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RIV Capital Inc. (OTC:CNPOF) has released its financial results for the last fiscal quarter of 23 and the nine-month transition period ended December 31, 2023. The company’s performance highlights significant revenue growth and strategic milestones amidst operational expansion efforts in the cannabis industry.
RIV Capital reported a surge in revenue, reaching $2.1 million for the three months ended December 31, 2023 (“CQ4 2023”), compared to $1.9 million for the same period in 2022 (“CQ4 2022”). Notably, retail revenue of $1.9 million was generated from Etain’s medical dispensaries in Manhattan, Kingston, Syracuse, and Yonkers, supplemented by wholesale revenue of $0.3 million from sales of Etain-branded products to other medical dispensaries in New York.
While revenue soared, the Company encountered increased cost of goods sold, totaling $1.5 million for CQ4 2023, compared to $1.1 million for CQ4 2022. Factors contributing to this include scaling operations at the expanded Chestertown Facility. Additionally, the Company reported an unrealized loss of $1.2 million on changes in fair value of biological assets for CQ4 2023, compared to a nominal amount for CQ4 2022, primarily due to adjustments in estimated selling prices for wholesale bulk flowers.
Despite revenue growth, the Company reported a gross loss of $0.6 million for CQ4 2023, compared to a gross profit of $0.8 million for CQ4 2022. Selling, general, and administrative (“SG&A”) expenses increased to $5.5 million for CQ4 2023, compared to $4.8 million in CQ4 2022.
An impairment charge is a figure used to describe the situation when an asset is no longer as valuable as it once was. The most significant factor impacting the Company’s reported net loss for CQ4 2023 was an impairment charge of $48.7 million related to goodwill and intangible assets recognized in connection with its acquisition of Etain in 2022. This impairment charge, primarily driven by a reduction in projected cash flows for Etain’s New York operations, underscores the challenges faced in market development and competition.
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The Company reported a net loss of $47.3 million for CQ4 2023, with a basic and diluted net loss per share of $0.35, compared to a net loss of $9.9 million for CQ4 2022. Total comprehensive loss stood at $50.3 million for CQ4 2023, compared to $12.7 million for CQ4 2022, primarily driven by the impairment charge.
While RIV Capital continues to navigate challenges in the cannabis market landscape, its revenue growth and operational expansion efforts underscore its resilience and commitment to long-term value creation.
Posted In: CNPOF
