- In Europe, revenues increased
by 141% year-over-year, driven by revenues in the United Kingdom, where the Corporation is now
increasing its existing product portfolio, and the specialized
cannabis clinic Zerenia™ Clinics UK celebrates its first
anniversary.
- Overall revenues for Q3 2022 decreased 24% driven primarily by
a reduction of medical cannabis sales in Colombia, due to an interruption in
insurance-covered prescriptions for Colombian patients during the
new change of government.
- As of September 30, 2022, the
Corporation´s cash used in operating activities was $9.8 million, compared to -$15.2 million in the nine months ended
September 30, 2021, resulting in a
net cash of $1.9 million at the end
of Q3 2022.
- Outlook Q4: In October 2022,
Khiron began sales of its first THC-dominant, Khiron-branded
products into Brazil. In
November 2022, Khiron entered the
Swiss medical cannabis market with the first sales of two of its
new flower products and after obtaining import approvals from
German regulators, Khiron has begun selling its new product
portfolio in Germany and the
UK.
TORONTO, Nov. 30,
2022 /CNW/ - Khiron Life Sciences Corp.
("Khiron" or the "Corporation") (TSXV: KHRN) (OTCQX:
KHRNF) (Frankfurt: A2JMZC), a
global leader in medical cannabis throughout Latin America and Europe, announced today its financial results
for the quarter ended September 30,
2022, which were prepared in accordance with International
Financial Reporting Standards ("IFRS"). Third quarter 2021
comparable numbers were also prepared in accordance with IFRS. All
financial results for the third quarter ended September 30, 2022, and related comparisons to
prior periods included in this press release have not been reviewed
by the auditors of the Corporation. These filings are available for
review on the Corporation's SEDAR profile at www.sedar.com. All
financial information in this press release is reported in Canadian
dollars, unless otherwise indicated.
Summary of Key Financial Results:
|
3 Months Ended
September 30
2022
|
3 Months Ended
September 30
2021
|
3 Months Ended
June 30 2022
|
Canadian dollars
('000s)
|
|
$
|
$
|
$
|
Revenues
|
3,385
|
3,519
|
4,473
|
Medical
Cannabis
|
1,604
|
1,207
|
2,607
|
Gross profit before
fair value adjustments
|
1,381
|
1,693
|
2,246
|
Gross profit from
Medical Cannabis before FV
|
1,081
|
1,078
|
1,993
|
General and
administrative costs
|
4,403
|
5,182
|
3,799
|
Net loss
|
(3,576)
|
(3,337)
|
(2,171)
|
Adjusted
EBITDA (1)
|
(2,831)
|
(3,772)
|
(2,288)
|
Net loss per share
(basic and diluted)
|
(0.02)
|
(0.02)
|
(0.01)
|
Weighted average shares
outstanding
|
214,528
|
177,028
|
186,444
|
(1)
|
Adjusted EBITDA
(earnings before interest, taxes, depreciation and amortization or
in this case loss) and Gross Profit do not have a standardized
meaning prescribed by IFRS and are therefore unlikely to be
comparable to similar measures presented by other issuers. The
Corporation calculates Adjusted EBITDA as net loss before tax as
reported under IFRS and adding back share-based compensation
expenses, transaction fees, unrealized gain on changes in fair
value of biological assets, interest, depreciation, amortization,
impairments, unrealized gain or loss in warrants and non-recurring
items. The Corporation calculates Gross Profit as revenue less cost
of revenue, changes in fair value of inventory sold, and unrealized
gain (loss) on changes in fair value of biological assets. Please
refer to the section entitled "Non-IFRS Financial Measures"
in this press release.
|
Q3 2022 operating highlights and subsequent events:
- Adjusted EBITDA loss of $2.8
million, a reduction of 25% year-over-year, driven by a
decrease of 17% year-over-year in expenses during Q3 2022, and the
Corporation´s high gross margins across its medical cannabis
segment of 67%.
