TORONTO, April 27,
2022 /CNW/ - Pathway Health Corp. (TSXV: PHC)
(Frankfurt: KL1) (formerly Colson Capital Corp.)
("Pathway" or the "Company"), a Canadian leader in chronic
pain solutions and management services, is pleased to report its
financial results for the three and twelve-month period ended
December 31, 2021. Unless
otherwise noted, all amounts are in Canadian dollars and are
prepared in accordance with International Financial Reporting
Standards ("IFRS").
"2021 was a significant year for the Company. We completed a
reverse take-over transaction and transitioned to a public company,
all while launching initiatives aimed at growing the breadth
and reach of our existing portfolio of chronic pain focused
services and products," said Ken
Yoon, CEO of Pathway. "We remain optimistic about the
future of the business as we expand and leverage on our leading
partnership position with some of the largest retail pharmacy
companies in Canada. We are also now actively exploring
international initiatives that look to leverage our leadership
position as the largest provider of medical cannabis services in
the country."
Financial and Operational Highlights
- Revenues continue to hold steady in spite of ongoing pandemic
challenges, with $2.7 million and
$10.9 million in revenues for the
three and twelve months ended December 31,
2021 respectively
- The Company continues to prudently manage resources and
expenses, ending the year with a positive working capital balance
of $2.0 million
- The Company focused on the infrastructure development of a
nurse practitioner-led telemedicine service model to extend its
footprint in several provinces and improve patient access to
care
- Signed a collaboration agreement with Metro Ontario Pharmacies
Limited ("Metro Ontario Pharmacies"), a subsidiary of Metro Inc.
(TSX: MRU), pertaining to the implementation of Pathway's Medical
Cannabis Management System ("MCS") in Metro Ontario Pharmacies'
Metro Pharmacy and Food Basics Pharmacy bannered pharmacies across
Ontario
Summary of the Q4 2021 Financial Results
Revenues were $2.7 million and
$10.9 million for the three and
twelve months ended December 31,
2021, respectively. Despite the many challenges brought on
by the ongoing COVID-19 pandemic, revenues remained stable
throughout the fiscal year. Furthermore, if the operating
assets of the Company were acquired January
1, 2021 (instead of January 18,
2021) and the Company continued to consolidate the results
of a jointly owned subsidiary, management estimates that the
revenues for the three and twelve months ended December 31, 2021 would have totaled $2.8 million and $11.7
million respectively.
Gross margins were $1.4 million
and $5.9 million for the three and
twelve months ended December 31,
2021, which represented 55.6% and 54.0% of gross revenues
respectively. The Company saw an improvement over Q3 2021
gross margin results of 53.1%.
Selling, general and administrative expenses ("SG&A") were
$3.7 million and $11.7 million for the three and twelve months
ended December 31, 2021. The
Company saw higher levels of expenses in Q4 2022 due to a
$0.4 million intercompany bad debt
expense and $0.5 million wage and
benefit accruals.
Other expenses were $0.9 million
and $3.1 million for the three and
twelve months ended December 31,
2021. Other expenses in Q4 2022 includes a non-cash
impairment charge $0.7 million
related to the group billing number and brand name intangible
assets of the Silver Medical Group Centre for Pain Care.
The Company incurred a net loss of $3.2
million and $8.9 million for
the three and twelve months ended December
31, 2021, respectively, and had a basic and diluted loss per
share of $0.03 and $0.16 for the same periods.
Earnings before interest, tax, depreciation and amortization
("EBITDA")1 was a loss of $2.8
million and $7.4 million for
the three and twelve months ended December
31, 2021 respectively. Adjusted EBITDA1 was
a loss of $1.6 million and
$4.0 million for the same three and
twelve month period.
Cash as of December 31, 2021 was $2.6
million compared to $0.001 million as
of December 31, 2020. The increase in cash is mainly a
result of the $13.8 million gross proceeds from a private
placement ($12.4 million net of
transaction costs), offset by $4.9 million paid to a
related party for the asset acquisition which closed
on January 18, 2021, $0.6 million used in
professional fees for the reverse takeover transaction and asset
acquisition, and funds used in operating activities.
