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Simply Better Brands Corp. (OTCQB:PKANF) (TSXV:SBBC) released its financial results for the quarter ended September 30, 2022, revealing revenue of $13.4 million, a 283% increase compared to $3.5 million in the Q3 2021.
Q3 Financial Highlights
Gross margin was $8.8 million (66%), an increase of 340% compared to a gross margin of $2.0 million (57%) during the three months ended September 30, 2021.
Net loss was $1.4 million, compared to net loss of $6.4 million in Q3 2021.
Loss per share was $0.04 in the third quarter of 2022.
Adjusted EBITDA was $400,000, an increase of $1.1 million over the adjusted EBITDA loss for the comparable period in 2021.
Private Placements
The company completed a private placement raise in August of 2022 and raised $3.1 million in common shares and convertible debentures. The funds raised were used for debt reduction and working capital.
Line of Credit Facilities
The company has secured several lines of credit facilities for three of its subsidiaries to support the financing of purchase orders from key customers. During the nine months ended September 30, 2022, the company raised $4.5 million in funds from these lines of credit to finance purchase orders from its large retail customers. Over the same period, the company repaid $4 million of these credit facilities to the lender. The nature of these loans is to turnover between 3-5 months from time the money is advanced to repayment.
Subsequent to the quarter ended September 30, 2022
The company entered into an agreement with the third party to settle the payment of the assigned portion of the PK promissory notes ($1.2 million). The company made an initial payment of $300,000 to the assigned portion of the PK promissory notes. The agreement calls for monthly payments of $50,000 beginning on December 15, 2022 and continuing until the $1.2 million amount is paid in full. The note bears an interest rate of 6%.
The company entered into a loan agreement with an amount of $1 million. The loan bears 15% interest per annum and will be repaid over 42-months starting November 15th, 2022.
2022 Outlook
The company updated its annual guidance as follows:
Expected consolidated net sales are increased from $50 million-55 million to $55 million -$60 million
Expected gross margin as a percentage of net sales is 63%-65%.
The company expects to achieve positive Adjusted EBITDA for fiscal 2022.
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Photo by Mackenzie Marco on Unsplash
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