Losses for Canada House Wellness Group Inc. have been cut by more than half, while the company’s revenues grow.
In the latest earnings report released Tuesday, the firm posts net revenues of $4 million for the three months ended July 31, an increase of 39 per cent from $2.9 million in the last consecutive quarter.
The loss and comprehensive loss of $2.6 million represents a 58-per-cent drop from $6.2 million last quarter. The firm notes loss and comprehensive loss for the latest period included “a one-time inventory impairment of $1 million and there was an unrealized gain on changes in fair value of biological assets of $0.7 million in the same period of the prior year.”
Total assets at the end of the period dipped by 16 per cent to $8.3 million from $9.9 million last period. And cash assets fell 60 per cent to $0.7 million from $1.8 million.
“The company is an early-stage company and is dependent on raising further capital, primarily equity, to fund its capital expenditures and its operating expenses in excess of revenue until such time as it reaches cash break-even,” reads the report.
As of the current quarter, the company had raised about $40.6 million “by the issuance of common shares, warrants, convertible debentures and long-term debt. The company may raise additional equity in the future, although there can be no assurance that the company will be successful in doing so.”
Private Montreal-based licensed producer MTL Cannabis is moving into a reverse takeover of Canada House. The deal was made public in August and is expected to double annual production capacity.
Read more: MTL Cannabis to take control of Canada House
Canada House will operate under MTL Cannabis’s corporate name with its shares trading on the CSE after the transaction closes.
During this period, Canada House finished the deal to buy Margaree Health Group Inc., a medical cannabis clinic dedicated to veterans in Nova Scotia.
The firm also entered into a product acquisition agreement with Quebec medical and recreational cannabis grower Groupe Fuga Inc.
Canada House stock is not currently trading, with a status of “halted pending fundamental change” noted on the Canadian Securities Exchange website.