Solis Tek, Inc. Announces Second Quarter 2017 Results
Introduction of Rare Nutrient Line for Terpene Enhancement to Fuel Growth Among Commercial Cannabis Growers
/EINPresswire.com/ -- CARSON, CA--(Marketwired - August 14, 2017) - Solis Tek, Inc. (OTCQB: SLTK), a vertically integrated technology innovator, developer, manufacturer and distributor focused on bringing products and solutions to commercial cannabis growers in legal markets across the U.S., today reported financial results for the quarter ended June 30, 2017.
Financial Highlights
- Revenues of $2.44 million; up 15% over the same period in 2016
- Gross Profit of $920 thousand; up 15% over the same period in 2016
- Gross Margin of 37.7%; consistent with comparable period in 2016
Business Highlights
- Launched Solis Tek's TERPENE ENHANCING Nutrient Line, TERPENEZ™, which uses natural ingredients to increase yield, lower costs and grow healthier plants
- Introduced new lighting controller at end of 2nd quarter to consumer marketplace, providing industry leading control capabilities to commercial and recreational growers
"We are pleased with our second quarter results, showing solid growth from our core operations, highlighted by 15% year-over-year Q2 revenue growth from our lighting equipment vertical. We believe demand trends centered around terpene profile and strain desirability based on terpene profiles will support the launch of our heavy-metal-free Nutrient Line, and are confident that initiatives recently undertaken to raise the Company's visibility among key target audiences will drive enhanced growth opportunities for Solis Tek," commented Dennis G. Forchic, Chief Executive Officer of Solis Tek.
"We are executing Solis Tek's strategy to provide a broad suite of products and services through our wholly owned subsidiaries, targeted at the commercial cannabis industry. We're excited about the feedback we have received from the grower community regarding our new terpene enhancing product TERPENEZ, and are confident that the product will emerge as a preferred choice among cannabis growers because it has been verified in independent third-party testing to be free of heavy metals and safe for all agriculture uses, while producing unrivaled results regarding terpene profiles.
"By leveraging the same client base as our existing lighting products, we expect the launch of the new nutrient division to drive significant revenue growth for Solis Tek, while expanding margins due to the increased efficiencies derived from utilizing existing sales and distribution channels. Solis Tek remains ideally positioned to capitalize on the rapidly expanding legalization of medical and adult-use cannabis, supported by these industry leading product platforms," concluded Mr. Forchic.
Second Quarter 2017 Results
For the second quarter of 2017, revenues were $2.44 million, representing a 15% increase over the same period in 2016, driven by increased market penetration among hydroponic customers and commercial facilities. Cost of revenues increased 15%, consistent with revenue growth. Thus, gross margins were consistent year-over-year at 37.7%.
Selling, general, and administrative expenses were $2.39 million in the second quarter of 2017, up 212% over the same period in 2016, due primarily to cash and stock-based compensation expenses to support a broad campaign to increase Solis Tek's industry and investment community visibility and, to a lesser extent, increased marketing and payroll related expenses.
Stock compensation expense was $1.19 million for the second quarter of 2017, compared with $25,000 in the same period in 2016. Research and development expenses were $82,500, 42% higher than the same period in 2016.
Net loss for the second quarter of 2017 was $1.59 million, or $0.04 per share, compared with a net loss of $35,157, or $0.00 per share for the same period in 2016, again due primarily to cash and stock-based compensation expenses.
As of June 30, 2017, the Company had $428,000 in cash, 55% higher than $276,000 at December 31, 2016, attributable to $300,000 received through the issuance of common stock to accredited investors.
To be added to the Solis Tek email distribution list, please email SLTK@kcsa.com with SLTK in the subject line.
About Solis Tek
Solis Tek is a vertically integrated technology innovator, developer, manufacturer and distributor focused on bringing products and solutions to commercial cannabis growers in both the medical and recreational space in legal markets across the U.S. For nearly a decade, growers have used Solis Tek's lighting solutions to increase yield, lower costs and grow better to maximize their return on investment. The Company's customers include retail stores, distributors and commercial growers in the United States and abroad. For more information, please visit our website, www.solis-tek.com.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on the current plans and expectations of management and are subject to a number of uncertainties and risks that could significantly affect the Company's current plans and expectations, as well as future results of operations and financial condition. The Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
Solis Tek, Inc.
