58% Year over Year Revenue Growth and Operating Loss reduced by 27%
VANCOUVER BC / ACCESSWIRE / June 30, 2021 / EMPOWER CLINICS INC. (CSE:CBDT)(OTC PINK:EPWCF)(FRA:8EC) (“Empower” or the “Company“) has filed today its audited consolidated financial statements and related management’s discussion and analysis, both of which are available at www.SEDAR.com. All financial information in this press release is reported in United States dollars, unless otherwise indicated.
“2020 presented our Company with unexpected challenges, yet through the pandemic, we discovered and experienced growth. Among other initiatives, we were able to expand the impact of our integrated health model through a successful pivot towards the COVID testing space through our acquisition of Kai Medical Laboratory and our big step into the Canadian healthcare market with the acquisition of Lawrence Park and Atkinson clinics.” said Steven McAuley, Chairman and CEO of Empower Clinics. “I look forward to the year ahead as we continue to expand the portfolio of direct-to-consumer testing products through Kai Medical and the Kai Care brand. Finally, I am so encouraged by our partnerships with best-in-market brands in the pharmacy and airlines industries as well as securing additional reputable clients and acquisitions for our future growth”.
2020 Highlights all financial results reported as USD$
- Total revenues at $3,209,196 for FY2020 compared to FY2019 revenues $2,031,581, representing 58% year over year growth.
- Operating costs lowered to $4,489,427 for FY2020 from $6,151,214 for FY2019, representing a reduction by 27%.
- Net loss of $17,066,311 of $0.09 per share compared to $4,301,663 or $0.04 per share for FY2019, which was primarily driven by a non-cash loss on the fair value adjustment related to the Company’s warrants outstanding that were impacted by the significant appreciation of the Company’s share price (a key input in determining the fair value).
- Cash at December 31, 2020 of $4,889,824, compared to cash of $179,152 at December 31, 2019, which increase was primarily driven by the proceeds generated on exercise of share purchase warrants.
- Cash used in operating activities was $1,749,818 or $0.01 per share, compared to $2,273,188 or $0.02 per share for fiscal 2019.
- In October 2020, the Company acquired Kai Medical Laboratory, LLC, which operates a high-complexity CLIA and COLA accredited laboratory that provides reliable and accurate testing solutions to hospitals, medical clinics, pharmacies, and employer groups.
- On December 31, 2020, the Company acquired Lawrence Park Health and Wellness Clinics Inc and Atkinson Clinic, which operate multidisciplinary health clinics in the Greater Toronto Area, Ontario.
Recent Highlights Subsequent to Year End
- COVID-19 Testing: In June 2021, the Company entered into a six-month pilot program with PharmaChoice to sell Kai Care saliva test kits. PharmaChoice is a fast growing, independently owned Canadian Pharmacy network with more than 900 locations covering the PharmaChoice and RxHealthMed brands.
- Financing: The Company brought in $5,776,335 resulting from the exercise of warrants and stock options.
- Debt Repayment: In Q1 2021, the Company paid off in full certain secured loans and promissory notes in the amount of $1,353,188.
- Acquisitions: In June 2021, the Company signed a non-binding term sheet to acquire Medisure + Sure Canada Inc. who are a leading Canadian manufacture of medical devices for patients managing diabetes.
Financial Summary
| USD$, except where noted | Three months ended December 31, |
Year ended December 31, |
||
| 2020 | 2019 | 2020 | 2019 | |
| Total revenues | 853,441 | 624,709 | 3,209,196 | 2,031,581 |
| Direct clinic expenses | (434,937) | (648,716) | (1,193,560) | (826,276) |
| Loss from operations | (3,086,625) | (3,603,938) | (4,489,427) | (6,151,214) |
| Net loss | (15,685,996) | (1,942,084) | (17,066,311) | (4,301,663) |
| Net loss per share | (0.05) | (0.02) | (0.09) | (0.04) |
Financial Performance
As part of total revenues, clinic services revenues for Q4 and full year 2020 were $848,190 and $3,154,301, respectively, compared to Q4 and full year 2019 revenues of $542,677 and $1,949,549, respectively. This increase over prior year is attributable to the impact of COVID-19, along with the acquisition of Kai on October 5, 2020, partially offset by the reduction in patients visiting the Sun Valley Health clinics as a result of State legalization of cannabis in November 2020.
