Humble & Fume Inc. (CSE: HMBL) (OTCQX: HUMBF) reported its third-quarter fiscal 2022 financial results for the fiscal third-quarter ending March 31, 2022. Revenue fell to $16 million in the quarter versus last year’s revenue of $18 million for the same time period. Humble & Fume said that the revenue decreased as a result of management’s focus on selling higher-margin products and moving away from lower-margin sales channels.
The net losses decreased to $2.5 million from last year’s $5.8 million. The decrease in net losses was primarily driven by the decrease in accretion expense on the convertible debentures issued in May 2019 and exercised on June 14, 2021, resulting in the conversion of the debt to share capital.
Joel Toguri, Chief Executive Officer of Humble, said, “We are laser-focused on cost-cutting, optimizing the business, improving on our end-to-end customer experience, and aggressively pursuing expansion opportunities in the US. Our commitment to right-sizing the business has resulted in faster turnaround times, improved accuracy in our fulfillment, and a meaningful reduction in our inventory. We have made significant improvements to our cost base while stabilizing revenue and improving gross margins.”
The operating loss for the quarter decreased to ($2) million from ($3) million compared to the same period in the prior year. The decrease in operating loss was driven primarily by increased gross margin.
Toguri added, “Our expansion into cannabis distribution in the US is ahead of schedule. In Q3, the build-out of our cannabis operations in California resulted in the on-boarding of multiple partners, including California’s preeminent flower brand Canndescent and industry-leading brands such as Leune, Proof, Highsman, and Humboldt Farms. We are very proud to be associated with these brands who share our vision for the future growth of the cannabis industry. They have chosen us as partners because we are dedicated to helping them grow their businesses, and we are committed to moving with pace.”
The company said that expansion into cannabis distribution in California is ahead of schedule and operational, with multiple tier-one brand partners onboarded in the first three months with an anticipated annualized revenue contribution of $25-35 million which is slated to start in Q4 (April – June 2022).