Net losses for Canada-based BZAM Ltd. (CSE: BZAM) (OTC: BZAMF) surpassed the C$100 million mark for 2023 after it posted a C$16.9 million loss in the third quarter that ended Sept. 30, the company reported this week. That’s despite a 112% year-0ver-year revenue increase.
Total losses for BZAM in 2023 are now at C$101.7 million against net revenues of C$64.4 million for the past nine months. The company recorded C$21 million in revenue for the third quarter, which is up from C$9.9 million a year prior.
“In Q3 we completed our extensive post-merger facility consolidation and cost reduction program, while rationalizing a number of low margin SKUs, which we expect to positively impact our operating metrics going forward,” CEO Matt Milich said in a statement, referring to BZAM’s merger with The Green Organic Dutchman.
The merger was responsible for the skyrocketing revenue, BZAM reported, including a 9% quarterly increase sequentially, primarily attributed to “increased sales of Highly Dutch flower, -ness vapes, and BZAM infused pre-rolls” and the discontinuation of lower-margin products.
BZAM continues to focus on controlling expenses in its quest toward profitability, which has thus far included shuttering “redundant facilities,” getting its Ontario and British Columbia production facilities to “maximize efficiencies,” and cutting SG&A costs.
Adjusted general and administrative expenses, however, were up dramatically – 59% – for the year due to the merger and were up sequentially by just over C$500,000, an 8% increase.
Also during the third quarter, BZAM took in international cannabis orders from Australia, Germany, and the United Kingdom after its European Union good manufacturing practice certification came through in the second quarter. The orders totaled just over C$1 million in new revenue after delivery was made in October.
After the end of the quarter, the company also took out a new C$1.79 million loan at the prime interest rate plus 8% from Stone Pine Capital, which is controlled by BZAM Chairman Bassam Alghanim. In May, Alghanim also invested C$5 million in the company after being named chairman in January. The new loan matures at the end of January 2025.
In October, BZAM obtained a waiver agreement from one of its creditors, allowing it to continue operations without penalty from an earlier deal that required the company to be EBITDA positive by January.
BZAM finished the third quarter with C$172 million in total assets, including C$4.9 million in cash, against C$86.6 million in total liabilities.
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