Urban-gro disclosure sheds light on COVID-19 impacts
LAFAYETTE — In an effort to bolster its financial position during the height of the COVID-19 outbreak this spring, Urban-gro Inc. (OTCQX: UGRO), a Lafayette-based developer of cannabis grow facilities, laid off 27% of its workforce and cut salaries by as much as 20%, according to a regulatory disclosure filed this week.
The firm, which received just over $1 million in Payroll Protection Program loans and currently employs 35 workers, also made cuts to marketing and administrative expenses, documents submitted to the U.S. Securities and Exchange Commission said.
“The coronavirus pandemic has upended nearly every industry, and the impacts have been felt by those serving the cannabis sector,” Urban-gro CEO Bradley Nattrass said in a prepared statement. “With a strategic reduction in our operating expenses and downsizing of our team in Q1 2020, we believe we have minimized the potential damage wrought by COVID-19. The area of greatest impact for Urban-gro has been project delays and the deferral of associated revenue. While we had shipments push into Q2 2020, we have been fortunate not to lose any projects.”
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Urban-gro posted net losses of $1.7 million in the first quarter of fiscal year 2020, up from losses of $1.5 million during the same period in 2019. Still, leaders report optimism about the firm’s future.
“As a result of our realignment in Q4 2019, our cost-cutting actions in Q1 2020 and our ability to obtain third-party financing, we believe we have positioned the company to weather the current economic challenges,” Urban-gro chief financial officer Dick Akright said in a prepared statement. “The fundamentals of our company are strong due to the collective action of the entire company, and we remain confidently focused on attaining adjusted EBITDA profitability during the second half of 2020.”
