Organigram Q1 Revenue Increases 54% Sequentially to $25.2 Million

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Organigram
Reports
First
Quarter
Fiscal
2020
Results

  • Net
    revenue
    more
    than
    doubled
    to
    $25.2
    million
    from
    $12.4
    million
    in
    Q1
    2019

  • Gross
    margin
    before
    fair
    value
    changes
    to
    biological
    assets
    and
    inventory
    of
    $9.3
    million
    or
    37%
    of
    net
    revenue
    compared
    to
    $8.8
    million
    or
    71%
    of
    net
    revenue
    in
    Q1
    2019

  • Net
    loss
    of
    $0.9
    million
    compared
    to
    net
    income
    from
    continuing
    operations
    of
    $29.5
    million
    in
    Q1
    2019
    largely
    due
    to
    non-cash
    fair
    value
    changes
    to
    biological
    assets
    and
    inventories
    in
    the
    prior
    year
    quarter

  • Adjusted
    EBITDA¹
    of
    $4.9
    million
    compared
    to
    $6.8
    million
    in
    Q1
    2019

  • As
    planned,
    the
    Company
    started
    shipping
    Trailblazer
    Torch
    vape
    cartridges
    on
    December
    17,
    2019
    and
    expects
    to
    start
    shipping
    Edison
    +
    Feather
    ready-to-go
    distillate
    pens
    before
    the
    end
    of
    January
    2020
    followed
    by
    Edison
    +
    PAX
    ERA
    distillate
    cartridges
    in
    Q2
    calendar
    2020

  • Received
    licensing
    for
    chocolate
    production
    and
    packaging
    areas
    in
    December
    2019
    and
    remain
    on
    track
    for
    initial
    sales
    of
    cannabis-infused
    chocolates
    in
    Q1
    calendar
    2020

  • The
    Company
    believes
    it
    has
    enough
    capital
    to
    fund
    its
    operations
    and
    capital
    expenditure
    plans.
    The
    Company
    had
    $34.1
    million
    of
    cash
    and
    short-term
    investments
    at
    quarter-end.
    Additionally,
    as
    of
    the
    date
    of
    this
    press
    release,
    Organigram
    has
    $30.0
    million
    in
    undrawn
    capacity
    on
    its
    term
    loan
    and
    $32.1
    million
    available
    to
    raise
    under
    its
    total
    $55
    million
    at-the-market
    equity
    program
    (the
    “ATM
    Program”)
    after
    it
    raised
    $22.9
    million
    subsequent
    to
    quarter-end

MONCTON,
New
Brunswick,
January
14,
2020–(BUSINESS
WIRE)–Organigram
Holdings
Inc.

(NASDAQ:
OGI)
(TSX:
OGI),
the
parent
company
of
Organigram
Inc.
(the
“Company”
or
“Organigram”),
a
leading
licensed
producer
of
cannabis,
is
pleased
to
announce
its
results
for
the
first
quarter
ended
November
30,
2019
(“Q1”
or
“Q1
2020”).


Despite
ongoing
industry
challenges,
we
are
pleased
with
solid
Q1
2020
results
and
our
return
to
positive
adjusted
EBITDA
during
the
quarter. Our
team
was
also
successful
in
shipping
the
first
of
our
Rec
2.0
products
as
planned
and
on
schedule
in
December
of
2019.

Greg
Engel,
CEO

We
also
look
forward
to
the
launch
of
the
remainder
of
our
vape
pen
portfolio
followed
soon
after
by
our
premium
cannabis-infused
chocolate
products.
In
addition
to
an
exciting
line-up
of
2.0
products,
we
are
rolling
out
a
couple
of
new
core
strains,
such
as
our
high
THC
Edison
Limelight,
across
the
country
following
their
success
as
limited-time-offers
in
smaller
markets.


