PharmaCielo Ltd (TSXV: PCLO) this morning filed its third quarter financial results, posting brutal revenues of just $25,913 – a decline a 97.9% on a quarter over quarter basis, while posting a net loss of $6.1 million. The results come just days after closing a $10.0 million financing which saw Marc Lustig join the board of directors. The results were so bad that the company has seen CEO David Attard relinquish his role at the company.
The company refused to state head-on why revenues cratered, with incoming CEO and current President Henning von Koss simply stating, “while Q3 revenue is not reflective of what I want to see us generate moving forward, we maintained good cost control during the quarter.”
It appears however that the company simply failed to sell any cannabis products, with revenues from the segment amount to just $5,085, compared to $1.2 million in the preview quarter. Telemedicine revenues were also down, falling from $23,566 to $20,828 in the three month period. The company managed to post a gross profit of $24,660 for the period, with the telemedicine services reportedly costing $0 to operate.
The lack of revenues were expensive however, with the company recognizing agricultural operating costs of $49,988, and selling, general and administrative expenses of $6.1 million. The largest expense here overall was salaries and wages at $1.7 million, followed by share based compensation of $1.2 million – a multiple far too high relative to revenues. Other expenses include expected credit losses of $0.8 million, professional fees of $0.6 million, and consulting fees of $0.5 million.
Other income meanwhile totaled out at $0.7 million, lead by amortization of deferred income of $0.6 million, and an exchange gain of $0.4 million, which was partially offset by a loss on a joint venture of $0.2 million.
Looking to the balance sheet, cash fell to $3.2 million from $5.1 million over the course of the quarter, while trade receivables fell from $1.3 million to $0.6 million. Prepaids meanwhile fell marginally from $1.4 million to $1.3 million, while inventory rose to $5.9 million from $4.5 million. Overall, total current assets fell from $13.1 million to $11.5 million.
Accounts payable meanwhile rose to $5.2 million from $3.8 million, while leas obligations were flat at $0.2 million. Total current assets during the period rose overall from $4.1 million to $5.5 million.
Given the poor performance of the company during the quarter, PharmaCielo this morning announced that CEO and director David Attard has reached a “mutual agreement” with the board of directors for his resignation, effective December 1, 2020. Taking his place will be Henning von Koss, whom is currently president and a director of the firm.
PharmaCielo Ltd last traded at $1.54 on the TSX Venture.
Information for this briefing was found via Sedar and PharmaCielo Ltd. 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.