Organicell Regenerative Medicine, Inc. (OCEL), a company focused on the development and commercialization of regenerative therapies, has released its quarterly report, revealing some interesting statistics and trends. In this 1500-word article, we’ll examine the key findings from the report and what they mean for the company’s future prospects.
Table of Contents
Gross Profit Decreases
Organicell’s gross profit for the six months ended April 30, 2023, was $1.7 million (88.9% of revenues), a significant decrease from the $3.1 million (91.7% of revenues) reported for the same period in 2022. This drop in gross profit can be attributed to several factors, including decreases in average sales prices for products sold and an overall decrease in unit sales during the six months ended April 30, 2023.
The decrease in average sales prices for products sold during this period can be traced back to reductions in the prices of the company’s aesthetic product offerings and the reduction in sales of higher-priced medical-grade products. These were partially offset by an increase in sales of aesthetic product offerings.
The percentage of overall unit sales for the company’s medical-grade products and aesthetic product offerings also fell, from 71.5% and 28.5% for the six months ended April 30, 2022, to 45.6% and 54.4% for the six months ended April 30, 2023.
Cost of Revenues Increases
Organicell’s cost of revenues for the six months ended April 30, 2023, was $212,389, compared to $275,539 for the same period in 2022. This represents a decrease of $63,150 or 22.9%. This reduction in cost of revenues can be attributed to a decrease in the number of units sold (25.2%, approximately $71,600) during the six months ended April 30, 2023, compared to the same period in 2022. This decrease was partially offset by a 3.1% increase in the cost of units sold (approximately $8,500) during the six months ended April 30, 2023.
General and Administrative Expenses
General and administrative expenses for the six months ended April 30, 2023, were $5,792,335, compared to $5,958,477 for the same period in 2022, representing a decrease of $166,142 or 2.8%. The reduction in general and administrative expenses was primarily due to decreased payroll and consulting fees of approximately $885,700, decreases in sales commissions, and travel and entertainment costs of approximately $792,600, and reduced office-related expenses of about $204,900.
These reductions were partially offset by increased stock-based compensation costs for advisors, consultants, and administrative staff totaling approximately $792,600, increased professional fees of about $100,600, increased research and development costs of roughly $49,500, increases in insurance costs of around $178,200, increased investor relations costs of about $175,400, and increased laboratory-related expenses of approximately $219,100.
Liquidity and Capital Resources
Organicell’s cash and cash equivalents have seen a concerning decrease, with cash at the end of the period for the six months ending April 30, 2023, at $1,130,937 compared to $3,753,097 at the beginning of the year. This reflects a significant increase in net cash used in operating activities ($1,953,576 compared to $623,943 during the same period in 2022), as well as net cash used in investing activities ($116,116 compared to $385,036 in the prior year) and net cash used in financing activities ($552,468 compared to cash provided of $966,411 in the previous year).
The recent quarterly report from Organicell Regenerative Medicine, Inc. highlights several concerning trends, including a decrease in gross profit and an increase in the cost of revenues. While the company has managed to reduce some general and administrative expenses, the overall financial picture remains troubling, particularly in terms of liquidity and cash resources.
In order to address these challenges, Organicell will need to focus on increasing sales of its products, finding ways to reduce costs further, and exploring additional avenues for raising capital. The company’s future success will depend on its ability to navigate these challenges and implement strategies that will help it generate stable revenue streams and ensure its long-term sustainability in the increasingly competitive field of regenerative medicine.
Note that we may hold securities mentioned in this article. All data is based on recent SEC filings. Even though we have implemented various manual and automatic fact-checking and data acquisition processes, some incorrect information may have slipped through (false positive). Let us know if you find any inconsistencies!