Key
Financial
Results
for
the
First
Quarter
Fiscal
2020

  • Net
    Revenue:

    • Q1
      2020
      net
      revenue
      grew
      102%
      to
      $25.2
      million
      from
      $12.4
      million
      in
      Q1
      2019
      wherein
      Q1
      2019
      adult-use
      recreational
      cannabis
      was
      only
      legalized
      on
      October
      17,
      2018
  • Gross
    Margin
    before
    fair
    value
    changes
    to
    biological
    assets
    and
    inventories
    sold:

    • Q1
      2020
      gross
      margin
      before
      fair
      value
      changes
      to
      biological
      assets
      and
      inventories
      of
      $9.3
      million
      or
      37%
      of
      net
      revenue
      compared
      to
      $8.8
      million
      in
      Q1
      2019
      or
      71%
      of
      net
      revenue
    • Higher
      absolute
      gross
      margin
      in
      Q1
      2020
      was
      due
      to
      higher
      net
      revenue.
      Lower
      Q1
      2020
      gross
      margin
      as
      a
      percentage
      of
      net
      revenue
      was
      largely
      due
      to
      higher
      cost
      of
      sales
      from
      increased
      staffing
      for
      more
      cultivation
      and
      post-harvest
      capacity
      without
      experiencing
      the
      benefit
      of
      full
      economies
      of
      scale
      as
      the
      Company
      believes
      consumer
      demand
      continues
      to
      be
      impacted
      by
      an
      inadequate
      retail
      store
      network
      in
      Canada
  • Gross
    Margin:

    • Q1
      2020
      gross
      margin
      of
      $11.2
      million
      compared
      to
      Q1
      2019
      gross
      margin
      of
      $51.7
      million,
      largely
      due
      to
      a
      net
      non-cash
      fair
      value
      gain
      on
      biological
      assets
      and
      inventories
      sold
      of
      $1.9
      million
      in
      the
      current
      quarter
      versus
      $42.9
      million
      in
      Q1
      2019
  • Adjusted
    EBITDA³:

    • Q1
      2020
      adjusted
      EBITDA
      of
      $4.9
      million
      compared
      to
      Q1
      2019
      adjusted
      EBITDA
      of
      $6.8
      million
    • Q1
      2020
      adjusted
      EBITDA
      was
      impacted
      by
      higher
      SG&A
      compared
      to
      Q1
      2019
      as
      the
      Company
      increased
      staffing
      and
      sales
      and
      marketing
      efforts
      in
      response
      to
      the
      first
      year
      of
      legalized
      adult-use
      recreational
      cannabis
      including
      edibles
      and
      derivative
      products
  • Sales
    and
    Marketing
    and
    General
    and
    Administrative
    Expenses
    (“SG&A”):

    • Q1
      2020
      SG&A
      of
      $9.4
      million
      compared
      to
      $4.5
      million
      in
      Q1
      2019
      as
      the
      Company
      had
      scaled
      up
      staffing
      and
      marketing
      activities
      for
      legalization
      of
      adult-use
      recreational
      cannabis
      sales
    • Q1
      2020
      SG&A
      represented
      37%
      of
      net
      revenue
      compared
      to
      36%
      in
      Q1
      2019,
      which
      reflected
      higher
      net
      revenue
      in
      Q1
      2020
      and
      management’s
      disciplined
      approach
      to
      spending
      despite
      being
      in
      a
      high
      growth
      period
  • Net
    Income
    (Loss)
    from
    Continuing
    Operations:

    • Q1
      2020
      net
      loss
      of
      $0.9
      million
      or
      $(0.006)
      per
      share
      on
      a
      diluted
      basis
      compared
      to
      Q1
      2019
      net
      income
      of
      $29.5
      million
      or
      $0.195
      per
      share
      largely
      due
      to
      non-cash
      fair
      value
      changes
      to
      biological
      assets
      and
      inventories
      sold


