News

Grove, Inc. Announces Fiscal Year 2021 Audited Financial Results

Revenues Reach $24.1 Million, a 250% Increase Over 2020 Net earnings of $2.9 Million or $.25 per share

HENDERSON, NV / September 29, 2021 / Grove, Inc. (NASDAQ:GRVI) (“Grove” or the “Company”), a global innovator in hemp, health, and wellness, today announced audited financial results for its fiscal year ended June 30, 2021 which surpassed preliminary results issued on June 28, 2021.   Investors are encouraged to read the Company’s annual report on Form 10-K which was filed with the Securities and Exchange Commission (the “SEC”), contains additional information, and is posted at https://groveinc.io/

Financial Highlights

  • $24.1 million in revenue
  • $2.9 million in net income
  • $0.25 basic earnings per share
  • $2.9 million in cash flow provided by operations
  • $3.2 million in adjusted EBITDA
  • Strong Margin expansion quarter over quarter
  • Strong Revenue growth Quarter over Quarter
  • 4th Quarter revenues of 10.64M surpassed a 361% growth over 4th quarter revenues in the prior year

Allan Marshall, Chief Executive Officer of Grove, stated, “Our team surpassed every internal and external projection for revenue growth, income growth, earnings per share and customer acquisition numbers. We finished the year with exceptional growth and significant momentum in the second half of the year. Our team has found a way to grow while maintaining profits in an industry that historically has not been able to produce these types of results. We enter 2022 with momentum and look to continue our outperformance in the current year”

Andrew Norstrud, Chief Financial Officer of Grove, stated, “Cash flow quarter over quarter exceeded our projections and ended with our strongest quarter to date. The company finished the quarter with $14.5 million in cash and minimal debt that has since been paid. The balance sheet is strong with net working capital of $12.5 million and stockholders’ equity of $21.2 million. The company’s financial position strengthened every quarter and we finished with great momentum.”

Liquidity and Capital Resources

Working Capital

  As of June 30, 2021  As of June 30, 2020 
Current assets $18,293,083  $2,649,674 
Current liabilities $5,819,161  $3,519,434 
Working capital $12,473,922  $(869,760)

Cash Flows

  Years Ended June 30, 
  2021  2020 
Cash flows provided by (used in) operating activities $2,939,306  $(4,164,746)
Cash flows used in investing activities  (1,281,007)  (1,462,915)
Cash flows provided by financing activities  11,988,395   2,817,746 
Net increase (decrease) in cash during period $13,646,694  $(2,809,915)

At June 30, 2021, the Company had cash of $14,534,211 or an increase of $13,646,694 from June 30, 2020. The increase of cash provided by operating activities is primarily related to the net income and the sale of the Company common stock.

About Grove, Inc.

Grove, Inc. is in the business of developing, producing, marketing and selling quality products and end consumer products containing the industrial hemp plant extract Cannabidiol (“CBD”), as well as diversified products in other verticals . The Company sells to numerous consumer markets including the botanical, beauty care, pet care and functional food sectors. It seeks to take advantage of an emerging worldwide trend to re-energize the production of industrial hemp and to foster its many uses for consumers.

Company Contact

Andrew Norstrud
Email: investorinfo@cbd.io
Phone: (702) 332-5591

Investor Relations Contact

TraDigital IR
John McNamara
Email: john@tradigitalir.com
Phone: (917) 658-2602

Forward-Looking Statements

This press release contains statements that constitute “forward-looking statements,” including with respect to the Company’s business strategy, product development and industry trends. No assurance can be given that the offering will be completed on the terms described, or at all. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company’s registration statement and preliminary prospectus for the offering filed with the SEC. Copies are available on the SEC’s website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Use of Non-GAAP Financial Measures

The Company discloses and uses the above-mentioned non-GAAP financial measures internally as a supplement to GAAP financial information to evaluate its operating performance, for financial planning purposes, to establish operational goals, for compensation plans, to measure debt service capability, for capital expenditure planning and to determine working capital needs and believes that these are useful financial measures also used by investors. Non-GAAP adjusted EBITDA is defined as GAAP net income or net loss before interest, taxes, depreciation and amortization (EBITDA) adjusted for the non-cash stock compensation and stock option expense, acquisition, integration & restructuring expenses, charges and gains or losses from extinguishment of debt and other non-cash items. Non-GAAP EBITDA and non-GAAP adjusted EBITDA are not terms defined by GAAP and, as a result, the Company’s measure of non-GAAP EBITDA and non-GAAP adjusted EBITDA might not be comparable to similarly titled measures used by other companies. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flow that either excludes or includes amounts that are not normally included in the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP financial measures discussed above, however, should be considered in addition to, and not as a substitute for, or superior to net income or net loss as reported for GAAP on the Consolidated Statements of Operations, cash and cash flows on the Consolidated Statement of Cash Flows or other measures of financial performance prepared in accordance with GAAP, and as reflected on the Company’s financial statements prepared in accordance with GAAP. These non-GAAP financial measures are not a substitute for or presented in lieu of financial measures provided by GAAP and all measures and disclosures of financial information pursuant to GAAP should be read to obtain a comprehensive and thorough understanding of the Company’s financial results. The reconciliations of non-GAAP EBITDA and non-GAAP adjusted EBITDA to GAAP operating income (loss) and/or GAAP net income (net loss) referred to in the highlights or elsewhere are provided in the schedules that are a part of this document.

