Lifeist Wellness Inc. (TSX-V:LFST, OTCQB:NXTTF) said it ended its 2021 financial year with a strengthened balance sheet as the company shifted focus to B2B recreational cannabis and nutraceuticals.
The company reported an improved cash balance of $12.7 million as of November 30, 2021, compared to $10.3 million a year earlier.
During its fourth-quarter to end-November 30, gross margin also improved to 11% of net revenue compared to a negative 1.1% in the same year-ago period, which the company attributed to production efficiencies across all segments and the focus on higher value-added revenue streams in the B2B and recreational markets.
READ: Lifeist Wellness says US subsidiary Mikra Cellular Sciences has started presales of CELLF compound for oxidative stress
Within recreational cannabis, gross margins improved to $500,000 in 4Q 2021 compared to negative $300,000 in 4Q 2020.
Lifeist saw its net revenue decrease 11% to $6.4 million in 4Q compared to $7.2 million in the same period last year, due to declines in hardware sales in Europe and medical cannabis sales in Canada.
However, the company narrowed its earnings before interest, tax, depreciation and amortization (EBITDA) loss to $2.8 million compared to a $5.7 million loss in 4Q 2020 and a $5.4 million loss in the third quarter ended August 30, 2021. The firm noted that 4Q 2021 EBITDA loss results are “net of incremental investments into emerging businesses including nutraceuticals.”
Lifeist told investors that recreational cannabis continues to be the largest driver of performance, accounting for 58% of the company's net revenue during 4Q, with growing gross margins, improved inventory management, an expanded distribution network, and bringing a recognizable brand to market.
"The past year was one of transitioning to wellness, sharpening our strategic focus, and investing to drive sustainable growth," said Meni Morim, CEO of Lifeist, in a statement.
"As a portfolio of wellness companies, Lifeist is growing its B2B recreational cannabis distribution and manufacturing business, and expanding its new nutraceutical division. We believe these opportunities provide the most direct and viable path to value creation, enabling Lifeist to leverage its capabilities and expertise to differentiate itself in the growing wellness economy."
The group recently launched biosciences and consumer wellness company Mikra, expanding its total addressable market to include the growing $105 billion nutraceutical market.
"With Mikra's first nutraceuticals product, CELLF, a novel cellular therapeutic compound targeting systemic fatigue, already in pre-orders and our distribution, logistics and CannMart Labs businesses driving growth in our recreational B2B cannabis business, we believe we have the platform for sustainable growth,” Morim added.
Mikra began pre-sales of CELLF this month with a waitlist of over 40,000 people.
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