California-based Blüm Holdings Inc. (OTCQB: BLMH) posted a $14.1 million net loss last year, the company announced this week in its fourth quarter and annual financial filings. Though the result is a dramatic improvement from 2022 – when Blüm lost $188.6 million – it still leaves the company struggling to attain profitability, with an accumulated deficit nearing half a billion dollars.
Revenues for the full 2023 calendar year were down by a dramatic 36% year-over-year, to $33.2 million from $52 million, and down slightly sequentially quarter-over-quarter to $8.1 million from $8.2 million. The company attributed the annual revenue dip to “strategic slowdown in its underperforming distribution segment.”
The improvement in overall losses, Blüm said in a release, was thanks to impairment charges in 2022 in conjunction with “reduced corporate headcount” and the business’s “exit from unprofitable segments” of the industry. That exit included the divestiture of “its unprofitable cultivation facility in Northern California” in the final quarter of last year, the company said.
Meanwhile, operating expenses increased 23% quarter-over-quarter, to $11.1 million, and the quarterly loss before taxes of $6.3 million was up 125%, due to some tax penalties.
CFO Patty Chan said in the release that Blüm has already implemented a number of cost-saving steps that helped the company cut its losses last year with new efficiencies.
Chan asserted that the company’s financials “demonstrate our commitment to enhancing our operational efficiency and a focus on financial performance. The divestiture of unprofitable operations has allowed us to focus on our core strengths, resulting in improved gross margins and a significant reduction in net operating loss.”
But in the company’s annual 10-K, Blüm reported an accumulated deficit of $454.18 million as of Dec. 31 – up from $440 million a year prior – and said its future is uncertain.
“We have not been able to generate sufficient cash from operating activities to fund our ongoing operations,” the company wrote. “Our future success is dependent upon our ability to achieve profitable operations and generate cash from operating activities. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support our operations.”
“Recurring losses from operations raise substantial doubt about our ability to continue as a going concern,” the company reported.
As of New Year’s Eve, Blüm had $32 million in total assets, including $862,000 in cash, against $77.7 million in total liabilities.
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