The fiscal Q1 2020 numbers arriving from Green Growth Brands Inc. (CSE: GGB; OTCQB: GGBXF) today reveal a company continuing to operate with negative working capital, high liabilities, and not enough revenue to meet expenses.
Green Growth underwent sustained expansion over the past year, opening new CBD mall kiosks under the Seventh Sense Botanical brand. 160 of those sites were doing business as of late October and an estimated 200 are expected to be operational by the end of the year.
Those kiosks and other acquisitions saw a bump in revenue as Green Growth recorded bringing in $12.7 million for the period ending Sept. 28, 2019 compared to only $7.2 million in fiscal Q4 between both CBD and MSO operations.
During fiscal Q4 2019, $5.5 million of revenue came from The+Source in Las Vegas, while only $1.7 million rolled in from CBD sources. The period of Q1 2020 notably included the acquisition of a second Source location in Henderson.
The previous quarter also only included a fraction of the CBD shops open during the July to September period.
Despite increased revenue, the company’s costs continue to outweigh incoming cash, with $9.6 million spent on general administrative costs and another $10 million in sales and marketing for the quarter. Combined with other expenses, Green Growth Brands posted a $29.8 million loss for Q1 2020.
The company ended the period with cash on hand of $6.8 million, down sharply from the end of June when Green Growth had $10.2 million in cash on hand.
As of the end of September, the company was on the hook for $129 million in liabilities, including $34 million in payable notes and $46.9 million in convertible debentures.
That number has increased in recent months, compared to the end of fiscal year 2019 that saw a net loss of $62 million for the year and $105 million in liabilities.
An earnings per share loss of $0.15 was cited for the quarter, and the end result of operational expenses and losses sees the company’s adjusted EBITDA rising to a loss of $15.2 million, with a negative working capital of $101.15 million.
GGBXF was down to $0.88 a share as of close of business today, and has lost 80% of its value from mid-January of 2019. A conference call to discuss the latest quarterly report will be held tomorrow morning at 8:30 AM EST.