- Overall revenues for Q3 2022 decreased 24% driven primarily by
a reduction of medical cannabis sales in Colombia, due to an interruption in
insurance-covered prescriptions for Colombian patients during the
new change of Government, which began its new period August 7th, 2022. The new incoming
Government is reviewing the protocols for use of medical cannabis
for specific conditions for which there is much evidence of medical
cannabis use, to create a more robust financing framework under
Colombia´s universal health benefits system.
- In Europe, revenues increased
by 141% year-over-year, driven by revenues in the United Kingdom, where the Corporation is now
increasing its existing product portfolio. In Germany, the restart of Khiron medical
cannabis product sales was delayed because of import product
approvals to Pharmadrug GmbH ("Pharmadrug") for Khiron's
existing and new product portfolio, which have now been obtained.
The Pharmadrug acquisition enables Khiron to sell directly to
pharmacies in Germany without the
need for a third-party distribution partner. As a result of the
Pharmadrug acquisition, the Corporation was able to successfully
export to and sell its first two medical cannabis SKUs in
Switzerland. The acquisition
formally closed on August
2nd, 2022, after the clearance certificate
required under German Foreign Trade Regulation was obtained. Since
obtaining import approvals from German regulators, Khiron is now
selling a total of seven medical cannabis SKUs and further SKUs are
already registered and will be launched over the next weeks.
- In October 2022, Khiron began
sales of its first THC-dominant, Khiron-branded products into
Brazil, making it one of the first
companies to sell approved THC medications into the country. The
Company opened its first ZereniaTM clinic in
Rio de Janeiro and it is in full
operation.
- As of September 30, 2022, the
Corporation´s cash used in operating activities was $9.8 million, compared to -$15.2 million in the nine months ended
September 30, 2021, resulting in a
net cash of $1.9 million at the end
of Q3 2022. The Corporation continues to actively manage its
working capital cycle, while reducing overall general and
administrative costs.
- In November 2022, the Corporation
was approved a loan with one of Colombia´s most traditional bank
lenders for an initial amount of approximately $700,000, which will be used to fund working
capital requirements in its Zerenia™ clinical operations in
Colombia. This would mark the
first time that a privately-owned, traditional banking entity lends
funds to a medical cannabis-related business in Colombia. In addition, the Corporation
continues to evaluate options for capitalizing the growth of its
business.
Management commentary:
Alvaro Torres, Khiron CEO and
Director, comments, "This quarter presented transitional challenges
in Colombia and Germany, impacting top line sales and our
short-term goals on profitability. In Colombia, insurance coverage has always been a
priority for the Company, and as we have witnessed in the past year
and a half, it's an importance in serving patients from all
communities. The new Government has been very supportive of the
industry and the efforts of companies such as Khiron to ensure
access to medical cannabis. We want to thank our patient
base, who was instrumental in advocating for the need of insurance
coverage, and the Government of Colombia who will create a more robust
long-term framework, so that medical cannabis continues reach
patients who depend on our services. In Germany, we are pleased to have finished all
regulatory approvals for the acquisition of Pharmadrug as well as
obtaining import permits for our product portfolio. This has
allowed us, in Q4 2022, to increase our presence in this country
and to look at different growth opportunities through our
Pharmadrug distribution platform, such as our new exports into
Switzerland. Meanwhile, we
continue to reduce expenses, while growing our high gross margin
medical cannabis business in Europe and the rest of Latin America.
The Company continues to evaluate all strategic opportunities and
financing options."
Webcast Details:
Khiron invites individual and institutional investors, as well
as advisors and analysts, to attend the Corporation's Third Quarter
2022 Conference Call, followed by a Q&A session.
DATE: Wednesday, November 30,
2022
TIME: 11:00am ET
PRESENTERS: Alvaro Torres, Khiron
Chief Executive Officer and Director, Helen
Bellwood, Khiron Chief Financial Officer, and Franziska
Katterbach, President of Khiron Europe.
