BZAM says it’s a going concern.
Late after the markets closed on Friday, BZAM Ltd. (formerly The Green Organic Dutchman) (CSE: BZAM) (OTC: BZAMF) released its financial results for the fourth quarter ending and year ending December 31, 2022 in Canadian dollars. In the fourth quarter, BZAM reported gross revenue increased 100% to $24 million over last year’s $12 million for the same time period. BZAM said the increase in revenue was driven by the introduction of new products to the market, as well as increased distribution and demand for existing SKUs, with the BZAM Transaction contributing $8.9 million in gross revenue and $5.7 million in net revenue since the closing of the BZAM Transaction.
The net loss for the quarter was $9.6 million, which was higher than last year’s net loss of $6.2 million for the same time period. The company said the increased loss was primarily due to increased loss from operations as well as the impairment loss of $22 million in the quarter. This was a combination of impairments on HemPoland and the Puslinch facility, plus the impairment loss of $12 million arising from the potential sale of the Galaxie assets.
For the full year, BZAM reported revenue of $68 million versus $39 million for 2021. The net loss for the year was trimmed to $36 million in 2022 from $42 million in 2021. The loss from operations was $35 million for the year.
“In November 2022, the company completed a transformational merger and established BZAM as a top player in Canada. This enhanced scale gives us a solid platform for sustained growth on the revenue side, both in Canada and abroad, while allowing us to take advantage of synergies and eliminate duplicative costs across the newly combined entity” commented Matt Milich, CEO. “The integration has been going smoothly and with approximately $24 million in net revenue booked in the first quarter of 2023, representing quarterly growth of nearly 40%, we continue to pursue our goals of positive adjusted EBITDA and free cash flow in 2023.”
Going Concern
Despite the improvement in revenue, BZAM still stated that it was filing its earnings as a going concern. The company’s cash and cash equivalents at the end of the year were just $4.6 million. The company ended the year with a positive working capital of $45 million and an accumulated deficit of $514 million. It wrote, “The Company has insufficient cash on hand to fund its planned operations. The Company’s ability to continue as a going concern is dependent upon its ability to generate sufficient revenues and positive cash flows from its operating activities and/or obtain sufficient funding to meet its obligations, neither of which is guaranteed to occur.”
The company also announced board changes with Wendy Kaufman and Sherry Tross getting added to the board of directors, effective as of April 28, 2023. Jacques Desserault and Louis Sterling have stepped down as directors of the Board. (Full Story)