BLACKROCK Municipal Income TRUST V.BFK.P

Financials--net losss ($68million) Total revenue ($38,760)

[Ghostinthedark]

Financial Update

In 000’s	For the three months ended						For the twelve months ended
Income Statement Snapshot	July 31,  2021		April 30,  2021		July 31, 2020		July 31,  2021		July 31,  2020
	$		$		$		$		$
Revenue from sale of goods	53,022		33,082		36,140		173,081		110,149
Excise taxes	(14,365	)	(10,482	)	(9,082	)	(49,583	)	(29,598	)
Net revenue from sale of goods	38,657		22,600		27,058		123,498		80,551
Ancillary revenue	103		60		87		271		233
Total revenue	38,760		22,660		27,145		123,769		80,784
Gross profit before adjustments2	7,988		5,006		8,104		34,175		26,953
Gross profit/(loss) before fair value adjustments	1,499		4,379		(36,012	)	29,066		(46,421	)
Gross profit/(loss)2	3,234		8,816		(34,690	)	48,798		(57,975	)
Operating expenses	(63,116	)	(24,906	)	(71,509	)	(134,293	)	(418,576	)
Loss from operations	(59,882	)	(16,090	)	(106,199	)	(85,495	)	(476,551	)
Other expenses and losses	(9,630	)	(4,621	)	(63,333	)	(29,664	)	(75,961	)
Loss and comprehensive loss before tax	(69,512	)	(20,711	)	(169,532	)	(115,159	)	(552,512	)
Current and deferred tax recovery	397		–		–		397		6,023
Other comprehensive income	1,156		3		–		1,152		–
Total Net loss and comprehensive loss	(67,959	)	(20,708	)	(169,532	)	(113,610	)	(546,489	)

Advertisement

 

STORY CONTINUES BELOW

 

Article content

1	The Company has adjusted the presentation of gross profit before fair value adjustments by removing inventory and biological asset write offs and impairment losses.
2	See section ‘Cost of Sales, Excise Taxes and Fair Value Adjustments’ for reconciliation of gross profits

Operating Expenses

In 000’s	For the three months ended					For the years ended
	July 31, 2021	April 30, 2021		July 31, 2020		July 31, 2021	July 31, 2020
	$	$		$		$	$
Selling, general and administration1	19,160	11,178		12,436		54,543	52,793
Marketing and promotion	3,665	2,452		2,375		10,348	12,474
Share-based compensation	827	2,715		4,373		11,731	25,790
Research and development	934	730		677		3,835	4,639
Depreciation of property, plant and equipment	1,728	1,612		1,179		6,097	6,072
Amortization of intangible assets	1,002	371		249		2,050	3,939
Restructuring costs	1,562	336		(79	)	3,283	4,767
Impairment of property, plant and equipment	19,350	16		46,414		20,230	79,418
Impairment of intangible assets	–	–		2,000		–	108,189
Impairment of goodwill	–	–		–		–	111,877
Realization of onerous contract	–	–		1,763		–	4,763
Disposal of long-lived assets	–	–		122		1,294	3,855
Loss/(gain) on disposal of property, plant and equipment	19	(19	)	–		64	–
Acquisition transaction costs	14,869	1,871		–		17,174	–
Health Canada Recovery Fee’s1	–	3,644		–		3,644	–
Total	63,116	24,906		71,509		134,293	418,576

1	The Company has adjusted the presentation of the Selling, General and Administrative expenses to breakdown the Health Canada Recovery Fee’s for ease of user review and identification. This presentation differs from that of the Company’s interim financial statement for the year ended July 31, 2021.

Advertisement

 

STORY CONTINUES BELOW

 

Article content

Other Matters

Gross margins

Quarter-over-quarter, the Company’s total gross margin declined to 20% from 22% in Q3’21. Net adult-use revenue (exclusive of beverages) gross margin declined to 12% from 28% due to; increases to sales in higher excise tax burdened markets, decreases to average selling prices, and the crystallization of fair value adjustments upon the business acquisition of Zenabis.

Normalizing for the impact of the crystallization, the Company’s total gross margin would improve to 26% in Q4’21. Strong margined international sales grew significantly in period to net revenues of $6.8 million and a gross margin contribution of 65%. Wholesales were also impacted by the crystallization of fair value adjustments on the purchase price accounting of Zenabis, normalized for this, margins would otherwise have been 35% versus reported gross margin of (65%).

Going Concern & the Senior Secured Convertible Note

The Company acknowledges the ongoing concern with its senior secured convertible notes issued on May 27, 2021. The Company has maintained a positive relationship with the holder, with the holder having negotiated and agreed to two amendments favorable to the Company.  While there exists a risk that significant cash outflows may be required over the next twelve months under the terms of the Senior Secured Convertible Note, the Company has been working with the Holder to renegotiate the terms of the Senior Secured Convertible Note.