Lifeist Wellness Inc. NXTTF LFST (FRANKFURT: M5B) released its financial results for the three months ended February 28, 2022 (“Q1 2022”) compared to the same period last year (“Q1 2021”).
Q1 2022 Highlights
Net revenue decreased 1% to CA$5.45 million ($4.28 million) in Q1 2022 (compared to CA$5.51 million in Q1 2021), entirely due to declines in hardware sales in Europe and medical cannabis sales in Canada, both operations having since been discontinued. Excluding these two businesses, revenue increased 20% in Q1 2022 (compared to Q1 2021)
Net loss was CA$4.6 million in Q1 2022 compared to CA$7.4 million in Q1 2021, due to improved gross margins and lower non-operating write-downs, as compared to Q1 2021.
Gross profit before inventory adjustment tripled to CA$1.4 million in Q1 2022 as compared to CA$0.5 million in Q1 2021, the highest in the past two years, with margins expanding to 26% from 8%.
EBITDA improved substantially by narrowing losses to CA$4.2 million in Q1 2022 (compared to a CA$7.0 million loss in Q1 2021), representing the sixth consecutive quarter of EBITDA loss improvements. The Q1 2022 EBITDA loss was net of incremental investments into emerging businesses including approximately CA$650,000 in nutraceuticals.
Working capital position of CA$12.4 million at quarter end remains strong.
“Our first quarter results reflect progress and momentum in our transition to a wellness-driven company,” stated Meni Morim, CEO of Lifeist. “We have sharpened our focus within cannabis on our B2B platform and this in turn is fueling meaningful increases in gross profit for all of Lifeist. We accomplished a tripling of gross profit versus the same quarter last year while simultaneously winding down unprofitable businesses and investing in our wellness future. This includes scaling our innovative health-tech company Mikra, which is going after the large and growing nutraceuticals market, and seeing promising early consumer interest for its first product which commenced pre-sales last month.”
Cash and cash equivalents were CA$9.2 million as of February 28, 2022, compared to CA$12.7 million as of November 30, 2021.
During the quarter, Fire & Flower Holdings Corp. FFLWF purchased Pineapple Express Delivery Inc., a holder of the company’s convertible loan payable. As part of the purchase, Fire & Flower assumed and repaid a CA$2.04 million convertible loan receivable owed to the company by PED. In addition, the company received 75,100 common shares in Fire & Flower, with a further 258,478 common shares in Fire & Flower having been placed into escrow pending completion of customary working capital adjustments and subject to achievement of certain performance-based milestones in its fiscal 2022 year.
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