Condensed Consolidated Balance Sheets
| June 30, 2017 | December 31, 2016 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | 427,580 | $ | 275,783 | ||||
| Accounts Receivable, net of allowance for doubtful accounts of $398,168 and $359,395 | 1,221,349 | 628,691 | ||||||
| Inventories | 1,550,761 | 2,880,804 | ||||||
| Prepaid expenses and other current assets | 79,309 | 75,109 | ||||||
| Total current assets | 3,278,999 | 3,860,387 | ||||||
| Property and equipment, net | 172,505 | 204,936 | ||||||
| Other assets | 32,072 | 32,071 | ||||||
| TOTAL ASSETS | $ | 3,483,576 | $ | 4,097,394 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable and accrued expenses | $ | 672,283 | $ | 552,057 | ||||
| Due to related party vendor | 124,715 | 1,083,764 | ||||||
| Note payable - related parties | 545,000 | 265,000 | ||||||
| Amount due to related parties | 150,795 | 134,086 | ||||||
| Capital lease obligations, current portion | 14,723 | 13,711 | ||||||
| Loans payable, current portion | 8,102 | 8,262 | ||||||
| Total Current Liabilities | 1,515,618 | 2,056,880 | ||||||
| Capital lease obligations, net of current portion | 1,883 | 9,665 | ||||||
| Loans payable, net of current portion | 22,021 | 25,958 | ||||||
| Notes payable related parties, net of current portion | 600,000 | 600,000 | ||||||
| Total liabilities | 2,139,522 | 2,692,503 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders' Equity | ||||||||
| Preferred stock, no par value, 20,000,000 shares authorized; no shares issued and outstanding | - | - | ||||||
| Common stock, $0.001 par value, 100,000,000 shares authorized; 37,477,577 and 29,721,998 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 37,472 | 29,722 | ||||||
| Additional paid-in-capital | 8,067943 | 2,795,842 | ||||||
| Accumulated deficit | (6,761,361 | ) | (1,420,673 | ) | ||||
| Total Shareholders' Equity | 1,344,054 | 1,404,891 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 3,483,576 | $ | 4,097,394 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
Solis Tek, Inc.
Condensed Consolidated Statements of Operations
| Three months ended June 30, | Six months ended June 30, | ||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||
| Sales | $ | 2,441,289 | $ | 2,125,830 | $ | 5,343,115 | $ | 4,710,498 | |||||
| Cost of goods sold (1) | 1,521,410 | 1,324,165 | 3,302,714 | 2,982,876 | |||||||||
| Gross profit | 919,879 | 801,665 | 2,040,401 | 1,727,622 | |||||||||
| Operating expenses | |||||||||||||
| Selling, general and administrative expenses | 2,391,231 | 765,531 | 7,155,886 | 1,519,225 | |||||||||
| Research and development | 82,500 | 58,000 | 165,270 | 115,000 | |||||||||
| Total operating expenses | 2,473,731 | 823,531 | 7,321,156 | 1,634,225 | |||||||||
| Income (loss) from operations | (1,553,852 | ) | (21,866 | ) | (5,280,755 | ) | 93,397 | ||||||
| Interest expense, net of interest income | (31,649 | ) | (23,620 | ) | (55,820 | ) | (50,394 | ) | |||||
| Interest income | - | 4,500 | - | 4,500 | |||||||||
| Income (loss) before income taxes | (1,585,501 | ) | (40,986 | ) | (5,336,575 | ) | 47,503 | ||||||
| Provision (benefit) for income taxes | 3,200 | (5,829 | ) | 4,113 | 37,700 | ||||||||
| NET INCOME (LOSS) | $ | (1,588,701 | ) | $ | (35,157 | ) | $ | (5,340,688 | ) | $ | 9,803 | ||
| BASIC AND DILUTED INCOME (LOSS) PER SHARE | $ | (0.04 | ) | $ | (0.00 | ) | $ | (0.15 | ) | $ | 0.00 | ||
| WEIGHTED - AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED | 37,011,893 | 29,596,998 | 36,807,540 | 29,595,789 | |||||||||
| (1) Related party costs included in cost of goods sold | $ | 1,247,897 | $ | 1,003,379 | $ | 2,688,893 | $ | 2,400,764 | |||||
Investor Relations Contact:
Phil Carlson / Elizabeth Barker
KCSA Strategic Communications
SLTK@kcsa.com
Communications Contact:
Danielle DeVoren
KCSA Strategic Communications
212-896-1272
SolistekKCSA@kcsa.com
