par Neptune Wellness Solutions, Inc.
Neptune Reports Fiscal Third Quarter 2024 Financial Results
LAVAL, QC / ACCESSWIRE / February 16, 2024 / Neptune Wellness Solutions Inc. ("Neptune" or the "Company") (NASDAQ:NEPT), a consumer-packaged goods company focused on plant-based, sustainable and purpose-driven lifestyle brands, today announced its financial and operating results for its fiscal third quarter 2024 ending December 31, 2023.
Recent Business Highlights
- Announced the appointment of Stifel Nicolaus Canada Inc. ("Stifel") to act as exclusive financial advisor to the Company's organic baby food and toddler brand, Sprout Foods Inc. ("Sprout Organics"), providing financial advisory, investment banking services, and strategic advice regarding the review of divestiture alternatives related to Sprout Organics.
- Announced that its nutraceuticals brand subsidiary, Biodroga Nutraceuticals Inc., entered into an accounts receivable factoring facility and inventory finance rider with Alterna Capital Solutions, LLC. The amount available under the Facility at any given time is $3 million, which may be increased in $1 million increments up to a maximum of $8 million.
- Announced a non-binding Letter of Intent ("LOI") to acquire Datasys Group, Inc., ("Datasys") and affiliated companies. While the Company has since concluded that it is no longer viable to pursue a transaction with Datasys on the terms contemplated in the LOI, the Company and Datasys remain in discussions regarding a revised transaction structure and continue to explore all possible avenues to reach an amicable partnership.
Third Quarter 2024 Financial Highlights
- Consolidated net revenue of $7.6 million, down $4.6 million for the same period last year. This is largely due to a decrease in Food & Beverage revenues compared to the same period last year.
- Gross profit of $1.0 million compared to a gross profit of $1.9 million for the same period last year. This change is due to a decrease in revenues of $4.6 million, offset by a reduction in cost of sales of $3.8 million.
- Consolidated SG&A expenses of $18.7 million compared to $8.7 million for the same period last year, a decrease of $10.0 million or 115%. This was primarily due to a $13.5 million increase in legal fees and settlements, offset by a $0.9 million decrease in payroll expenses, a $0.8 million decrease in office related expenses, a $0.7 million decrease in insurance, a $0.6 million decrease in marketing and a $0.4 million decrease in depreciation expense.
- Net loss of $19.2 million compared to a reported net loss of $0.5 million in the comparable period in fiscal 2023.
- Adjusted EBITDA (non-GAAP) loss of $18.5 million compared to an Adjusted EBITDA (non-GAAP) loss of $0.5 million for the same period last year.
About Neptune Wellness Solutions Inc.
Neptune is a consumer-packaged goods company that aims to innovate health and wellness products. Founded in 1998 and headquartered in Laval, Quebec with a United States headquarters in Jupiter, Florida, the company focuses on developing a portfolio of high-quality, affordable consumer products that align with the latest market trends for natural, sustainable, plant-based and purpose-driven lifestyle brands. The company's products are available in more than 29,000 retail locations and include well-known organic food and beverage brands such as Sprout Organics, Nosh, and Nurturme, as well as nutraceuticals brands like Biodroga and Forest Remedies. With its efficient and adaptable manufacturing and supply chain infrastructure, the company can quickly respond to consumer demand, and introduce new products through retail partners and e-commerce channels. Please visit neptunewellness.com for more details.
Disclaimer - Safe Harbor Forward-Looking Statements
Statements in this news release that are not statements of historical or current fact constitute "forward-looking statements" within the meaning of applicable securities laws. Such forward-looking statements involve known and unknown risks, uncertainties, and other unknown factors that could cause the actual results of Neptune to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements which explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms "believes", "belief", "expects", "intends", "projects", "anticipates", "will", "should" or "plans" to be uncertain and forward-looking. Forward-looking statements relate to future events or future performance and reflect management's expectations or beliefs regarding future events including, but not limited to, statements with respect to the timing of reporting quarterly results. Although the Company believes that the assumptions and factors used in preparing the forward-looking information or forward-looking statements in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. The forward-looking statements and information included in this news release are made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking information or forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities laws. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release. The forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement and the "Cautionary Note Regarding Forward-Looking Information" section contained in Neptune's latest Annual Report on Form 10-K and its subsequent filings, which are available on EDGAR at www.sec.gov/edgar.shtml. All forward-looking statements in this news release are made as of the date of this news release. Neptune does not undertake to update any such forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.
Going Concern
As of the date this press release, there is minimal cash balance at the Company. The Company requires funding in the very near term in order to continue its operations and is considering all strategic alternatives that may be available, including debt financing and asset divestitures, in order to generate cash to fund operations. The Company's lack of cash resources and current share price may adversely affect its ability to raise new capital, maintain its NASDAQ listing and execute its business strategy. If the Company is unable to obtain funding in the near term, it may have to cease operations and liquidate its assets. These conditions cast substantial doubt about the Company's ability to continue as a going concern.