Reconciliation of Non-GAAP Adjusted EBITDA to GAAP Net Income (Net Loss)
Year Ended June 30,
       
  2021  2020 
Net income (Net loss) GAAP $2,978,948  $(5,383,673)
Income tax  (1,282,815   
Interest expense, net  530,449   138,406 
Depreciation and amortization  1,030,021   611,346 
Stock compensation  738,932   372,770 
Impairment of lease cancellation     588,347 
Gain on lease settlement  (387,860)   
Gain on SBA PPP loan extinguishment  (403,277)   
Gain on sale of asset  (8,708)  (180,211)
Non-GAAP adjusted EBITDA $     3,195,690  $(3,853,015)

Grove Inc

Consolidated Balance Sheets

  June 30,  June 30, 
  2021  2020 
       
ASSETS      
Current assets      
Cash $14,534,211  $887,517 
Accounts receivable, net of allowance for doubtful accounts of $57,500 and $10,000, respectively  1,277,662   165,147 
Inventory  2,094,952   1,448,448 
Prepaid expenses and other current assets  386,258   148,562 
Total current assets  18,293,083   2,649,674 
         
Property and equipment, net  2,832,400   1,687,273 
Intangible assets, net  1,845,166   1,240,260 
Goodwill  2,413,813   493,095 
Deferred tax asset  1,403,591    
Other assets  49,068   37,068 
Right-of-use asset  417,443   294,835 
Total other assets  8,961,481   3,752,531 
         
Total assets $27,254,564  $6,402,205 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities        
Accounts payable $1,604,723  $484,333 
Accrued compensation  1,020,936   195,399 
Deferred revenue  485,973   473,320 
Accrued liabilities  296,021   221,664 
Acquisition payable  1,764,876    
Current portion of notes payable  447,100   183,595 
Convertible notes payable     1,500,000 
Current portion of operating lease payable  199,532   461,123 
Total current liabilities  5,819,161   3,519,434 
         
Notes payable, net of current portion     365,350 
Operating lease payable, net of current portion  217,430   338,040 
Total long-term liabilities  217,430   703,390 
         
Commitments and contingencies      
         
Stockholders’ equity        
Preferred stock, $0.001 par value, 100,000,000 shares authorized, and 500,000 and 0 shares issued and outstanding, respectively  500    
Common stock, $0.001 par value, 100,000,000 shares authorized, and 15,262,394 and 10,222,223 shares issued and outstanding, respectively  15,262   10,223 
Additional paid in capital  25,372,247   7,314,341 
Accumulated deficit  (4,170,036)  (7,098,984)
Total stockholders’ equity attributable to Grove, Inc.  21,217,973   225,580 
Non-controlling interest in subsidiary     1,953,801 
Total stockholders’ equity  21,217,973   2,179,381 
         
Total liabilities and stockholders’ equity $27,254,564  $6,402,205 

Grove Inc.

Consolidated Statements of Operations

  Year Ended June 30, 
  2021  2020 
       
Revenue      
Product revenue  24,095,025   6,159,013 
Trade show revenue     1,253,847 
   24,095,025   7,412,860 
         
Product costs  12,196,123   4,280,909 
Trade show costs     561,988 
   12,196,123   4,842,897 
         
Gross profit  11,898,902   2,569,963 
         
Operating expenses        
Sales and marketing  2,388,211   1,370,964 
General and administrative expenses  8,083,954   6,037,329 
   10,472,165   7,408,293 
         
Income (loss) from operations  1,426,737   (4,838,330)
         
Other expense (income), net        
Interest expense (income), net  530,449   138,406 
Gain on sale of assets  (8,708)  (180,211)
Gain on SBA PPP loan extinguishment  (403,277)   
Settlement of cancelled lease  (387,860)   
Impairment of cancelled lease expense     588,347 
         
Other expense (income), net  (269,396)  546,542 
         
Income (loss) before income tax  1,696,133   (5,384,872)
         
Income tax benefit (expense) 1,282,815    
         
Net income (loss)  2,978,948   (5,384,872)
Net loss attributable to noncontrolling interest     (1,199)
Deemed dividend related to the issuance of Series A Preferred Stock  (50,000)   
Net income (loss) attributable to Grove, Inc. $2,928,948  $(5,383,673)
         
Basic income (loss) per share $0.25  $(0.53)
         
Diluted income (loss) per share $0.21  $(0.53)
         
Weighted average shares outstanding  11,930,378   10,097,075 
         
Fully diluted weighted average shares outstanding  14,257,934   10,097,075 
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