M7 Archives - Green Market Report

Debra BorchardtNovember 1, 2021


ManifestSeven Holdings Corporation (M7) (OTCMKTS: MNFSF) announced financial results for its fiscal third-quarter ending August 31, 2021, on October 29, 2021, as revenues rose 11% sequentially to $4.2 million from the second quarter’s revenues of $3.8 million. The net loss for the quarter was $1.6 million. Despite this M7 said it is still in default of certain debt obligations. M7 said it is looking at solutions and is working closely with its major creditors, vendors, and landlords as it continues to pursue a range of strategic and financing alternatives.

Revenue Decline

M7 reported revenue of $11,704,450 for the nine months ending August 31, 2021, which represents a decrease of $1,979,802 (15%) from $13,684,252 for the nine months ended August 31, 2020. The company attributed the decrease to a decline in revenue generated from ancillary product sales due to a disruption in one of the company’s third-party e-commerce distribution channels that caused extended delays in the delivery time of products to customers and were partially corrected following the conclusion of the first fiscal quarter.

Can’t Pay The Bills

As of August 31, 2021, M7 only had $170,704 in cash. The company had a net working capital deficit of $28,251,574, however, the financial statements at August 31, 2021, reflect certain notes payable and convertible debentures as current liabilities that are not expected to be repaid within the next twelve months. In addition, the derivative liability is a non-cash balance, the resolution of which is entirely tied to the resolution of the convertible debentures. When excluding these balances, the working capital deficit was approximately $15.9 million.

As a result of the debt woes, M7 said it continues to explore, review and evaluate a broad range of potential strategic alternatives focused on maximizing shareholder value. The company managed to cut some operating expenses as that number fell by 33% to $2.3 million during the fiscal third quarter versus $3.5 million during the second fiscal quarter.

Revenue Streams

During the third fiscal quarter, M7 said it continued to place a greater emphasis on generating revenue from its regulated operations, with regulated product sales increasing by 25% quarter-over-quarter and expected to yield more significant long-term revenue growth. the company also said in July that it entered into a Master Services Agreement with a licensed third-party cannabis distribution company, focused primarily on the rapidly growing beverage product category, to carry out finished goods distribution operations on behalf of Highlanders. “The contract consolidates a client portfolio that includes some of California’s highest-selling beverage products, a database of nearly 400 active licensed retailers throughout California, and a robust fleet of 16 distribution vehicles, allowing for efficient statewide long-haul transportation and last-mile fulfillment of regulated products. The agreement is expected to result in significant operational synergies and maximize the company’s ability to monetize its regulated distribution infrastructure by generating incremental and accretive revenue and optimizing operating margins.”

One of the company’s products, The Marijuana Index has been offline for some months saying it is being reengineered. Though it seems the company is more focused on supply chain businesses.

Debra BorchardtAugust 2, 2021


Following the close of the market on Friday, ManifestSeven Holdings Corporation (OTC: MNFSF) reported its financial results for its fiscal second-quarter ending May 31, 2021, as revenue fell from last year and was flat sequentially. The total revenue for the quarter was $3.7 million, which dropped from last year’s $4.9 million for the same time period. It was flat from the first quarter’s revenue of $3.8 million. 

The net loss for the quarter increased from $1 million in 2020 to $1.7 million in 2021. M7 said it continued to optimize its cost structure, resulting in operating expenses of $2.7 million during the fiscal second quarter, representing a decrease of 23% from $3.5 million during the first fiscal quarter.

During the second fiscal quarter, M7 said it continued to place a greater emphasis on generating revenue from its regulated operations, with regulated product sales increasing by 4% quarter-over-quarter and expected to yield greater long-term revenue growth. The company’s gross profit margin increased from 30% during the first fiscal quarter to 33% during the second fiscal quarter, with gross profit margin for the company’s regulated segment increasing from 30% to 34% quarter-over-quarter.

