46% year over year increase in gross profit margin and 7% Increase in Revenue
VANCOUVER, B.C.: February 28, 2023 – EMPOWER CLINICS INC (CSE:EPW)(OTC PINK:EPWCF) (“Empower” or the “Company”) a life sciences healthcare company- serving patients through medical centers, a medical device company and the application ofclinical studies that leverages it’s high complexity medical diagnostics laboratory – announcedtoday it has filed its Q4 2022 interim consolidated financial statements and relatedmanagement’s discussion & analysis, both of which are available at www.SEDAR.com. Allfinancial information in this press release is reported in United States dollars, unless otherwiseindicated. On December 23, 2022, the Company announced it has changed its fiscal year endfrom December 31 to March 31.
“I am proud of our team and their efforts to maintain growth initiatives, all while managingcosts going into 2023,” said Steven McAuley, Chairman & CEO. “Going forward, we continueto develop our U.S. healthcare initiatives focusing on offering clinical trial services, with thestated objective of becoming an established Site Management Organization (SMO) for thepharmaceutical, biotechnology and medical device industries.”
Q4 2022 Highlights
- Total revenues from continuing operations of $426,786 for Q4 2022 compared torevenues of $1,142,581 for Q4 2021, representing a 63% decrease year over year.The decrease in revenue was mainly attributed to the decrease in COVID-19 testingservices.
- Gross margin from continuing operations was 16% for Q4 2022, compared to anegative gross margin of 25% in Q4 2021. The increase in gross margin resulted fromsavings in personnel costs.
- Net loss from continuing operations was $2,370,651 or $0.01 per share compared toa net loss from continuing operations of $4,684,114 or $0.01 per share for Q4 2021.
- Cash as at December 31, 2022 was $193,144, compared to cash of $866,170 atDecember 31, 2021.
- Cash used in operating activities from continuing operations was $447,013 for Q42022, compared to $778,897 for Q4 2021.
As part of total revenues, revenues from the Health & Wellness segment for Q4 2022 were$151,659 compared to Q4 2021 revenues of $256,254. This decrease over the prior yearperiod is attributable to lower revenues from Medi-Collective’s clinics.
Diagnostics & Technology revenue includes the sale of MediSure products and laboratorytesting services conducted by MediSure Laboratory and Empower Clinics. Diagnostics &Technology revenue for Q4 2022 were $275,127 compared to $886,327 in Q4 2021. Thedecrease in revenue was due to reduced Covid-19 testing in the United States as well as otherlaboratory services in the current year period. Of the total revenue in Q4 2022, 98% wasattributable to the sale of medical equipment in MediSure
Direct expenses excluding depreciation and amortization for Q4 2022 were $359,668compared to Q4 2021 direct clinic expenses of $1,428,074. The decrease in direct expenseswas due to the decrease in operating activities, primarily personnel costs, associated withproviding Covid-19 testing services.
Loss from operations for Q4 2022 was $1,194,869 compared to Q4 2021 of $2,361,586. Thisdecrease in loss over the prior year comparable quarter is primarily due to reduced advertisingand promotion activities and legal and professional fees.
Net loss from continuing operations for Q4 2022 was $2,370,651 compared to Q4 2021 of$4,684,114. In Q4 2021, the Company recognized aggregate impairment charges of$5,222,249, while no impairment was recorded in Q4 2022. This difference was offset by aloss on debt settlement of $1,873,901 in the current year period and a lower gain on changein fair value of warrant liability and conversion features associated with convertible debenturesin Q4 2022.
Adjusted EBITDA is a non-GAAP financial measure that is calculated as net loss fromcontinuing operations before depreciation and amortization, interest, accretion, share-basedcompensation, changes in the fair value of derivative liabilities and extraordinary items suchas impairment. Adjusted EBITDA loss in Q4 2022 was $863,284 compared to $2,250,620 inQ4 2021. Adjusted EBITDA is a metric used by management to monitor the Company’srevenues compared to its cash operating costs in an effort to trend toward improvedprofitability.
During Q4 2022, the Company used $447,013 of cash in operating activities of continuingoperations. The Company invested cash of $754 for the purchase of furniture and equipmentand had $186,396 of cash provided by financing activities from the issuance of units andconvertible debentures offset by lease payments and consideration payable.
Please refer to Empower’s condensed interim consolidated financial statements, related notesand accompanying management’s discussion & analysis for a full review of the Company’soperations.
Empower is an integrated healthcare company that provides body and mind wellness forpatients through its clinics, with digital and telemedicine care, and world-class medicaldiagnostics laboratories. Supported by an experienced leadership team, Empower isaggressively growing its clinical and digital presence across North America. Our Health &Wellness and Diagnostics & Technology business units are positioned to positively impact theintegrated health of our patients, while simultaneously providing long term value for ourshareholders.
ON BEHALF OF THE BOARD OF DIRECTORS:
Chief Executive Officer
DISCLAIMER FOR FORWARD-LOOKING STATEMENTS
This news release contains certain “forward-looking statements” or “forward-looking information”(collectively “forward looking statements”) within the meaning of applicable Canadian securities laws.Statements other than statements of historical fact are forward-looking statements and are based onexpectations, estimates and projections as at the date of this news release, and include statementsregarding the Company’s ability to positively impact the integrated health of its patients whilesimultaneously providing long term value for shareholders. Forward-looking statements can frequentlybe identified by words such as “plans”, “continues”, “expects”, “projects”, “intends”, “believes”,”anticipates”, “estimates”, “may”, “will”, “potential”, “proposed” and other similar words, orinformation that certain events or conditions “may” or “will” occur. Such statements are onlyprojections, are based on assumptions known to management at this time, and are subject to risksand uncertainties that may cause actual results, performance or developments to differ materiallyfrom those contained in the forward-looking statements, including: that the Company will be able tosuccessfully operate numerous SMO’s starting in Dallas, TX or operate any at all; that the Company’sproducts may not work as expected; that the Company may not be able to maintain or expand itscurrent COVID-19 testing; that legislative changes may have an adverse effect on the Company’sbusiness and product development; that the Company may not be able to obtain adequate financingto pursue its business plan; that general business, economic, competitive, political and socialuncertainties; failure to obtain any necessary approvals in connection with any proposed transactions;and other factors beyond the Company’s control. No assurance can be given that any of the eventsanticipated by the forward-looking statements will occur or, if they do occur, what benefits theCompany will obtain from them. Readers are cautioned not to place undue reliance on the forwardlooking statements in this release, which are qualified in their entirety by these cautionary statements.The Company is under no obligation, and expressly disclaims any intention or obligation, to update orrevise any forward-looking statements in this release, whether as a result of new information, futureevents or otherwise, except as expressly required by applicable laws.