VIVO Cannabis Inc. (TSX:VIVO) (OTCQX:VVCIF) released its fourth-quarter 2020 financial and operating results.
"While 2020 presented its share of challenges, we did a lot to better position VIVO for the future, and we are beginning to see the early results of these efforts," Richard Fitzgerald, interim CEO of VIVO said. "We have already had some noteworthy achievements in 2021.
Q4 And FY 2020 Financial Highlights
- Net revenue was $6.2 million, which represents a 23% decrease quarter-over-quarter as compared to Q3 2020.
- Net revenue for 2020 was $32.8 million, an increase of over 32% compared with the same period last year.
- Net average selling price (net of excise) of $6.01 per gram in the fourth quarter of 2020 up 11% from the third quarter of 2020 due to product mix.
- Sales, general and administrative expenses were $5.1 million in the fourth quarter of 2020, compared to $4.3 million in the third quarter of 2020, an increase of 19% driven by restructuring costs.
- Adjusted EBITDA came in negative at $4.8 million for the quarter, compared to a $2.6 million loss in Q3 2020, the difference primarily due to inventory write-downs, price protection accruals, and restructuring.
- An annual goodwill impairment test was performed and the company determined an impairment charge of $33.5 million was required as the Canna Farms CGU carrying value was found to exceed its recoverable amount.
- As of December 31, 2020 the company had $6.6 million 6% convertible debt remaining, due to mature on September 15, 2022.
- As of December 31, 2020 (not including the financing subsequent to year-end), VIVO had a cash balance of $5.7 million at the end of the quarter with another $7 million held in equity investments.
2020 Business Update
- Recorded first significant revenues from VIVO's Australian business in 2020.
- Restructured its $38 million convertible debenture liability through cash repurchase, equity conversion, and maturity date extension.
- Subsequent to year-end the Company closed an $8 million public offering to help fund the company's growth plans.
- In October 2020, began streamlining its Napanee, Ontario operations and integrating the operations of its Napanee and Hope LPs to achieve production cost and efficiency improvements.
- In November 2020, VIVO announced the planned retirements of both its chair and the company's CEO.
- Richard Fitzgerald assumed the role of VIVO's chair and interim CEO of VIVO. The company's search for a permanent CEO is ongoing.
- Released brick hash as part of VIVO's Cannabis 2.0 product lineup and expected to release a new line of topicals in Q2 2021, VIVO's 9th and 10th product formats, respectively.
- Vanluven facility received EU-GMP certification allowing VIVO to export cannabis products for sale in Europe and Beacon Medical Germany GmbH received an import license to allow imports of medical cannabis flowers
- Pharmascience Inc., VIVO's strategic partner for specific medical cannabis formulations, received its Cannabis Standard Processing License for its Quebec-based facility to formulate and process cannabis and derivative products into finished products.
Price Action
VIVO’s shares traded 8% higher at $0.0648 per share at the time of writing Thursday morning.
Photo: Courtesy of Markus Winkler on Unsplash