Key
Commentary
on
Q1
2020
Results
vs
Q4
2019

  • Q1
    2020
    net
    revenue
    of
    $25.2
    million
    was
    largely
    comprised
    of
    about
    $16.7
    million
    of
    sales
    to
    the
    adult-use
    recreational
    and
    medical
    markets
    and
    about
    $9.5
    million
    to
    the
    wholesale
    and
    international
    markets
    with
    the
    negligible
    balance
    coming
    from
    other
    sources,
    partly
    offset
    by
    about
    $1.1
    million
    in
    a
    provision
    for
    product
    returns
    and
    price
    adjustments.
    This
    compared
    to
    Q4
    2019
    net
    revenue
    of
    $16.3
    million
    comprised
    of
    about
    $20.0
    million
    of
    sales
    and
    about
    $3.7
    million
    in
    a
    provision
    for
    product
    returns
    and
    pricing
    adjustments.
    The
    majority
    of
    the
    Q1
    2020
    provision
    was
    related
    to
    THC
    oils
    which
    have
    seen
    less
    than
    anticipated
    demand
    in
    the
    adult-use
    recreational
    market.
    The
    majority
    of
    the
    Q4
    2019
    provision
    was
    related
    to
    two
    slower
    selling
    stock-keeping
    units
    (“SKUs”)
    sold
    to
    the
    Ontario
    Cannabis
    Store
    (OCS),
    comprised
    of
    a
    bespoke
    order
    of
    lower
    THC
    dried
    flower
    intended
    to
    fulfill
    a
    supply
    gap
    in
    the
    market
    earlier
    in
    calendar
    2019
    and
    THC
    oils.
  • Q1
    2020
    cash
    and
    “all-in”
    costs
    of
    cultivation
    of
    $0.61
    and
    $0.87
    per
    gram
    of
    dried
    flower
    harvested4,
    respectively,
    decreased
    from
    $0.66
    and
    $0.94
    per
    gram
    in
    Q4
    2019
    as
    yield
    per
    plant
    increased
    from
    148
    grams
    in
    Q4
    2019
    to
    152
    grams
    in
    Q1
    2020.
  • Q1
    2020
    cost
    of
    sales
    remained
    relatively
    stable
    at
    $15.8
    million
    from
    $15.5
    million
    in
    Q4
    2019.
    Q1
    2020
    cost
    of
    sales
    benefited
    from
    lower
    inventory
    write-offs
    than
    in
    Q4
    2019
    and
    lower
    post
    harvest
    costs
    for
    product
    sales
    to
    another
    LP
    for
    which
    product
    is
    packaged
    in
    bulk
    without
    any
    specific
    labeling
    and
    excise
    stamps.
  • Q1
    2020
    gross
    margin
    before
    fair
    value
    changes
    to
    biological
    assets
    and
    inventory
    increased
    to
    $9.3
    million
    or
    37%
    of
    net
    revenue
    from
    Q4
    2019
    gross
    margin
    before
    fair
    value
    changes
    to
    biological
    assets
    and
    inventories
    of
    $0.7
    million
    or
    5%
    largely
    due
    to
    higher
    net
    revenue
    and
    relatively
    stable
    cost
    of
    sales
    and
    indirect
    production
    costs
    as
    described
    above.
  • Q1
    2020
    gross
    margin
    of
    $11.2
    million
    compared
    to
    Q4
    2019
    gross
    margin
    of
    negative
    $11.1
    million,
    largely
    due
    to
    negative
    non-cash
    fair
    value
    changes
    in
    biological
    assets
    and
    inventories
    in
    the
    prior
    year
    quarter.
  • Q1
    2020
    positive
    adjusted
    EBITDA5
    of
    $4.9
    million
    compared
    to
    Q4
    2019
    negative
    adjusted
    EBITDA
    of
    $7.9
    million.
    Q4
    2019
    negative
    adjusted
    EBITDA
    was
    impacted
    by
    lower
    gross
    margin
    before
    fair
    value
    changes
    to
    biological
    assets
    and
    inventories
    (described
    above)
    and
    higher
    SG&A
    compared
    to
    Q1
    2020.
  • Q1
    2020
    SG&A
    of
    $9.4
    million
    decreased
    32%
    from
    $13.9
    million
    in
    Q4
    2019.
    As
    expected,
    Q1
    2020
    SG&A
    as
    a
    percentage
    of
    net
    revenue
    decreased
    to
    37%
    from
    85%
    in
    Q4
    2019
    as
    the
    Company
    had
    previously
    indicated
    Q4
    2019
    was
    an
    anomaly.


Adult-Use
Recreational
Launch
2.0
(“Rec
2.0”)

