Debra Borchardt
BZAM Ltd. (CSE: BZAM) (US-OTC: BZAMF) release its financial results for the three months ending March 31, 2023. Revenues increased 41% sequentially to $35 million. BZAM attributed the increase in revenue quarter-over-quarter to the merger between BZAM Holdings Ltd. and The Green Organic Dutchman Holdings Ltd. in November 2022 as well as organic sales growth and increased demand for products under the TGOD and Highly Dutch brands.
Despite the improved revenue, the net losses increased to $19 million in the first quarter from a net loss of $13 million in the fourth quarter. In addition, the results were prepared for the company s a going concern. As of March 31, 2023, BZAM had a net working capital deficit of $4 million (inclusive of restricted cash of $427,000 and the current portion of non-cash contingent consideration of $19 million) (December 31, 2022 – $45 million ) and an accumulated deficit of $532 million up from $514 million in the fourth quarter.
Matt Milich, CEO said, “We delivered strong net revenue growth in Q1 2023, from both the full impact of our November merger and the Company’s organic sales growth. Further to the progress we made in Q1 2023, we continue to execute on our plans to improve margin and reduce SG&A, including the headcount rationalization and cost savings measures we have just implemented this month, which we expect to generate about $2.5M in annual savings across both cost of goods sold and SG&A.”
Milich continued saying, “We are looking forward to a robust second half of the year. We continue to leverage our industry leading lab and innovation folks, with the launch of over 20 new products across Canada in the next six months. And, we continue to build momentum in the export market, having received our EU GMP certification earlier this month, we are executing on distribution agreements in Germany and the UK – with branded products expected to land in the UK market by Q4 this year.”
If the company can’t raise the money it needs it said it currently does not have any commitments in place that would provide the level of revenues, cash flows, or funding required to provide sufficient funding to meet its obligations. BZAM did say it was planning on selling part of the Galaxie acquisition and its cultivation facilities and equipment located at the Maple Ridge Facility within the next 12 months.
