Stem Holdings, Inc. (OTCQX: STMH) (CSE: STEM) (the “Company” or “Stem”), a vertically integrated cannabis operator, today announced its financial results for the fiscal first quarter 2022 ended December 31, 2021. All amounts are expressed in U.S. dollars unless indicated otherwise and are prepared under International Financial Reporting Standards (“IFRS”).
Steve Hubbard, Interim CEO and CFO of Stem, commented, “Our financial results during our fiscal first quarter 2022 reflects a period of transition as we divested our e-commerce and delivery wholly owned subsidiary on December 15, 2021. The recent business decisions we have made with Driven Deliveries and other non-core assets puts us on a path to positive working capital. We have decided to focus the majority of our resources on cultivation facilities in Oregon and retail stores in Oregon and California where, in particular, we have significant room for growth in the cultivation operations as we have recently been producing at less than 50% capacity.”
Financial Results for the Fiscal First Quarter 2022:
Revenue for the fiscal first quarter 2022 totaled $4.9 million, a decrease of 21% as compared to $6.2 million for the same period the year prior. Net revenue after discounts and returns totaled $4.2 million, a decrease of 20.1% as compared to $5.3 million for the same period the year prior, a decrease in retail sales resulting from general market conditions.
During the fiscal first quarter 2022, the Company reported impairment expense of $800 thousand predominately related to the impairment of investments and a non-refundable deposit.
The Company had other income during the three months ended December 31, 2021, of $2.4 million compared to other expenses of $.3 million for the comparable period of 2020, the increase in other income was primarily related to the change in fair value of warrant liabilities. In the three months ended December 31, 2021, we had recognized a loss from discontinued operations of $1.745 million related to the divesture of Driven compared to a loss of $.144 million in the comparable period of the prior year.
On December 31, 2021, we had working capital of approximately $1.3 million, which included cash and cash equivalents of $3.3 million. We reported a net loss of approximately $4.2 million and our net cash used in operating expenses totaled $2.0 million, our cash used in investing activities was $0.1 million and cash flows used in financing activities totaled $0.1 million. Total liabilities as of December 31, 2021 were reduced to $14.2 million as compared to $23 million as of September 30, 2021.
