The company's 3Q results were impacted by a number of non-cash impairment charges against legacy assets and operations that do not feature heavily in its future trajectory
() () (FRA:AC4) reported its third quarter 2021 results on Monday evening that saw the company end a transformational period with $7.6 million in cash.
Revenue for the quarter came in at $90,000, consisting of consulting fees from BAMM and technology revenue from its Cocoon business, both legacy businesses that do not feature heavily in the Las Vegas-based company’s future plans.
In a statement accompanying the results, the cannabis company said it was “positioned for rapid growth” following the closing of two major transactions to acquire cultivation facility construction firm ALPS and Green Therapeutics, a Nevada-based cannabis company.
READ: Australis Capital buys 51% stake in cannabis facility design/construction company ALPS
Australis plans to leverage an ALPS-driven expansion model to scale up the Green Therapeutics brands throughout the US after both deals close by the end of March.
The company told investors that its 3Q results, which covered the three-month period ended December 2020, were impacted by non-cash impairments and reserve adjustments related to legacy business. Australis anticipates that ALPS will bring a “significant boost” to revenues in its fourth quarter 2021 result, with the full impact materializing in the following quarter.
New team at the helm
"We are delivering on the promises made to our shareholders when the new leadership team took over,” Duke Fu, interim CEO of Australis said in a statement.
“We are executing at a very high pace, with two proposed acquisitions announced and moving towards completion, a completely new leadership team installed, ALPS firing on all cylinders with over $5 million in contracts signed in the past six weeks, and the team is progressing on further potential partnerships, transactions and strategic revenue enhancing initiatives. Consequently, we are exceptionally well positioned to leverage our assets and execute on our unique expansion strategy to transform AUSA into a meaningful, national MSO."
The results for the period under review were impacted by a number of one-off, mostly non-cash extraordinary items, the company said. Net loss came in at $19.4 million, versus $5.8 million in the comparable year-ago quarter due predominantly to extraordinary items, which totaled $17.6 million.
Adjusted for these items, the company would have recorded a $1.8 million operating loss, a $4 million improvement over the prior year's quarter, it added.
Clean slate
"The company's third quarter results were impacted by a number of non-cash impairment charges against legacy assets and operations, as well as one off charges related to the recent proxy battle and the resulting reorganization of the company's board and management,” new CFO Jon Paul said.
“Without these extraordinary expenses, net loss would have been limited to $2.3 million. The cash burn from operations during the quarter of $2.7 million was consistent with the first half of fiscal 2021. As we wrap up the restructuring of the legacy operations, we have a cleaner slate for focusing on the ALPS, GT and other potential acquisitions and partnerships as we scale our business."
The company's investments in BAMM and Quality Green are up by about $7 million, Paul added, while the sale of land held in North Las Vegas is expected to bring around $1.9 million cash upon closing at the end of March.
Australis is hosting a conference call on Tuesday at 10AM ET to discuss the results.
Contact Angela at angela@proactiveinvestors.com
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