You’re reading a copy of this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015.
We thought that perhaps the positive reaction was due to relief that the numbers weren’t actually even worse, but we believe that the market was perhaps keyed to something beyond revenue and adjusted EBITDA.
The income statement included in the release, of course, made it easy to see what was going on, at least to those who looked at it.
The 10-Q broke down the non-operating income into mainly $56.1 million of change in the value of its convertible debentures and $21.1 million of change in the value of warrant liabilities.
Another item that helped boost profits was a -$29.1 million operating expense, a change in the fair value of the contingent consideration for the recently acquired Sweetwater.
The company also bragged about revenue growth, but it compared not only the combined company’s results but also those of recently acquired Breckinridge Distillery in this quarter to those of just Aphria a year ago.
While the company spent a lot of verbiage talking about growth in revenue and other metrics, the weighted average share-count growth was even higher at 84%, the highest growth number we saw in that press release.
It’s no wonder the company is so aggressively selling its shares, especially as a big portion of its debt is about to become current.
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