NEWPORT BEACH, CA / ACCESSWIRE / May 17, 2022 / Jacksam Corporation dba Convectium (OTCQB:JKSM) ("Jacksam" or "Convectium" or the "Company"), a workflow automation Company focused on developing system solutions for the cannabis and CBD industry, today announcedfinancial and operational results for the three months ended March 31, 2022.
Key Financial Highlights for Three Months Ended March 31, 2022 (Year-over-Year as Compared with the Three Months Ended March 31, 2021)
Revenue increased slightly to $1.8 million; due to shipping delays from China
Record quarterly cartridge sales increased 662% to $0.7 million
Gross profit decreased 19% to $0.4 million
Operating expenses as a percentage of revenue declined to 23%, from 29%, reflecting continued focus on optimization
Operating income decreased slightly to $1,380
Net income improved to $29,384, from a loss of $8,682
Cash balance strengthened to $0.8 million
Business Highlights for the Three Months Ended March 31, 2022
Partnered with Emerald Scientific, LLC to expand the distribution for Convectium's workflow automation systems and equipment solutions for the cannabis and CBD industry
Raised $1.0 million in Series B Preferred Stock from two institutional investors
Cartridge Sales Increased by 662% to Record $0.7 Million
On February 28, 2022, Jacksam partnered with Emerald Scientific, LLC making Convectium the exclusive provider of filling and capping systems to Emerald. Emerald Scientific has been an industry leader in the distribution of scientific supplies and equipment to cannabis and hemp labs and manufacturing facilities since 2012.Emerald has a proven track record of being a leading distributor in the space, driven by a world class sales team.
Mark Adams, Jacksam's Chief Executive Officer, commented, "We are pleased with our first quarter results, especially our purchase order and interest activity around our 710 Shark filing systems, 710 Captain capping systems, PreRoll-ER pre-roll and cone filling systems and cartridges. We continue to see increased demand for our automated equipment solutions across the cannabis and CBD industries."
Adams, continued, "While revenue was up just slightly due to lower machine sales, we had record quarterly cartridge sales. Our ability to fulfill customer orders during the quarter was negatively impacted by the lockdown of major cities in China due to Covid-19, which caused shipping issues of systems from China to the U.S. Our continued focus on operation optimization and efficiency led to another decrease of operating expenses as a percentage of revenue."
Adams, concluded, "We have a strong base having now recorded 6 consecutive quarters of $1.3 to 1.9 million revenue with quarterly operating performance ranging from a negative $0.4 million to a profitable $0.1 million. We believe our strategy of providing automated equipment to address manufacturing and processing bottlenecks of our customers and increasing our predictable recurring revenue has positioned us well to become the premier solution provider in the industry."
Financial Results for Three Months Ended March 31, 2022
Revenue for the three months ended March 31, 2022 increased slightly by $0.0 million, or 0%, to $1.8 million, compared to $1.8 million for the three months ended March 31, 2021. For the three months ended March 31, 2022, the breakdown of sales comprised of $1.0 million of system sales and $0.7 million of cartridge sales, compared to $1.6 million of system sales and $0.1 million of cartridge sales for the three months ended March 31, 2021.
Revenue for the three months ended March 31, 2022 was negatively impacted by the lockdown of major cities in China due to Covid-19, which caused shipping issues of systems from China to the U.S. This adversely impacted our ability to fulfill the order of our customers during the quarter. However, lower machine sales were offset by record quarterly cartridge sales driven by our strong execution of strategic partnership and customer development.
Gross profit for the three months ended March 31, 2022 decreased by $0.1 million, or 19%, to $0.4 million, compared to $0.5 million for the three months ended March 31, 2021. Gross margin decreased to 24% for the three months ended March 31, 2022, as compared to 29% during the three months ended March 31, 2021, primarily due to a higher mix of cartridge sales.
Operating expenses for the three months ended March 31, 2022 decreased by $0.1 million, or 18%, to $0.4 million, compared to $0.5 million for the three months ended March 31, 2021. Operating expenses as a percentage of revenue decreased to 23% from 29% for the three months ended March 31, 2022, reflecting the Company's continued focus on operation optimization and efficiency. Management believes this ratio will decrease going forward as revenues continue to grow at a higher rate than operating expenses.
Operating income for the three months ended March 31, 2022 decreased slightly by $2,370 to $1,380, compared to $3,750 for the three months ended March 31, 2021.
Net income for the three months ended March 31, 2022 improved to $29,384, compared to a net loss of $8,682 for the three months ended March 31, 2021. Of note, net income for the three months ended March 31, 2022 included non-cash items of interest expense of $249,094 and a derivative gain of $287,098. The resulting EPS profit for the three months ended March 31, 2022, was $0.00, as compared to an EPS loss of ($0.00) for the three months ended March 31, 2022.
As of March 31, 2022, Jacksam had $0.8 million in cash, compared to $0.3 million on December 31, 2021.
About Jacksam Corporation dba Convectium
Jacksam Corporation dba Convectium (OTCQB:JKSM) designs and markets automated vape, POD and cartridge filling/capping systems for the cannabis and CBD industry. We are also a distributor of other CBD and cannabis automation solutions including the "PreRoll-ER" automated pre roll machine. Our automated equipment is designed and built in the U.S. and carries full UL certification in the U.S. Using Jacksam/Convectium's automated equipment, our customers increase output by up to 60 times over hand filling. Jacksam/Convectium is focused on helping our customers automate their workflow and quickly get custom branded products onto dispensary shelves. Over 250 companies, including many dominant brands and multi state operators (MSO's) in this industry, rely on Jacksam/Convectium for automation of their production and back office operations.
For additional information, please visit: https://www.convectium.com.
This press release contains "forward-looking statements." Such statements may be preceded by the words "intends," "may," "will," "plans," "expects," "anticipates," "projects," "predicts," "estimates," "aims," "believes," "hopes," "potential," or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company's control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, the Company's ability to retain the listing of its common stock on the OTCQB Market; the impact of the COVID-19 pandemic on our results of operations and our business. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's filings with the Securities and Exchange Commission ("SEC"), including the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC's website at www.sec.gov.
All forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement was made, except to the extent required by applicable securities laws.
Investors Contact: mark@convectium.com
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