Media Contacts:
media@neptunecorp.com
Investor Contacts:
Valter Pinto, Managing Director
KCSA Strategic Communications
neptune@kcsa.com
212.896.1254
Condensed Consolidated Interim Balance Sheets
(in U.S. dollars)
| As at | As at | |||||||||||
| Notes | December 31, 2023 | March 31, 2023 | ||||||||||
| (Unaudited) | ||||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 1,232,905 | $ | 1,993,257 | ||||||||
Short-term investment | 17,642 | 17,540 | ||||||||||
Trade and other receivables | 3,893,358 | 7,507,333 | ||||||||||
Prepaid expenses | 1,839,657 | 1,025,969 | ||||||||||
Inventories | 5 | 9,616,172 | 13,006,074 | |||||||||
Total current assets | 16,599,734 | 23,550,173 | ||||||||||
Property, plant and equipment | 6 | 1,035,423 | 1,403,264 | |||||||||
Operating lease right-of-use assets | 1,599,231 | 1,941,347 | ||||||||||
Intangible assets | 7 | 1,308,849 | 1,607,089 | |||||||||
Goodwill | 7 | 2,482,706 | 2,426,385 | |||||||||
Total assets | $ | 23,025,943 | $ | 30,928,258 | ||||||||
Liabilities and Equity (Deficiency) | ||||||||||||
Current liabilities: | ||||||||||||
Trade and other payables | $ | 31,371,563 | $ | 27,051,561 | ||||||||
Current portion of operating lease liabilities | 339,620 | 339,620 | ||||||||||
Current portion of loans and borrowings | 8 | 25,984,400 | 7,538,369 | |||||||||
Provisions | 9 | 14,809,758 | 2,948,340 | |||||||||
Liability related to warrants | 10 | 911,790 | 3,156,254 | |||||||||
Total current liabilities | 73,417,131 | 41,034,144 | ||||||||||
Operating lease liabilities | 1,816,377 | 2,017,888 | ||||||||||
Loans and borrowings, net of current portion | 8 | - | 15,412,895 | |||||||||
Other liability | 13 | (c) | 14,000 | 24,000 | ||||||||
Total liabilities | 75,247,508 | 58,488,927 | ||||||||||
Shareholders' Equity (Deficiency): | ||||||||||||
Share capital - without par value (4,532,038 shares issued and outstanding as of December 31, 2023; 300,070 shares issued and outstanding as of March 31, 2023) | 11 | 327,944,215 | 321,946,102 | |||||||||
Warrants | 14 | 6,648,437 | 6,155,323 | |||||||||
Additional paid-in capital | 59,681,063 | 58,138,914 | ||||||||||
Accumulated other comprehensive loss | (14,925,620 | ) | (14,538,830 | ) | ||||||||
Deficit | (410,595,259 | ) | (383,641,363 | ) | ||||||||
Total deficiency attributable to equity holders of the Company | (31,247,164 | ) | (11,939,854 | ) | ||||||||
Non-controlling interest | 12 | (20,974,401 | ) | (15,620,815 | ) | |||||||
Total shareholders' deficiency | (52,221,565 | ) | (27,560,669 | ) | ||||||||
Commitments and contingencies | 16 | |||||||||||
Subsequent event | 18 | |||||||||||
Total liabilities and shareholders' deficiency | $ | 23,025,943 | $ | 30,928,258 | ||||||||
See accompanying notes to the condensed consolidated interim financial statements.
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
(Unaudited) (in U.S. dollars)
For the three and nine-month periods ended December 31, 2023 and 2022
| Three-month periods ended | Nine-month periods ended | |||||||||||||||||||
| Notes | December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||||||||||||||
Revenue from sales, net of excise taxes of nil and nil (2022 - nil and $643,476 ) | $ | 7,611,836 | $ | 11,945,092 | $ | 26,913,567 | $ | 39,668,246 | ||||||||||||
Royalty revenues | 23,963 | 263,816 | 70,961 | 766,736 | ||||||||||||||||
Other revenues | (36,047 | ) | - | (17,071 | ) | 32,996 | ||||||||||||||
Total revenues | 17 | 7,599,752 | 12,208,908 | 26,967,457 | 40,467,978 | |||||||||||||||
Cost of sales other than impairment loss on inventories | (6,564,684 | ) | (10,328,349 | ) | (24,941,822 | ) | (37,293,901 | ) | ||||||||||||
Impairment loss on inventories | 5 | - | - | (216,184 | ) | (3,079,997 | ) | |||||||||||||
Total cost of sales | (6,564,684 | ) | (10,328,349 | ) | (25,158,006 | ) | ||||||||||||||