Attached files
file | filename |
---|---|
8-K - CURRENT REPORT - GILLA INC. | glla_8k.htm |
Exhibit 99.1
GILLA PROVIDES CORPORATE UPDATE; RELEASES Q1 2017
RESULTS
New York, NY – (May 18th,
2017) - Gilla
Inc. (“Gilla” or the “Company”)
(OTCQB: GLLA), the fast-growing designer, manufacturer and marketer
of E-liquid for vaporizers, today provided a corporate update on
the acquisition of the Canadian-based E-liquid manufacturer and its
cannabis concentrates division along with the release of the
Company’s financial results for the three month period ended
March 31, 2017.
CORPORATE UPDATE
●
The Company has
commenced due diligence on the Canadian-based E-liquid manufacturer
(the “Target”) and reiterates an expected closing date
on or before May 31st, 2017, subject to
the completion of its confirmatory due diligence of the
Target’s business and approval from the Company’s board
of directors and applicable regulatory bodies or exchange, if so
required. There has been no change to the terms of the letter of
intent or the total purchase price as disclosed in the
Company’s press release dated May 5th, 2017.
●
The Company
continues to build its complementary cannabis concentrates division
and is continuing to build and license its portfolio of cannabis
concentrate products with a multi-jurisdictional distribution
strategy.
●
May 20th, 2017 marks the end
of the Tobacco Products
Directive (Directive 2014/40/EU) (“TPD”)
implementation and sell-through period across the European Union
(“EU”). The Company has been preparing for the upcoming
adoption date and now has successfully released a full portfolio of
TPD compliant packaging for E-liquid products marketed for sale
across the EU.
Q1 2017 HIGHLIGHTS
●
For the three month
period ended March 31, 2017 (“Q1 2017”), the Company
generated $1,243,539 in revenue through sales of proprietary
E-liquid and other vaping products as compared to $1,233,791 in
revenue during the three month period ended December 31, 2016
(“Q4 2016”); a stable quarter-over-quarter result given
the slowdown observed in the EU market prior to the conclusion of
the TPD non-compliant packaging sell-through period ending on May
20th,
2017.
●
The Company
generated gross profit margins of 56% in Q1 2017 as compared to 68%
in Q4 2016, mostly as a result of higher than expected one-time
costs relating to the implementation of TPD compliant packaging for
the Company’s products in the EU.
●
Revenue generated
outside of North America grew to 84% of total Q1 2017 sales
compared to 80% of total Q4 2016 sales, reflecting the
Company’s focus on diversifying revenue across international
markets and building international brand awareness. In addition,
the Company’s implementation of store-level marketing
programs in Europe has seen tremendous results to
date.
●
Administrative
costs including sales and marketing expenses reduced to $997,350 in
Q1 2017 from $1,174,933 in Q4 2016, reflecting the realization of
significant cost savings from the consolidation and integration of
operating activities during the second half of fiscal
2016.
●
Net loss amounted
to $898,268 in Q1 2017 as compared to a net loss of $1,058,879 in
Q4 2016.
“Despite
market turmoil in the EU as a result of the full adoption of the
TPD, Gilla has had continued success throughout the EU due to our
early implementation of compliant products,” stated Graham
Simmonds, Chairman and CEO of Gilla. “We continue to invest
in our cannabis concentrate division and we will soon update our
shareholders on our exciting launch plans. Our goal remains to
diversify Gilla into a global market leader for both nicotine
E-liquid and cannabis vape products.”
About Gilla Inc.
Gilla
Inc. manufactures, markets and distributes E-liquid, which is the
liquid used in vaporizers, E-cigarettes, and other vaping hardware
and accessories. E-liquid is heated by the atomizer to deliver the
sensation of smoking. Gilla aims to be a global leader in
delivering the most efficient and effective vaping solutions for
nicotine and cannabis related products. The Company provides
consumers with choice and quality across various categories and
price points. Gilla’s proprietary product portfolio includes
the following brands: Coil Glaze™, Siren, The Drip Factory,
Craft Vapes™, Craft Clouds, Surf Sauce, Vinto Vape, VaporLiq,
Vape Warriors, Vapor’s Dozen, Miss Pennysworth’s
Elixirs, The Mad Alchemist™, Replicant, Enriched CBD and
Crown E-liquid™.
Forward-looking Statements
Note:
This press release contains “forward looking
statements” as defined in the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
currently available competitive, financial and economic data and
management’s views and assumptions regarding future events.
Such forward-looking statements are inherently uncertain. Gilla
Inc. cannot provide assurances that the matters described in this
press release will be successfully completed or that the company
will realize the anticipated benefits of any transaction. Actual
results may differ materially from those projected as a result of
certain risks and uncertainties, including but not limited to:
global economic and market conditions; the war on terrorism and the
potential for war or other hostilities in other parts of the world;
the availability of financing and lines of credit; successful
integration of acquired or merged businesses; changes in interest
rates; management’s ability to forecast revenues and control
expenses, especially on a quarterly basis; unexpected decline in
revenues without a corresponding and timely slowdown in expense
growth; the company’s ability to retain key management and
employees; intense competition and the company’s ability to
meet demand at competitive prices and to continue to introduce new
products and new versions of existing products that keep pace with
technological developments, satisfy increasingly sophisticated
customer requirements and achieve market acceptance; relationships
with significant suppliers and customers; as well as other risks
and uncertainties, including but not limited to those detailed from
time to time in Gilla Inc. SEC filings. Gilla Inc. undertakes no
obligation to update information contained in this release. For
further information regarding risks and uncertainties associated
with Gilla Inc.’s business, please refer to the risks and
uncertainties detailed from time to time in Gilla Inc.’s SEC
filings.
For
more information, please visit gilla.com, or
contact:
Mr. Bradford Long
Investor Relations
T: 1
(888) 994-GLLA (4552)
E:
brad.long@gilla.com