iAnthus Capital Holdings Inc (CNSX:IAN) (OTCMKTS:ITHUF) (FRA:2IA) delivered earnings late Monday evening. However, with the financials of recently-acquired MPX Bioceutical Corp. not yet consolidated—and with the company entrenched in deep build out mode—Tuesday morning’s conference call is essentially the main event.
For the quarter, iAnthus experienced a robust year-over-year organic revenues increase common in the sector. Q4 revenue and other income registered at $2.2 million, while FY fiscal 2018 revenue and other income of $4.5 million, up 165% and 88%, respectively, compared to the same periods in 2017. Pro forma revenue—including acquired MPX entities and managed revenue for Colorado and New Mexico operations—for Q4 was $14.8 million and $49.3 million for FY fiscal 2018.
However, iAnthus Capital Holdings bottom line in 2018 isn’t a pretty one—but it was never expected to be. It rang-up a net loss of approximately $62.0 million, which includes $44.1 million of various non-cash charges. Q4 net loss was around $15.9 million, which includes $9.9 million of non-cash charges used to derive adjusted EBITDA primarily due to accretion expense, fair market value adjustments, depreciation and share-based compensation.
iAnthus’ cash balance will need to be addressed—although a solution could already be in place. The company has a current cash balance is approximately $45 million, but has the potential to receive over $125 million from the exercise of warrants already issued.
iAnthus Capital Holdings CEO Hadley Ford provides a recap of the company’s completed merger with MPX Bioceutical. Ford explains that there are 3 keys to success for US cannabis companies and the MPX deal helps iAnthus meet each condition.
iAnthus continued to strengthen its balance sheet through consolidating loan balances via its acquisition of MPX. On March 18, 2019, the company closed a $35 million private placement of unsecured convertible note units. A week later, it announced a notice of redemption to legacy MPX debenture holders. The will help to reduce the company’s cost of capital, although specifics weren’t given.
Also of note, iAnthus anticipates that sales will launch in California in the next 60 days, which will be the 10th state for revenue generation.
Thus, we await tomorrow’s morning conference call to see if any surprises are in-store. On the face if it, the report appears rather benign in terms of actionable content. Everything from the large net losses to light-ish revenues were expected.
Please visit https://www.ianthuscapital.com/investors to access the archived conference call.
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