Derivative
and
Edible
Products

  • The
    Company
    has
    chosen
    to
    initially
    focus
    on
    the
    two
    most
    popular
    product
    forms
    based
    on
    US
    state
    sales
    data:
    vaporizer
    pens
    and
    edible
    products6.
  • To
    date,
    Organigram
    has
    submitted
    new
    product
    notifications
    to
    Health
    Canada
    in
    October
    2019
    for
    a
    comprehensive
    vape
    pen
    portfolio
    and
    cannabis
    infused
    chocolates.
  • As
    planned,
    the
    Company
    began
    shipping
    the
    first
    of
    its
    2.0
    products,
    Trailblazer
    Torch
    vape
    cartridges,
    on
    December
    17,
    2019.
    The
    cartridges
    are
    custom
    engineered
    with
    borosilicate
    glass
    and
    stainless-steel
    components,
    designed
    to
    accommodate
    a
    standard
    510-thead
    battery.
  • Launches
    of
    Edison
    +
    Feather
    ready-to-go
    distillate
    pens
    and
    Edison
    +
    PAX
    ERA®
    distillate
    cartridges
    are
    expected
    in
    January
    2020
    and
    Q2
    calendar
    2020,
    respectively.
  • The
    Company’s
    next-generation
    product
    portfolio
    includes
    high-quality
    cannabis
    infused
    chocolate
    and
    a
    dissolvable
    powder
    product,
    designed
    using
    nanotechnology
    for
    faster
    absorption
    of
    cannabinoids
    (when
    compared
    to
    traditional
    edible
    products).
    Planned
    launches
    of
    Organigram’s
    chocolate
    and
    dissolvable
    powder
    products
    are
    anticipated
    in
    Q1
    and
    Q2
    calendar
    2020,
    respectively.
  • As
    expected,
    the
    Company
    took
    delivery
    of
    its
    high
    speed,
    high
    capacity,
    fully
    automated
    chocolate
    production
    line
    in
    October
    2019.
    Installation
    of
    the
    production
    line
    has
    been
    completed,
    licensing
    approval
    for
    the
    chocolate
    operations
    area
    has
    been
    received
    and
    the
    Company
    expects
    commissioning
    in
    time
    for
    initial
    sales
    in
    Q1
    calendar
    2020.
  • As
    previously
    announced,
    Organigram
    has
    developed
    a
    proprietary
    nano-emulsification
    technology
    that
    is
    anticipated
    to
    provide
    an
    initial
    absorption
    of
    cannabinoids
    within
    10
    to
    15
    minutes.
    The
    emulsion
    process
    developed
    by
    the
    Organigram
    team
    generates
    micro-particles
    that
    are
    very
    small
    and
    uniform,
    which
    it
    expects
    will
    translate
    to
    an
    absorption
    and
    onset
    of
    effect
    that
    is
    rapid,
    reliable
    and
    controlled.
    The
    Company
    anticipates
    the
    nano-emulsion
    technology
    will
    have
    stability
    to
    temperature
    variations,
    mechanical
    disturbance,
    salinity,
    pH
    and
    sweeteners.
    The
    Company’s
    researchers
    have
    also
    recently
    developed
    a
    way
    to
    transform
    this
    emulsification
    into
    a
    solid
    form,
    turning
    it
    into
    a
    dissolvable
    powder.
    This
    shelf
    stable,
    water-compatible,
    unflavored
    nano-emulsion
    formulation
    is
    also
    expected
    to
    begin
    to
    be
    absorbed
    within
    10
    to
    15
    minutes
    when
    ingested
    after
    being
    added
    to
    a
    liquid.
    The
    powdered
    formulation
    will
    offer
    consumers
    a
    measured
    dose
    of
    cannabinoids
    which
    they
    can
    then
    add
    to
    liquid,
    such
    as
    a
    beverage
    of
    their
    choice,
    while
    also
    offering
    the
    discretion,
    portability
    and
    shelf
    life
    expected
    of
    a
    dry
    powder
    formulation.
    The
    Company
    expects
    to
    launch
    the
    dissolvable
    powder
    product
    in
    Q2
    calendar
    2020.


