Liberty Health Sciences Inc. (CSE: LHS) (OTCQX: LHSIF ) announced its financial results for the second quarter ending August 31, 2020. The company said that consolidated net sales for the quarter ended August 31, 2020, were $18,170,975 versus $10,627,656 for the quarter ended August 31, 2019.  

While Liberty recorded a net income in the quarter of $11.5 million, this was a huge drop from last year’s net income of $23 million for the same time period.

“We continue to strive to post steady operational results and grow our market share to meet the increased demand for our suite of cannabis brands,” said George Gremse, Interim Chief Executive Officer of Liberty. “Despite the challenges we face with COVID-19, we continue to make progress with our strategy and provide our patients with some of the best quality of life medicinal products on the market today.”

For the quarter ended August 31, 2020, the company reported Adjusted EBITDA of $5,632,626 , compared with $872,946 for the quarter ended August 31, 2019, and $11,227,903 for the six months ended August 31, 2020, compared with negative Adjusted EBITDA of ($1,731,727) for the six months ended August 31, 2019.

Prices rose for the company’s product. Estimated selling prices for cannabis flower averaged $9.95 and $11.02 for the three and six months ended August 31, 2020, respectively. Estimated selling prices for cannabis flower averaged $12.26 for the three months ended May 31, 2020. Estimated selling prices of cannabis flower averaged $8.97 for the three months ended August 31, 2019, and $10.18 for the year ended February 29, 2020.

Earlier this week, Liberty made changes in its C-suite. The company announced that Victor Mancebo had resigned from the Board of Directors and his role as Chief Executive Officer, effective December 31, 2020. Gremse was appointed as Interim CEO during the process of identifying a permanent CEO.

The moves came after shareholders expressed dissatisfaction with the company’s disappointing cannabis production in the state of Florida. A recent state report from the Office of Medical Marijuana dated October 16-22 showed that Liberty, with 26 dispensing locations, had produced only 3,937,111 mgs of medical marijuana with THC. AltMed Florida, which also has 26 locations, produced 14,854,911 mg. of medical marijuana with THC. The same report listed Liberty as producing 1,189,520 ounces of “marijuana in smoking form” while AltMed produced 3,410,551 ounces. Sales also fell as the same report showed that Liberty’s sales fell 26% in the THC category, but rose 75% in flower sales. However, Liberty only sold 1,200 ounces of flower versus AltMed’s 3,400 ounces of flower.

In addition to that, Liberty asked its debt holders for a 12-month extension on Senior Secured Convertible Debentures from the original November 22, 2020 maturity date (that were originally issued on November 22, 2017). They were offered to increase the interest from 12% to 13%. $6 million is currently outstanding. Debenture holders that don’t choose the extension are said to be repaid from existing funds held at the company. 

The company had cash and cash equivalents of $17,086,203 as of August 31, 2020, compared to $24,957,245 as of February 29, 2020. In the quarter ended August 31, 2020, the company made tax payments of $13,998,820 .