FORMAT: Live 45-minute presentation & Q&A session
REGISTER LINK:
https://us06web.zoom.us/webinar/register/WN_nB0mQsxmR2SgKJCnHlhL9Q
Grant of Restricted Share Units
On November 23, 2022, the Board of
Directors approved the grant of 87,500 restricted share units
("RSUs") to an officer of the Corporation, upon the satisfaction of
certain milestones associated with the grant. The RSUs were subject
to performance-based vesting conditions that are already met and
will expire on December 15, 2025.
Participant
|
Position(s)
|
Equity-Based
Compensation
|
Expiry Date
|
Juan Diego
Alvarez
|
VP Corporate
Affairs
|
87,500 RSUs
|
15/12/2025
|
About Khiron Life Sciences Corp.
Khiron is a global medical cannabis company with core operations
in Latin America and Europe. Leveraging wholly owned medical health
clinics and proprietary telemedicine platforms, Khiron combines a
patient-oriented approach, physician education programs, scientific
expertise, product innovation, and focus on creating access to
drive prescriptions and brand loyalty with patients worldwide. The
Company has a sales presence in Colombia, Germany, UK, Peru, Switzerland, and Brazil. The Company is led by Co-founder and
Chief Executive Officer, Alvaro
Torres, together with an experienced and diverse executive
team and Board of Directors.
Visit Khiron online at investors.khiron.ca
Linkedin
https://www.linkedin.com/company/khiron-life-sciences-corp/
Non-IFRS Financial Measures
[NTD: Khiron to review and confirm the below disclosure
regarding non-IFRS financial measures, which has been taken from
the Q2 2022 earnings release. Note that we included "Gross
Profit", as it was previously disclosed as a non-IFRS financial
measure in Q2 2022, but please confirm and review and include the
disclosure below as necessary for all non-IFRS financial measures
included.]
This press release includes references to "Adjusted EBITDA" and
"Gross Profit", which are financial measure that does not have a
standardized meaning prescribed by IFRS. Investors are cautioned
that non-IFRS financial measures should not be considered in
isolation or construed as an alternative to the measurements of
performance calculated in accordance with IFRS, because given the
non-standardized meaning of non-IFRS financial measures, they may
not be comparable to similar measures presented by other
issuers.
Adjusted EBITDA
Adjusted EBITDA is calculated as reported under IFRS and adding
back share-based compensation expense, transaction fees, unrealized
gain on changes in fair value of biological assets, interest,
depreciation, amortization, impairments, unrealized gain or loss in
warrants, and non-recurring items. Adjusted EBITDA provides an
indication of the results generated by the Corporation's principal
business activities prior to how these activities and assets are
financed (including mark-to-market movements of the warrant value),
depreciated and amortized or how the results are taxed in various
jurisdictions, impairment of property, plant, and equipment,
impairment of intangible assets, changes in fair value of
inventory, unrealized changes in fair value of biological assets,
prior to the effect of foreign exchange, other income and expenses,
and non-cash share-based payment expense. The term Adjusted EBITDA
does not have any standardized meaning and therefore may not be
comparable to similar measures presented by other issuers. The
Corporation believes Adjusted EBITDA is useful for comparing
results from one period to another, as Adjusted EBITDA normalizes
earnings to exclude certain non-operating, non-cash, and
extraordinary amounts. Existing Adjusted EBITDA is not necessarily
predictive of the Corporation's future performance or the Adjusted
EBITDA of the Corporation as at any future date.
The following table provides a reconciliation of net loss to
Adjusted EBITDA.
