iAnthus Reports 21% YoY Revenue Increase And Net Loss Decline In Q3 Despite 2020 Challenges

Cannabis operator iAnthus Capital Holdings, Inc. IAN ITHUF reported its financial results Monday for the three and nine months ended Sept. 30, revealing a 21% year-over-year increase in revenue, which totaled $49.3 million in the third quarter of fiscal 2021.

Q3 2021 Financial Highlights

• Gross profit of $26.1 million, up 4% from the same quarter in the prior year.
• Gross margin of 52.9%, reflecting a decrease of 8.9% from 61.8% in the same quarter in the prior year.
• Net loss of $15.8 million, or a loss of $0.09 per share, compared to a net loss of $25.5 million, or a loss of $0.15 per share, in the same quarter in the prior year.
• Adjusted EBITDA, a non-GAAP measure, came in positive at $7.8 million, up from $6.4 million from the same quarter in the prior year. 
• The New York and Toronto-based company also said that it did not make applicable interest payments due on its 13% senior secured convertible debentures and its 8% convertible unsecured debentures due during 2020.

Update On U.S. Class Action Complaint And Complaint Filed By Hi-Med, LLC

In the meantime, the company announced the dismissal of previously disclosed consolidated actions in the U.S. District Court for the Southern District of New York on Sept. 1.

The consolidated actions include:

• various shareholder class action claims filed against, among others, iAnthus and certain of its current and former officers and directors, alleging violations of U.S. securities laws;
• a complaint filed by Hi-Med, LLC, a holder of an unsecured debenture in the principal amount of U.S. $5 million against iAnthus and certain of its current and former officers and directors alleging violations of U.S. securities laws and breaches of the unsecured debenture and the related debenture purchase agreement.

Under the Court's memorandum of opinion dated Aug. 30, the plaintiffs were granted the right to move for leave to file proposed second amended complaints by Sept. 2021.

Each plaintiff moved for leave to file second amended complaints and the Court granted the plaintiffs' motions for leave to file second amended complaints.

A Challenging Year 

In 2020, iAnthus struggled to raise cash due to the many challenges it faces. In November, the New York-based company revealed that Joy Chen had resigned as director after serving on the board for a year.

Chen was not the first director to leave the company, though. In May 2020, Mark Dowley also stepped down.

The board shake-ups followed the departure of co-founder and CEO Hadley Ford, who had been reviewed for allegedly taking out two undisclosed loans, totaling $160,000.

These are not the only setbacks iAnthus has been experiencing. In June of 2020, the company's secure lender, Gotham Green Partners, demanded repayment of more than $160 million in debt.

Shortly after, the multi-state cannabis operator was suspended from trading on the Candian Securities Exchange for not delivering its financial reports on time. The company has since been re-instated.

ITHUF Price Action

iAnthus' shares traded 3.65% higher at $0.1818 per share after the market close on Monday.

Photo: Courtesy of Nataliya Vaitkevich from Pexels