NSCI Nanalysis Scientific Corp

Hosting Call Today at 5pm ET

CALGARY, AB, May 31, 2022 /CNW/ - Nanalysis Scientific Corp. ("the Company", TSXV: NSCI, OTCQX: NSCIF, FRA: 1N1), a leader in portable NMR machines and MRI technology for healthcare and industrial applications, releases its first quarter results ending March 31, 2022. Chief Executive Officer, Sean Krakiwsky and Chief Financial Officer, Luke Caplette will host a conference call at 5 P.M. Eastern Time on May 31, 2022 to discuss the results. All interested parties are invited to join this call. 

"We are happy to have carried the momentum from the fourth quarter into the new year and first quarter," said Sean Krakiwsky, Founder and CEO of Nanalysis.  "The fourth quarter is our strongest quarter of the year, as I expected it to be in 2022. We showed sequential increase in revenue from Q4 to Q1, which is a  positive signal for our company for the rest of 2022. As seen with our recent service contract win, we are beginning to achieve synergies from the specific M&A transactions we have completed, I'm proud to say we have diversified our product and service offerings while continuing to drive towards our vision."

Financial highlights for the three months ended March 31, 2022:

• For the three months ended March 31, 2022, the Company reported consolidated revenue of $5,554K, an increase of $2,277K or 69% from the comparative period in 2021.
• Gross margin was 60% for the three months ended March 31, 2022 compared to 64% for the three months ended March 31, 2021.
• Income before other items for the three months ended March 31, 2022 was $210k versus $267k compared to the same period last year.
• Net loss for the three months ended was $1,492K, as compared to the three month loss March 31, 2021 of $467K.
• The Company had cash on hand of $19,179K, an undrawn credit facility of $6,127K, working capital of $18,530K and an undrawn government contribution funding of $4,985K as of March 31, 2022.

Recent strategic and operational highlights during and subsequent to the first quarter of 2022 include:

• Awarded $160 Million Multi Year Service and Maintenance Contract: The Company's wholly-owned subsidiary K'(Prime) Technologies (KPrime) has won a six year $160 million service and maintenance contract with Canadian Air Transportation Security Authority ("CATSA"), which includes a gradual phase in period of approximately one year. Furthermore, it is common for these types of contracts to be renewed for an additional five years, making it a potential 11 year recuring revenue opportunity, with inflation-based contractual price increases. The effective date of the executed contract is May 25, 2022 and it expires on May 31, 2028.
• Announced $4,985,000 Funding Contribution Commitment from the Canadian Government: The funding is provided through Prairies Economic Development Canada's Business Scale-up and Productivity program, which provides fast growing tech firms with support to scale-up and enter new markets. Nanalysis will draw down on the funds over the next three years with interest-free repayments commencing on September 1, 2025.
• Closed Initial Equity Investment in Quad Systems: Nanalysis paid 7,500,000 CHF to acquire a 43% ownership position and two of five board seats in Quad Systems AG. Nanalysis has nominated two Directors on the Board of Quad Systems: Sean Krakiwsky and René Lenggenhager. Additionally, until July 1, 2023, Nanalysis has an option to acquire 100% of the issued and outstanding shares (i.e. remaining 57%) of Quad Systems at a pre-set valuation formula in a combination of cash and Nanalysis shares. During the Option Period, Nanalysis has a right of first refusal on all debt and equity offerings of Quad Systems.
• Executed an Upsized Public Offering and Non-Brokered Private Placement For Gross Proceeds of $15,224,700. On February 11, 2022 the Company closed a best efforts marketed public offering of common shares of the Company, including the full exercise of the over-allotment option and a non-brokered private placement of common shares for combined gross proceeds of $15.2 million. Pursuant to the terms of the public offering and non-brokered private placement the Company issued 13,840,637 common shares.
• Closed of Acquisition of K'(Prime) Technologies Inc. in early January, 2022: KPrime, a North American sales and service company, with a particular focus on scientific instrumentation for pharma, food, chemical and oil & gas customers, as well as imaging systems for security applications is being integrated into the Company.

