Skylight Health Admits It Can’t File Q4 Results, Expects To Be Halted

The end of the line appears to be here for Skylight Health Group (TSXV: SLHG). The firm this evening revealed that it is considering strategic alternatives after it failed to raise financing sufficient to fund its cash flow needs.

On top of its financial difficulties, Skylight has indicated that it “does not expect to be in a position to complete its year-end audit,” or be able to complete and file its annual financial statements. The company as a result is expecting to see its securities restricted from trading by the Ontario Securities Commission.

In its third quarter financial results, which were filed in mid-November, the company indicated that it had cash and cash equivalents of just $194,000, while total current assets sat at $16.9 million. Curiously, of that figure, $9.9 million was attributable to trade and other receivables, which was said to be current, with a credit loss of just $149,000 expected by the company.

Total current liabilities meanwhile were pegged at $20.5 million, of which $13.1 million was categorized as accounts payable and accrued liabilities.

The inability of the company to file its financial statements follows a period where Skylight has been working to frantically cut costs. In February, after announcing that it was working towards adjusted EBITDA profitability in 2023, it shut down its Rocky Mountain Health Care clinics in Colorado. Two years prior it had acquired the seven locations for $13.5 million in cash, expecting the transaction to push its annual revenue run rate to $56 million.

Skylight managed to post $20.8 million in topline revenue in the third quarter of 2022, however gross profit came in at just $3.8 million, versus operating expenses of $9.4 million.

The writing was on the wall however when it began to shed board members last month, with the resignation of Patrick McNamee on April 3. That resignation was followed today by Grace Mellis.

Skylight Health last traded at $0.05 on the TSX Venture.

Information for this briefing was found via Sedar and the companies mentioned. 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.

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