Phase
4
Expansion

  • In
    December
    2019,
    the
    Company
    received
    Health
    Canada
    licensing
    approval
    for
    the
    remaining
    16
    grow
    rooms
    for
    incremental
    target
    production
    capacity
    of
    about
    13,000
    kg
    per
    year
    of
    dried
    flower
    and
    sweet
    leaf.
    This
    brings
    the
    Company’s
    total
    licensed
    target
    production
    capacity
    to
    89,000
    kg
    per
    year7.
    Management
    has
    decided
    to
    fill
    these
    newly
    licensed
    rooms
    in
    Phase
    4B
    at
    a
    slower
    pace
    in
    response
    to
    lower
    than
    anticipated
    consumer
    demand
    at
    this
    time
    which
    the
    Company
    believes
    is
    largely
    due
    to
    the
    lack
    of
    an
    inadequate
    retail
    store
    network
    at
    this
    time,
    particularly
    in
    Ontario.
  • As
    previously
    reported
    with
    the
    release
    of
    Organigram’s
    Fiscal
    2019
    results
    on
    November
    25,
    2019,
    the
    Company’s
    management
    made
    a
    strategic
    decision
    to
    delay
    the
    completion
    of
    Phase
    4C
    (the
    final
    stage
    of
    the
    Phase
    4
    expansion),
    previously
    targeted
    for
    the
    end
    of
    calendar
    2019,
    largely
    due
    to
    less
    than
    anticipated
    consumer
    demand
    noted
    above
    and
    to
    more
    effectively
    manage
    and
    prioritize
    cash
    flow
    as
    well
    as
    potentially
    use
    the
    space
    in
    4C
    for
    other
    opportunities
    (if
    strategic
    and/or
    market
    factors
    dictate).
  • In
    December
    2019,
    the
    Ontario
    government
    announced
    it
    is
    taking
    steps
    to
    move
    to
    an
    open
    market
    for
    retail
    cannabis
    stores
    beginning
    in
    January
    2020.
    Store
    authorizations
    from
    this
    open
    application
    process
    are
    expected
    to
    be
    issued
    beginning
    in
    April,
    at
    an
    initial
    rate
    of
    approximately
    20
    per
    month.
    Management
    will
    assess
    its
    decision
    to
    delay
    the
    completion
    of
    Phase
    4C
    on
    an
    ongoing
    basis
    based
    on
    the
    progress
    and
    extent
    of
    store
    openings
    and
    the
    impact
    on
    consumer
    demand.
  • To
    date,
    the
    Company
    has
    completed
    a
    significant
    portion
    of
    Phase
    4C,
    such
    that
    the
    Company’s
    management
    believes
    the
    remaining
    construction
    can
    be
    completed
    in
    a
    relatively
    short
    timeframe
    to
    be
    ready
    to
    respond
    to
    an
    increase
    in
    consumer
    demand
    which
    may
    result
    from
    additional
    store
    openings.
  • The
    estimate
    to
    complete
    all
    of
    Phase
    4
    (including
    the
    remainder
    of
    Phase
    4C)
    was
    approximately
    $16
    million
    as
    of
    quarter-end.
  • If
    and
    when
    the
    Company
    decides
    to
    complete
    100%
    of
    Phase
    4C
    for
    cultivation
    as
    currently
    designed,
    the
    Moncton
    Campus
    facility
    is
    expected
    to
    have
    a
    target
    production
    capacity
    of
    113,000
    kg
    per
    year7
    of
    dried
    flower
    and
    sweet
    leaf.


Phase
5
Under
Refurbishment

  • The
    Company
    is
    taking
    an
    already
    constructed
    56,000
    square
    foot
    footprint
    within
    its
    existing
    facility
    and
    turning
    it
    into
    a
    multi-functional
    space
    (“Phase
    5”)
    with
    design
    specifications
    to
    European
    Union
    GMP
    standards.
  • Phase
    5,
    once
    fully
    licensed
    and
    operational,
    is
    expected
    to
    add
    significant
    functionality
    to
    the
    Moncton
    Campus
    including
    additional
    post-harvesting
    rooms
    (including
    drying
    rooms),
    additional
    extraction
    capacity,
    and
    a
    dedicated
    derivatives
    and
    edibles
    facility.
  • The
    estimated
    total
    capital
    cost
    of
    Phase
    5
    is
    expected
    to
    be
    approximately
    $65
    million8
    and
    the
    estimate
    to
    complete
    was
    approximately
    $20
    million
    as
    at
    quarter-end.
  • In
    addition
    to
    the
    chocolate
    production
    line
    now
    installed
    and
    licensed,
    Phase
    5
    plans
    also
    include
    a
    powdered
    drink
    mixing
    and
    packaging
    line,
    expanded
    vaporizer
    pen
    filling
    and
    automated
    packaging,
    additional
    extraction
    by
    both
    CO2
    and
    hydrocarbon
    as
    well
    as
    additional
    areas
    for
    formulation
    including
    short
    path
    distillation
    for
    edibles
    and
    vaporizer
    pen
    formulas.


