Numinus Wellness Inc. (TSX:NUMI, OTC:LKYSF) has announced a number of measures aimed at reducing costs as it focuses on its positive cash flow-generating businesses.
The actions include ceasing operating activities at its non-revenue producing research lab, Numinus Bioscience, consolidating two wellness clinics into nearby locations to improve margins and cash flow, and not renewing leases for two research clinics in Canada, the company said in a statement.
Numinus said it expects these measures to reduce annualized cash expenses by C$1 million, with little impact on its revenue-producing operations. As a result, there will be a meaningful improvement in its margins, accelerating its path to positive cash flow and profitability.
"I want to personally thank all Numinus Bioscience staff who made a tremendous contribution not only to Numinus, but to early and recent developments in our industry," Numinus founder and CEO Payton Nyquvest commented.
"Their impact has been immeasurable; however, our focus on building a sustainable, cash flow positive business is paramount to our long-term success and proving the resiliency and growth potential of our operating model.”
Numinus said it plans to wind down operations at Numinus Bioscience and supporting functions in an orderly fashion in the coming weeks. However, it said the research lab will remain a legal entity under Numinus Wellness Inc to ensure all intellectual property, patents and regulatory licenses will be retained by the company.
Sharan Sidhu, vice president for Scientific Research and Innovation, will remain at Numinus and will continue to provide valued guidance on clinical trials and regulatory activities, the company added.
By consolidating its Peoria wellness clinic — which was not producing positive cash flow — into its nearby Phoenix clinic location at 2400 West Dunlap Avenue, the company said it expects to retain all clients and most practitioners while reducing cash expenses.
It has also relocated its clinic in Orem, Utah, to American Fork.
Additionally, the company said it will not renew the leases on its research clinic locations in Montreal and Vancouver.
Ultimately, the company said it expects these changes to enhance service levels and client experience throughout the remaining 11 wellness clinic locations and three clinical research sites operated by Cedar Clinical Research.
Numinus Wellness is a mental health care company advancing innovative treatments and safe, evidence-based psychedelic-assisted therapies.
Contact the author at stephen.gunnion@proactiveinvestors.com