StateHouse recorded a net loss of $196 million in the fourth quarter.
StateHouse Holdings Inc. (CSE: STHZ) (OTCQX: STHZF) reported total net revenues for the fourth quarter of 2022 increased 68.8% to $25.5 million, compared with $15.1 million in the fourth quarter of 2021. However, it fell sequentially from the third quarter revenue of $30.8 million.
The California-based company this week announced its financial results for the quarter and year ended Dec. 31, 2022.
Total operating expenses in the fourth quarter were $19 million.
StateHouse also recorded a net loss of $196 million in the fourth quarter due to an impairment charge. This came to a net loss of $(0.89) per share, compared to a net loss of $27.7 million or net loss of $(0.38) per share for the same time period in 2021.
For the full year of 2022, StateHouse reported total net revenues were $108.2 million, an increase of 79.4% compared with $60.3 million in 2021. The company’s impairment charge resulted in a net loss of $240,226,029 for 2022, and, as of that date, the company had a working capital deficit of $99,434,112. Accountants called the company a “going concern.”
“2022 was a foundational year for StateHouse, as we came together to realize our full combined potential as a unified business and a leading California-focused cannabis company,” said Ed Schmults, Chief Executive Officer of StateHouse. “The substantial integration work we have completed in this past year has strongly positioned us to execute on the considerable opportunities ahead in California. This market presents unique challenges that we are successfully navigating, thanks to our fully integrated supply chain and ability to leverage our industry leading scale to accelerate our growth initiatives.”
The company’s cash is down to $2.8 million as of the end of December 2022. In the company’s MD&A it stated that it is exploring the sale of non-core assets in connection with the company’s continued efforts to improve its profitability and to focus on maximizing its presence and impact in the California market.
The company said it has been actively marketing certain rights and interests in its non-core assets, including cannabis licenses in noncore geographies within California and selected retail operations in Oregon and California.
In addition to selling properties, StateHouse said it has reduced SG&A from the second quarter by approximately $36 million on an annualized basis. The company also reduced headcount approximately 44% from April 2022 to year-end. Management reduced headcount an additional 16% from January 1, 2023 to April 30, 2023.
Schmults added, “We anticipate realizing additional synergies throughout 2023 to further reduce costs, optimize operations, and improve profitability to deliver long-term value for our shareholders. With these initiatives underway we are on track to deliver on our target of positive EBITDA in 2023 and to generate positive cash flow before the end of the year.” (Full Story)