CLS HOLDINGS USA, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q) – Marketscreener.com

HISTORY AND OUTLOOK
On April 29, 2015, the Company, CLS Labs and the Merger Sub consummated the Merger, whereby the Merger Sub merged with and into CLS Labs, with CLS Labs remaining as the surviving entity. As a result of the Merger, we acquired the business of CLS Labs and abandoned our previous business. As such, only the financial statements of CLS Labs are included herein.
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The gradual return to more normal operations from the COVID-19 pandemic is continuing to evolve and the ways that our business may respond to meet the needs of our customers cannot be fully known.
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Results of Operations for the Three Months Ended August 31, 2022 and August 31, 2021
(1) EBITDA is a non-GAAP financial performance measures and should not be
considered as alternatives to net income(loss) or any other measure derived
in accordance with GAAP. This non-GAAP measure has limitations as an
analytical tool and should not be considered in isolation or as substitutes
for analysis of our financial results as reported in accordance with GAAP.
Because not all companies use identical calculations, these presentations
may not be comparable to other similarly titled measures of other companies.
As required by the rules of the SEC, we provide below a reconciliation of
this non-GAAP financial measure contained herein to the most directly
comparable measure under GAAP. Management believes that EBITDA provides
relevant and useful information, which is widely used by analysts, investors
and competitors in our industry as well as by our management. By providing
this non-GAAP profitability measure, management intends to provide investors
with a meaningful, consistent comparison of our profitability measures for
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Selling, General and Administrative Expenses
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Gain on Settlement of Note Receivable
Our net loss for the three months ended August 31, 2022 was $1,332,125 compared to a net income of $427,599 for the three months ended August 31, 2022, a decrease of $1,759,721, or 412%.
Net Loss Attributable to CLS Holdings USA, Inc.
Our net loss attributable to CLS Holdings USA, Inc. for the three months ended August 31, 2022 was $1,148,478 compared to a net income of $427,599 for the three months ended August 31, 2021, a decrease of $1,576,077, or 369%.
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Liquidity and Capital Resources
The following table summarizes our total current assets, liabilities and working capital at August 31, 2022 and May 31, 2022:
Current Liabilities $ 28,788,597 $ 28,112,190 Working Capital (Deficit) $ (22,822,630 ) $ (21,228,633 )
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2018 U.S. Convertible Debentures $ 365,991 Outstanding Repaid
* The terms of the 2021 Debenture provide for additional payments in the aggregate amount of not less than $375,000 per year for five years after the maturity of the 2021 Debentures.
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2018 U.S. Convertible Debenture Offering
On October 25, 2021, we repaid three of the debentures at maturity, which comprised $365,991 of principal and $2,065 of interest.
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2018 Convertible Debenture Offering
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November 2021 Debenture Offering
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Accounts Receivable Financing Agreement
We maintain an accounts receivable financing agreement (the “Short Term Financing Agreement”) with LeafLink Financial whereby we can sell certain of our accounts receivable for a discount of 3%. In April 2022, the discount rate decreased to 2.5% Loans under the facility cannot exceed an aggregate of $1,500,000 and are payable within 30 days.
The Canaccord Special Warrant Offering
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Off-Balance Sheet Arrangements
Recently Issued Accounting Standards
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