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 proportion

HENDERSON, NV, Sept. 29, 2021 (GLOBE NEWSWIRE) — via NewMediaWire — 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 promoted 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 proportion
  • $2.9 million in cash flow provided by operations
  • $3.2 million in modificated EBITDA
  • Strong margin expansion quarter over quarter
  • Strong revenue growth quarter over quarter
  • 4th Quarter revenues of $10.64 million 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 proportion and customer acquisition numbers. We finished the year with exceptional growth and meaningful 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 go into 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 surpassed 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 limitations   $ 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 (decline) 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 chiefly related to the net income and the sale of the Company shared 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”), in addition 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: [email protected]
Phone: (702) 332-5591

Investor Relations Contact

TraDigital IR
John McNamara
Email: [email protected]
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 unprotected 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 obtainable 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 estimate 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 modificated EBITDA is defined as GAAP net income or net loss before interest, taxes, depreciation and amortization (EBITDA) modificated 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 modificated EBITDA are not terms defined by GAAP and, as a consequence, the Company’s measure of non-GAAP EBITDA and non-GAAP modificated 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 typically 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 replace, 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 replace 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 acquire a comprehensive and thorough understanding of the Company’s financial results. The reconciliations of non-GAAP EBITDA and non-GAAP modificated EBITDA to GAAP operating income (loss) and/or GAAP net income (net loss) referred to in the highlights or in other places are provided in the schedules that are a part of this document.

Reconciliation of Non-GAAP modificated 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 modificated 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  
                 
character 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  
                 
limitations AND STOCKHOLDERS’ EQUITY                
Current limitations                
Accounts payable   $ 1,604,723     $ 484,333  
Accrued compensation     1,020,936       195,399  
Deferred revenue     485,973       473,320  
Accrued limitations     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 limitations     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 limitations     217,430       703,390  
                 
Commitments and contingencies            
                 
Stockholders’ equity                
Preferred stock, $0.001 par value, 100,000,000 shares empowered, and 500,000 and 0 shares issued and noticeable, respectively     500        
shared stock, $0.001 par value, 100,000,000 shares empowered, and 15,262,394 and 10,222,223 shares issued and noticeable, 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 limitations 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 assistance (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 proportion   $ 0.25     $ (0.53 )
                 
Diluted income (loss) per proportion   $ 0.21     $ (0.53 )
                 
Weighted average shares noticeable     11,930,378       10,097,075  
                 
Fully diluted weighted average shares noticeable     14,257,934       10,097,075  

  

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