Aleafia Health (TSX: ALEF) this morning reported its first quarter 2020 financial results, reporting net revenues of $14.6 million, of which $13.7 million came from the sale of cannabis. The company reported a positive adjusted EBITDA figure of $6.4 million, while posting a net loss of $6.2 million.
While the company boasted a positive EBITDA figure, the firm actually posted an operating loss, largely in part to changes in fair value of inventory sold of $6.1 million, reducing gross profit from $12.1 million to $5.9 million. Operating expenses came in at $9.2 million, with general and administrative expenses amounting to $3.1 million and wages and benefits coming in at $2.5 million.
The firm did claim positive cash flow from operations of $146,000, however the cash position still saw an overall $7.9 million reduction on a quarter over quarter basis, thanks in part to the company spending $7.9 million on investing activities, of which $7.94 million was for the acquisition of property. Aleafia saw its cash position decline from $41.2 million to $33.4 million over the course of the quarter.
Outside of the decreasing cash position, most other current asset line items stayed relatively the same, save for inventory which decreased from $34.1 million to $29.1 million over the quarter, while still representing several periods worth of sales. Total current assets declined from $117.6 million to $102.6 million.
Accounts payable decreased significantly over the period, falling from $20.1 million to $10.7 million, while $21.9 million in convertible debt became current during the period, bringing total current liabilities up from $20.7 million to $34.9 million. The current convertible debt consists of $25.0 million in principal due on February 2, 2021.
In terms of cannabis, the company saw its average net selling price of medical cannabis decrease from $9.80 to $8.04 over the course of the quarter, while adult use cannabis increased to $6.88 from $6.14. Wholesale cannabis declined marginally, from $2.50 per gram to $2.47 per gram. The company saw 4,992 kilograms sold during the quarter, up from 1,398 kilograms in the fourth quarter of 2019.
Aleafia Health last traded at $0.63 per share.
Information for this briefing was found via Sedar and Aleafia Health Inc. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.