Canadian cannabis company Entourage Health Corp. reported a net loss of 123.1 million Canadian dollars ($90 million) for its 2022 fiscal year amid declining revenue.
Entourage, previously known as WeedMD, warned in a regulatory filing about “material uncertainty that may cast a significant doubt about the company’s ability to continue as a going concern.”
The Aylmer, Ontario-based company said it “has sufficient cash on hand to service its liabilities and fund operating costs for the immediate future with the additional sources of funding actually received in February 2023, as well as additional funding expected during 2023.”
“However, there is uncertainty as to how long these funds will last,” the filing noted.
Entourage announced in November that it was laying off more than a third of its staff, ending its cultivation operations and sourcing cannabis from Hexo Corp.
The company’s total revenue for 2022 was CA$54.5 million, down nearly 1.3% from the previous year, according to a late Monday news release.
Meanwhile, Entourage’s annual selling, general and administrative expenses were CA$30.3 million, up from CA$28.7 million in 2021.
The company attributed the increased expenses primarily to its restructuring effort.
“Despite encountering revenue stagnation in 2022 because of a product shortfall last spring, initial indications imply that the partnership with Hexo, our third-party supplier, is positively impacting overall operations,” Entourage Chief Financial Officer Vaani Maharaj said in a statement.
Entourage’s cost-saving measures are expected to save CA$12 million per year, according to Maharaj.
“The infusion of CA$30 million in financing from (key investor and creditor Liuna Pension Fund) and deferred debt payments has strengthened our company’s liquidity and provided additional support for our operations and growth initiatives,” she said.
Shares of Entourage trade as ENTG on the TSX Venture Exchange.