Outlook

  • The
    Company
    believes
    that
    the
    Canadian
    market
    is
    positioned
    for
    growth
    with
    additional
    retail
    store
    openings
    planned
    in
    the
    largest
    markets
    of
    Ontario
    and
    Quebec
    collectively
    representing
    over
    60%
    of
    the
    Canadian
    population.
  • Legalization
    of
    edible
    and
    derivative
    products
    is
    also
    expected
    to
    significantly
    expand
    the
    legal
    market
    from
    its
    current
    state.
    Certain
    provinces
    have
    announced
    delays
    or
    other
    restrictions
    on
    the
    launch
    of
    vaporizable
    products
    in
    their
    markets
    including
    Newfoundland
    &
    Labrador,
    Quebec
    and
    Alberta.
    The
    Company
    is
    adjusting
    its
    distribution
    schedules
    and
    revenue
    expectations
    accordingly.
  • Organigram
    has
    and
    continues
    to
    build
    excised
    finished
    product
    across
    a
    variety
    of
    SKUs
    and
    is
    ready
    to
    onboard
    the
    addition
    of
    Ontario
    retailers.
    The
    first
    few
    of
    Ontario’s
    new
    stores
    opened
    in
    December
    2019.
    That
    same
    month,
    Ontario
    announced
    it
    is
    taking
    steps
    to
    move
    to
    an
    open
    market
    for
    retail
    cannabis
    stores
    beginning
    in
    January
    2020.
    Store
    authorizations
    from
    this
    open
    application
    process
    are
    expected
    to
    be
    issued
    beginning
    in
    April,
    at
    an
    initial
    rate
    of
    approximately
    20
    per
    month.
    This
    is
    expected
    to
    set
    the
    stage
    for
    further
    growth
    for
    Organigram
    and
    the
    industry.
    The
    Société
    québécoise
    du
    cannabis
    also
    previously
    announced
    plans
    to
    double
    its
    number
    of
    stores
    and
    Alberta’s
    robust
    network
    of
    about
    375
    stores
    has
    continued
    to
    grow
    to
    meet
    consumer
    demand.


Liquidity
and
Capital

  • Organigram
    had
    $34.1
    million
    in
    cash
    and
    short-term
    investments
    at
    quarter-end.
    The
    Company
    also
    generated
    positive
    adjusted
    EBITDA9
    of
    $4.9
    million
    in
    Q1
    2020.
  • The
    Company
    reported
    approximately
    $84.5
    million
    in
    current
    and
    long-term
    debt
    as
    at
    quarter-end,
    which
    primarily
    represents
    the
    carrying
    value
    of
    its
    term
    loan
    in
    its
    credit
    facility
    with
    BMO
    and
    a
    syndicate
    of
    lenders.
    As
    of
    the
    date
    of
    this
    press
    release,
    there
    is
    $30.0
    million
    in
    available
    capacity
    on
    the
    term
    loan
    in
    its
    credit
    facility.
    The
    Company
    also
    has
    a
    revolver
    of
    up
    to
    $25
    million
    available
    to
    be
    drawn
    against
    specified
    receivables.
  • On
    November
    15,
    2019,
    the
    Company
    amended
    its
    credit
    facility
    with
    BMO
    to:
    i)
    extend
    the
    final
    draw
    deadline
    of
    the
    term
    loan
    from
    November
    30,
    2019
    to
    March
    31,
    2020;
    ii)
    postpone
    the
    commencement
    of
    principal
    repayments
    on
    the
    term
    loan
    to
    May
    31,
    2020;
    and
    iii)
    realign
    the
    financial
    covenants
    structure,
    effective
    November
    30,
    2019,
    to
    be
    more
    consistent
    with
    industry
    norms
    up
    to
    and
    including
    May
    31,
    2020,
    which
    will
    also
    provide
    the
    Company
    with
    greater
    flexibility
    around
    the
    timing
    and
    quantum
    of
    incremental
    draws.
    The
    financial
    covenants
    will
    revert
    to
    the
    original
    structure
    on
    August
    31,
    2020.
  • Included
    in
    the
    facility
    is
    an
    uncommitted
    option
    to
    increase
    the
    term
    loan
    and/or
    revolving
    debt
    by
    an
    incremental
    $35
    million
    to
    a
    total
    of
    $175
    million,
    subject
    to
    agreement
    by
    BMO
    and
    the
    syndicate
    of
    lenders
    and
    satisfaction
    of
    certain
    legal
    and
    business
    conditions.
  • On
    November
    22,
    2019,
    the
    Company
    filed
    a
    base
    shelf
    prospectus
    for
    an
    amount
    up
    to
    $175
    million
    through
    the
    issuance
    of
    common
    shares,
    preferred
    shares,
    debt
    securities,
    subscription
    receipts,
    warrants
    or
    units.
    The
    purpose
    of
    filing
    the
    base
    shelf
    prospectus
    is
    to
    shorten
    the
    timeline
    to
    raise
    funds
    for
    growth
    opportunities
    and
    working
    capital.
  • On
    December
    4,
    2019,
    Organigram
    announced
    it
    had
    established
    an
    ATM
    program
    pursuant
    to
    a
    prospectus
    supplement
    to
    the
    base
    shelf
    prospectus
    that
    allows
    the
    Company
    to
    issue
    up
    to
    $55
    million
    (or
    its
    U.S.
    dollar
    equivalent)
    of
    common
    shares
    from
    treasury,
    the
    volume
    and
    timing
    of
    which
    is
    at
    its
    discretion.
    The
    ATM
    program
    will
    be
    effective
    until
    the
    earlier
    of
    December
    25,
    2021
    and
    the
    issuance
    and
    sale
    of
    all
    the
    common
    shares
    issuable
    pursuant
    to
    the
    ATM
    program,
    unless
    terminated
    prior
    to
    such
    date
    by
    the
    Company
    or
    the
    agents
    under
    the
    ATM
    program.
    The
    Company
    has
    used,
    and
    continues
    to
    intend
    to
    use,
    the
    net
    proceeds
    to
    fund
    capital
    projects,
    for
    general
    corporate
    purposes
    and
    to
    repay
    indebtedness.
    As
    of
    the
    date
    of
    this
    press
    release,
    the
    Company
    had
    issued
    7,302,600
    common
    shares
    for
    gross
    proceeds
    of
    approximately
    $22.9
    million
    at
    a
    weighted
    average
    price
    of
    $3.14
    per
    common
    share,
    leaving
    about
    $32.1
    million
    available
    for
    common
    share
    issuance
    under
    the
    ATM
    program.