About Pathway Health
Pathway Health is an integrated
healthcare company that provides products and services to patients
suffering from chronic pain and related conditions. The Company
owns and operates eleven community-based clinics across four
provinces where its team of health professionals work together to
help patients through a variety of evidence-based approaches and
products, including medical cannabis. Pathway Health's patient care
programs utilize an interdisciplinary approach that is guided by
trained pain specialists, physical and occupational therapists,
psychologists, nurses, and other healthcare providers. Pathway is
also the leading provider of medical cannabis services in
Canada and has established itself
as the leading partner with national and regional pharmacy
companies for the delivery of medical cannabis services to their
customers. The Company is working with several pharmacy companies
on the development of Cannabis Health Products (CHPs) for OTC
product distribution through retail pharmacy locations across the
country following anticipated changes to the Cannabis Act.
For more information, visit Pathway Health's website:
www.pathwayhealth.ca
1Non-IFRS financial measures
The non-IFRS measures included in this MD&A are not recognized
measures under IFRS, and do not have a standardized meaning
prescribed by IFRS and may not be comparable to similar measures
presented by other issuers. When used, these measures are
defined in such terms as to allow the reconciliation to the closest
IFRS measure. These measures are provided as additional
information to complement those IFRS measures by providing further
understanding of the Company's results of operations from its
perspective. Accordingly, they should not be considered in
isolation nor as a substitute for analysis of the Company's
financial information reported under IFRS. Despite the
importance of these measures to management in goal setting and
performance measurement, these are non-IFRS measures that may be
limited in their usefulness to investors.
Working capital is a non-IFRS measure calculated as current
assets less current liabilities. This measure is used to assist
management and investors in understanding liquidity at a specific
point in time. Management uses non-IFRS measures, such as EBITDA
and Adjusted EBITDA to provide investors with a supplemental
measure of the Company's operating performance and thus highlight
trends in the Company's core business that may not otherwise be
apparent when relying solely on IFRS financial measures. Management
also believes that securities analysts, investors and other
interested parties frequently use non-IFRS measures in the
valuation of issuers. Management also uses non-IFRS measures in
order to facilitate operating performance comparisons from period
to period, prepare annual operating budgets, and to assess the
Company's ability to meet its future debt service, capital
expenditure and working capital requirements. The definition and
reconciliation of EBITDA and Adjusted EBITDA used and presented by
the Company to the most directly comparable IFRS measures follows
below:
EBITDA and Adjusted EBITDA
EBITDA is defined as net
(loss)/income adjusted for income tax, depreciation of property and
equipment, amortization of intangible assets, interest on long-term
debt and other financing costs, interest income, and changes in
fair values of derivative financial instruments. Management uses
EBITDA to assess the Company's operating performance. Adjusted
EBITDA is defined as EBITDA adjusted for, as applicable,
share-based compensation, loss of control of related company, fair
value of guarantee, gain on disposal of intangible assets and
goodwill, impairment of intangible assets, reverse takeover
transaction costs, additional professional fees due to the Reverse
Take Over transaction and Asset Acquisition Transaction. We
use Adjusted EBITDA as a key metric in assessing our business
performance when we compare results to budgets, forecasts and prior
years. Management believes Adjusted EBITDA is a good alternative
measure of cash flow generation from operations as it removes cash
flow fluctuations caused by non-cash expenses, or extraordinary and