Direct clinic expenses for Q4 and full year 2020 were $434,937 and $1,193,560, respectively, compared to Q4 and full year 2019 direct clinic expenses of $615,814 and $826,276, respectively. This increase over prior year is attributable to the reduction in patients visiting the Sun Valley Health clinics as a result of State legalization of cannabis in November 2020.
Loss from operations for Q4 and full year 2020 were $3,086,625 and $4,489,427, respectively, compared to Q4 and full year 2019 loss of $3,603,938 and $6,151,214, respectively. This decrease from prior year is primarily attributable to the increase in clinic services revenues, offset by the reduction in goodwill impairment as 2019 included a charge to impair Sun Valley clinics as a result of State legalization of cannabis in November 2020 which adversely impacted the profitability of the Sun Valley operation.
Net loss for Q4 and full year 2020 were $15,685,996 and $17,066,311, respectively, compared to Q4 and full year 2019 net loss of $1,942,084 and $4,301,663, respectively. This increase over prior year is primarily attributable to the loss on change in fair value recognized on the warrant liability which resulted from the significant increase in the Company’s share price and therefore the value of the warrants exercisable.
During the year ended December 31, 2020, the Company used $1,749,818 in cash from operations after changes in non-cash working capital. The Company invested $309,994 and raised $6,770,483 via proceeds from various issuances of shares and exercise of warrants and stock options, partially offset by lease payment and repayments of loans and notes payable.
Please refer to the Company’s audited consolidated financial statements, related notes and accompanying Management Discussion and Analysis for a full review of the operations.
About Empower
Empower is an integrated healthcare company that provides body and mind wellness for patients through its clinics, with digital and telemedicine care, and world-class medical diagnostics laboratories. Supported by an experienced leadership team, Empower is aggressively growing its clinical and digital presence across North America. Our Health & Wellness and Diagnostics & Technology business units are positioned to positively impact the integrated health of our patients, while simultaneously providing long term value for our shareholders.
ON BEHALF OF THE BOARD OF DIRECTORS:
Steven McAuley
Chief Executive Officer
CONTACTS:
| Investors | Tamara Mason | Steven McAuley | |
| Business Development & Communications | CEO | ||
| 416-671-5617 | 604-789-2146 | ||
| t.mason@wordpress-776017-3222400.cloudwaysapps.com | s.mcauley@wordpress-776017-3222400.cloudwaysapps.com |
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. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Forward-looking statements can frequently be identified by words such as “plans”, “continues”, “expects”, “projects”, “intends”, “believes”, “anticipates”, “estimates”, “may”, “will”, “potential”, “proposed” and other similar words, or information that certain events or conditions “may” or “will” occur. Forward-looking statements in this news release include, but are not limited to, statements regarding: the expected benefits to the Company and its shareholders as a result of the acquisition of Kai Medical Laboratory; the transaction terms; the expected number of clinics and patients following the closing; the future potential success of Kai Medical Laboratory, Sun Valley’s franchise model; launch of new healthcare centers and the occurrence thereof; that the Company can bring healthcare to millions of Canadians; that new healthcare services can be added and that the Company will be positioned to be a market- leading service provider for complex patient requirements in 2020 and beyond. Such statements are only projections, are based on assumptions known to management at this time, and are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the forward-looking statements, including: that Kai Medical Laboratory will successfully win any US Government RFP; that the MedX Health pilot program will be successful; that Empower will place the MedX Health teledermatology product in health centers in North America; that the Company’s products may not work as expected; that the Company may not be able to expand COVID-19 testing; that legislative changes may have an adverse effect on the Company’s business and product development; that the Company may not be able to obtain adequate financing to pursue its business plan; that the Company will be able to commence and/or complete build-outs and tenants improvements for Canadian clinics or Kai Medical Laboratory expansion during fiscal 2021; that general business, economic, competitive, political and social uncertainties; failure to obtain any necessary approvals in connection with the proposed transaction; and other factors beyond the Company’s control. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are cautioned not to place undue reliance on the forward-looking 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 or revise any forward-looking statements in this release, whether as a result of new information, future events or otherwise, except as expressly required by applicable laws.
SOURCE: Empower Clinics Inc.