Capital
Structure


Outstanding
basic
and
fully
diluted
share
count
as
at
January
12,
2020
is
as
follows:



First
Quarter
Fiscal
2020
Conference
Call

The
Company
is
scheduled
to
report
its
first
quarter
fiscal
2020
results
on
Tuesday,
January
14,
2020
after
market
close.
The
Company
will
host
a
conference
call
to
discuss
its
results:

Date:
January
14,
2019
Time:
5:00
p.m.
Eastern
Time
Toll
Free
(North
America)
Dial-In
Number:
1-866-211-4093
International
Dial-In
Number:
647-689-6727
Webcast:

https://event.on24.com/wcc/r/2152232/54B24C07755D838D71560C08FF6CC73E

A
replay
of
the
webcast
will
be
available
within
24
hours
after
the
conclusion
of
the
call
at

https://www.organigram.ca/investors

and
will
be
archived
for
a
period
of
90
days
following
the
call.


Non-IFRS
Financial
Measures

This
news
release
refers
to
certain
financial
performance
measures
(including
adjusted
EBITDA,
adjusted
EBITDA
as
a
percentage
of
net
revenue
and
cash
and
“all-in”
cost
of
cultivation)
that
are
not
defined
by
and
do
not
have
a
standardized
meaning
under
International
Financial
Reporting
Standards
(“IFRS”)
as
issued
by
the
International
Accounting
Standards
Board.
These
non-IFRS
financial
performance
measures
are
defined
below.
Non-IFRS
financial
measures
are
used
by
management
to
assess
the
financial
and
operational
performance
of
the
Company.
The
Company
believes
that
these
non-IFRS
financial
measures,
in
addition
to
conventional
measures
prepared
in
accordance
with
IFRS,
enable
investors
to
evaluate
the
Company’s
operating
results,
underlying
performance
and
prospects
in
a
similar
manner
to
the
Company’s
management.
As
there
are
no
standardized
methods
of
calculating
these
non-IFRS
measures,
the
Company’s
approaches
may
differ
from
those
used
by
others,
and
accordingly,
the
use
of
these
measures
may
not
be
directly
comparable.
Accordingly,
these
non-IFRS
measures
are
intended
to
provide
additional
information
and
should
not
be
considered
in
isolation
or
as
a
substitute
for
measures
of
performance
prepared
in
accordance
with
IFRS.
Please
refer
to
the
Company’s
Q1
2020
MD&A
for
definitions
and
reconciliations
to
IFRS
amounts.


About
Organigram
Holdings
Inc.

Organigram
Holdings
Inc.
is
a
NASDAQ
Global
Select
Market
and
a
Toronto
Stock
Exchange
(“TSX”)
listed
company
whose
wholly
owned
subsidiary,
Organigram
Inc.,
is
a
licensed
producer
of
cannabis
and
cannabis-derived
products
in
Canada.

