Bright Green Corporation (Nasdaq: BGXX) posted mixed updates as it tries to inch toward commercialization since moving into the Nasdaq Stock Market as a direct listing. The company reported financial results for the quarter ending June 30, 2022.
Bright Green recorded no revenues “as it is in its initial stages to start building facilities to grow, research and distribute cannabis, pending DEA inspection, registration, and quota approvals,” the company said. Bright green recorded a net loss of $19.18 million. Earnings loss per share was $0.12 for the quarter.
“This quarter has shown that Bright Green is uniquely positioned to capitalize on a growing market opportunity and deliver on our near and long-term goals as we scale our business,” said interim CEO Terry Rafih. “In May, we completed a direct listing of our common stock on Nasdaq – a milestone that has provided us access to the public capital markets and strengthened our profile as a player in the cannabis industry.”
Despite the optimism, Bright Green’s stock has flatlined to $1.16 since soaring almost immediately to $58 amid its May listing. Questions also remain regarding a pair of active lawsuits — including one from a former angry CEO who is accusing the company of fraud.
The company has also played up its connection to the DEA suggesting that the partnership is solidified, even though the company doesn’t have a formal contract with the DEA. In June, the DEA also would not confirm it had a contract with Bright Green and wouldn’t comment on the MOA.
Bright Green said in its release that renovation of the greenhouse facility is expected to be completed in the second half of 2022. However, the company also said that the DEA inspection of the facility, as well as registration, quota approvals, and the company’s first harvest are also all expected during the second half of 2022. That gives the company just four months and it takes at least three to eight months to take a cannabis plant from seed to harvest depending on whether the company starts with a seed or a clone.
Total operating expenses totaled $19.18 million, up from $430,000 in the same quarter last year, and up from $730,000 in the previous quarter, “resulting mainly from payments to support the company’s operations and ramp-up towards commercialization and the successful direct listing of the company’s common stock with the Nasdaq Stock Market.”
Bright Green also entered into a $5 million credit facility with a pre-existing shareholder, while drawing down $2 million from the credit facility during the quarter “to support near- and long-term business objectives.” Subsequent to June 30, 2022, the company has drawn an additional $1 million from the credit facility.
Bright Green said it received cash proceeds for $3.05 million in the second quarter from the sale of common stock in May 2022, $2 million from the aforementioned line of credit, and deployed $2.6 million for capital expenditures and growth investments. However, the company said it now only has $178,973 worth of cash. The total liquidity is $3.2 million, including the remaining balance on the credit facility.
“Since our direct listing, we have made significant progress developing our world-class agricultural facility in Grants, New Mexico,” said Rafih. “These advancements, as well as relationships with key strategic partners like Techson IP, will help us meet growing demand from potential pharmaceutical and research partners. We look forward to sharing additional updates on our progress over the coming months.”