- The Corporation recorded revenues of $4.6 million in Q1 2022, a 65% increase from Q1
2021, and a 28% increase from Q4 2021
- Record revenue in medical cannabis of over $2.6 million in Q1 2022, a 470% increase from the
prior year and 32% increase from Q4 2021
- Gross profit before fair value adjustments grew to $2.1 million, up 96% from Q1 2021, driven
primarily by its 75% gross margin medical cannabis business,
compared to 49% in Q4 2021.
- In Q1 2022, Europe (the UK and
Germany) represented 53% of all
medical cannabis revenue, compared to 10% in Q1 2021.
- The net change in cash and cash equivalents of -$3.3 million, compared to -$8.6 million in Q1 2022, ending Q1 2022 with
$5.1 million in cash
TORONTO, May 31, 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 March 31, 2022, reporting record revenue in the
medical cannabis business. 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
March 31 2022
|
3 Months Ended
March 31 2021
|
3 Months Ended
Dec 31 2021
|
Canadian dollars
('000s)
|
|
$
|
$
|
$
|
Revenues
|
4,643
|
2,836
|
3,636
|
Medical
Cannabis
|
2,650
|
563
|
2,011
|
Gross profit before
fair value adjustments
|
2,137
|
1,090
|
1,083
|
Gross
profit from Medical Cannabis before FV
|
1,973
|
505
|
1,068
|
General and
administrative costs
|
5,550
|
6,313
|
5,304
|
Net loss
|
(5,412)
|
(5,494)
|
(19,969)
|
Adjusted
EBITDA (1)
|
(3,057)
|
(4,019)
|
(5,649)
|
Net loss per share
(basic and diluted)
|
(0.03)
|
(0.04)
|
(0.11)
|
Net cash used in
operating activities
|
(2,803)
|
(8,195)
|
(5,166)
|
Weighted average shares
outstanding
|
179,395
|
150,718
|
179,144
|
(1)
|
Adjusted EBITDA
(earnings before interest, taxes, depreciation and amortization or
in this case loss) does not have a standardized meaning prescribed
by International Financial Reporting Standards ("IFRS") and
is therefore unlikely to be comparable to similar measures
presented by other issuers. The Corporation calculates Adjusted
EBITA as net loss before tax as reported under IFRS and adding back
share-based compensation expense, transaction fees, unrealized gain
on changes in fair value of biological assets, depreciation and
non-recurring items. Please refer to the section entitled
"Non-IFRS Financial Measures" in this press
release.
|
Q1 2022 operating highlights and subsequent events:
- Khiron's unique patient-focused medical cannabis segment posted
7th quarter of consecutive revenue growth in Q1 2022, and now
represents 57% of the Corporation´s revenue and 92% of its total
gross profits. In the month of March
2022, Khiron had surpassed $1
million in monthly revenues in medical cannabis alone.
- Khiron's unique business model is already beginning to yield
positive financial results during Q1 2022. ILANS SAS (Khiron's
health service business in Colombia) has been instrumental in driving
higher gross margin medical cannabis and clinical services.
- Both Khiron's European expansion and continued growth in
Colombia, is driving the medical
cannabis segment growth in Q1 2022. In Q1 2022, Khiron surpassed
$1 million in medical cannabis
revenues in the United
Kingdom.
- In Colombia, Khiron continues
to be a market leader in medical cannabis with its unique
vertically integrated approach and leverage of insurance coverage
on its clinics. Over 82% of sales were sold through insurance
coverage, and over 84% of the sales were sold to returning
patients, who are now purchasing up to 1.8 bottles per month.
- At the end of Q1 2022, the Corporation had $37.6 million in total assets (excluding
goodwill), with more than $9.4
million in land and buildings, high-quality medical cannabis
inventory of $8.1 million, healthy
Accounts Receivables with credit-worthy clients in Colombia and Europe of $4.4
million and $0.8 million in
financial debt.
