- Secured approximately $40 million
of investment capital for cultivation site construction, product
development and distribution
- Became the first Colombian cannabis company to list on the TSX
Venture Exchange
- Geographic footprint to countries including Colombia, Mexico, Chile, Peru,
Uruguay and Italy
- Received first INVIMA approvals for seven CBD-based
cosmeceutical products in Colombia.
- Generated first revenue in Q4 2018 with the commercialization
of the Kuida® brand of cosmeceutical products
- Increased potential cultivation capacity to 220 tonnes per
annum through organic growth and pending acquisitions
- Made key management and board appointments including Mr.
Vicente Fox as Director of the
Board, the former CEO of Coca Cola Mexico and former President of
Mexico
- Net working capital position of $17,493,835
- Raised $28,842,000 in bought deal
financing including full exercise of over-allotment option,
subsequent to the quarter
TORONTO, May 1, 2019 /CNW/ - Khiron Life Sciences Corp.
("Khiron" or the "Company") (TSXV: KHRN),
(OTCQB: KHRNF), (Frankfurt:
A2JMZC), is pleased to report its financial results for the year
ended December 31, 2018. Khiron has
filed today its audited consolidated financial statements and
related management's discussion and analysis, both of which are
available on Khiron's profile at www.sedar.com. All financial
information in this press release is reported in Canadian dollars,
unless otherwise indicated.
Quarterly Summary of Financial Results
|
|
Q1
2018
|
|
Q2
2018
|
|
Q3
2018
|
|
Q4
2018
|
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
891,677
|
Comprehensive
Loss
|
|
2,031,848
|
|
6,203,970
|
|
5,829,913
|
|
6,165,034
|
Weighted avg.
shares
|
|
33,042,295
|
|
40,566,495
|
|
49,851,687
|
|
70,187,318
|
Total
assets
|
|
2,345,202
|
|
8,601,765
|
|
18,775,679
|
|
40,348,817
|
Total non-current
financial liabilities
|
|
-
|
|
-
|
|
-
|
|
2,353,080
|
|
|
December 31,
2018
|
Revenues
|
$
|
891,677
|
Comprehensive
Loss
|
|
20,230,765
|
Weighted avg.
shares
|
|
48,518,873
|
Total
assets
|
|
$40,348,817
|
Total non-current
financial liabilities
|
|
2,353,080
|
Financial Highlights
Khiron achieves first sales during the fourth quarter of fiscal
2018. Sales totalled $891,677 and
were attributable to the commercialization of Kuida branded
cosmeceutical products, and the acquisition of ILANS, a network of
medical clinics in Bogota,
Colombia. These initial sales represent an initial market
entrance in advance of any other licenced producer in Colombia. Gross margin on sales was 33.3%.
Management anticipates gross margin to increase with the
introduction of higher margin medical cannabis products.
Operating costs were consistent with management expectations and
totalled to $20,093,697. The majority
of these expenditures were comprised of general and administrative
expenses of $9,560,797. The total
comprehensive loss for the period was $20,230,765.
Cash and cash equivalents as at year-end were $18,963,272. These amounts are reflective of
equity capital and warrant exercises completed during the period.
Cash resources have enabled the Company to accelerate its business
plan and expand its team across markets. Subsequent to the
reporting period, the Company also completed a bought deal
financing for gross proceeds of $28,842,000 in Q1 2019.
Year-end accounts receivable and accounts payable were,
respectively, $4,323,771 and
$6,817,235. These amounts are
directly attributable to the commercial operations of the Company,
including accounts receivable and payables associated with the
ILANS acquisition. The Company had total working capital of
$17,493,835 as at December 31, 2018.
Management Commentary
Alvaro Torres, Khiron CEO and
Director, commented: "Fiscal 2018 marked an important year for
Khiron as we accomplished a number of significant objectives
towards delivering on our strategy of becoming an internationally
recognized, market-leading cannabis company. From a start-up to a
team over 250, we have established operations and activity in
multiple jurisdictions, acquired medical clinics, developed a
market-leading skincare brand, entered into research partnerships,
set up educational programs and received patient association
endorsements."
Mr. Torres continued, "We operate in a complex, fast-moving
industry, and I would like to recognize our incredible team who
have worked hard to bring the Khiron vision to life. It has been
their passion and commitment that has made our significant progress
possible."
