day-to-day business and delivering on our commitments to customers, partners and shareholders. Relatedly, and as anticipated, we successfully closed the sale of NuLeaf last week resulting in the receipt of $6.5 million. 

“And finally, I truly understand the value of regular communications with shareholders. In the coming weeks, we will release a shareholder letter with more details about our new leadership team and our go forward plans. In the meantime, I continue to be very optimistic about the future of our company and the industry.”

Financial Update

• Our gross profit for the year ended December 31, 2021 was approximately $11.97 million, compared to a gross profit of approximately, $2.64 million for the year ended December 31, 2020, an increase of $9.32 million. Our gross margin for the year ended December 31, 2021 was 25.1% compared with the gross margin of 42.9% for the year ended December 31, 2020. The year over year margin decrease was due to the inclusion of the lower margin distribution operation into the portfolio in 2021. In 2020, the operation was exclusively retail.
• Selling, general and administrative expenses for the year ended December 31, 2021 were approximately $48.26 million, compared to approximately $19.32 million for the year ended December 31, 2020, an increase of $30.12 million. In general the increase was due to costs associated with the acquisitions brought on-board in 2021 that resulted in a significantly larger company. We ended 2021 with six retail operations compared with two in 2020; as well as three distribution centers compared to none in 2020; and we ended 2021 with 334 employees compared to 52 employees at the end of 2020. As a result of operating a larger organization, we saw increases in the following areas: (i) a $4.38 million increase in salaries / payroll taxes (excluding severance), (ii) a $3.13 million increase in amortization and depreciation expenses, (iii) a $2.45 million increase in allowance for doubtful accounts, (iv) a $1.93 million increase in business and city taxes, (v) a $1.90 million increase in stock compensation expense, (vi) a $1.71 million increase in consulting and professional fees, (vii) a $1.39 million increase in insurance expense, (viii) a $1.10 million increase in advertising and promotion expense, (ix) a $1.09 million increase in security expense, and (x) a $0.87 million increase in rent expense. Another significant driver of expense increase in 2021 was a $9.10 million severance expense for the departure of the company's founders. This was an increase of $9.05 million over the year ended December 31, 2020.
• The Company reported revenue of $47.7 million for full year 2021 compared to $6.2 million for full 2020. In the fourth quarter of 2021, we reported revenue of $22.7 million compared to $2.5 million for fourth quarter 2020. These numbers exclude revenue from NuLeaf as it was "held for sale" so the $12.9 million in revenue for that operation in 2021 was excluded. Inclusion of NuLeaf would have resulted in approximately $60.6 million revenue for 2021. 
• The Company’s previously communicated $70 million revenue target for 2021 revenue included NuLeaf and was presented as "combined" or "pro forma" with total UMBRLA revenue for the year. Because the merger with UMBRLA occurred on July 1, 2021, the Company’s reported financial results only include approximately a half year of UMBRLA revenue.

About Unrivaled Brands

Unrivaled Brands is a multi-state vertically integrated company focused on the cannabis sector with operations in California and Oregon. In California, Unrivaled Brands operates five dispensaries, direct to consumer delivery, a state-wide distribution network, company-owned brands, and two cultivation facilities. In Oregon, we operate a state-wide distribution network, company-owned brands and outdoor and greenhouse cultivation. Unrivaled Brands is home to Korova, the market leader in high potency products across multiple product categories, currently available in California, Oregon, Arizona, and Oklahoma, as well as Sticks and Cabana.

For more info, please visit: https://unrivaledbrands.com.

Cautionary Language Concerning Forward-Looking Statements

Certain statements contained in this communication regarding matters that are not historical facts, are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. These include statements regarding management's intentions, plans, beliefs, expectations, or forecasts for the future, and, therefore, you are cautioned not to place undue reliance on them. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law. We use words such as "anticipates," "believes," "plans," "expects," "projects," "future," "intends," "may," "will," "should," "could," "estimates," "predicts," "potential," "continue," "guidance," and similar expressions to identify these forward-looking statements that are intended to be covered by the safe-harbor provisions of the PSLRA. Such forward-looking statements are based on our expectations and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements due to a number of factors.

New factors emerge from time-to-time and it is not possible for us to predict all such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. These risks, as well as other risks associated with the combination, will be more fully discussed in our reports with the SEC. Additional risks and uncertainties are identified and discussed in the "Risk Factors" section of the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed from time to time with the SEC. Forward-looking statements included in this release are based on information available to Company as of the date of this release. The Company undertakes no obligation to update such forward-looking statements to reflect events or circumstances after the date of this release.

Contact
Jason Assad
LR Advisors LLC.
jassad@unrivaledbrands.com
678-570-6791

Released April 18, 2022