Organigram
is
focused
on
producing
high-quality,
indoor-grown
cannabis
for
patients
and
adult
recreational
consumers
in
Canada,
as
well
as
developing
international
business
partnerships
to
extend
the
Company’s
global
footprint.
Organigram
has
also
developed
a
portfolio
of
adult
use
recreational
cannabis
brands
including
The
Edison
Cannabis
Company,
Ankr
Organics
and
Trailblazer.
Organigram’s
primary
facility
is
located
in
Moncton,
New
Brunswick
and
the
Company
is
regulated
by
Health
Canada
under
the
Cannabis
Act
(Canada)
and
the
Cannabis
Regulations
(Canada).



1
Adjusted
EBITDA
is
a
non-IFRS
financial
measure
not
defined
by
and
does
not
have
any
standardized
meaning
under
IFRS;
please
refer
to
the
Company’s
Q1
2020
MD&A
for
definitions
and
a
reconciliation
to
IFRS.


2
Adjusted
EBITDA
and
adjusted
EBITDA
as
a
percentage
of
net
revenue
are
non-IFRS
financial
measures
not
defined
by
and
do
not
have
any
standardized
meaning
under
IFRS;
please
refer
to
the
Company’s
Q1
2020
MD&A
for
definitions
and
a
reconciliation
to
IFRS.


3
Adjusted
EBITDA
is
a
non-IFRS
financial
measure
not
defined
by
and
does
not
have
any
standardized
meaning
under
IFRS;
please
refer
to
the
Company’s
Q1
2020
MD&A
for
definitions
and
a
reconciliation
to
IFRS.


4
Cash
and
“all-in”
costs
of
cultivation
per
gram
of
dried
flower
harvested
are
non-IFRS
measures
that
are
not
defined
by
and
do
not
have
any
standardized
meaning
under
IFRS.
“Cost
of
cultivation”
per
gram
harvested
includes
“cash”
costs
such
as
direct
labour,
direct
materials
and
manufacturing
overhead
(e.g.
maintenance)
as
well
as
“non-cash”
expenses
such
as
employee
share-based
compensation
for
cultivation
employees
and
depreciation
related
to
buildings
and
equipment
of
the
production
facility.
Cost
of
cultivation
does
not
include
packaging
costs,
which
are
added
to
arrive
at
the
cost
for
inventory,
nor
distribution
costs
(shipping),
both
of
which
are
included
in
the
cost
of
sales.
Thus,
readers
are
cautioned
against
comparing
cost
of
cultivation
per
gram
harvested
with
cost
of
sales
for
the
same
period(s)
for
at
least
two
reasons:
(1)
Cost
of
sales
includes
packaging
costs
and
distribution
(shipping)
costs
which
“Cost
of
cultivation”
does
not,
and
(2)
there
is
a
delay
between
when
product
is
harvested
and
when
it
is
sold.
Sometimes
that
delay
is
one
or
two
quarters
(and
longer
with
extraction
material).
Cost
of
cultivation
also
does
not
include
indirect
production
costs,
which
are
expensed
directly
against
gross
margin.


5
Adjusted
EBITDA
is
a
non-IFRS
financial
measure
not
defined
by
and
does
not
have
any
standardized
meaning
under
IFRS;
please
refer
to
the
Company’s
Q1
2020
MD&A
for
definitions
and
a
reconciliation
to
IFRS
amounts.


6
QUICK
TAKE

Cannabis

Cowen’s
THC
Tracker:
U.S.
Brands

Cowen
and
Company,
March
29,
2019


7
Target
production
capacity
once
licensed
and
fully
operational;
several
factors
can
cause
actual
capacity
and
cost
to
differ
from
estimates.
See
“Risk
Factors”
in
the
Company’s
Q1
2020
MD&A.


8
Target
production
capacity
once
licensed
and
fully
operational;
several
factors
can
cause
actual
capacity
and
cost
to
differ
from
estimates.
See
“Risk
Factors”
in
the
Company’s
Q1
2020
MD&A.


9
Adjusted
EBITDA
is
a
non-IFRS
financial
measure
not
defined
by
and
does
not
have
any
standardized
meaning
under
IFRS;
please
refer
to
the
Company’s
Q1
2020
MD&A
for
definitions
and
a
reconciliation
to
IFRS.


Original
press
release

For
fact-based
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on
Organigram, view
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company’s
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