Mr. Torres concluded, "We have much work to do in growing the
Company and remain focused on executing all aspects of our business
to generate value for our shareholders and bring medical cannabis
products to people in Latin America and globally."
2018 Highlights
Listing
- On May 24, 2018, the Company's
common shares began trading on the TSX Venture Exchange
("TSXV"). Khiron became the first fully-licensed grower of
medical cannabis with operations in Colombia to be listed on the TSXV.
Capital
- Closed a subscription receipt and private placement offering
for total gross proceeds of $12,135,000 concurrent with the completion of its
reverse takeover transaction.
- Closed a marketed short form prospectus offering on
September 12, 2018, resulting in
gross proceeds of $12,937,500.
- Received $14,007,000 from the
accelerated expiry and exercise of warrants.
- Subsequent to the quarter, the Company completed a bought deal
short form prospectus offering of 13,110,000 Common shares for
aggregate gross proceeds of $28,842,000.
Geographic Expansion
- Obtained approval from the Obligatory Sanitary Notification for
commercialization of four Kuida® CBD-based cosmeceutical products
in Peru.
- Increased cultivation capacity into Chile on closing of its agreement with
Fundacion Daya, the first organization to receive cultivation
permits from the Chilean Agricultural and Livestock Services.
- Khiron was invited to sit on the U.S. National cannabis
Roundtable, led by John Boehner,
Former Speaker of the U.S. House of Representatives
- Khiron obtained preliminary approvals from COFEPRIS and the New
Government of Mexico for the sale
of it nutraceutical products.Entered into a retail distribution
agreement with Farmalisto for Kuida® CBD cosmeceutical products in
Mexico.
- In Q1 2019, the Company:
-
- entered into a non-binding LOI with an Italian-based hemp
company Canapalife Group.
- Executed a definitive agreement for the acquisition of 100% of
NettaGrowth which, through its wholly-owned subsidiary, has secured
the first medical THC and CBD cannabis licence.
Patient Association Endorsements
- Secured medical cannabis endorsements from the Colombian
Association of Internal Medicine and the Colombian Association of
Neurology, two of the largest medical associations in Colombia.
- Secured medical endorsements from the Colombian Association of
Palliative Care
- Secured medical endorsement from the Colombia Association for
the Study of Pain.
Product Development and Portfolio
- Launched Kuida®, the first CBD-based cosmeceutical
brand in Colombia and secured
multi-channel distribution agreements with leading Colombian
cosmeceutical distributors, including with Farmatodo and
Farmalisto.
- Announced partnership with Centro Dermatologico Federico Lleras
Acosta, to initiate the first cannabis clinical research in
Latin America and expand product
development to address the global skincare market.
Revenue Generation and Product Distribution
- Initiated revenue generation in Q4 2018 with the launch of the
Kuida® CBD brand.
- Subsequent to the reporting period, expanded Kuida® retail
presence, securing partnerships with Fedco, Colombia's top specialist beauty retailer and
Linio, Latin America's largest
online E-retailer.
- Subsequent to the quarter, signed LOI with Copservir Ltda, to
establish medical cannabis distribution agreement for over 900
pharmacies across 200 cities and municipalities across Colombia.
- In Q1 2019, Khiron signed an agreement with Cafam, a prominent
Colombian drugstore for Kuida® distribution into up to 150
stores
Grow Status – Regulatory and Capacity
- Received medical cannabis quota allocation provided by the
Government of Colombia.
- Received approvals from Colombia's National Food and Drug Surveillance
Institute ("INVIMA") to commercialize CBD cosmeceutical
products for Colombian domestic sale and export, becoming the first
fully licensed medical cannabis company to receive approvals from
INVIMA for CBD-based cosmeceutical products.
- Secured and expanded agricultural land from an initially leased
4.5 hectares to 17.5 hectares in Ibague, Colombia.
- Acquired additional cultivation quotas from the Colombian
Technical Quotas Group to cultivate 5,040 psychoactive cannabis
plants for the purposes of completing the ICA agronomic evaluation
tests.
Merger and Acquisitions
- Expanded to second Latin
America cultivation jurisdiction on closing of agreement
with Dayacann to enter Chilean medical cannabis market.
- Acquired ILANS, a network of prominent medical clinics in
Colombia treating over 100,000
patients and with gross revenue of approximately C$10.5 million.
