hexos Q2 financials -
comparing fire to hexo is misleading - and BMO didn't force them to do anything.
For the six months ended January 31, 2020, the Company reported a loss of $358,298, including impairment charges of $250,850 related to goodwill, intangible assets, and property, plant and equipment; negative cash flows from operating activities of $85,512; and, an accumulated deficit of $471,040. As well, the Company’s term loan of $31,754 requires compliance with certain covenants by April 30, 2020 in order to avoid a default on the facility (Note 18).
In December and January, the Company received funding of $125,684, net of issuance costs, through the issuance of convertible debentures of $70 million, and two registered direct offerings, aggregating U.S. $45 million (Notes 14 and 15), and as at January 31, 2020, the Company has net working capital of $189,210, including cash and cash equivalents of $80,426.
In addition to funding ongoing working capital requirements, including maintaining compliance with existing debt covenants, the Company must secure sufficient funding for existing commitments (Note 26), and obtain new cash resources sufficient to cover expected cash shortfalls due to growth requirements needed to achieve the appropriate level of output and anticipated additional product revenue streams. Existing funds on hand, combined with existing debt facilities, are not sufficient to support ongoing operations, existing commitments, and costs of acquiring new investments for increased product offerings. Management plans to secure the necessary financing through the issuance of new public or private equity or debt instruments; through investments in associates; the generation of profits from operations; or, the sale of assets in the future. Nevertheless, there is no assurance that additional future funding will be available to the Company, or that it will be available on terms which are acceptable to management. These circumstances lend substantial doubt as to the ability of the Company to meet its obligations as they come due and, accordingly, the appropriateness of the use of accounting principles applicable to a going concern.