- Q1 2022 revenues came in at $2.5
million despite the reintroduction of pandemic
restrictions.
- We will be working with our pharmacy partners to launch the
medical cannabis programs in the upcoming quarters.
TORONTO, May 20, 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-month
period ended March 31, 2022. Unless
otherwise noted, all amounts are in Canadian dollars and are
prepared in accordance with International Financial Reporting
Standards ("IFRS").
"During the first quarter, the Company concentrated on
streamlining its operations to effectively manage resources.
We continue to review and develop our patient retention and
acquisition strategies and look forward to being able to leverage
these changes in future quarters," said Ken
Yoon, CEO of Pathway.
Financial and Operational
Highlights
- Revenues were at $2.5 million
this quarter despite the reintroduction of more restrictive
COVID-19 measures in a number of provinces. Since the lifting of
these restrictions, the Company has seen improvements in revenue in
the more recent months.
- The Company remains focused on patient care, adding in two more
physicians to the team of specialists at Silver Pain Centre and an
additional fluoroscopy suite. These additions will allow the
Company to offer additional treatment options for patients
suffering from chronic pain.
- The Company continues to expand on our preeminent partnership
position with some of the leading retail pharmacy companies in the
country, as we launch the Medical Cannabis Management System in
pharmacy locations across Canada.
Summary of the Q1 2022 Financial
Results
Revenues were $2.5 million and
$2.6 million for the three months
ended March 31, 2022 and 2021
respectively. The 2021 figures were impacted by the Asset
Acquisition Transaction that closed January
18, 2021, prior to which the Company had no revenue
generating assets. The Company was particularly impacted by
the reinstated COVID-19 restrictions. Furthermore, cannabis
education revenues were impacted by a reduction in marketing fees
previously provided by licensed producers as the related clinics
moved to a telemedicine platform.
Gross margins were $1.2 million
and $1.4 million for the three months
ended March 31, 2022, and 2021, which
represented 49% and 55% of gross revenues respectively. The
variance is mainly a result of the increase in products and
provincially non-insured physician services as a total percentage
of overall revenue.
Selling, general and administrative expenses ("SG&A") were
$2.9 million and $2.3 million for the three months ended
March 31, 2022 and 2021
respectively. The 2021 figures were impacted by the Asset
Acquisition Transaction that closed January
18, 2021, prior to which the Company had minor activities.
The $0.4 million increase in wages
and benefits and $0.1 million in
office expenses over the prior year period are consistent with the
growth of the operations of the Company as it explores other
potential avenues of business including cannabis health products
and the international cannabis markets. Public company costs have
increased by $0.1 million over the
prior year comparable as the Company began trading on the TSXV on
June 17, 2021. This is offset by a
$0.2 million reduction in
professional and consulting fees, which were unusually high in the
prior year as they reflect the additional listing fees, legal and
professional fees related to the Reverse Takeover transaction which
closed on May 31, 2021.
The Company incurred a net loss of $1.9
million and had a basic and diluted loss per share of
$0.02 for the three months ended
March 31, 2022 compared to a net loss
of $1.0 million and a basic and
diluted loss per share of $0.02 for
the same prior year period.
Earnings before interest, tax, depreciation and amortization
("EBITDA")1 was a loss of $1.6
million and adjusted EBITDA1 was a loss of
$1.5 million for the three months
ended March 31, 2022, compared to an
EBITDA loss of $0.7 million and
$0.2 million in the prior year.
Cash as of March 31, 2022 was $1.3
million compared with $2.6
million on December 31,
2021. The Company is currently discussing a draw-down debt
facility with its largest shareholder.
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
1
|
Non-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, additional professional fees due to
reverse takeover ("RTO") transaction the 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
March 31,
|
|
2022
|
2021
|
Net (loss) attributable
to shareholders
|
$
(1,938,841)
|
$
(1,027,773)
|
Adjustments:
|
|
|
Amortization of intangible assets
|
35,490
|
31,660
|
Depreciation
|
187,027
|
164,729
|
Finance expense*
|
70,466
|
92,325
|
EBITDA
|
$
(1,645,858)
|
$
(739,059)
|
|
|
|
Share-based
compensation
|
132,134
|
96,779
|
Loss of control of
related company
|
6,108
|
-
|
Additional professional
fees due to RTO Transaction
|
-
|
286,945
|
Additional professional
fees due to Asset Acquisition Transaction
|
-
|
122,306
|
Adjusted
EBITDA
|
$
(1,507,616)
|
$
(233,029)
|
*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.)