- In Q1 2019, the Company:
-
- Entered into a joint venture with Dixie Brands to bring a portfolio of
cannabis-infused products to Latin America and Khiron's
Kuida® cosmeceutical brand to the U.S. CBD cosmetic market.
- Signed a definitive agreement to acquire 100% of
NettaGrowth
- Signed a non-binding LOI to acquire 100% of Italy-based prominent hemp company Canapalife
Group.
Key Board and Management Appointments
- Appointed Mr. Vicente Fox to its
Board. Mr. Fox is the former CEO of Coca Cola Mexico, former
President of Mexico and a
significant advocate for the legalization of cannabis in
Mexico.
- Appointed Chris Naprawa to the
position of President. Mr. Naprawa brings extensive institutional
capital markets experience to the Company.
- Appointed internationally recognized medical Cannabis
specialist Dr. Maria Fernanda
Arboleda as Medical Director
- Appoints Former DEA Chief of Pharmaceutical Investigations Matt
Murphy as Vice President, Compliance
- In Q1 2019:
-
- Larry Holifield, Former U.S. DEA
Regional Director, Mexico and
Central America appointed as
Khiron Security and Compliance Director, Mexico.
- Seasoned capital markets leader and cannabis
authority John Cooke is appointed VP of Corporate
Development.
- Luis Chaves appointed to manage corporate development
strategy and guide regulatory affairs for the Company
in Mexico.
- Rodrigo Azócar appointed Country Manager for Chile, to
lead Company's market development and patient association
strategy.
- Rodrigo Durán appointed to lead Dixie Brands joint venture
to bring Dixie's 100+ market-leading products to Latin
America.
- Khiron expands skincare leadership team with appointment of Dr.
Edwin Bendek as Medical Director,
Skincare.
About Khiron
Khiron Life Sciences Corp. is positioned to be the dominant
integrated cannabis company in Latin
America. Khiron has core operations in Latin America and is fully licensed for the
cultivation, production, domestic distribution, and international
export of both THC (tetrahydrocannabinol) and CBD (cannabidiol)
medical cannabis. In May 2018, Khiron
listed on the TSX Venture Exchange, becoming the first Colombian
based medical cannabis company to trade on any exchange
globally.
With a focused regional strategy and patient oriented
approach, the Company combines global scientific expertise,
agricultural advantages, branded product market entrance
experience and education to drive prescription and brand
loyalty to address priority medical conditions such as chronic
pain, epilepsy, depression and anxiety in the Latin American
market of over 620 million people. Khiron is led by Co-founder and
Chief Executive Officer, Alvaro
Torres, together with an experienced executive team,
and a knowledgeable Board of Directors that includes former
President of Mexico, Vicente Fox. Further information on Khiron
Life Sciences can be found at https://investors.khiron.ca/
To be added to the distribution list, please email
khiron@kcsa.com with "Khiron" in the subject line.
Cautionary Note Regarding Forward-Looking
Statements
This news release contains forward-looking
information within the meaning of applicable Canadian and
United States securities laws.
Often, but not always, forward-looking information can be
identified by the use of words such as "plans", "expects" or "does
not expect", "is expected", "estimates", "intends", "anticipates"
or "does not anticipate", or "believes", or variations of such
words and phrases or state that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be
achieved. Forward-looking information involves known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Khiron or its subsidiaries
to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking
information contained in this news release. Examples of such
statements include statements with respect the future market share,
product development, build out of facilities, the proposed
acquisitions of NettaGrowth and CanapaLife Group, and additional
market and product expansion, among others. Risks,
uncertainties and other factors involved with forward-looking
information could cause actual events, results, performance,
prospects and opportunities to differ materially from those
expressed or implied by such forward-looking information, including
risks contained in the Company's annual information form filed with
Canadian securities regulators available on the Company's issuer
profile on SEDAR at www.sedar.com. Although the Company believes
that the assumptions and factors used in preparing the
forward-looking information in this news release are reasonable,
undue reliance should not be placed on such information and no
assurance can be given that such events will occur in the disclosed
time frames or at all. The forward-looking information included in
this news release are made as of the date of this news release and
the Company does not undertake an obligation to publicly update
such forward-looking information to reflect new information,
subsequent events or otherwise unless required by applicable
securities legislation.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this press
release.
SOURCE Khiron Life Sciences Corp.