CannaPharmaRx, Inc. reported a significant financial performance shift in its latest 10-K filing for the fiscal year ending December 31, 2024. The company generated revenue of $820,137, marking its first sales since commencing cannabis production in 2023. However, it also recorded a net loss of approximately $9.9 million, compared to a net income of $3.7 million in the previous year. The gross loss for the year was $2.9 million, primarily attributed to high production costs and suboptimal pricing due to lower THC levels in early product batches.
The company's financial position has deteriorated, with a working capital deficiency of $24.7 million as of December 31, 2024, compared to $17.5 million the previous year. CannaPharmaRx's accumulated deficit has increased to $101.2 million, raising substantial doubt about its ability to continue as a going concern. The company is actively seeking additional financing to support its operations and growth strategy, which includes expanding its cannabis cultivation capacity and entering European markets.
Strategically, CannaPharmaRx has made notable developments, including a revised agreement with LTB Management, LLC, to acquire equity interests aimed at building a sales network in Europe. This agreement involved the issuance of warrants and promissory notes, reflecting the company's commitment to enhancing its market presence. The company plans to increase its operational capacity at its Cremona, Alberta facility from five to eleven growing rooms over the next two years, which is expected to support sales growth, particularly in Germany and Israel.
Operationally, CannaPharmaRx has faced challenges, including a significant impairment of inventory valued at $1.9 million, which impacted its cost of goods sold. The company employed 26 full-time staff as of the end of 2024, with plans to hire additional personnel as production ramps up. The company’s engagement metrics indicate a focus on optimizing production processes to improve product quality and market competitiveness.
Looking ahead, CannaPharmaRx's management has expressed intentions to raise capital through equity financing and is exploring collaborative arrangements to support its growth initiatives. However, the company acknowledges the risks associated with its current financial condition and the competitive landscape of the cannabis industry, which may affect its ability to achieve profitability in the near term.
About CANNAPHARMARX, INC.
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