Revenues continue to decline for Emerald Health Therapeutics (TSXV: EMH), with the firm posting first quarter revenues of $2.9 million on a net basis, as compared to $4.3 million in the prior period, a decline of $32.4%. Overall, the firm posted a net loss of $4.9 million during the quarter.
Revenues for the quarter ended March 31, 2020 saw a negative gross margin of $1.0 million, largely the result of a $1.1 million inventory writedown. Operating expenses further added to the losses, with Emerald Health recognizing $2.8 million in general and administrative expenses, followed by $1.0 million in share based payments among other items.
Losses were partially offset however thanks in part to Pure Sunfarms, which contributed $5.2 million in income during the quarter. The joint venture asset recognized $18.0 million in sales during the period, posting an overall net income of $10.9 million.
Looking towards the balance sheet, its clear that Emerald Health is not currently playing from a point of strength. Cash and cash equivalents fell to $0.6 million during the quarter from $2.5 million, while receivables fell from $1.9 million to $1.1 million. Inventory stayed relatively unchanged at $6.6 million, with total current assets overall posting a decline from $15.7 million to $13.8 million.
Current liabilities on the other hand saw accounts payable climb to $11.7 million frrom $10.9 million, while deferred payments climbed to $8.2 million from $7.8 million. Due to related parties decreased from $6.2 million to $3.4 million, with total current liabilities overall declining from $25.7 million to $23.3 million. Notably however, the company has little means to meet its payables.
It should also be noted that subsequent to the end of the quarter, Emerald Health managed to close a financing for total gross proceeds of $2.1 million. While not significant in size, it might allow them to continue operations for another quarter. Long term prospects for the firm however appear to be grim.
Emerald Health last traded at $0.24 on the TSX Venture
Information for this briefing was found via Sedar and Emerald Health Therapeutics. 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.