Delta 9 Cannabis (TSX:DN) (OTCQX:DLTNF) announced financial and operating results for the three-month period ending March 31, 2022, revealing net revenue of $12.5 million versus $13.2 million for the three-month period ending March 31, 2021.
Financial Highlights for Q1, 2022:
- Gross profit, before changes in the fair value of biological assets, of $3.0 million versus $3.7 million for the three-month period ending March 31, 2021.
- Net loss from operations of $(2.9) million versus $(3.2) million for the three-month period ending March 31, 2021.
- Adjusted EBITDA loss was $(1.7) million versus Adjusted EBITDA of $6,199 for the three-month period ending March 31, 2021.
- The company reported loss per share of ($0.04) for the three-month period ending March 31, 2022.
- Cash position of $11.5 million, working capital of $15 million, and total assets of $106.9 million.
"Delta 9 recorded a transformative first quarter of 2022, closing on our 17-store acquisition of Uncle Sam’s Cannabis as well as a $42 million balance sheet re-structuring through a $10 million strategic investment and $32 million credit facility,” stated John Arbuthnot, CEO of Delta 9. “In the first quarter of 2022 we saw a degree of seasonality and industry headwinds relating to supply chain issues and overall weakness in the Canadian cannabis market affecting our business and impacting sequential revenue growth; however, we remain bullish that the remainder of 2022 looks to be a promising year for Delta 9.”
Q1, 2022 Operational Highlights:
- Delta 9 Cannabis announced closing of transformative retail acquisition acquiring 17 cannabis retail stores in Edmonton, Alberta from Uncle Sam’s Cannabis Ltd. Delta 9 now has 35 operating retail stores and is a leading retailer of cannabis products in Canada. The Company expects the Uncle Sam’s Transaction to be accretive in 2022 and 2023 before synergies. The acquisition represents an attractive revenue multiple of approximately 0.68x annualized revenue.
- The company completed a strategic financing of $10 million with Sundial Growers Inc. (NASDAQ:SNDL) by way of a convertible debenture that matures on March 30, 2025 and bears an interest rate of 10% per annum. The Sundial Debenture is convertible into common shares at a conversion price of $0.35 per common share.
- Delta 9 announced closing of a $32 million credit facility with connect First Credit Union. The credit facility consists of a $23 million commercial mortgage, a $5 million M&A facility, and a $4 million working capital line of credit. The term of the facility is for 5 years and amortized over a 12-year period. The funds will be used to pay down $11.2 million in existing debt and $11.8 million for the Company’s existing $11.8 million convertible debenture due July 2022. To our knowledge, the new 4.55% fixed interest rate we are paying is among the most competitive rates established by any public cannabis company to date.
Related Links:
Delta 9 & Fire & Flower Enter Into Separate Agreements With Manitoba To Become Cannabis Distributors
Photo: Courtesy of Esteban Lopez on Unsplash