- The Corporation's cash used in operating activities for Q1 2022
was $2.8 million, compared to
-$8.2 million in Q1 2021 and
approximately -$5.4 million in Q4
2021, resulting in net cash of $5.1
million at the end of Q1 2022. This is a result of actively
managing the working capital cycle, improving collection times for
the Corporation´s Accounts Receivable, and extending payment terms
on its Accounts Payables while reducing overall general and
administrative costs and increasing its high gross margin medical
cannabis business.
Management commentary:
Alvaro Torres, Khiron CEO and
Director, comments, "Khiron is the top-selling medical cannabis
brand in Latin America and one of
the top-selling brands in the United
Kingdom. Our unique approach will continue to generate
double-digit revenue and gross profits quarter over quarter in
markets poised to become significant in the coming years. Our focus
is to leverage the infrastructure we have built to continue driving
sales in our target markets while maintaining discipline in our
expenses so we can achieve profitability in the near future, and
then continue to look for more growth opportunities in Latin America and Europe."
Mr. Torres added, "The results of Q1 2022 continue to showcase
the success of Khiron's global expansion and the Corporation's
unique "patient-first" strategy.
Webcast Details:
Khiron invites individual and institutional investors, as well
as advisors and analysts, to attend the Corporation's First Quarter
2022 Conference Call, followed by a Q&A session.
DATE: Tuesday, May 31th, 2022
TIME: 10:00am ET
PRESENTERS: Alvaro Torres, Khiron
Chief Executive Officer and Director, Swapan Kakumanu, Khiron Chief Financial Officer,
and Franziska Katterbach, President of Khiron Europe.
FORMAT: Live 45 minute presentation & Q&A session
REGISTER LINK:
https://us02web.zoom.us/webinar/register/WN_VVgAryILSl-W9at7iftkCQ
About Khiron Life Sciences Corp.
Khiron is a leading vertically integrated international medical
cannabis corporation with core operations in Latin America and Europe. Leveraging medical health clinics and
proprietary telemedicine platforms, Khiron combines a
patient-oriented approach, physician education programs,
scientific, product innovation, and cannabis operations expertise
to drive prescriptions and brand loyalty with patients worldwide.
The Corporation has a sales presence in Colombia, Peru, Germany, United
Kingdom, and Brazil and is
positioned to commence sales in Mexico. The Corporation 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 https://investors.khiron.ca.
Linkedin
https://www.linkedin.com/company/khiron-life-sciences-corp/
Non-IFRS Financial Measures
This press release includes references to Adjusted EBITDA, which
is a financial measure that does not have a standardized meaning
prescribed by IFRS. Adjusted EBITDA is calculated as net loss
before tax as reported under IFRS and adding back share-based
compensation expense, transaction fees, unrealized gain on changes
in fair value of biological assets, depreciation 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 not only provides management with
comparable financial data for internal financial analysis but also
provides meaningful supplemental information to investors. In
particular, management believes that this financial measure can
provide information useful to its shareholders in understanding the
performance of the Corporation and may assist in the evaluation of
its business relative to that of its peers. Investors are cautioned
that this non-IFRS measure should not be considered in isolation or
construed as an alternative to the measurements of performance
calculated in accordance with IFRS as, given the non-standardized
meaning, it may not be comparable to similar measures presented by
other issuers. 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.
Calculation and Reconciliation of Adjusted EBITDA
The following table provides a reconciliation of net loss to
Adjusted EBITDA.
For the three months
ending March 31
($ Cdn
thousands)
|
2022
|
2021
|
Net loss before
tax
|
(5,412)
|
(5,494)
|
Add back
(deduct):
|
|
|
Interest
expense
|
155
|
95
|
Taxes
|
(6)
|
(7)
|
Depreciation and
amortization
|
596
|
298
|
Net fair value
adjustment on biological assets and cannabis product
sales
|
642
|
(471)
|
Impairment on other
items
|
3
|
|
Share-based
compensation
|
309
|
721
|
Amortization of signing
bonus
|
-
|
839
|
Unrealized gain on
warrants
|
686
|
-
|
|
(3,057)
|
(4,019)
|
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, 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; 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.
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SOURCE Khiron Life Sciences Corp.