Sturges Karban, M7’s Chief Executive Officer, said, “M7’s launch into 2021 demonstrated that our commitment to integrating our B2B and B2C operations into a singular, statewide cannabis superhighway has yielded a reliable, scalable, and frictionless commercial platform capable of supporting the legal cannabis industry’s increasing demand for distribution, retail, and delivery solutions. In this most recent quarter, M7 continued to build upon its focused strategy by further developing Highlanders’ distribution capabilities and strengthening the business processes and practices across the Company’s integrated regulated operations.”

Going Concern

The company also stated within its earnings release that it will need to raise additional capital during the next twelve months and beyond to support current operations and planned development. At the time of the filing, M7 only had $644,000 in cash on hand. “These factors indicate the existence of a material uncertainty that may cast significant doubt as to the Company’s ability to continue as a going concern. Management intends to finance operating costs over the next twelve months with cash on hand and proceeds from a financing done
prior to the Merger.” The company said in a statement that it has initiated a strategic review process to explore, review and evaluate a broad range of potential alternatives for M7 focused on maximizing shareholder value.

M7 also reviewed its inability to make its interest payments due on the New H3O Note on July 1, 2021. “The Company announced that it has modified the terms of the New H3O Note to (a) clarify the rights of the parties thereto, (b) provide for additional security in consideration of the lender’s deferral of its right to immediately foreclose upon the pledged collateral, and (c) to amend certain other provisions of the New H3O Note to add the lender as a regulatory owner on H3O’s applicable cannabis licenses and escrow all documents required to completely transfer ownership of H3O over to the lender in the event of a subsequent default under the New H3O Note.”

“As consideration for this modification, the New H3O Note will accrue interest at the pre-existing default rate of 25% per annum from June 1, 2021, until paid in full pursuant to the terms of the New H3O Note (as modified). No payment of principal or interest shall be due before the maturity date, which shall remain January 1, 2022. In accordance with New H3O Note, the Company shall be entitled to prepay the principal amount, all accrued and unpaid interest, and costs plus a prepayment fee equal to the lesser of two additional months of interest or the amount of interest that would accrue between the date of prepayment and the maturity date.”

Despite revenue and going concern issues, in April 2021, M7 approved the issuance of 14,360,789 restricted stock units, 2,187,826 of which vest in October 2021 with the remainder vesting in April 2022. Stock-based compensation was $152,333 in the quarter versus $14,606 for the same time period last year.


As M7 tries to make strategic moves, it seems each attempt is thwarted. The company is in litigation over its acquisition of the cannabis delivery firm DPH. The value of the deal was $645,000. In July 2020, DPH claimed M7 failed to pay the money due to DPH and get regulatory approvals. DPH wants to cancel the agreement. M7 filed a countersuit in August 2020 and claimed DPH didn’t cooperate with M7 to get the approvals. The claims have not been resolved.

The company conducts, or, in the case of the Sacramento facility, plans to conduct, operations out of these facilities through certain of its wholly-owned subsidiaries, or, in the case of the Long Beach and Oakland facilities, through certain affiliated entities owned by the company’s CEO and director and controlled by the company by way of a management agreement. The company initially funded security deposits on these facilities, including the Long Beach and Oakland facilities. One location has apparently not worked out. M7 had placed a deposit of $65,000 on a facility in Monterey, but due to a change of operations and the assessment that it was not recoverable, the company has determined this deposit to be uncollectible and recorded a full write-off on the amount during the year ending November 30, 2020.



Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.


We respect your privacy. See our privacy policy.

About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


Recent Tweets

@GreenMarketRpt – 19 hours

5 Cannabis Stock Picks From Viridian

@GreenMarketRpt – 21 hours

RT : AMAZING account of how consumer brands are using the psychedelic buzzword to market legal non-psychedelic products explo…

@GreenMarketRpt – 21 hours

RT : Founder and managing principal of , Matt Hawkins, spoke with on primarily private-side investors in…

Back to Top

Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.


We respect your privacy. See our privacy policy.