non-recurring items, including changes in working capital. A
reconciliation of net (loss)/income to EBITDA (and Adjusted EBITDA)
is set out below:
|
|
For the three months
ended
December 31,
|
|
For the twelve
months ended
December 31,
|
|
|
2021
|
2020
|
|
2021
|
2020
|
Net (loss) attributable
to shareholders
|
$
|
(3,164,533)
|
$
|
(372,811)
|
|
$
|
(8,866,250)
|
$
|
(374,506)
|
Adjustments:
|
|
|
|
|
|
|
Amortization of
intangible assets
|
60,063
|
-
|
|
140,577
|
-
|
|
Depreciation
|
194,673
|
-
|
|
741,890
|
-
|
|
Finance
expense*
|
72,831
|
-
|
|
601,373
|
-
|
EBITDA
|
$
|
(2,836,966)
|
$
|
(372,811)
|
|
$
|
(7,382,410)
|
$
|
(374,506)
|
|
|
|
|
|
|
|
Share-based
compensation
|
160,966
|
-
|
|
547,700
|
-
|
Loss of control of
related company
|
6,110
|
-
|
|
88,757
|
-
|
Related party bad debt
expense
|
365,707
|
-
|
|
365,707
|
|
Fair value (gain) loss
of guarantee
|
(20,238)
|
-
|
|
54,762
|
-
|
Impairment of
intangible assets
|
678,347
|
-
|
|
678,347
|
-
|
Gain on disposal of
intangible assets and goodwill
|
-
|
-
|
|
(255,328)
|
-
|
Reverse takeover
transaction cost
|
-
|
-
|
|
1,251,608
|
-
|
Additional professional
fees due to RTO Transaction
|
-
|
-
|
|
509,252
|
-
|
Additional professional
fees due to Asset Acquisition Transaction
|
-
|
-
|
|
112,891
|
-
|
Adjusted
EBITDA
|
$
|
(1,646,074)
|
$
|
(372,811)
|
|
$
|
(4,028,714)
|
$
|
(374,506)
|
*this figure includes
interest expense, financing expense, fair value of financing
facilities and accretion expense.
|
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION
This news release includes certain
"forward-looking statements" under applicable Canadian securities
legislation. Forward-looking statements are necessarily based upon
a number of estimates and assumptions that, while considered
reasonable, are subject to known and unknown risks, uncertainties,
and other factors that may cause the actual results and future
events to differ materially from those expressed or implied by such
forward-looking statements. Such factors include, but are not
limited to: general business, economic, competitive, political and
social uncertainties; delay or failure to receive applicable
approvals; and the results of operations. There can be no assurance
that such statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. Pathway disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
Neither the Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the Exchange) accepts
responsibility for the adequacy or accuracy of this Press Release.
The TSX Venture Exchange Inc. has in no way passed upon the merits
of the proposed transaction and has neither approved nor
disapproved the contents of this press release.
Pathway Health Corp.
(formerly Colson Capital Corp.)
|
Consolidated Statements
of Financial Position
|
As at December 31, 2021
and 2020
|
|
|
|
|
|
|
|
|
|
December 31,
2021
|
|
December 31,
2020
|
Assets
|
|
|
|
Current
|
|
|
|
Cash
|
$
|
2,603,429
|
|
$
|
588
|
Restricted
cash
|
75,000
|
|
-
|
Accounts and other
receivables
|
811,587
|
|
34,771
|
Deferred
cost
|
54,978
|
|
-
|
Inventory
|
340,340
|
|
-
|
Prepaids
|
249,579
|
|
-
|
|
4,134,913
|
|
35,359
|
|
|
|
|
Due from related
parties
|
117,362
|
|
-
|
Property and
equipment
|
2,914,078
|
|
-
|
Intangible
assets
|
691,447
|
|
-
|
Goodwill
|
504,901
|
|
-
|
Investment in related
company
|
475,824
|
|
-
|
|
4,703,612
|
|
-
|
|
|
|
|
Total assets
|
$
|
8,838,525
|
|
$
|
35,359
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' equity (deficiency)
|
|
|
|
Current
|
|
|
|
Acccounts payable and
accrued liabilities
|
$
|
1,585,558
|
|
$
|
379,568
|
Current portion of
lease liability
|
545,515
|
|
-
|
Due to related
parties
|
20,459
|
|
30,296
|
|
2,151,532
|
|
409,864
|
|
|
|
|
Lease
liability
|
2,292,993
|
|
-
|
Government loan
payable
|
67,574
|
|
-
|
|
2,360,567
|
|
-
|
|
|
|
|
Total liabilities
|
4,512,099
|
|
409,864
|
|
|
|
|
Shareholders' equity
(deficiency)
|
|
|
|
Share
capital
|
42,630,724
|
|
1
|
Warrants
|
1,866,866
|
|
-
|
Contributed surplus
(deficiency)
|
(30,930,408)
|
|
-
|
Deficit
|
(9,240,756)
|
|
(374,506)
|
|
4,326,426
|
|
(374,505)
|
|
|
|
|
Total liabilities and shareholders' equity
(deficiency)
|
$
|
8,838,525
|
|
$
|
35,359
|
Pathway Health Corp.
