I am honoured and humbled to join the team as HEXO’s President & CEO.
As we review our last fiscal year, I would like to highlight some key achievements.
Quarter-over-quarter, the Company’s total gross margin declined to 20% from 22% in Q3’21.
Wholesales were also impacted by the crystallization of fair value adjustments on the purchase price accounting of Zenabis, normalized for this, margins would otherwise have been 35% versus reported gross margin of .
While there exists a risk that significant cash outflows may be required over the next twelve months under the terms of the Senior Secured Convertible Note, the Company has been working with the Holder to renegotiate the terms of the Senior Secured Convertible Note.
The Company has sufficient funding for ongoing working capital requirements, however, current funds on hand, combined with operational cash flows, are not sufficient to also support funding potential cash requirements under the Senior Secured Convertible Note, investments required to continue to develop cultivation and distribution infrastructure, and the future growth plans of the Company.
Nevertheless, there is risk that certain sources of additional future funding will not be available to the Company or will be available on terms which are acceptable to management.
In this press release, reference is made to gross profit before adjustment, profit/margin before fair value adjustments, adjusted gross profit/margin, adjusted EBITDA, and revenue per gram equivalent which are not measures of financial performance under International Financial Reporting Standards .
Scott Cooper, President & CEO, and Trent MacDonald, CFO, will host the call starting at 8:30 a.m.
HEXO serves the Canadian recreational market with a brand portfolio including HEXO, Redecan, UP Cannabis, Namaste Original Stash, 48North, Trail Mix, Bake Sale, REUP and Latitude brands, and the medical market in Canada, Israel and Malta.