Ayurcann Holdings Corp. (CSE: AYUR) (OTCQB: AYURF) reported record sales for its fiscal second quarter, as it tries to narrow its losses after cancelling a merger in November.

The Canadian cannabis manufacturer posted C$13.4 million in gross revenue for the three months that ended Dec. 31, a 25% rise from the same period the previous year.

Still, net loss came out to C$121,718 for the quarter, which was a solid improvement from the C$772,616 loss reported in the same quarter last year.

The Ontario-based firm reported a 43% gross margin and positive adjusted EBITDA of C$356,828 for the quarter, showing some progress toward profitability.

“Ayurcann’s Q2 results reflect the strategic execution of our growth plan and solidify our position as a market leader in the Canadian cannabis space,” the company said in a news release.

The company, which focuses on extraction services and branded products, said it holds 6% of the Canadian vape market and 12% of Ontario’s vape market, positioning itself as a “top 3 producer of vapes in Ontario by volume,” citing data from cannabis analytics firm Hifyre IQ.

Ayurcann said it is on track to bring in more than C$50 million in revenue for fiscal 2025, which would be a 300% increase over the past three years; it reported annual revenue of C$11 million in fiscal 2022.

The company launched 30 new products in the last six months as it expanded across vapes, pre-rolls and cannabis extracts.

The results come just months after Ayurcann terminated its planned business combination with Arogo Capital Acquisition Corp. (NASDAQ: AOGO), a special purpose acquisition company. Ayurcann ended the deal, citing Arogo’s failure to meet stock exchange listing and public filing requirements, Green Market Report reported at the time.

Financials show the company’s working capital improved to C$3.6 million as of Dec. 31, versus a C$2.1 million deficit in June.

The Daily Hit is a recap of the top financial news stories for Thursday, November 21, 2024.

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Earnings:

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Canadian cannabis manufacturer Ayurcann Holdings Corp. (CSE: AYUR) (OTCQB: AYURF) terminated its planned business combination with Arogo Capital Acquisition Corp. (NASDAQ: AOGO), a special purpose acquisition company, citing failures to meet key regulatory requirements.

The Ontario-based company sent Arogo a termination letter stating the SPAC failed to fulfill covenants related to stock exchange listing and public filings, according to a statement Thursday. Under the termination agreement, Arogo is required to pay Ayurcann a $250,000 fee, though Ayurcann noted it “disputes any payment demand from Arogo in connection with the termination.”

The deal’s collapse comes less than five months after the companies announced plans to combine in a transaction that valued the merged entity at approximately $210 million. The proposed merger also would have given Ayurcann access to up to $19.6 million in cash.

Ayurcann has worked to expand its presence in Canada’s cannabis market, focusing on extraction services and branded products. The company reported revenue of C$25.2 million for fiscal 2024, up 101% from C$12.5 million the previous year, according to filings. However, it posted a net loss of nearly C$4 million for the latest fiscal year.

The termination follows a pattern of challenged cannabis SPAC deals amid broader market volatility and sector-specific headwinds. Ayurcann’s working capital deficit grew to C$2.1 million as of June 30, versus C$706,437 a year earlier, filings show.

Ayurcann’s announcement comes just a day after Arogo initiated its own claim that the transaction had been terminated, demanding the same $250,000 fee that Ayurcann now seeks to collect.