Interim Condensed Consolidated Statement of Financial
Position
(Unaudited)
|
March 31,
2022
|
December 31,
2021
|
Assets
|
|
|
Current
|
|
|
Cash
|
$
1,257,604
|
$
2,603,429
|
Restricted
cash
|
75,000
|
75,000
|
Accounts and other
receivables
|
1,039,566
|
811,587
|
Deferred
cost
|
48,870
|
54,978
|
Inventory
|
324,051
|
340,340
|
Prepaids
|
264,616
|
249,579
|
|
3,009,707
|
4,134,913
|
|
|
|
Due from related
parties
|
30,190
|
117,362
|
Property and
equipment
|
2,790,568
|
2,914,078
|
Intangible
assets
|
655,957
|
691,447
|
Goodwill
|
504,901
|
504,901
|
Investment in related
company
|
422,564
|
475,824
|
|
4,404,180
|
4,703,612
|
|
|
|
Total assets
|
$
7,413,887
|
$
8,838,525
|
|
|
|
|
|
|
Liabilities and Shareholders'
equity
|
|
|
Current
|
|
|
Acccounts payable and
accrued liabilities
|
$
2,034,860
|
$
1,585,558
|
Current portion of
lease liability
|
550,424
|
545,515
|
Due to related
parties
|
15,969
|
20,459
|
|
2,601,253
|
2,151,532
|
|
|
|
Lease
liability
|
2,208,969
|
2,292,993
|
Government loan
payable
|
70,446
|
67,574
|
|
2,279,415
|
2,360,567
|
|
|
|
Total liabilities
|
4,880,668
|
4,512,099
|
|
|
|
Shareholders' equity
|
|
|
Share
capital
|
42,644,224
|
42,630,724
|
Warrants
|
1,866,866
|
1,866,866
|
Contributed surplus
(deficiency)
|
(30,798,274)
|
(30,930,408)
|
Deficit
|
(11,179,597)
|
(9,240,756)
|
|
2,533,219
|
4,326,426
|
|
|
|
Total liabilities
and shareholders' equity
|
$
7,413,887
|
$
8,838,525
|
Pathway Health Corp. (formerly Colson Capital Corp.)
Interim Condensed Consolidated Statements of Loss and
Comprehensive Loss
For the three months ended March 31,
2022 and 2021
(Unaudited)
|
For the three months
ended
March 31,
|
|
2022
|
2021
|
|
|
|
|
Revenue
|
$
2,538,154
|
$
2,628,207
|
|
|
Cost of sales
|
|
|
Consultants
|
991,322
|
956,977
|
Cost of goods sold
|
192,183
|
147,356
|
Clinic and medical supplies
|
122,045
|
88,387
|
Total cost of
sales
|
1,305,550
|
1,192,720
|
|
|
Gross margin
|
1,232,604
|
1,435,487
|
|
|
|
Selling, general and
administrative expenses
|
2,873,987
|
2,318,149
|
Loss before other items
|
(1,641,383)
|
(882,662)
|
|
|
|
Other expenses (income)
|
|
|
Finance
expense
|
70,466
|
92,325
|
Share-based
compensation
|
132,134
|
96,779
|
Amortization of
intangible assets
|
35,490
|
31,660
|
Share of loss of
equity-accounting investment
|
53,260
|
-
|
Loss of control of
related company
|
6,108
|
-
|
Government
grant
|
-
|
(25,558)
|
Gain on remeasurement
of contingent consideration
|
-
|
(24,000)
|
|
297,458
|
171,206
|
|
|
|
Loss before income taxes
|
(1,938,841)
|
(1,053,868)
|
|
|
|
Income tax
expense
|
-
|
-
|
|
|
|
Net loss and comprehensive loss
|
(1,938,841)
|
(1,053,868)
|
|
|
|
Net loss attributable to:
|
|
|
Shareholders
|
(1,938,841)
|
(1,027,773)
|
Non-controlling
interest
|
-
|
(26,095)
|
|
$
(1,938,841)
|
$
(1,053,868)
|
|
|
|
Basic and diluted loss
per share
|
$
(0.02)
|
$
(0.02)
|
Weighted average shares
outstanding
|
|
|
Basic and diluted
|
93,708,752
|
41,335,969
|
SOURCE Pathway Health Corp.