The company reported that it is more $137 million in debt, with $15 million cash and equivalents on the books.
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MedMen (OTC: MMNFF) is at the edge of capitulation after new financial statements on Thursday show the once-mighty MSO may not be able crawl out of the hole of debt it dug for itself.
The reported earnings were for the fiscal second quarter ending Dec. 24, 2022.
With $15 million cash and equivalents on the books, it has a working capital deficit of a whopping $137 million and noted that it is a going concern. Medmen stated that it had already defaulted on debt with a senior lender and would need to obtain an extension or refinance.
“The conditions described above raise substantial doubt with respect to the company’s ability to meet its obligations for at least one year,” MedMen wrote. the filing stated:
Its cash needs are significant and not achievable with the current cash flow from operations.
Still, MedMen has been trying to settle land disputes, sell off stores and other assets, as well as trim down on headcount and overall costs. The filings stated that if the “strategic actions, for any reason, are inaccessible, it will have a significantly negative effect on the company’s financial condition.”
MedMen said it will delay new store openings, permanently or temporarily close underperforming stores, and other restructuring activities. The company said it is also trying to renegotiate leases with landlords and outlined several lawsuits regarding the company’s real estate issues. It continues to try to sell its New York assets, which Ascend Wellness opted not to buy.
Total revenue came out to $29.6 million, down 17% versus $35.5 million the year prior. Net loss from continuing operations totaled $15.1 million during the quarter and $39.4 million over the six months leading up to the period end, versus $8.2 million and $54.4 million the year before.
MMNFF was up nearly 7% after closing hours.
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