Neptune(US:NEPT)2022-08-15 20:35Financial Performance - For the three-month period ended June 30, 2022, the Company incurred a net loss of $6.5 million and negative cash flows from operations of $7.2 million, with an accumulated deficit of $327.5 million as of June 30, 2022[119]. - Total revenues for the three-month period ended June 30, 2022, were $16.272 million, up from $10.079 million in the same period in 2021, representing a 61.5% increase[191]. - The net loss for the three-month period ended June 30, 2022, was $6.504 million, significantly improved from a net loss of $18.856 million in the same period in 2021[191]. - Adjusted EBITDA loss decreased by $3.1 million or 24% for the quarter ended June 30, 2022, resulting in an Adjusted EBITDA loss of $9.8 million compared to $12.9 million for the same period in 2021[217]. - Gross profit (loss) for the three-month period ended June 30, 2022, was $(2.9) million, a deterioration of $0.6 million or 25% compared to $(2.3) million for the same period in 2021[209]. - Total consolidated revenues for the three-month period ended June 30, 2022, amounted to $16.3 million, representing an increase of $6.2 million or 61% compared to $10.1 million for the same period in 2021[204]. - The net loss for the quarter ended June 30, 2022, was $6.5 million, a decrease of $12.4 million or 66% compared to a net loss of $18.9 million for the same period in 2021[218]. Business Strategy and Divestiture - The Company plans to divest its cannabis business, including the sale of the Mood Ring™ and PanHash™ brands, which is expected to result in a 50% reduction in workforce and over 30% reduction in total payroll costs[124]. - The planned exit from the Canadian cannabis business is expected to reduce the amount of financing the Company seeks and facilitate working with a broader set of financing sources[124]. - The company plans to divest its Canadian cannabis business, which is expected to decrease future revenues from cannabis products[206]. - The company announced a strategic plan focused on divesting its Canadian cannabis business, which is expected to result in a 50% reduction in workforce and an estimated annual cost savings of $4.5 million[181]. Funding and Liquidity - The Company has minimal available cash balances, with current liabilities exceeding cash on hand of $6.2 million, requiring immediate funding to continue operations[120]. - The Company aims to raise necessary funds through additional securities offerings and strategic alliances to support its growth trajectory and path to profitability[122]. - The company raised gross proceeds of $5.0 million from a direct offering on June 23, 2022, which were primarily used for operating activities[223]. - The current cash position is sufficient to support financial needs for two to three months, with potential financing initiatives including public issuances and private placements[230]. - As of June 30, 2022, the company's liquidity position was $6.2 million, a decrease of $2.5 million or 29% compared to $8.7 million as of June 30, 2021[225]. Product Development and Market Expansion - Neptune's long-term strategy focuses on the health and wellness sector, emphasizing select consumer packaged goods verticals, including Nutraceuticals, Beauty & Personal Care, and Organic Foods & Beverages[134]. - The Company launched new consumer products, including MaxSimil® with CoQ10 and MaxSimil® with Curcumin, as part of its expansion in the Nutraceuticals vertical[136]. - Neptune launched its Forest Remedies Multi Omega 3-6-9 line of supplements in over 340 Sprouts Farmers Market stores across the U.S. on March 10, 2022, marking a significant milestone in its transformation into a high-growth branded CPG company[145]. - Neptune launched a new line of CoComelon co-branded organic snack bars for toddlers, expanding its product offerings in the organic baby food market[186]. - Neptune is actively working on expanding its brand portfolio, including the Biodroga subsidiary, which offers product development and turnkey solutions across North America[151]. Workforce and Employment - As of June 30, 2022, Neptune employed 155 individuals, with 119 in Canada and 36 in the United States, indicating a stable workforce[168]. - The Company plans to divest its cannabis business, which is expected to result in a 50% reduction in workforce and over 30% reduction in total payroll costs[124]. Financial Obligations and Assets - The company has limited financial commitments and debt, with warrant liabilities dependent on share price and only payable if in the money[231]. - The Corporation has contractual obligations totaling $49.692 million as of June 30, 2022, with $21.969 million due within one year[236]. - Neptune's total assets decreased to $97.756 million as of June 30, 2022, down from $104.955 million as of March 31, 2022[191]. - Total equity attributable to equity holders decreased from $48.116 million on March 31, 2022, to $43.277 million on June 30, 2022[235]. Regulatory Compliance - Neptune's products are subject to regulations by authorities such as Health Canada and the FDA, ensuring compliance with good manufacturing practices[158].