iAnthus sees revenue decline as the company sells off assets
Following the market close on Tuesday, iAnthus Capital Holdings, Inc. (CSE: IAN) (OTCQB: ITHUF) reported its financial results for the third quarter ending September 30, 2024.
IAnthus reported that its revenue fell 6.3% sequentially to $40.3 million and dropped 6.1% from the same quarter in the prior year. The company’s revenue in the eastern region actually went up a bit. These operations include Florida, Maryland, Massachusetts, New York, and New Jersey. Results from the Vermont and CBD businesses were included until March 8, 2023 and May 8, 2023, respectively, when they were deconsolidated.
The western region included operations in Arizona and Nevada. Results from the Nevada business were included until June 23, 2024, when it was then deconsolidated, while the Colorado operations were included until November 14, 2023, the date at which the remaining assets and investments were sold. The company closed two asset sales during the quarter. It completed the sale of certain Massachusetts assets where the company recognized a gain of $2.2 million. It also closed the sale of its Nevada GreenMart The company said it recognized a gain on deconsolidation of $2.1 million.
iAnthus cut costs in the quarter by 11.6% with total operating expenses coming to $19.3 million versus $21.9 million for the 2023 third quarter.
iAnthus also reported a net loss of $11.6 million, or less than $0.01 per share, compared to a net loss of $9.8 million, or less than $0.01 per share, in the second quarter of 2024 and a net loss of $19.2 million, or less than $0.01 per share, in the same quarter in the prior year.
The company continues to operate as a going concern. At the end of the quarter, it had unrestricted cash of $19.9 million, an accumulated deficit of $1.3 billion and a working capital deficit of $31.4 million. The company said it may need to raise additional capital, however, it also stated that it faces restrictions on increasing its debt.
The company said in its MD&A, “As we continue to expand our operations and as these operations become more established, we continue to expect cash flow to be provided from operations, and we intend to place less reliance on financing from other sources to fund our operations. Although, we expect to continue to have positive cash flows from operations for the remainder of 2024, no assurance can be given that we will have positive cash flows in the future.”
Litigation update
The lawsuit filed against the company from a 2018 acquisition of GrowHealthy is set to go to trial in January 2025.
In another case, a wholly-owned subsidiary of the company, CGX Life Sciences, Inc., filed a demand for arbitration in 2022 against LMS Wellness Benefit. This case has taken numerous twists and turns over the years. The filing noted that in March 2024, the Court granted the iAnthus’ motion to dismiss and administratively stayed the Federal Complaint pending the outcome of the CGX Arbitration and the S8 Arbitration. On November 1, 2024, LMS filed a voluntary notice of dismissal, dismissing the Federal Complaint. On November 4, 2024, the court ordered that LMS’s notice of dismissal be adopted and further ordered that the Federal Complaint be dismissed.
