Flora Growth(US:FLGC)2025-11-05 22:06Financial Performance - Revenue for the three months ended September 30, 2025, was $9.8 million, an increase of 35% from $7.2 million in the same period of 2024[179]. - Gross profit for the three months ended September 30, 2025, was $0.3 million, down from $0.5 million in 2024, resulting in a gross margin of 3% compared to 7% in 2024[180]. - Operating expenses increased to $3.6 million for the three months ended September 30, 2025, from $2.6 million in 2024, primarily due to a contingency loss[181]. - Net loss for the three months ended September 30, 2025, was $6.7 million, compared to a net loss of $3.8 million in 2024, driven by increased losses from discontinued operations[194]. - Revenue for the nine months ended September 30, 2025, totaled $26.3 million, a decrease from $28.2 million in the same period of 2024[195]. - Gross profit for the nine months ended September 30, 2025, was $1.5 million, down from $1.9 million in 2024, with a gross margin of 6% compared to 7% in 2024[196]. - Operating expenses for the nine months ended September 30, 2025, were $6.9 million, a slight decrease from $7.1 million in 2024, attributed to a gain on the disposal of insolvent subsidiaries[197]. - Share-based compensation expenses increased to $0.9 million for the nine months ended September 30, 2025, compared to $0.4 million in 2024, due to grants of SARs to key employees[202]. - Loss from discontinued operations totaled $3.0 million for the three months ended September 30, 2025, compared to $1.5 million in 2024, primarily due to goodwill impairment[193]. - Non-operating loss for the three months ended September 30, 2025, was $0.3 million, consistent with the same period in 2024, reflecting unrealized losses and foreign exchange impacts[191]. - Gain on disposal of insolvent subsidiaries totaled $1.1 million for the nine months ended September 30, 2025, compared to $nil for the same period in 2024[206]. - Other expenses increased to $1.4 million for the nine months ended September 30, 2025, up from $0.8 million in 2024, primarily due to a $0.6 million contingency loss related to a legal proceeding[207]. - Non-operating income was less than $0.1 million for the nine months ended September 30, 2025, compared to a non-operating loss of $0.2 million in 2024, driven by a $1.3 million gain on digital asset revaluation[208]. - The net loss remained consistent at $9.8 million for both the nine months ended September 30, 2025, and 2024[211]. Cash Flow and Financing - Cash at the end of the period increased to $13.1 million as of September 30, 2025, from $5.2 million at December 31, 2024[212]. - Net cash used in operating activities was $5.5 million for the nine months ended September 30, 2025, compared to $3.7 million in 2024[216]. - Net cash provided by financing activities totaled $12.1 million for the nine months ended September 30, 2025, significantly up from $3.1 million in 2024[217]. - The Company had working capital of $9.4 million as of September 30, 2025, including $13.1 million in cash[219]. - The Company raised $13.3 million in gross cash proceeds from the PIPE Offering that closed on September 26, 2025[222]. - The outstanding amount of credit facilities was €2.3 million ($2.7 million USD) as of September 30, 2025, with interest rates ranging from 4.76% to 5.08% per year[225]. Corporate Actions and Compliance - The Company generated approximately $1.1 million in net proceeds from the May 2025 Private Placement, using $0.4 million each to purchase Solana and Ethereum, and $0.1 million each for Sui and Ripple[153]. - The PIPE Offering on September 19, 2025, resulted in gross proceeds of $2.9 million from 116,340 common share units and $10.4 million from 412,037 pre-funded warrant units[154]. - The first closing of the PIPE Offering on September 26, 2025, yielded aggregate gross cash proceeds of $13.3 million and 2,592,212 PIPE Pre-Funded Warrants valued at $54.7 million[155]. - The Company transferred 100% of its legacy hemp and cannabis business subsidiaries on September 26, 2025, to Flora Growth US Holdings LLC, satisfying the balance receivable under promissory notes[160]. - The Company is in compliance with Nasdaq's Minimum Bid Price Requirement after a reverse stock split on August 3, 2025, which resulted in a closing bid price above $1.00 for 10 consecutive trading days[163]. - The Company is currently evaluating options to regain compliance with Nasdaq's Corporate Governance Requirements following the passing of an Independent Director on August 25, 2025[165]. Business Operations - The Company operates as a global pharmaceutical distributor through its subsidiary Phatebo, focusing on 28 countries, primarily in Europe[151]. - The Company plans to utilize proceeds from the Cryptocurrency Offering to enhance its digital asset treasury strategy linked to 0G Tokens[157]. - The Company recognizes revenue at the transaction price upon transferring control of goods to customers, with payment terms generally ranging from 0 to 30 days[170]. - The Company includes costs of raw materials, purchased finished goods, and inventory reserves in its cost of sales, which can be impacted by various factors including product volume and mix[171].