What Makes Hexo An Acquisition Target Despite Its Cash Burn And Dilution Risk?

Canadian cannabis company HEXO (NASDAQ: HEXOreleased its fiscal first-quarter results on Tuesday, reporting a wider loss and announcing a new strategic plan dubbed “The Path Forward.” 

The company recorded a net loss of CA$116.9 million ($90.08 million) compared to CA$67.9 million prior quarter and CA$4.2 million last year.

Its quarterly sales reached CA$50.2 million, an increase of 29% from Q4 FY21 and up 70% from Q1 FY21.

HEXO closed its acquisition of Redecan and 48North, which contributed net revenues of CA$13.5 million and CA$1.1 million, respectively, during the two months ended October 31.

The company forecast positive cash flow within the next four quarters based on the incremental cash flow of C$37.5 million in fiscal and an additional C$135 million in 2023.

HEXO said that new measures under the strategic plan include five priorities: …

Full story available on Benzinga.com

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