Relevium Technologies Inc. (TSX.V:“RLV”, OTCQB:“RLLVF” and
Frankfurt: “6BX”) (the “
Company”
or “
Relevium”), is pleased to
report third quarter results for fiscal year ending June 30, 2020.
During the three-month period ended March 31,
2020, the Company undertook a complete review of its products
portfolio and its overall costs’ structure. The Company began
eliminating high-cost and high-competition products from its
portfolio, which lead to a significant decrease in marketing and
promotion expenses. The macroeconomic context of the Company during
the third quarter was a primary driver of this decision, including
significant valuation gaps, lack of liquidity in the capital
markets and the start of a global pandemic.
During this restructuring period, sales were
reduced to focus only on the profitable top 20% of our products
which resulted in revenues for the three-month period of $529,735
($1,038,467 in 2019) but with significantly improved net loss of
$11,514 ($945,261 in 2019). The focus on profitable products led to
improved gross profit margins as compared to sales 79% as compared
to 54% in the comparable period last year. For the nine-month
period ended March 31, 2020, the Company reported revenues of
$2,671,675 ($3,030,019 in 2019) and a net loss $1,305,932
($2,600,035 in 2019).
Financial highlights for the three-month
period ended March 31, 2020
- The Company reported a decreased
revenue for the reporting period. Revenues were reported as
$529,735 (compared to $1,038,467 for the three-month period ended
March 31, 2020).
- Gross margins for the period
increased by twenty-five percentage points to 79%, compared to 54%
in the previous year.
- Total expenses for the quarter
decreased by $1,072,863 to $434,136 (compared to $1,506,999 in
2019).
- The company reported a net and
comprehensive loss of $197,871 (compared to a net and comprehensive
loss of $955,038 in the previous period).
Financial highlights for the nine-month
period ended March 31, 2020
- The Company reported a decrease in
revenues for the reporting period. Revenues were $2,671,675
(compared to $3,030,019 in the comparable quarter in 2019).
- Gross margins for the period
increased by five percentage points to 60%, compared to 55% in the
previous year.
- Total expenses for the second
quarter decreased by $1,336,445 to $2,918,686 (compared to
$4,255,131 in 2019).
- The company reported a net and
comprehensive loss of $1,241,322 (compared to a net and
comprehensive loss of $2,613,586 in 2019)
- Total assets as at March 31, 2020
were $8,338,820 (compared to $8,560,452 as at June 30, 2019).
- Total liabilities were $4,339,071
(compared to $3,512,144 on June 30, 2019) primarily driven by
higher accounts payables and accrued liabilities and short-term
loans.
- Current assets were $1,573,678
(compared to $1,796,016) a decrease primarily driven by lower cash
and equivalents and higher accounts receivables.
- Current liabilities were $4,297,071
(compared to %1,343,664 as at June 31, 2019). The increase is
primarily due to the transfer of the long-term convertible
debentures into short terms liabilities as they are due within the
year.
Relevium’s CEO, Aurelio Useche, stated, "This
has been an extraordinarily challenging time for people and
businesses globally. We have remained active and taken the
opportunity to reset our costs structure. We are actively taking
this opportunity as well with the goal of seeing our business
strategies thrive over the longer term as we introduce new products
that support current opportunities in the market.”
REPORT ON THE IMPACT OF
COVID-19
The operations and financial condition of the
Company have been affected by the Covid-19 global health crisis.
Since the beginning of the pandemic, the management and board of
Relevium have worked remotely. The Company follows all federal,
provincial, and municipal regulations that have been put in place.
The Company will continue to monitor closely developments in this
regard, with the health and safety of the Company’s employees and
management as the primary concern.
Covid-19 had an initial impact on the Company in
the three months ended March 30, 2020. During the three-month
period, the Company experienced a decrease in consumer spending
along with some minor supply chain and marketplace disruptions.
During the same period and leveraging the
disruptions associated with Covid-19, the Company began a program
to revamp its cost structure by conducting a major review of its
existing product line and cost structure. Over the 18 months prior
to the reporting period, costs for selling and marketing started
escalating due to increased competition and changes in the Amazon
algorithms. In view of this, the Company started eliminating
unprofitable or high marketing cost products and those facing
aggressive price competition in the Company’s various marketplaces,
primarily Amazon.
THE ROLL-OVER TRANSACTION OF BGX E-HEALTH AND
COVID-19 GLOBAL PANDEMIC During the same period, the strategic
focus of management strategic was on the conclusion of the
roll-over of BGX E-Health LLC into New Scope Capital and the
completion of the concurrent financings for both companies. During
the reporting period macroeconomic conditions in terms of liquidity
in the Canadian financial markets began to deteriorate and along
with the overall market capitalization of the Company. In early
February, the market begun to feel the effects from the situation
in China relating to COVID-19 and in mid-February of 2020, the
World Health Organization declared a global pandemic, which in
itself solidified the weak financial markets and the appetite for
new financings contracted.
Business and Corporate Development
Highlights
- On November 8, 2019, the Company
announced that it had entered into an agreement to acquire a
Montreal-based biopharma contract manufacturer. The transaction was
aimed to complement the spin out of BGX and its Bioganix® brand.
The Company is working closely with the contract manufacturer to
transfer the manufacturing of key products to the Montreal-based
manufacturer.
- The same macroeconomic factors
affecting the transaction with Newscope have led Relevium to put
the transaction on hold pending a strategic review on a
post-pandemic basis. Relevium does not have any outstanding
obligations toward the contract manufacturer.
- On June 11, 2020, Relevium
announced the successful delivery of CleanCare™ hand sanitizers to
retail customers in the US, including the orders announced in the
Company’s news release of April 15, 2020.
