cbdMD(YCBD)2023-02-13 21:06Financial Performance - Total net sales for the three months ended December 31, 2022, were $6.1 million, a decrease of 34.7% from $9.3 million in the same period of 2021[161]. - The company reported a net loss attributable to common shareholders of $4.96 million for Q4 2022, compared to a net loss of $20.16 million in Q4 2021, an improvement of $15.2 million[161]. - The company reported a net cash consumption of $2.1 million for Q4 2022, compared to $5.5 million for Q4 2021, indicating an improvement in cash flow[184]. Sales and Revenue - E-commerce sales accounted for 80.6% of total net sales in Q4 2022, down from 76.3% in Q4 2021, with a decline of $2.2 million year-over-year[162]. Cost Management - Gross profit as a percentage of net sales increased to 58.6% in Q4 2022 from 53.6% in Q4 2021, reflecting improved cost management[161]. - Operating expenses decreased by $4.3 million or 36.3% year-over-year, driven by reductions in staff-related expenses and marketing costs[169]. - Corporate overhead expenses decreased from $1,857,959 in Q4 2021 to $726,649 in Q4 2022, a reduction of approximately 62.0%[173]. - R&D and regulatory expenses for Therapeutics dropped significantly from $267,529 in Q4 2021 to $75,213 in Q4 2022, a decrease of approximately 71.9%[175]. Strategic Initiatives - The company is focusing on product innovation, with plans to launch new clinically proven products, including cbdMD Max for Pain, in fiscal 2023[159]. - The company is expanding its international presence, with products currently available in 31 countries and ongoing efforts to enter markets in the EU, Israel, and Japan[159]. - The company aims to improve its cost structure by lowering facility costs and reassessing marketing expenses, with a focus on achieving profitability by the end of 2022[158]. - The company has engaged third parties to assess strategic alternatives to enhance operational efficiency and revenue growth[171]. - The company is exploring acquisitions that could provide a complementary customer base or profitable business synergies to accelerate profitability[160]. Financial Position - Cash and cash equivalents decreased from $6.7 million at September 30, 2022, to $3.4 million at December 31, 2022, a decline of approximately 49.0%[181]. - Working capital decreased from $10.7 million at September 30, 2022, to $6.0 million at December 31, 2022, a reduction of approximately 44.0%[181]. - The non-cash contingent liability decreased from $276,000 at September 30, 2022, to $215,000 at December 31, 2022, a reduction of approximately 22.1%[179]. - Goodwill was fully impaired by September 30, 2022, after being valued at $42,772,685 on December 31, 2021[176]. - The company does not have any commitments for capital expenditures as of December 31, 2022[182]. - The company’s ability to continue as a going concern is dependent on improving profitability and acquiring additional funding[183]. Staffing and Expenses - Staff-related expenses for Therapeutics increased from $80,235 in Q4 2021 to $87,198 in Q4 2022, a rise of 8.7%[175].