iAnthus Capital Holdings, Inc. (OTCQX: ITHUF) reported a staggering net loss of $237.3 million, which included a $199.4 million impairment loss. While the revenue rose 12% sequentially to $30.4 million, the net losses and defaulting on debt payments have overshadowed any good news.
The net loss per share was $1.38 versus last year’s net loss of $0.19. The majority of the impairment losses were from the Arizona and Nevada properties, $86 million, and $64 million respectively.
iAnthus said in its earnings statement that it did not make interest payments due on its Secured Notes and Unsecured Debentures due on March 31, 2020. “This non-payment of interest triggered an event of default with respect to these components of the Company’s long-term debt, consisting of principal amounts at face value of $97.5 million and $60.0 million and accrued interest amounts at March 31, 2020, of $3.2 million and $1.2 million on the Secured Notes and Unsecured Debentures, respectively.”
The company has an accumulated deficit of $622 million according to the filing. On July 10, the company entered into a Restructuring Support Agreement with some of its lenders. “If the Recapitalization Transaction is completed through CCAA Proceedings, then the Existing Shareholders (defined as the existing holders of Common Shares) will not receive a recovery.” In other words, the shareholders lose everything.
Trading Resumption Requested
The company has requested an extension for reporting its second-quarter earnings due to logistical issues and delays caused by COVID-19. The company has until October 15, 2020 to file those earnings. The company has been affected by a cease trade order that started on June 22 for failure to file financial results and now that the fiscal first quarter has been released, iAnthus is asking for the cease trading order to be revoked.
The stock has continued to trade on the OTC Markets, where it was lately selling at $0.06 a share. Its 52-week high was $2.74 on that exchange.
Beth Stavola sold her CBD for Life company to iAnthus in 2019 and became the Chief Strategy Officer and board member of the company. For the three months ending in March, CBD For Life reported sales revenues of $652 thousand and net losses of $3.6 million. The impairment loss was listed at $2.5 million. Stavola also engineered the MPX Bioceutical acquisition for iAnthus which caused the markets to dub her the $845 million woman. The company reported that MPX delivered revenues in the quarter of $15.7 million and a net loss of $192 million.
Stavola recently left the company and told Forbes that her role was much less hands-on than she expected. However, she managed to make sure she was paid before the company began experiencing financial troubles. The Stavola Trust Note of $10.8 million was paid in full on January 10, 2020.