- On June 19, 2020, the Company
announced that it had expanded and continues to expand its
CleanCare™ product line, as it prepares to address increased
government and institutional demand for disinfection supplies in
preparation for a potential second wave of Covid-19.
- On June 18, 2020, CBC News reported
that NATO nations have agreed to stockpile medical equipment and
essential supplies to prepare for an anticipated second wave of
Covid-19. Defense ministers from NATO have asked member nations to
contribute to an emergency fund to buy even more supplies, as the
alliance braces for a second wave of the pandemic. Municipal,
regional, and federal governments and institutions are also
following suit, and the demand for North American-made and
compliant products increases daily.
- On June 23, 2020, Relevium
announced the appointment of James Mansour, an award-winning brand
and marketing executive, to its advisory board. Mr. Mansour is an
award-winning branding authority who works closely with global
brands to ensure success. He was instrumental in the development of
many brands that became icons in the marketplace and
multi-billion-dollar businesses, including Victoria’s Secret, the
#1 lingerie brand in the world, and Bath and Body Works, the #1
beauty products specialty retailer in the world. Well versed in the
needs of global corporations like 3M and Corian and highly
experienced in navigating the demands of emerging companies,
Mansour Design specializes in integrating brands across all media,
delivering clarity, consistency and engaging interactivity, which
elevates brands and drives target customers to new products online
and on-shelf.
- On July 13, 2020, the Company
announced the expansion of its CleanCare™ brand into the
disinfection and personal protection market, following its
successful entry into the hand sanitizing business. Following this
successful launch of its hand sanitizing products, and in view of
new demand arising from the ongoing global pandemic, the Company’s
brand is expanding its mandate to cover disinfection and personal
protection equipment and supplies (the “PPES Business”). With the
expected introduction of air purification and disinfection home and
office systems this fall, the Company is also mapping the entry
into disinfection technologies and other personal protection
products.The Company also announced the appointment of The Paper
Store as an official retailer for its Bioganix® CleanCare™
products, covering the northeastern United States. Established in
1964, The Paper Store is the largest family owned and operated
specialty gif business in the American northeast. Today, the
Anderson family runs over 80 stores throughout the northeast with a
thriving ecommerce business and over 3,000 employees. The Company
completed the delivery of initial inventory of Bioganix® CleanCare™
during the month of June 2020, and the products received great
acceptance by the customer base of The Paper Store.
Outlook
The most significant challenge for the Company,
in terms of its ability to execute its strategy, is its ability to
secure financing.
The Company remains focused on the execution of
opportunities in the disinfection and personal protection
market.
About Relevium
TechnologiesRelevium is a publicly traded Company that
operates in the health and wellness industry, including legal
cannabis, with a primary focus on online distribution. The
principal business of the Company is the identification,
evaluation, acquisition and operation of brands and businesses in
the health and wellness markets and medical cannabis. The Company
pursues its business strategy through an acquisition and
partnership model in a holistic approach to encompass a wide range
of health and wellness consumer products. Relevium operates through
two wholly owned subsidiaries:
BGX E-Health LLC (BGX), based in Orlando,
Florida, markets dietary supplements, nutraceuticals, sports
nutrition and cosmeceuticals primarily through its Bioganix® brand
portfolio in the US and Europe. Relevium’s premium brands are sold
at some of the world’s largest retailers including Walmart.com and
Amazon.com.
Biocannabix Health Corporation (BCX), based in
Montreal, Quebec, is a biopharma nutraceutical Company focused on
delivering pediatric endo-medicinal nutraceuticals for cannabinoid
therapy.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Cautionary Note Regarding
Forward-Looking StatementsThis release includes certain
statements and information that may constitute forward-looking
information within the meaning of applicable Canadian securities
laws. All statements in this news release, other than statements of
historical facts, including statements regarding future estimates,
plans, objectives, assumptions or expectations of future
performance, including the timing and completion of the proposed
acquisitions, are forward-looking statements and contain
forward-looking information. Generally, forward- looking statements
and information can be identified by the use of forward-looking
terminology such as "intends" or "anticipates", or variations of
such words and phrases or statements that certain actions, events
or results "may", "could", "should", "would" or "occur".
Forward-looking statements are based on certain material
assumptions and analysis made by the Company and the opinions and
estimates of management as of the date of this press release,
including the assumptions that the Company will be able to apply
for and ultimately obtain an ACMPR licence, the proposed business
of Biocannabix will develop as anticipated, that the Company will
raise sufficient funds to develop the Biocannabix business, and
that the Company will obtain all requisite regulatory approvals.
These forward-looking statements are subject to known and unknown
risks, uncertainties and other factors that may cause the actual
results, level of activity, performance or achievements of the
Company to be materially different from those expressed or implied
by such forward-looking statements or forward-looking information.
Important factors that may cause actual results to vary, include,
without limitation, the risk that the proposed business
developments may not occur as planned; the timing and receipt of
requisite approvals and failure to raise sufficient funds.
Although management of the Company has attempted
to identify important factors that could cause actual results to
differ materially from those contained in forward-looking
statements or forward-looking information, there may be other
factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will prove
to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward- looking
statements and forward-looking information. Readers are cautioned
that reliance on such information may not be appropriate for other
purposes. The Company does not undertake to update any
forward-looking statement, forward-looking information or financial
outlook that are incorporated by reference herein, except in
accordance with applicable securities laws. We seek safe
harbor.
On Behalf of the Board of Directors
RELEVIUM TECHNOLOGIES
INC.
Aurelio UsechePresident and CEO
For more information about this press
release:
Tel: +1.888.528.8687
RELEVIUM TECHNOLOGIES INCEmail:
investors@releviumcorp.comWebsite: www.releviumtechnologies.com
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