Neptune(NEPT) - 2023 Q4 - Annual Report

Financial Performance - For the three-month period ended March 31, 2023, the consolidated gross profit margin improved to (21.14)% of net sales, up from (49.39)% for the same period last year[69]. - The gross profit margin for the twelve-month period ended March 31, 2023 was (4.70)%, an improvement from (15.44)% for the same period of the prior year[69]. Strategic Initiatives - The new CPG focused strategic plan aims to reduce costs and improve profitability, with a projected reduction of global headcount by approximately 50%[74]. - The company launched a new line of CoComelon co-branded organic snack bars for toddlers, featuring 4g of plant-based protein and 2g of dietary fiber[75]. - The company has successfully expanded Sprout baby foods and toddler snacks in major retailers like Target and Walmart since acquiring a majority stake in Sprout Organics[67]. - The 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.[68]. Capital Raising and Financing - The company has entered into agreements for the purchase and sale of shares and pre-funded warrants in October 2022, June 2022, and March 2022 to shore up cash reserves[65]. - An amendment to existing Secured Promissory Notes expanded the facility from $22.5 million to a maximum of $37.5 million, with an immediate commitment of an additional $3 million[84]. - Sprout entered into agreements to issue an additional $0.55 million of Secured Promissory Notes and issued 146,330 common shares valued at $0.1 million[85]. - On March 10, 2023, Sprout issued promissory notes for gross proceeds of $0.3 million and granted warrants to purchase 111,111 shares at $0.54 per share[86]. - Neptune closed a $6 million Registered Direct Offering and Private Placement, resulting in net proceeds of approximately $5.1 million[88]. - On January 13, 2023, Neptune closed on a senior secured notes financing for gross proceeds of $4 million, with an interest rate of 16.5% per annum[89]. - Neptune announced a maximum available accounts receivable factoring facility of $5 million, later increased to $7.5 million for inventory financing[91]. - The Company announced a public offering on May 11, 2023, resulting in gross proceeds of approximately $4 million, with plans to use proceeds for working capital and potential acquisitions[92]. Compliance and Regulatory Matters - The company received a Deficiency Notice from Nasdaq regarding non-compliance with the minimum bid price requirement, with a deadline to regain compliance by December 26, 2023[81]. - Neptune extended the maturity of its existing $13 million secured promissory note to December 31, 2024, with an interest rate of 15.0% per annum until the end of 2023[87]. Divestitures - The company divested its Canadian cannabis business for approximately $3.8 million ($5.15 million CAD), closing the sale on November 9, 2022[71].