Adam JacksonLifeist Wellness Inc. (TSXV: LFST) widened its loss in its second quarter, as the health-tech firm pushes ahead with plans to exit the cannabis business.
The company reported a net loss of C$1.4 million in the quarter ending May 31, versus a loss of C$2.2 million a year earlier. Revenue fell to C$3.9 million from C$7.7 million.
“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,” CEO Meni Morim said in a statement.
Lifeist said it is working to finalize the previously announced announced sale of its CannMart subsidiary to Simply Solventless Concentrates Ltd. and shift focus to its Mikra Cellular Sciences division, which develops nutraceutical products. CannMart distributes recreational cannabis to Canadian provincial governments.
Under the deal, Simply Solventless will provide operational support to CannMart. Lifeist will receive a monthly fee of either 90% of CannMart’s net revenue or its net revenue minus C$100,000, whichever is less. The deal includes a C$500,000 upfront payment in addition to some of those considerations tied to inventory sales and future revenue.
“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,” Morim said.
Operating costs for the company dropped to C$2.9 million, down from C$3.9 million, reflecting cost-cutting efforts. Cash on hand rose to C$2.1 million from C$1.5 million at year-end.
To boost its stock price, Lifeist in May consolidated its shares in 20-to-1 swap, reducing outstanding shares from about 594 million to 29.7 million.
Trading of Lifeist shares are halted pending submission of documents related to the CannMart sale. The deal requires shareholder approval at an upcoming meeting.
