- Ended the quarter with $47.9
million in cash and short-term investments
- Robust balance sheet puts Company in a position of
strength
- ILANS clinics showed progressively stronger margins and an over
20% increase in revenues in Q3
- Multi-country strategy advances with TSX-V approval for
distribution and sale of Kuida CBD products in the United States, with sales launched in the
US market in November, and;
- Approval to sell Aceso hemp CBD brand in Colombia, targeted for entry in Q1 2020
- Fulfilled European Union cosmetic product regulatory
requirements for seven Kuida products for distribution into the
United Kingdom – sales expected to
commence in Q1 2020
- 22 cannabis strains registered in Colombia and in Q3 successfully harvested a
number of these strains, converting to an extract. Final product
manufacturing expected in Q4 2019
- Appointed veteran independent director Deborah Rosati, FCPA, FCA, ICD.D, subsequent to
the quarter
TORONTO, Nov. 26, 2019 /CNW/ - Khiron Life Sciences Corp.
("Khiron" or the "Company") (TSXV:KHRN, OTCQB:KHRNF), a
cannabis company with core operations in Latin
America announced today its financial results for the third
quarter ended September 30, 2019.
These filings are available for review on the Company's SEDAR
profile at www.sedar.com. All financial information in this
press release is reported in Canadian dollars, unless otherwise
indicated.
Summary of key financial results
|
Three months
ended
September 30
|
Nine months ended
September 30
|
(Canadian
dollars)
|
2019
|
2018
|
2019
|
2018
|
|
$
|
$
|
$
|
$
|
Revenues
|
2,773,239
|
-
|
7,071,896
|
-
|
Gross
profit
|
593,456
|
-
|
1,387,933
|
-
|
Net loss
|
10,621,101
|
5,180,411
|
29,270,566
|
13,302,158
|
Adjusted EBITDA
(1)
|
5,516,787
|
3,662,357
|
19,539,314
|
10,
493,340
|
Net loss per share
(basic and diluted)
|
0.09
|
0.10
|
0.30
|
0.32
|
Weighted average
shares
outstanding
|
113,996,724
|
49,851,687
|
97,448,114
|
41,212,034
|
1.
|
Adjusted EBITDA
(earnings before interest, taxes, depreciation and amortization or
in this case loss) is a non-GAAP measure calculated as net loss as
reported under International Financial Reporting Standards and
adding back share-based compensation expense, transaction fees and
depreciation.
|
Discussion of operations for three months ended September 30, 2019
The Company recorded a net loss for the three months ended
September 30, 2019 of $10.6 million ($0.09 per share) compared to a net loss of
$5.2 million for the same period in
2018. Adjusted EBITDA, which excludes mostly non-cash items, was
$5.5 million for the three months
ended September 30, 2019. The Company
ended the quarter with a strong $47.9
million balance in cash and short-term investments.
Revenues of $2.8 million were
recognized from the sale of services at its clinics (ILANS) and
sale of its cosmeceutical products (Kuida), both of which commenced
in the fourth quarter of 2018.
Revenues at ILANS in the third quarter increased 23% from the
previous quarter at a healthy 20% gross margin. The increase in
sales quarter over quarter was largely due to a higher number of
surgical procedures at improved margins. It is expected that the
fourth quarter will not sustain the same level revenues as the
third quarter because traffic to the clinics is likely to slow down
during the holiday season in December.
Awareness for Kuida CBD brand products continues to grow through
the Company's marketing channels and increased distribution
networks, and the Company expects Kuida revenues to continue to
strengthen in the fourth quarter of 2019 especially with the
expansion into new markets outside of Colombia and the holiday shopping season.
Adjusted EBITDA was a loss of $5.5
million for the third quarter of 2019, which was
$1.9 million higher than the prior
year second quarter largely due to the growth of the business,
which included cultivation and operating costs of $1.0 million as the Company prepares to
manufacture and sell its first medicinal cannabis extracts,
expected in January 2020, as well as
increased marketing and selling costs to boost Kuida brand
awareness as it enters new markets and adds SKUs.
The Company has a strong financial position at September 30, but the growth in revenues and cash
inflows is contingent on advancements in cannabis related
regulation globally. As a result, the Company is focused on
allocating its capital towards countries where regulatory approvals
appear more imminent. In Colombia,
the low-cost cultivation facilities are being expanded and energy
sources being improved at a total cost of approximately
$3.7 million commencing in the fourth
quarter of 2019. In Uruguay, the
construction of the $10 million
cultivation and processing facility in Juan
Lacaze has been put on temporary hold pending further
advancement in regulation. The licenses remain in good
standing.
Management Commentary
Alvaro Torres, Khiron CEO and
Director, commented: "We continue our positive momentum in
executing our strategic initiatives. Revenues are improving at
ILANS, we are adding SKUs to our Kuida CBD line and expanding into
new markets, including our recent launch in the US. We are in a
strong cash position to continue this momentum and we will sensibly
find the right balance in prioritizing our cash spending needs and
executing our growth plans."
Mr. Torres continues, "Subsequent to the quarter we achieved
several firsts; authorization for the commercialization of high THC
cannabis for domestic sale and export, successful first sales of
our Kuida CBD brand in the US, and we became the exclusive
Latin America provider to Project
Twenty21, the largest medical cannabis research study in
Europe. As we grow our dominant
market position and revenue in Colombia, we prudently continue to increase
new market presence as regulations open for us, backed with a
strengthened board, experienced leadership and committed
operational teams."
About Khiron Life Sciences Corp.
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 in Colombia for the
cultivation, production, domestic distribution, and international
export of both tetrahydrocannabinol (THC) and cannabidiol (CBD)
medical cannabis. The company delivers best in class regulatory
compliance, has the first approved set of CBD cosmetic products on
shelf in Colombia, and is currently facilitating testing to
meet and surpass all license requirements for commercial cannabis
derived products.
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. The Company 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.
Cautionary Notes
Forward-Looking Statements
This press release may contain certain "forward-looking
information" and "forward-looking statements" within the meaning of
applicable securities legislation. All information contained herein
that is not historical in nature may constitute forward-looking
information. Khiron undertakes no obligation to comment analyses,
expectations or statements made by third-parties in respect of
Khiron, its securities, or financial or operating results (as
applicable). Although Khiron believes that the expectations
reflected in forward-looking statements in this press release are
reasonable, such forward-looking statement has been based on
expectations, factors and assumptions concerning future events
which may prove to be inaccurate and are subject to numerous risks
and uncertainties, certain of which are beyond Khiron's control,
including the risk factors discussed in Khiron's Annual Information
Form which is available on Khiron's SEDAR profile
at www.sedar.com. The forward-looking information contained in
this press release is expressly qualified by this cautionary
statement and are made as of the date hereof. Khiron disclaims any
intention and has no obligation or responsibility, except as
required by law, to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise.
United States Disclaimer
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities
in the United States. The securities have not been and
will not be registered under the United States Securities Act of
1933, as amended (the "U.S. Securities Act") or any state
securities laws and may not be offered or sold within the
United States or to U.S. Persons
(as such term is defined in Regulation S under the U.S. Securities
Act) unless registered under the U.S. Securities Act and applicable
state securities laws or an exemption from such registration is
available
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.
Further information in respect of the Company can be found
at www.khiron.ca.
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SOURCE Khiron Life Sciences Corp.