CLS Holdings Reports Revenue Decline and Net Loss for Three and Six Months Ended November 30, 2024

CLS Holdings USA, Inc. reported a decline in financial performance for the three and six months ended November 30, 2024, compared to the same periods in the previous year. The company generated revenues of $4.16 million for the three months, a decrease of 10% from $5.20 million in the prior year. For the six-month period, revenues fell by 13% to $8.97 million from $10.31 million. The decrease in revenue was attributed to a decline in sales at the company's cannabis dispensary and production operations, with dispensary revenue dropping 13% to $2.71 million and production revenue decreasing 31% to $1.45 million in the latest quarter.

The company's cost of goods sold (COGS) also decreased, amounting to $2.39 million for the three months ended November 30, 2024, down 12% from $3.03 million in the same period last year. This resulted in a gross margin of 42.6%, slightly improved from 41.8% in the prior year. Selling, general, and administrative expenses (SG&A) decreased by 10% to $2.10 million, reflecting cost-cutting measures implemented by the company. Despite these reductions, CLS Holdings reported a net loss of $87,671 for the three months, a significant improvement from a net loss of $1.30 million in the same period last year.

Operationally, the company served 57,152 customers at its dispensary during the latest quarter, down from 68,586 in the previous year. The total employee headcount remained stable, and the company continues to focus on enhancing its operational efficiency. CLS Holdings has also been actively engaged in debt restructuring, including the conversion of $2.20 million of debt into equity, which resulted in the issuance of 56.85 million shares of common stock.

Looking ahead, CLS Holdings aims to strengthen its market position through strategic initiatives, including potential acquisitions and the development of a cannabis consumption lounge adjacent to its dispensary. The company is optimistic about generating positive cash flow from operations, although it acknowledges the challenges posed by its accumulated deficit of $114.28 million and a working capital deficit of $13.12 million as of November 30, 2024. The management remains focused on improving operational performance and reducing debt, while navigating the complexities of the cannabis industry and regulatory environment.