Lotus Ventures Inc. LTTSF J released financial results for the period ending August 31, 2022, revealing revenue of CA$1.69 million ($1.25 million) in fiscal year 2022, a 208% decrease compared to CA$5.48 million in the fiscal year 2021.
Fiscal Year 2022 Financial Highlights
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Gross margin was a loss of CA$3.24 million, compared to gain of CA$2.77 million in the prior year.
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Net loss of CA$4.79 million compared to income of CA$241,097 in the prior year.
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Cash at August 31, 2022 was CA$46,796, compared to CA$580,177 in the prior year.
Q4 FY 2022 Financial Highlights
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Net loss of CA$4.9 million, compared net income of CA$42,625 for the three months ended August 31, 2021. Net income for the three months ended August 31, 2022 decreased by CA$5 million as a result of the decline in sales and gross margin, and impairment of inventory in the current period as compared to the prior comparative period.
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Loans payable at year-end, primarily from related parties totaled CA$1 million up from CA$319,704 the previous year. As at December 31, 2022 the amount outstanding totaled approximately CA$2.9 million.
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Gross margin before fair value adjustments decreased by CA$838,566 as a result of the decrease in sales and impairment of inventory.
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Impairment of CA$1.4 million in harvested cannabis inventory was recognized due to the capitalized costs exceeding the estimated net realizable value of that inventory in the three months ended August 31, 2022.
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Loss for changes in fair market value of biological assets increased by CA$2.5 million due to a decline in market prices.
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Bank fees and interest increased by CA$122,597 as a result of an increase in interest on outstanding loans received.
The primary feature of fiscal 2022 was the diversification of sales channels from an almost exclusive business-to-business sales model to adding additional business-to-consumer channels. Difficulties in the B2B market generated a steep decline in sales volume and pricing which culminated in a large year-end loss of CA$4.8 million after significant inventory and fair value accounting write-downs. Overhead and operating expenses are lean, and the company has obtained short-term debt from related and other parties during this transition period.
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