CLS Holdings USA, Inc. reported its financial results for the three months ended August 31, 2024, revealing a decline in revenue and an increase in net loss compared to the same period in the previous year. Revenue for the quarter was $4.8 million, a decrease of 6% from $5.1 million in Q3 2023. The revenue breakdown indicated that the cannabis dispensary generated $3.1 million, down 7% from $3.3 million, while cannabis production revenue fell 4% to $1.7 million.
The company's gross margin also decreased, totaling $2.0 million for Q3 2024 compared to $2.3 million in the prior year. The cost of goods sold was $2.8 million, a slight reduction from $2.8 million in Q3 2023. Selling, general, and administrative (SG&A) expenses decreased significantly by 20% to $2.2 million, down from $2.7 million, primarily due to reductions in payroll and professional fees.
Despite the decrease in expenses, CLS Holdings reported a net loss of $820,863 for the quarter, an increase of 78% from a loss of $461,733 in Q3 2023. The company’s operating loss improved to $(136,564) from $(455,974) year-over-year. The net loss attributable to CLS Holdings was also higher, reflecting a 77% increase from the previous year.
As of August 31, 2024, the company had total assets of $10.9 million, up from $7.9 million at the end of the previous fiscal period. Total liabilities increased to $22.4 million from $20.8 million. The accumulated deficit rose to $114.2 million, compared to $113.4 million as of May 31, 2024.
Cash and cash equivalents decreased to $521,349 from $600,007, while accounts receivable surged to $1.2 million from $682,894. The company reported a working capital deficit of $9.8 million, improved from $10.9 million at the end of May 2024, primarily due to tax accruals under Section 280E.
In terms of strategic developments, CLS Holdings raised $2.6 million through a note payable to a related party, with $2.2 million converted into common stock. The company plans to invest in a capital expenditure project for a cannabis consumption lounge, with expected costs between $500,000 and $1 million. The company has faced ongoing operational losses since inception, with plans to address its financial challenges moving forward.
About CLS Holdings USA, Inc.
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