Lifeist Reports Second Quarter 2024 Financial Results

/EIN News/ -- TORONTO, July 30, 2024 (GLOBE NEWSWIRE) -- Lifeist Wellness Inc. (“Lifeist” or the “Company”) (TSXV: LFST) (FRANKFURT: M5B0) (OTCMKTS: LFSWF), a health-tech company that leverages advancements in science and technology to build breakthrough companies that transform human wellness, today reported its financial results for the three months ended May 31, 2024 (“Q2 2024”) compared to the same period last year (“Q2 2023”). All financial figures are in Canadian dollars unless otherwise indicated.

Second Quarter Highlights

• Net revenue from continued operations of $3.9 million in Q2 2024 compared to $7.7 million in Q2 2023.
• Gross profit before inventory adjustment of $1.9 million in Q2 2024, representing gross margin of 49%, compared to $3.7 million, or 48% gross margin, in Q2 2023.
• Operating costs and professional fees decreased to $2.9 million in Q2 2024 compared to $3.9 million in Q2 2023.
• Adjusted EBITDA loss was $0.9 million in Q2 2024 compared to $0.2 million in Q2 2023.
• Cash and cash equivalents increased to $2.1 million at the end of Q2 2024 versus $1.5 million at the end of 2023.
  

“Our performance in the second quarter of 2024 is another clear indication that we must move on from operating our legacy cannabis business segments and find other solutions that have exposure to the broader wellness market” said Meni Morim, CEO of Lifeist. “We are working to finalize the sale of CannMart and shift our focus and resources to advancing Mikra Cellular Sciences. We are actively rebuilding our marketing and sales strategies from the ground up to increase sales, improve margins, and transform Lifeist into a profitable leading nutraceutical company offering superior health and wellness products backed by science.”

Financial Summary

Net revenue was $3.9 million in Q2 2024 compared to $7.7 million in Q2 2023.

Gross profit before inventory adjustment was $1.9 million in Q2 2024 versus $3.7 million in the same period last year, with margins of 49% in Q2 2024 compared to 48% in Q2 2023.

Total expenses decreased $1.4 million to $3.0 million in Q2 2024 compared to $4.4 million in the previous year. The decrease reflects the Company’s efforts to control costs and enhance efficiencies as evidenced by improvements across multiple cost categories including salaries ($455,000 decrease), office and general expenses ($72,000 decrease), professional fees ($200,000 decrease), sales and marketing ($234,000 decrease), and share-based compensation ($380,000 decrease)

Adjusted EBITDA, a non-IFRS measure, was a loss of $0.9 million in Q2 2024 compared to $0.2 million in Q2 2023 and net loss from continuing operations was $1.4 million, or ($0.047) per diluted share, in Q2 2024 compared to a loss of $2.2 million, or ($0.015) per diluted share, in Q2 2023. The change in both adjusted EBITDA loss and net loss was largely the result of the restructuring of CannMart Labs in Q2 2024, costs which are non-recurring.

Balance Sheet and Cash Flow

Cash and cash equivalents were $2.1 million on May 31, 2024, compared to $1.5 million on November 30, 2023.

Inventories were $2.3 million on May 31, 2024 compared to $4.5 million on November 30, 2023.

The working capital position was negative $2.6 million on May 31, 2024.

Net cash used in operations was $0.4 million in Q2 2024 compared to net cash used in operations of $0.6 million in Q2 2023.

Additional Information

The Company’s complete financial statements and management’s discussion & analysis (“MD&A”) for the three and six months ended May 31, 2024 are available on Lifeist’s website (www.lifeist.com) and SEDAR+ (www.sedarplus.ca).

About Lifeist Wellness Inc.

Sitting at the forefront of the post-pandemic wellness revolution, Lifeist leverages advancements in science and technology to build breakthrough companies that transform human wellness. Portfolio business units include Mikra, a biosciences and consumer wellness company developing and selling innovative products for cellular health, and CannMart, which operates a B2B wholesale distribution business facilitating recreational cannabis sales to Canadian provincial government control boards including for CannMart Labs, a BHO extraction facility producing high margin cannabis 2.0 products.

