Cronos Group (TSX: CRON) (NASDAQ: CRON) this morning reported its first quarter financial results, leaving investors yet again asking why this company has over a three billion dollar valuation. The company recorded revenues of $12.6 million, along with a net loss of $161.6 million.
Revenues were down 26% on a quarter over quarter basis, falling from $17.4 million in the fourth quarter to $12.6 million in the first quarter of 2021. The company also continued to demonstrate an inability to generate a gross profit, instead posting a gross loss of $2.9 million for the period – an improvement over the gross loss of $6.5 million posted a year ago.
Operating expenses meanwhile amounted to $40.5 million, with the company seeing $21.9 million in general and administrative expenses, or about $1.73 for every dollar of net revenue it earned. Sales and marketing meanwhile amounted to $10.3 million, followed by R&D expenditures of $5.1 million.
Other income provided a negative impact of $118.1 million, a result of a loss on derivative liabilities of $116.9 million, as well as $1.7 million in impairments on PPE by the company, offset marginally by interest income of $2.3 million.
Looking to the balance sheet, the company has continued to burn cash, with its cash and cash equivalents falling from $1.1 billion to $1.0 billion over the course of the quarter, a function of negative operating cash flows of $46.0 million, as well as finance cash flows of -$9.3 million and investing cash flows of -$9.7 million. Total current assets declined from $1.4 billion to $1.3 billion as the company continues to burn cash at an impressive rate.
Total current liabilities meanwhile climbed from $206.8 million to $302.6 million, a function of derivative liabilities climbing from $163.4 million to $272.3 million.
Cronos Group last traded at $9.26 on the TSX.
Information for this briefing was found via Sedar, Sedi and Cronos Group. The author has no securities or affiliations related to these organizations. 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.