Cannabis producer Hexo Corp. (HEXO) reported a net loss of $690.3 million due to a one-time impairment charge of $616 million in its latest quarter.
The Gatineau, Quebec-based company spent its second quarter focused on its plan to reduce manufacturing and production costs, better manage revenue, and uncover cost synergies from recent acquisitions.
The company has been found non-compliant with minimum bid price requirements set out by the Nasdaq index, which could delist Hexo if its financial situation and stock price do not improve.
Hexo’s share price finished trading in New York last Friday (March 18) at $0.60 U.S., down 69% in the past six months.
In the second quarter, Hexo announced a 180-person staff layoff, which is expected to deliver about $15 million of savings on an annualized basis. The cuts largely targeted Hexo’s Stellarton, Nova Scotia facility, which is closing, and the company’s back office.
The company said its second-quarter loss amounted to $1.94 per diluted share for the period ended January 31, compared with a net loss of $20.8 million or $0.17 per share a year earlier.
Net revenue in what was the company’s fiscal second quarter totalled $52.8 million, up from $32.9 million in the same quarter last year.
Hexo hopes a deal it signed with fellow cannabis company Tilray Brands (TLRY) will improve its finances. Under the agreement, Tilray will acquire up to $211 million U.S. of senior secured convertible notes that were issued by Hexo. They will also launch a joint venture to provide shared services to both companies.