The company is transitioning from pre-revenue to generating sales through its cannabis retail operations, but persistent losses and a going-concern warning indicate it remains dependent on external financing. Monitor the next quarterly filing for revenue growth trajectory and any improvement in working capital or cash burn rate.
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Executive Summary
CordovaCann Corp. filed unaudited interim financial statements for the nine months ended March 31, 2021, reporting revenue of $7,063,355 (up from $0 in the prior-year period) but a net loss of $1,536,642. The company continues to have substantial doubt about its ability to continue as a going concern, with an accumulated deficit of $26,274,855 and a working capital deficiency. The filing also details the acquisition of Extraction Technologies, LLC in February 2021 for 3,000,000 common shares plus earnout consideration, and a February 2021 private placement raising gross proceeds of $1,976,870.
Key Facts
- Revenue for the nine months ended March 31, 2021 was $7,063,355 (prior-year period: $0).
- Net loss for the nine months ended March 31, 2021 was $1,536,642 (prior-year period: $1,989,104).
- Accumulated deficit as of March 31, 2021 was $26,274,855.
- Working capital deficiency as of March 31, 2021 was $4,006,991 ($5,986,256 current liabilities minus $1,979,265 current assets).
- Cash and cash equivalents as of March 31, 2021 were $806,766.
- On February 26, 2021, the company acquired Extraction Technologies, LLC for 3,000,000 common shares plus up to 4,000,000 earnout shares.
- On February 19, 2021, the company closed a private placement of 6,117,718 common shares at $0.32 per share for gross proceeds of $1,976,870.
- The company's independent auditor has not performed a review of these financial statements.
- There is substantial doubt about the company's ability to continue as a going concern.
Financial Impact
Revenue grew from $0 to $7.1M CAD, but the company remains deeply unprofitable with a $26.3M accumulated deficit and negative working capital of ~$4.0M.
Risk Factors
- Going-concern risk: accumulated deficit of $26.3M and negative working capital of $4.0M.
- Dilution risk: 15.9M warrants and 6.1M options outstanding, plus 4.0M contingently issuable shares for the Extraction Tech earnout.
- Regulatory risk: U.S. cannabis operations remain illegal under federal law.
- Liquidity risk: only $806,766 in cash against $6.0M in current liabilities.
Investment Themes
Documents Analyzed
This report is based on 2 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (Primary) | 0001654954-26-008494 |
| Document: lvrlf_ex9924.htm | 0001654954-26-008494 |
US Market Status
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