Glass House Brands Inc. GLASF GHBWF GLAS GLAS Q2 2022 net sales were $16.5 million, a decrease of 12% from $18.7 million in Q2 2021 and increase of 18% sequentially from $14.0 million in Q1 2022.
Q2 2022 Financial Highlights
Gross Profit was $254,000 compared to $8.6 million in Q2 2021 and $2.3 million in Q1 2022.
Gross Margin was 2%, compared to 46% in Q2 2021 and 17% in Q1 2022.
Adjusted EBITDA was $(9.8) million, compared to $2.2 million in Q2 2021 and $(6.4) million in Q1 2022.
Cash balance was $17.5 million at quarter-end compared to $24.8 million at Q1 2022 quarter end.
Preferred Equity Offering of $26.5 million
Glass House announced a private placement of preferred equity shares with a target raise of approximately $26.5 million. The company intends to use $10 million of the proceeds to retire the bridge loan from WhiteHawk, and the remainder for working capital, including cap ex to complete the buildout of the new Farmacy stores. Glass House currently has received $10.7 million in cash-in-hand and signed agreements, and additional commitments of $8.7 million for a total of $19.4 million of GHB preferred shares. Additionally, the company will convert the existing $23.5 million of preferred equity issued by the company’s subsidiary, GH Group Inc. in 2021 into the GHB preferred shares to create a $50 million series. The company currently has commitments to convert $22.5 million of the $23.5 million of existing GH Group preferred equity. Holders of the GHB preferred shares will be entitled to a 20% dividend which gradually increases to 25% by year four. The dividend will be paid quarterly with 10% in cash and the additional amount accruing to the principal. In addition, with each $10 of preferred equity investment, the holder will receive 2 warrants of Glass House, each warrant being exercisable to acquire one share of Glass House at a price of $5 for a term of 5-years following issuance. The first closing of the preferred equity share offering, subject to the approval of the NEO Exchange, is expected to occur by the end of August 2022. A final close is targeted for thirty to sixty days thereafter.
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