Lifeist Wellness Inc. (TSXV:LFST) (FRANKFURT: M5B0) (OTC:LFSWF), a health-tech company, reported its financial results Tuesday for the three months ended May 31, 2024.
The Toronto-based company reported a nearly 50% year-over-year drop in net revenue from continued operations to CA$3.9 million ($2.8 million) in the second quarter of fiscal 2024.
Meni Morim, CEO of Lifeist said the company's second-quarter performance "is another clear indication that we must move on from operating our legacy cannabis business segments and find other solutions that have exposure to the broader wellness market."
Simply Solventless Concentrates Ltd. (TSXV:HASH) announced a month ago that it is acquiring Lifeist's subsidiary CannMart Inc. According to a June press release, the purchase price under the agreement includes $500,000 cash, $500,000 in units on the same terms as the financing and a vendor take-back note of $1.5 million on the closing of the acquisition.
"We are working to finalize the sale of CannMart and shift our focus and resources to advancing Mikra Cellular Sciences," Morim explained. "We are actively rebuilding our marketing and sales strategies from the ground up to increase sales, improve margins, and transform Lifeist into a profitable leading nutraceutical company offering superior health and wellness products backed by science."
Read Also: Lifeist Reports Highest Quarterly Gross Profit In History, Continues To Diversify Its Wellness Business
Q2 2024 Financial Highlights
- Gross profit before inventory adjustment totaled CA$1.9 million versus CA$3.7 million in the same period last year.
- Gross margins of 49% compared to 48% in the same period of last year.
- Total expenses decreased from CA$1.4 million to CA$3 million compared to $4.4 million in the prior year's period.
- Adjusted EBITDA, a non-IFRS measure, came in negative at CA$0.9 million, compared to CA$0.2 million in the second quarter of 2023.
- Net loss from continuing operations was CA$1.4 million compared to a loss of CA$2.2 million in the corresponding quarter of 2023. The company said the change in both adjusted EBITDA loss and net loss was largely the result of the restructuring of CannMart Labs during the quarter, non-recurring costs.
- Cash and cash equivalents were CA$2.1 million on May 31, 2024, compared to CA$1.5 million on Nov. 30, 2023.
- Inventories were CA$2.3 million on May 31, 2024, compared to CA$4.5 million on Nov. 30, 2023.
- The working capital position was negative CA$2.6 million on May 31, 2024.
- Net cash used in operations was CA$0.4 million in the second quarter of 2024 compared to net cash used in operations of CA$0.6 million in the prior year's period.
- Revenue Down, Margins Up: Lifeist's Q1 Financial Results Show Focus On Premium Products Curbed Revenue Drop
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