Avant Brands touts sales growth overseas, plans $3.9M offering

Avant Brands Inc. (TSX:AVNT) (OTCQX: AVTBF) posted record second-quarter results ending May 31, with international sales outpacing domestic revenue for the first time as the cannabis producer continues to expand globally.

Key stats:

• Second-quarter gross revenue up 5% to C$9.4 million; net revenue rose 4% to C$8.3 million
• International sales jumped 26% to C$3.7 million, now 45% of net revenue
• Adjusted EBITDA surged 174% to C$2.8 million; adjusted net income of C$1.4 million versus C$300,000 loss year-ago
• Domestic recreational sales fell 30% to C$3.3 million amid pricing pressures

The Kelowna, British Columbia-based company has been pivoting towards international markets as it faces headwinds in Canada’s recreational cannabis sector, where it says it relaunched the Flowr brand at a lower price point. CEO Norton Singhavon cited “strong international demand” as a key driver of growth.

Cannabis production increased 59% year-over-year to 3,186 kilograms, while sales volume rose 1% to 2,708 kilograms. Cash flow from operations more than doubled to a record C$4.6 million

Avant also plans to raise up to $3.9 million through a private offering of convertible debentures and warrants, with proceeds earmarked for debt repayment. Each $1,000 unit will comprise a 10% interest-bearing convertible debenture and 10,000 common share purchase warrants.

That follows a C$2.39M private placement closed on June 3, according to filings. The company also restructured some debt during the quarter, including extending a convertible debenture’s maturity.

What’s Next:

Avant’s management is “confident in the continued expansion of (the company’s) international footprint,” citing nine international agreements executed this fiscal year. The company has already shipped products to one client, with shipments pending for five more.

The new deals target key markets like Australia, Germany, and Israel, while also exploring opportunities in the Czech Republic, Poland, Portugal, Switzerland, and the United Kingdom. Collectively, these markets represent over 250 million potential consumers, it said.

“This expanded network positions Avant to become a leading player in the global premium cannabis market,” the company said, adding that its flagship brand BLK MKT, is “well-positioned for international success.”

Avant this year.teamed up with IM Cannabis Corp. (NASDAQ: IMCC) to launch BLK MKT in Germany, alongside “active discussions” to launch the brand in Australia.