The Hempshire Group, Inc. (formerly Hoist Capital Corp.) HMPSF (TSXV: HMPG) reported Tuesday its financial results for the three and nine months ended September 30, 2022, revealing third-quarter revenue of $19.833, down 59% from $48,756 in the same period of 2021.
Q3 Financial Summary
- Gross profit was $7,541, compared to $27,504 in the third quarter of 2021;
- Loss from operations amounted to $672,336, versus $299,834 in the same period last year;
- Total comprehensive loss was $748,598, which compares to $308,040 in the corresponding quarter of 2021;
- Loss per share (basic and diluted) was $0.01, the same as in the third quarter of last year.
- As of September 30, 2022, the company had cash of $0.7 million, non-cash working capital of $0.8 million, and no debt.
The company’s revenue for the three and nine months ended September 30, 2022, decreased 59% and 70% from the respective comparative periods because of initial sales orders from Switzerland and South Africa in 2021 which accounted for an additional $114,585 in revenue in the comparative nine-month period. In addition, stronger U.S. domestic sales were driven by wholesale orders combined with eCommerce sales in 2021 versus sales only generated through eCommerce sales during 2022.
Lower third-quarter 2022 gross profit compared to the third quarter in 2021 was due to promotional pricing strategies applied in connection with the launch of the new website which includes a free pack offer. Gross profit for the nine months ended September 30, 2022, was lower than the comparative 2021 period due to the impact of a write-down of $24,966 during the second quarter of 2022 in relation to finished goods inventory that did not meet the Company’s quality standards due to a formulation error during manufacturing.
Increases to a total comprehensive loss for the three and nine months ended September 30, 2022, relative to the same periods in 2021 are attributed to lower gross profits combined with increased investor relations and product marketing costs in preparation for future growth as well as increased general and administrative costs related to higher salaries and wages, consulting and professional fees. Losses were significantly higher during the nine months that ended September 30, 2022, due to listing expenses incurred in connection with the previously announced reverse takeover transaction dated June 24, 2022.
Following the completion of the Transaction and the receipt of $3.5 million (CDN $4.5) in gross proceeds from a private placement received in connection with the transaction, the company settled all outstanding debt balances and has committed the remaining cash towards executing its branding and sales growth strategy for its MOUNTAIN Smokes brand, both through its domestic eCommerce and B2B sales channels and internationally, with its initial focus on growth in the European Union.
Image and article originally from www.benzinga.com. Read the original article here.