Simply Solventless Concentrates (HASH.V) Q1 2025 Update - Proceed with Caution

Summary

A detailed business update is helpful but until those updates start aligning with the statement of cash flows, I don’t see a path forward for investing. $HASH.V

• Reliability of Financial Information and Business Update

  • Management Integrity Still Uncertain – CFO turnover, 11-day gap in public disclosure from SEDI to SEDAR, Certificate of Interim Filings-CFO signed by a director who is not a CPA and has never been a CFO which is odd.

  • Accounting Policies – as noted by management the restatements in 2024 without restating 2023 for comparability would lead to reduced comparability for 2025; thus, hard to relate the P&L to the actual performance of the business.

  • Potentially Promotional Disclosure - I find the MD&A and press release business update helpful but leaning too much towards being overly promotional. Hard for me to look past the conflict of interest here where the Company needs to support a higher share price ahead of showing a track record of positive cash flow generation (which will take time) so they can shore up their balance sheet with an equity raise.

  • No Auditor Review – An audit not practical but some companies engage their auditors for a review engagement, which the Company elected not to do.

• Focus on Cash Flow

  • Management highlights the run rate profitability of the business but bottom line the business was not cash flow positive in the quarter and until that turns positive I’m taking business updates with a grain of salt.

  • Inventory and AR use of cash flow in the quarter excludes the balances acquired the acquisition in the quarter, so this was all an organic use of cash to the tune of $4.8M approx. making cash flow from operations negative $2.8M.

I expand on this summary below. At this point I’m not modelling out the results until I see additional track record of cash flow performance as management’s pro-forma’s and quarterly P&L can’t be relied upon.