Numinus reports declining revenue as the company restructures

After markets closed on Friday, April 12,  Numinus Wellness Inc. (TSX: NUMI) (OTCQX: NUMIF) announced its financial results for the second quarter ending February 29, 2024. Revenues declined sequentially by 15.4% from the prior quarter to $5 million in the quarter and dropped from $5.3 million for the same period in 2022. Numinus attributed the decline to the company’s further optimization of operations to focus on profitability and seasonality effects.

The net loss for the quarter was trimmed to $5.9 million versus last year’s net loss of $7.3 million in the same period. Numinus stated that operating expenses decreased 27% to $6.7 million during the quarter compared to $9.2 million during the second quarter in 2023. In the quarter, the company said it continued its cost containment initiatives to refocus support on revenue-producing activities and profitability.

“Over the past two quarters, Numinus has steadfastly focused on fortifying our operations to ensure we are well-positioned for sustainable growth and profitability in the quarters to come,” said CEO and Founder Payton Nyquvest. “This included reducing headcount across the organization, concentrating on higher margin procedures at our clinics, and eliminating our unproductive location in Arizona. While these initiatives have generated one-time impacts in the quarter, they are also enabling us to optimize our patient experience and care model, improve efficiencies, and establish best practices.”

Reorganization

Numinus had announced in January that it was exploring strategic alternatives and had hired Stifel Nicolaus Canada Inc. as its sole financial and strategic advisor. The company said that the Strategic Review is complete and Numinus has decided to explore opportunities to redefine, divest, and/or discontinue its Canadian clinical operations. Numinus said in a statement that it will focus on the United States while shifting to a resource-efficient, capital-light model to continue to support Canadian organizations and the therapists and healthcare professionals practicing in this mental health treatment sphere.

“We believe this decision will support our goal of profitability from our remaining operations and our focus on the significant opportunities available in the U.S. with MDMA at the new drug application stage with the FDA and several novel drug therapies at late clinical trial stages, we expect that the U.S. will be first to introduce breakthrough therapies in patient care,” said Nyquvest. “It’s important to note that our U.S. operations generated 88 percent of our revenue in fiscal 2023, with our U.S. wellness clinics having an optimized business model with full-time practitioners and near-term profitable EBITDA.”

Numinus is reporting its earnings as a ‘going concern. The company said it has incurred an accumulated deficit of $127,227,250 and a net loss of $10,360,806 for the six months ended February 29, 2024. The continues selling assets as it tries to drum up cash, and has also been selling laboratory and computer equipment. As at February 29, 2024, the company has cash and cash equivalents of $6,611,966

The company also stated that it had entered into a non-binding letter of intent with a Canadian Centre for Psychedelic Healing for a component of the Canadian Reorganization, and is actively working to settle definitive terms. CCPH currently operates seven clinics across Canada under the “Field Trip” brand, each of which offers psychedelic-assisted therapy.

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