(formerly Colson Capital Corp.)
|
Consolidated Statements
of Loss and Comprehensive Loss
|
For the year ended
December 30, 2021 and the 104 day period from the date of
incorporation on September
18, 2020 to December 31, 2020
|
|
|
|
|
|
|
|
For the three months
ended
December 31,
|
|
|
|
|
2021
|
2020
|
|
For the year ended December 31,
2021
|
For the 104 days
ended December 31,
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
2,669,658
|
$
|
-
|
|
$
|
10,895,372
|
$
|
-
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
|
Consultants
|
873,871
|
-
|
|
3,828,453
|
-
|
Cost of
goods sold
|
191,901
|
-
|
|
735,951
|
-
|
Clinic and
medical supplies
|
118,630
|
-
|
|
448,813
|
-
|
Total cost of
sales
|
1,184,402
|
-
|
|
5,013,217
|
-
|
|
|
|
|
|
|
Gross margin
|
1,485,256
|
-
|
|
5,882,155
|
-
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
3,703,059
|
372,811
|
|
11,706,178
|
374,506
|
Loss before other
items
|
(2,217,803)
|
(372,811)
|
|
(5,824,023)
|
(374,506)
|
|
|
|
|
|
|
Other expenses (income)
|
|
|
|
|
|
Reverse takeover
transaction cost
|
-
|
-
|
|
1,251,608
|
-
|
Finance
expense
|
72,831
|
-
|
|
601,373
|
-
|
Impairment of
intangible assets
|
678,347
|
-
|
|
678,347
|
-
|
Share-based
compensation
|
160,966
|
-
|
|
547,700
|
-
|
Amortization of
intangible assets
|
60,063
|
-
|
|
140,577
|
-
|
Share of loss of
equity-accounting investment
|
48,464
|
-
|
|
138,239
|
-
|
Loss of control of
related company
|
6,110
|
-
|
|
88,757
|
-
|
Fair value loss of
guarantee
|
(20,238)
|
-
|
|
54,762
|
-
|
Government
grant
|
-
|
-
|
|
(25,558)
|
-
|
Gain on remeasurement
of contingent consideration
|
(59,813)
|
-
|
|
(152,155)
|
-
|
Gain on disposal of
intangible assets and goodwill
|
-
|
-
|
|
(255,328)
|
-
|
|
946,730
|
-
|
|
3,068,322
|
-
|
|
|
|
|
|
|
Loss before income taxes
|
(3,164,533)
|
(372,811)
|
|
(8,892,345)
|
(374,506)
|
|
|
|
|
|
|
Income tax
expense
|
-
|
-
|
|
-
|
-
|
|
|
|
|
|
|
Net loss and comprehensive loss
|
(3,164,533)
|
(372,811)
|
|
(8,892,345)
|
(374,506)
|
|
|
|
|
|
|
Net loss attributable
to:
|
|
|
|
|
|
Shareholders
|
(3,164,533)
|
(372,811)
|
|
(8,866,250)
|
(374,506)
|
Non-controlling
interest
|
-
|
-
|
|
(26,095)
|
-
|
|
$
|
(3,164,533)
|
$
|
(372,811)
|
|
$
|
(8,892,345)
|
$
|
(374,506)
|
|
|
|
|
|
|
Basic and diluted loss
per share
|
$
|
(0.03)
|
$
|
(372,811)
|
|
$
|
(0.16)
|
$
|
(374,506)
|
Weighted average shares
outstanding
|
|
|
|
|
|
Basic and
diluted
|
93,561,681
|
1
|
|
55,010,082
|
1
|
SOURCE Pathway Health Corp.