Walkingzombie1 wrote: Here is my revised Q3 projections, based on a more conservative perspective, with Q2 comparison:
Notes:
1. CB closed the $5B investment deal on Nov 2, 2018. So Canopy would have $5 B for 2 months, and assuming they invested in an account for 3% return would give them an interest income of $12.5 MM a month. I am assuming $20 MM for the Q.
2. Most people omitted the increase in value of all the MJ plants during the Q. This increase in bilogical asset value is a substantial number and is included in the income statement as an adjustment to cost of sale. If the plants dies for any reason, we have the opposit effect, a write off, which happened in Q2. For Q3 I am assuming an increase in value of $40 MM.
3. I am assuming a stock based compensation of $50 MM. This is a discretionary expense and the number I picked is an educated guess and not based on any info.
4. The loss from financial transactions should be zero compared to $116 in Q2. Most of the loss in Q2 was likely due to the decline in Canadian $ vs US$, and Canopy had $1 B debt in US$. That would result in a substantial exchange loss. In Q3 they paid off the debt early in the Q. So there should not be any loss related to financing.
5. Marketing and other expenses were increased based on the increased revenue and sales efforts.
I believe, based on the above assumptions, that the Q3 bottom line will look much much better than Q2.
| $ MM | Q3 2019 | Q2 2019 | |
| Revenue | 75 | 23 | |
| Cost of sale (50%) | 38 | 17 | |
| Gross margin b4 biological asset adjustments | 38 | 7 | |
| Increase (decrease) in biological assets | 40 | (41) | Q2 W/O plants due to delay in obtaining license |
| Gross margin | 78 | (34) | |
| Interest revenue ($5B @3%) | 20 | 0 | |
| Total revenue | 98 | (34) | |
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| Operating expenses | | | |
| Sales & marketing | 78 | 39 | |
| R & D | 4 | 2 | |
| Administration | 50 | 37 | |
| Acquisition expense | 0 | 3 | |
| Share based compensation | 50 | 95 | |
| Depreciation | 20 | 4 | |
| Total operating expenses | 202 | 180 | |
| Income from opration | (105) | (214) | |
| Loss related to financing etc. | 0 | (116) | |
| Net loss | (105) | (330) | |
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