Mettrum Announces Second Quarter 2017 Financial Results

TORONTO, ONTARIO -- (Marketwired) -- 11/15/16 -- Mettrum Health Corp. ("Mettrum" or the "Company") (TSX VENTURE: MT), a fully integrated provider of cannabis products, announced today its second quarter and year-to-date 2017 financial results for the period ended September 30, 2016.

                          For the       For the   For the six   For the six
                     three months  three months  months ended  months ended
                       ended Sept    ended Sept      Sept 30,      Sept 30,
Figures in CDN$          30, 2016      30, 2015          2016          2015

Grams sold                480,340       211,730       916,910       372,290
Revenue                 4,790,022     1,711,072     8,960,536     2,960,243
Gross profit            2,855,178       971,237     6,176,006     1,657,361
Adjusted EBITDA        (1,095,970)   (1,622,121)   (1,442,250)    5,696,800
Loss from operations   (1,874,778)   (2,093,072)   (2,851,934)   (3,233,982)
Net loss               (1,909,313)   (2,081,362)   (2,923,613)   (3,995,310)
Net loss per share
 basic and diluted          (0.05)        (0.06)        (0.07)        (0.12)

Note (1) Adjusted EBITDA is defined as earnings before interest, depreciation, amortization, share-based compensation and income taxes.

Recent Developments

--  On November 2, Mettrum, announced license renewals at both of its
    Bowmanville facilities, and an increase in total licensed capacity to
    5,600 kgs from 3550 kgs. Mettrum believes it now has the second largest
    licensed capacity in the country. The company's Phase 2 expansion is
    progressing as planned. Two thirds of the final buildout at Bennett Road
    South will completed by the end of December and the final third will be
    completed by the end of March, 2017. The company has begun working on
    its Phase 3 expansion in Bowmanville, Ontario in order to achieve its
    objective of 25,000 kg of production capacity by March, 2018.
--  On September 20, 2016, Mettrum announced that it entered into an
    agreement with Cannabis Care Canada Inc. ("CCC") to sell to CCC its
    wholly-owned subsidiary, Bennett Road North, which is licensed to
    produce and sell dried cannabis and cannabis extracts for medical
    purposes. Under the terms of the agreement, CCC will pay $7 million in
    cash to acquire Bennett Road North and enter into a three-year Supply
    Agreement that is expected to generate up to $40mm in revenue for
    Mettrum over the next three years. As part of the transaction, CCC will
    assume all outstanding obligations associated with Bennett Road North.
--  On September 7, 2016, the Company completed a bought deal financing
    through the issuance of 6,510,150 shares at a price of $2.65 per common
    share to raise $15.9 million in net proceeds.

Second Quarter and Year-to-Date 2017 Review

--  Revenues increased 180% to $4,790,022 compared to $1,711,072 during the
    second quarter ended September 30, 2015. During the six-month period
    ended September 30, 2016, revenues increased by 203% to $8,960,536
    compared to 2,960,243 during the corresponding period in 2015. This is
    the result of continued solid growth in the business and the addition of
    cannabis extracts.
--  Average selling price per gram increased to $9.56 during the second
    quarter ended September 30, 2016, versus $7.73 during the second quarter
    ended September 30, 2015, because of a graduation toward higher priced
    products and the introduction of oil products.
--  Gross profit increased by 194% from $971,237 to $2,855,178, or 60% from
    57% as a percentage of sales during the second quarter of 2016. Gross
    profit was $6,176,006 and $1,657,361, or 69% and 56% as a percentage of
    sales for the six months ended September 30, 2016 and 2015 respectively,
    representing a 273% increase.
--  Cash growing costs were $2.40 per gram for the quarter ended September
    30, 2016, compared to $3.21 during quarter ended September 30, 2015,
    primarily due to ongoing efforts on improving efficiency by increasing
    yields and automating processes to reduce the costs of production per
    gram.
--  Adjusted EBITDA loss amounted to $1,095,970 million for the quarter
    ended September 30, 2016, versus a loss of $1,622,121 million for the
    same period in 2015. The company expects to be EBITDA and cash flow
    break even before the end of this fiscal year now that it is operating
    at full capacity.
--  As at September 30, 2016, Mettrum's registered client count increased to
    15,330 registered clients, representing a 253% increase in customer
    registration when compared to the same period in 2015. Due to increased
    production and inventory, the company expects to maintain client
    acquisition growth at a rate of 10% month over month.
--  Mettrum's balance sheet remains solid with a $24 million cash position
    as at September 30, 2016. As previously announced, the company expects
    to complete the sale of its Bennett Road North facility to CCC before
    the end of its fiscal year which will add another $7mm to the balance
    sheet. The renewal of the license at the Bowmanville North Facility
    issued on November 1, 2016 was one of the key conditions of closing the
    CCC transaction.

To view the Quarterly Sales and Quarterly Clients graphs, please visit the following link: http://media3.marketwire.com/docs/mt1115graphs.pdf.

"During the second quarter, we experienced solid growth in terms of sales and client acquisition. We focused on capacity expansion, transitioned most of our operations to our newest facility and significantly improved operational efficiencies, which, while not evident in our Q2 results, are already driving improved margins and accelerating sales," noted Michael Haines, CEO of Mettrum. "Looking ahead to the balance of the fiscal year and beyond, our capacity to service the needs of our growing client base, combined with our ongoing expansion of Bowmanville South, leaves us very well positioned for continuous and sustainable growth within this accelerating medical cannabis market and prepared for the impending recreational cannabis market."

About Mettrum Health Corp.

Mettrum Health Corp. is a Tier 1 Industry Issuer listed on TSX Venture Exchange. Mettrum Ltd., a wholly owned subsidiary of the Company, is a Toronto-based company and a licensed producer of medical cannabis under the MMPR, which came into effect on October 1, 2013. Mettrum received its first license from Health Canada under the MMPR on November 1, 2013 and began production of medical cannabis at its first production facility in Bowmanville, Ontario. Mettrum received its second license from Health Canada under the MMPR on December 11, 2014 for its Mettrum Creemore facility in Clearview, Ontario. Mettrum received its third license from Health Canada under the MMPR on December 17, 2015 for its new 60,000 square foot production and distribution facility in Bowmanville, Ontario. With the Company's three licenses, Mettrum is a leading producer and vendor of medical cannabis under the ACMPR system. In addition, through its wholly owned subsidiary Mettrum Hempworks, Mettrum also is a licensed producer and distribution of industrial cannabis (hemp) products, including Mettrum's functional food line, Mettrum Originals, under the Industrial Hemp Regulations (Canada) issued pursuant to the Controlled Drugs and Substances Act (Canada). For more information, visit www.mettrumoriginals.com and www.mettrum.com.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; and the results of operations. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company and Mettrum disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this Press release.

Contacts:
Mettrum Health Corp.
Ali Mahdavi
Director, Investor Relations
416.962.3300
[email protected]
www.mettrumoriginals.com and www.mettrum.com

Source: Mettrum Health Corp.

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