TORONTO, Oct. 30, 2024 (GLOBE NEWSWIRE) -- Lifeist Wellness Inc. ("Lifeist” or the "Company”) (TSXV: LFST) (FRANKFURT: M5B0) (OTCMKTS: LFSWF), a health-tech company that leverages advancements in science and technology to build breakthrough companies that transform human wellness, today reported its financial results for the three months ended August 31, 2024 ("Q3 2024”) compared to the same period last year ("Q3 2023”). All financial figures are in Canadian dollars unless otherwise indicated.
Third Quarter Highlights
- Net revenue from continued operations of $2.1 million in Q3 2024 compared to $4.8 million in Q3 2023.
- Gross profit before inventory adjustment of $0.9 million in Q3 2024, representing gross margin of 43%, compared to $3.1 million, or 65% gross margin, in Q3 2023.
- Total expenses decreased $1.4 million to $1.8 million in Q3 2024 compared to $3.2 million in Q3 2023.
- Adjusted EBITDA loss was $0.6 million in Q3 2024 compared to $0.3 million in Q3 2023.
- Cash and cash equivalents decreased to $1.0 million at the end of Q3 2024 versus $1.5 million at the end of fiscal 2023.
Financial Summary
Net revenue was $2.1 million in Q3 2024 compared to $4.8 million in Q3 2023.
Gross profit before inventory adjustment was $0.9 million in Q3 2024 versus $3.1 million in the same period last year, with margins of 43% in Q3 2024 compared to 65% in Q3 2023.
Total expenses decreased $1.4 million to $1.8 million in Q3 2024 compared to $3.2 million in Q3 2023. The decrease reflects the Company's efforts to control costs with a focus on improving efficiencies which resulted in the decrease across multiple cost categories including salaries ($904,000 decrease), professional fees ($145,000 decrease), and selling and marketing ($675,000 decrease).
Adjusted EBITDA loss was $0.6 million in Q3 2024 compared to $0.3 million in Q3 2023 and net income from continuing operations was $3.0 million, or $0.099 per diluted share, in Q3 2024 compared to a loss of $0.6 million, or ($0.024) per diluted share, in Q3 2023. The change in both adjusted EBITDA loss and net loss was largely the result of the gain on sales of discontinued operations, CannMart Labs, in Q3 2024.
Balance Sheet and Cash Flow
Cash and cash equivalents were $1.0 million at August 31, 2024, compared to $1.5 million at November 30, 2023.
Inventories were $1.4 million at August 31, 2024 compared to $4.5 million at November 30, 2023.
The working capital position was $1.1 million at August 31, 2024.
Net cash used in operations was $0.3 million in Q3 2024 compared to net cash used in operations of $3.0 million in Q3 2023.
Subsequent Event
In September 2024 Lifeist completed the sale of the shares of CannMart Inc. ("CannMart”) to Simply Solventless Concentrates Ltd. (TSXV: HASH) ("SSC”), an arm's length party, pursuant to the terms of a share purchase agreement dated and announced June 25, 2024, made between the Company, SSC and CannMart. The terms of the sale agreement included a cash payment in the amount of $500,000, the issuance of 2,000,000 units of securities of SSC at a price of $0.25 per unit (each unit comprising of one common share in the capital of SSC and one-half of one common share purchase warrant), and a promissory note from SSC, secured against the assets of CannMart.
Additional Information
The Company's complete financial statements and management's discussion & analysis ("MD&A”) for the three and nine months ended August 31, 2024 are available on Lifeist's website (www.lifeist.com) and SEDAR+ (www.sedarplus.ca).
About Lifeist Wellness Inc.
Sitting at the forefront of the post-pandemic wellness revolution, Lifeist leverages advancements in science and technology to develop innovative products that support human wellness and transform lives. Lifeist's key asset is its U.S. biosciences subsidiary Mikra Cellular Sciences Inc. ("Mikra"), a biosciences and consumer wellness company focused on developing and selling innovative wellness products.
Information on Lifeist and its businesses can be accessed through the links below:
Contact:
Meni Morim
CEO
Lifeist Wellness Inc.
Ph: 647-362-0390
Email: ir@lifeist.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release or has in any way approved or disapproved of the contents of this press release.
Non-IFRS Financial Measures
Management evaluates the Company's performance using a variety of measures, including "Net loss before income tax, depreciation and amortization” and "Adjusted EBITDA”. The non-IFRS measures discussed below should not be considered as an alternative to or to be more meaningful than revenue or net loss. These measures do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS.
The Company believes these non-IFRS financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Company.
Management uses these and other non-IFRS financial measures to exclude the impact of certain expenses and income that must be recognized under IFRS when analyzing consolidated underlying operating performance, as the excluded items are not necessarily reflective of the Company's underlying operating performance and make comparisons of underlying financial performance between periods difficult. From time to time, the Company may exclude additional items if it believes doing so would result in a more effective analysis of underlying operating performance. The exclusion of certain items does not imply that they are non-recurring.
- Current and deferred income taxes, depreciation and amortization, and share-based compensation were excluded from the Adjusted EBITDA calculation as they do not represent cash expenditures.
- Other income consisting of gain on disposal of subsidiary, interest income, realized gain on disposition of AFS investments, unrealized gain on derivatives and other miscellaneous non-recurring income were excluded from Adjusted EBITDA calculation.
- Non-recurring costs related to restructuring and legacy issues were excluded from Adjusted EBITDA calculation.
- Impairment loss relating to goodwill, customer list, domains and brand names were excluded from Adjusted EBITDA calculation.
- Impairment loss relating to receivable is a provision for expected credit loss to an associate and was excluded from Adjusted EBITDA calculation.
- Share of associates loss, net of tax, is excluded due to lack of control.
This news release contains "forward-looking information” within the meaning of applicable securities laws. All statements contained herein that are not historical in nature contain forward-looking information. Forward-looking information can be identified by words or phrases such as "may”, "expect”, "likely”, "should”, "would”, "plan”, "anticipate”, "intend”, "potential”, "proposed”, "estimate”, "believe” or the negative of these terms, or other similar words, expressions and grammatical variations thereof, or statements that certain events or conditions "may” or "will” happen.
The forward-looking information contained herein, including, without limitation, statements related to: the Company's expectations in creating long-term value for its shareholders are made as of the date of this press release and is based on assumptions management believed to be reasonable at the time such statements were made, including, without limitation, Lifeist's ability to grow its nutraceutical business including increasing sales of existing products and developing new products for sale, its ability to continue to implement beneficial structural changes to its operations as needed including, including additional cost cutting measures, the Company's ability to quickly respond to future opportunities to increase revenue, as well as other considerations that are believed to be appropriate in the circumstances. While we consider these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct. By its nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the forward-looking information in this press release. Such factors include, without limitation: the failure of the Company to grow its nutraceutical business and increase sales to appropriate economic levels or to implement needed operational changes, its inability to develop its business as anticipated and to increase revenues and/or its profitable margin on such revenues, unanticipated changes to current regulations that would adversely impact the Company's businesses, competition from others, risks related to any slowdown in the expected demand for nutraceutical products in general and those of Mikra in particular, regulatory risk, risks relating to the Company's ability to execute its business strategy and the benefits realizable therefrom and risks specifically related to the Company's operations. Additional risk factors can also be found in the Company's current MD&A which has been filed under the Company's SEDAR+ profile at www.sedarplus.ca. Readers are cautioned not to put undue reliance on forward-looking information. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
Source: Lifeist Wellness Inc.