For the three months
ending September 30,
($ Cdn
thousands)
|
|
2022
|
2021
|
Net loss
|
|
(3,576)
|
(3,335)
|
Add back
(deduct):
|
|
|
|
Interest
expense
|
|
93
|
43
|
Taxes
|
|
125
|
1
|
Depreciation and
amortization
|
|
556
|
341
|
Net fair value
adjustment on biological assets and cannabis product
sales
|
|
(272)
|
(120)
|
Foreign exchange
loss
|
|
102
|
-
|
Impairment on other
items
|
|
88
|
-
|
Share-based
compensation
|
|
328
|
535
|
Unrealized gain on
warrants
|
|
(275)
|
(1,235)
|
Adjusted
EBITDA
|
|
(2,831)
|
(3,771)
|
|
|
|
|
|
|
|
|
For the nine months
ending June 30,
($ Cdn
thousands)
|
2022
|
2021
|
Net loss
|
(11,159)
|
(13,627)
|
Add back
(deduct):
|
|
|
Interest
expense
|
281
|
145
|
Taxes
|
84
|
(13)
|
Depreciation and
amortization
|
1,805
|
964
|
Net fair value
adjustment on biological assets and cannabis product
sales
|
263
|
(1,371)
|
Foreign exchange
loss
|
506
|
-
|
Impairment on other
items
|
85
|
-
|
Share-based
compensation
|
975
|
2,568
|
Amortization of
signing bonus
|
-
|
840
|
Unrealized gain on
warrants
|
(1,235)
|
(1,234)
|
|
(8,395)
|
(11,728)
|
|
|
|
Gross Profit
Gross Profit is defined as revenue less cost of revenue, changes
in fair value of inventory sold, and unrealized gain (loss) on
changes in fair value of biological assets. Management believes
that Gross Profit is a useful supplemental measure of operations
and is used by management to analyze overall and segmented
operating performance. Gross Profit is not intended to represent an
alternative to net earnings or other measures of financial
performance calculated in accordance with IFRS.
The following table provides a reconciliation of revenues to
Gross Profit.
Cautionary Statement Regarding Forward-Looking
Statements
This press release may contain "forward-looking information"
within the meaning of applicable securities legislation. All
information contained herein that is not historical in nature
constitutes forward-looking information. Forward-looking
information contained in this news release include, without
limitation, statements pertaining to the Corporation's business
plans and goals, including its goal of achieving profitability in
the near future, and improving revenue collections, reducing cash
outflows, and leveraging the Corporation's assets to generate more
working capital. Forward-looking information and statements
contained in this news release reflect management's current beliefs
and is based on information currently available and on assumptions
that management believes to be reasonable. These assumptions
include, but are not limited to, assumptions regarding the future
regulatory developments and economic conditions, and the
Corporation's ability to continue its growth and reduce costs.
Although management believes that its expectations and
assumptions to be reasonable, forward-looking information is always
subject to known and unknown risks, uncertainties, and other
factors, many of which are beyond the control of management, that
may cause actual results to differ materially from those expressed
or implied in such forward-looking information. Such risks and
uncertainties include but are not limited to the following: risks
relating to general economic conditions and capital markets; risks
relating to the availability of financing on satisfactory terms;
risks relating to the COVID-19 pandemic or other health crises;
risks relating to regulatory, legislative, competitive and
political conditions; business integration risks; as well as those
other risk factors discussed in Khiron's most recent annual
information form which is available on Khiron's SEDAR profile at
www.sedar.com.
As a result of the foregoing and other risks and uncertainties,
readers are cautioned not to place undue reliance on
forward-looking information contained in this press release.
Readers are further cautioned that the foregoing risks and
uncertainties is not exhaustive, and there may be other risks and
uncertainties, presently unknown to management of the Corporation,
that may cause actual results to differ materially from those
expressed or implied in forward-looking statements contained in
this press release. The forward-looking information contained in
this press release is expressly qualified by this cautionary
statement. Khiron disclaims any intention to update or revise any
forward-looking information disclosed herein, whether as a result
of new information, future events or otherwise, except as required
by law.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/khiron-life-sciences-reports-third-quarter-2022-financial-results-301690188.html
SOURCE Khiron Life Sciences Corp.