For the three months ended March 31, 2022, the Company reported consolidated revenue of $5,554K, an increase of $2,277K or 69% from the comparative period in 2021. The increase from Q1 prior year can be attributed to the shipment of more units of the 100MHz, coupled with revenue from the recent acquisition, KPrime. Gross profit for the three months ended March 31, 2022 was $3,345K (a margin of 60%) compared to gross profit of $2,122K (a margin of 64%) for the three months ended March 31, 2021. The Company's net loss for the three months ended was $1,492K, as compared to the three-month loss March 31, 2021 of $467K. The increased loss was due to higher costs, specifically sales and marketing expenses, increased general and administration expenses and increased research and development expenses, both in the Nanalysis segment and from the new acquisitions. In addition, there were business acquisition costs from the two transactions completed in the quarter, increased depreciation and amortization expense, increased finance expense partially offset by no RS2D earnout in the quarter and increased revenues.

"As we have laid out publicly, the Company's main objective this year is to make the intrinsic value we've created by our recent acquisitions manifest to shareholders. Combined with our ongoing organic innovation, we believe that by the end of 2022, it will become clear that we have positioned the company for solid growth for years to come, with a strong economic moat, and a motivated team energized for the future! Operational excellence is our most important mantra, as we continue to leverage existing customer relationships, in addition to our technologies, to fuel growth. So the rest of 2022 is about consolidation, execution and capitalizing on synergies. Then, in 2023, we'll resume acquisitions and strategic activity. I am incredibly enthusiastic about the challenges immediately before us, and the opportunities that lay on the other side of those challenges."

"The Company plans to continue to expand business with a full sales and service offering which has been substantially augmented through our KPrime acquisition.  With Quad Systems, we are currently rolling out magnetic resonance ("MR") modules and will have a full system to pursue the high-field part of the MR market later this year. This broadens and complements our benchtop NMR products. With products, service and sales we are moving towards our goal," said Mr. Krakiwsky.      

Investors interested in participating on the live call can dial 1-888-664-6392 or 416-764-8659 from abroad. Investors can also access the call online through a listen-only webcast here: https://app.webinar.net/NMnWA6QxEr9, or on the investor relations section of the Company's website HERE.

The webcast will be archived on the Company's investor relations webpage for at least 90 days and a telephonic playback will be available for seven days after the conference call by calling 1-888-390-0541 or 416-764-8677, conference ID # 991626.

Nanalysis trades on the TSX Venture Exchange (TSXV) in Canada with ticker symbol 'NSCI', OTC and the Frankfurt exchange under the ticker symbol '1N1'. The company's business is what we term "MRI and NMR for industry". The company develops and manufactures portable Nuclear Magnetic Resonance (NMR) spectrometers or analyzers for laboratory and industrial markets. The NMReady-60™ was the first full-feature portable NMR spectrometer in a single compact enclosure requiring no liquid helium or any other cryogens. The company has followed-up that initial offering with new products and continues to have a strong innovation pipeline. Nanalysis recently announced that it has begun selling a 100MHz device in 2020. The Company's new device will be the most powerful and most advanced compact NMR device ever brought to market.

Nanalysis devices are used in many industries (oil and gas, chemical, mining, pharma, biotech, flavor and fragrances, agrochemicals, law enforcement, and more) as well as numerous government and university research labs around the world. The Company continues to exploit new global market opportunities independently and with partners.

With the recent acquisition of K'Prime, the company maintains a North American sales and service company of over 40 individuals who cover scientific instrumentation for pharma, food, chemical and oil & gas customers, as well as imaging systems for security applications.

Additionally, the Company has a 43% ownership in Quad Systems AG ("Quad Systems"), with an option to purchase the remaining shares.  Quad Systems is a Zurich-based Nuclear Magnetic Resonance (NMR) company focused on high-field NMR for pharmaceutical and other vertical markets.

This news release contains certain "forward-looking statements" within the meaning of such statements under applicable securities law. Forward-looking statements are frequently characterized by words such as "anticipates", "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed", "positioned" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Company is under no obligation, and expressly 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 expressly required by applicable law.

Neither TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

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SOURCE Nanalysis Scientific Corp.