An adjustment of $400k on the Curative wind up, Dec 31 2019 restated. Housekeeping. And a reminder of a deal that went straight into a ditch.
Inventory up to $32MM (from $28MM), pretty much entirely from ‘Generation 2 Derivative Products’. Throughput on these is the thing to watch. $600k written off this quarter, attributed to declining sale value and some product that didn’t meet QA/QC.
Revenues for 2.0 decreased to $6.8MM
As mentioned by GoBlue, SG&A remains flat at +$13MM. Interest expense up to $3.3MM in the quarter, exceeding gross profit.
Which, is 38% excluding an inventory impairment of $700k.
They sold some long term investments which totalled $3.9MM, the bulk of this was Delta 9.
4.7MM shares went out in the period as employee stock options. These were at $0.025, and ancient. Uncertain how many more of them there are, but another 4.8MM at-the-money options have been granted.
The quarter saw some $ISH warrants expire (or sold), but $XLY reloaded a position in $ISH options for a similar amount. $XLY is holding $4MM in shares as well. $XLY also reported a $1MM gain over the period on $ISH.
Property Plant & Equipment expanded by only $180k, it stands at about $90MM. All I can see is that they put deposits down on more extraction equipment.
KGK brought in $1.7MM, through ‘research contracts’ – which looks like KGK is doing all the back end of work on clinical trials. $XLY notes the trials were delayed initially due to COVID, but that they’re underway using a virtual process.
Ok. Disclosure here is very good. It makes one want to go through these statements.
Looks like they’ve put the Kolab store in Lloydminister up for sale. High design on the prairies didn’t last, which sucks (I thought it was a neat concept):
The convertible ‘ATM’ Auxly set up pulled in more than $8MM. Add in share price declination and the warrant ramp….it isn’t cheap:
Well, it’s all about the sales, and the big picture for Auxly is right here:
They have runway, but 2022 is coming. The drop in sales probably reflects that previous quarter included pressurizing the supply chain, and if so, we could be seeing what a ‘normal’ quarter is for 2.0 sales.
Look for some deep reflection about G&A, it appears to be needed.
Let the ground wars begin.
The preceding is the opinion of the author, and is in no way intended to be a recommendation to buy or sell any security or derivative. The author holds no position in $XLY.
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