Stockwatch today, for what it's worth .............. Stockwatch says Zena is scheduled to release financials on Friday and offerred the following comments (which are pretty much commonly known):
Elsewhere in Canada, Zenabis Global gained a cent to 13 cents on 15.8 million shares after providing a monthly update for July. There were two main parts to the update: (1) from August forward, Zenabis announced that it expects international shipments of over 1,000 kilograms of cannabis per month; and (2) Zenabis received two export permits to ship cannabis products to Australia starting in August.
Zenabis's revenue now includes sales from Canada, Israel, Malta and Australia. Zenabis offers products ranging from marijuana to vaporizers to cannabis-infused beverages to oils to edibles. As a result, the company had revenue of $19.9-million in Q1 2020, up from $17.9-million in Q4 2019.
While Zenabis has respectable sales figures, the rest of its business is much less impressive. The problems revolve around how much money Zenabis has been losing, and what that has in turn done to the company's balance sheet. The cannabis producer lost $127-million in 2019, burning through $170-million of cash in the process. Those figures improved in Q1 2020 to a relatively manageable $7.7-million loss in Q1 2020 with $14.5-million of cash burn.
Zenabis has shown improvement, but last year's cash burn continues to hang over the company. As of March 31, Zenabis had a working capital deficit of $46.2-million. Balance sheet problems are common in the cannabis industry, but Zenabis is in unusually poor standing. The company tried to alleviate its working capital problems in June with a $23.5-million financing. The financing diluted shareholders by about 30 per cent and caused Zenabis to fall from 14.5 to nine cents. The stock has since recovered to 13 cents, but that is still over 90 per cent below its 52-week high of $1.53.