YOOMA Wellness has released its Q4 and full year results for 2021 two weeks behind schedule, seeing its shares reinstated on the Aquis Exchange after being suspended due to the delay.
Though it is understood Yooma is still waiting for its shares to return to trading on the larger Canadian Securities Exchange, its share price across both markets continues to sit at an all-time low.
The company says its share price, alongside a $33.35m loss for the year, makes it ‘difficult’ to raise the cash it needs to fund the growth of its six wholly-owned subsidiaries.
As such, it has enlisted the help of Canaccord Genuity to undertake a ‘strategic review’ of the company’s potential options in order to realise value for shareholders.
Full Year Results
Yooma had a transformative year in 2021, making six ‘significant acquisitions’ with a reported aggregate value of nearly $60m.
This rapid expansion in size saw its revenues jump from just $42,765 in 2020 to $10.2m in the 12 months to December 31 2021, beating its previous forecasts.
Revenues also rose dramatically in the final quarter, with Yooma reporting revenues of just $4.9m for the nine months to September 30 2021.
This is due to three of its six acquisitions, including speciality drinks business Big Swig, Japanese wellness products company Vertex, and US CBD manufacturer N8 essentials falling during the quarter.
However, this rapid expansion has also come at a significant cost to Yooma. While gross profits for the year rose from a loss of $42,765 to $2.4m, it ended with a comprehensive loss of over $33m.
According to the company, this loss reflected $7.81m cost of sales, alongside expenses of $35.71m relating to the ‘acquisition and integration of six new businesses’.
As well as these primary acquisitions, Yooma says its February reverse takeover transaction, which saw its shares admitted to the Canadian Securities Exchange, and its dual listing onto the Aquis Exchange in August, also incurred expenses contributing to the loss.
At December 31, 2021, Yooma reportedly had working capital of $1,244,689, around half what it had at the beginning of the year.
While losses at a company in its growth phase are largely expected, the continued underperformance of cannabis stocks in almost every market has left Yooma in a precarious situation.
Two weeks ago, Yooma’s shares were suspended on both its listed markets after it announced ‘unexpected delays to its audit’, which it attributed to complexities surrounding consolidating the accounts of six businesses across five countries.
As a result, the Ontario Securities Commission issued a ‘failure-to-file cease trade order’ (CTO), seeing its shares drop 22% on the CSE before being suspended.
While they are still waiting to be reinstated at the time of writing, the return would still see Yooma’s share price sit at $0.06 CAD, down 96.5% on its listing price. Meanwhile its shares on Aquis currently sit at 8p, down 85% on its 54.5p listing price.
Yooma’s Chairman Lorne Abony said that while the company was pleased with the strong Q4 sales figures ‘the markets have been difficult’.
“We do not believe our current share price is a fair reflection of what the company has achieved or its potential for further growth.
“Depressed share prices make additional capital raising and further acquisitions difficult in the short-term, as they would be unfairly dilutive to our shareholders. They also make it difficult to move to other regulated stock exchanges and raise the much-needed growth capital to support our brands.”
He added that the he would like to thank the management teams of those companies Yooma has recently acquired, as he was aware the ‘share price is disappointing to them, as it is to all of us’.
As a company ‘dependent upon its ability to continue to raise adequate financing’, it has appointed investment banking and financial services firm Canaccord Genuity as a strategic advisor.
The firm will reportedly examine a number of potential options for the company, including listing on another stock exchange, though as Mr Abony stated this is unlikely given its current circumstances.
The strategic review could also reportedly mean the ‘sale of assets’ or further M&As ‘if financing can be secured at acceptable terms.’ BusinessCann has contacted Canaccord Genuity for comment.