Canopy Rivers Inc. announced a series of operational changes designed to optimize its organizational structure, streamline operations, and preserve and maximize cash-on-hand. As part of its strategic and operational review of the business, the Company announced today the following changes:
- A material reduction in the Company’s operating cash outflows, including a reduction in headcount, directors’ compensation, marketing expenses, and general corporate expenses of a minimum of 35% from the Company’s fiscal 2020 operating cash outflows on a normalized basis;
- A focus on generating positive cash flow from operations for fiscal 2021 (year ended March 31, 2021); and
- A focus on maximizing returns on existing assets.
The Company also reaffirms its intention, under its previously announced normal course issuer bid (the “NCIB“), to repurchase subordinated voting shares in accordance with its NCIB. Pursuant to the previously announced NCIB, the Company is permitted to repurchase up to 10% of the subordinated voting shares in the public float.
“We believe that sharpening our focus on financial discipline, operational excellence, and opportunistic capital deployment on our investment pipeline will yield long-term results for shareholders,” said Narbe Alexandrian, President & CEO. “In addition, the strategic utilization of our NCIB could be an important tool to provide attractive returns to shareholders.”
“Our cash on hand from our prior capital raises and returns from certain investments will allow us to deploy capital opportunistically moving forward, both towards new investment opportunities and in conjunction with our NCIB,” continued Alexandrian. “These unprecedented times, while difficult, are revealing investment opportunities at attractive valuations, and we intend to actively execute on our investment pipeline during this time. Our expectation is that our efforts to achieve positive operational cash flow, conserve and deploy capital on a strategic basis, and focus on our core business objectives will better align our share price with our underlying net asset value.”
