Blüm Holdings reports $3M loss in Q3 as subsidiary Unrivaled declares bankruptcy

California-based Blüm Holdings Inc. (OTCQB: BLMH) reported a net loss of $3.3 million for its third quarter of the year, down year-over-year from the $23.8 million in net income the company reported for the same period in 2023.

A partial factor in Blüm’s troubles is the insolvency of its subsidiary, Unrivaled Brands, which filed a petition for Chapter 11 bankruptcy this week after “bitter activist litigation” forced its hand, according to a press release. The value of Unrivaled Brands stands at roughly $6 million, Blüm reported, but the subsidiary’s liabilities and debts are approximately $35 million. Unrivaled, which was formerly known as Terra Tech, rebranded about a year ago.

Blüm emphasized in its quarterly report that it “remains unaffected by this filing and will continue its operations as usual outside of the Chapter 11 proceedings.”

“As of the date of this filing, there is no order confirming a plan of reorganization, arrangement or liquidation that has been entered by a court or governmental authority,” Blüm stated in a release.

Despite that speed bump, Blüm has made significant strides in paying down debts and driving up revenue, though the net loss was a big change from the $23.4 million in net income it reported in the second quarter this year.

Quarterly revenue for Blüm reached $4.3 million, up 182% from $1.5 million for the same period last year and up 15% sequentially. That brought revenue for the calendar year to $9.9 million, up from $5.6 million year-over-year. Blüm said the growth was driven by “the consolidation of (three) Northern California stores and supported by growth in the Korova brand.”

Blüm also reported a 68% reduction in company debts, which fell to $9.2 million, since the start of 2024. The debt was partially taken care of by two rounds of layoffs during the quarter and “a targeted decrease in corporate overhead,” according to a release. The moves also helped cut expenses to $14.8 million from $30.3 million year-over-year.

In addition, Blüm said it initiated a new strategy to attract more shareholders and retail investors, and began “reinvigorating” its Korova brand, a key part of its Unrivaled portfolio.

Following the close of the quarter, on Nov. 5, Blüm sold two of its dispensaries in Oakland and San Leandro to VLPS LLC for “a combined $3.18 million through liability assumption.” The sale, Blüm said, would allow the company to “optimize its retail footprint and focus on high-performing locations.”

“The Northern California stores and the implementation of consistent operational practices have significantly strengthened our financial and operational foundation,” CFO Patty Chan said. “We are confident that these enhancements position us well for continued growth and profitability.”

As of Sept. 30, Blüm had $38.6 million in total assets, including $1 million in cash, against $66.1 million in total liabilities.