Information on Lifeist and its businesses can be accessed through the links below:

www.lifeist.com
https://wearemikra.com/
https://cannmart.com

Contact:
Meni Morim
CEO
Lifeist Wellness Inc.
Ph: 647-362-0390
Email: ir@lifeist.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release or has in any way approved or disapproved of the contents of this press release.

Non-IFRS Financial Measures

Management evaluates the Company’s performance using a variety of measures, including “Net loss before income tax, depreciation and amortization” and “Adjusted EBITDA”. The non-IFRS measures discussed below should not be considered as an alternative to or to be more meaningful than revenue or net loss. These measures do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS.

The Company believes these non-IFRS financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Company.

Management uses these and other non-IFRS financial measures to exclude the impact of certain expenses and income that must be recognized under IFRS when analyzing consolidated underlying operating performance, as the excluded items are not necessarily reflective of the Company’s underlying operating performance and make comparisons of underlying financial performance between periods difficult. From time to time, the Company may exclude additional items if it believes doing so would result in a more effective analysis of underlying operating performance. The exclusion of certain items does not imply that they are non-recurring.

1. Current and deferred income taxes, depreciation and amortization, and share-based compensation were excluded from the Adjusted EBITDA calculation as they do not represent cash expenditures.
2. Other income consisting of gain on disposal of subsidiary, interest income, realized gain on disposition of AFS investments, unrealized gain on derivatives and other miscellaneous non-recurring income were excluded from Adjusted EBITDA calculation.
3. Non-recurring costs related to restructuring and legacy issues were excluded from Adjusted EBITDA calculation.
4. Impairment loss relating to goodwill, customer list, domains and brand names were excluded from Adjusted EBITDA calculation.
5. Impairment loss relating to receivable is a provision for expected credit loss to an associate and was excluded from Adjusted EBITDA calculation.
6. Share of associates loss, net of tax, is excluded due to lack of control.

Forward Looking Information

This news release contains “forward-looking information” within the meaning of applicable securities laws. All statements contained herein that are not historical in nature contain forward-looking information. Forward-looking information can be identified by words or phrases such as “may”, “expect”, “likely”, “should”, “would”, “plan”, “anticipate”, “intend”, “potential”, “proposed”, “estimate”, “believe” or the negative of these terms, or other similar words, expressions and grammatical variations thereof, or statements that certain events or conditions “may” or “will” happen.

The forward-looking information contained herein, including, without limitation, statements related to: the Company taking steps to address operational structural issues and to act on future opportunities to increase revenue and achieve profitability, and its expectations from such actions to increase revenue growth and achieve profitability are made as of the date of this press release and is based on assumptions management believed to be reasonable at the time such statements were made, including, without limitation, Lifeist’s ability to implement beneficial structural changes to its operations in the short term including, including additional cost cutting measures, the Company’s ability to quickly respond to future opportunities to increase revenue, as well as other considerations that are believed to be appropriate in the circumstances. While we consider these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct. By its nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the forward-looking information in this press release. Such factors include, without limitation: the failure of the Company to implement meaningful structural operational changes, its inability to develop its business as anticipated and to increase revenues and/or its profitable margin on such revenues, unanticipated changes to current regulations that would adversely impact the Company’s businesses, increased regulatory costs relating to the Company’s cannabis business, competition from others, risks related to any slowdown in the expected demand for cannabis and nutraceutical products in general and those of CannMart and Mikra in particular, regulatory risk, risks relating to the Company’s ability to execute its business strategy and the benefits realizable therefrom and risks specifically related to the Company’s operations. Additional risk factors can also be found in the Company’s current MD&A which has been filed under the Company’s SEDAR+ profile at www.sedarplus.ca. Readers are cautioned not to put undue reliance on forward-looking information. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Source: Lifeist Wellness Inc.