Neptune(NEPT) - 2022 Q4 - Annual Report

Financing Activities - The company closed a registered direct offering on March 14, 2022, raising $8,000,000 by selling 528,572 common shares and 185,714 pre-funded warrants at a combined offering price of $11.20 per share[58]. - A second registered direct offering was completed on June 23, 2022, generating $5,000,000 from the sale of 1,945,526 common shares at an offering price of $2.57 per share[59]. - Neptune completed a registered direct offering, raising $8 million by selling 18,500,000 common shares at a price of $0.32 each[100]. - Neptune entered into a second registered direct offering, raising $5 million by selling 1,945,526 common shares at an offering price of $2.57 per share[102]. - Neptune's share consolidation reduced the number of common shares from approximately 198 million to about 5.7 million, effective June 13, 2022[95]. Business Strategy and Operations - The company reported positive gross margins for the first time in Q3 of fiscal year 2022, following a strategic transition to a consumer packaged goods model[63]. - The company plans to divest its Canadian cannabis business, which is expected to result in a 50% reduction in workforce and an estimated annual cost savings of $5.8 million CAD[66]. - The divestiture of the cannabis business is anticipated to lower the company's financing needs due to a reduced expense structure and expected cash inflows from the sale[67]. - The company has initiated a strategic plan focused on reducing costs and enhancing shareholder value, with a realignment towards its consumer products business[65]. Product Development and Partnerships - The company has expanded its Sprout Organics brand significantly since acquiring a majority stake in February 2021, launching products in major retailers like Target and Wal-Mart[61]. - A strategic partnership with Walmart for a co-branded product line with CoComelon is now available in 900 Walmart stores, capturing approximately 90% of the organic baby food market in the U.S.[62]. - Neptune announced a multi-year licensing agreement with CoComelon®, the leading children's entertainment brand, which has over 110 million subscribers and ranks 1 on YouTube with nearly 9 billion views[84]. - Neptune launched a new line of CoComelon co-branded organic snack bars for toddlers, containing 4g of plant-based protein and 2g of dietary fiber[85]. - Neptune introduced Forest Remedies' plant-based Multi Omega 3-6-9 supplements, using sustainable Ahiflower oil, which is a vegan alternative to fish oil[86]. - Neptune expanded its Sprout Organic Foods product line into Canada, initially launching toddler snacks in Metro grocery stores in Ontario[87]. - The company launched a new line of cannabis products under the Mood Ring brand, including vape products and pre-rolls, expanding its presence in the Canadian market[75]. - The company has patented a method for extracting compounds from cannabis using cold organic solvents, which it plans to leverage for licensing opportunities[74]. Management and Compliance - Neptune appointed Raymond Silcock as Chief Financial Officer, effective July 25, 2022, bringing extensive experience from previous roles in various companies[91]. - Neptune regained compliance with Nasdaq's minimum bid price requirement as of the date of the annual report[96]. - Neptune's loss of foreign private issuer status requires compliance with U.S. domestic reporting requirements, increasing legal and financial compliance costs[98].