- 7,607 patient visits generating revenue of $1,091,386
- Company has been re-positioning its overall strategy to become a vertically integrated health and wellness company that connects to its 120,000 patients using a data driven focus to improve patients’ lives with products, technology and health systems
VANCOUVER, June 4, 2019 – EMPOWER CLINICS INC. (CSE: CBDT) (Frankfurt 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.
“The Company has worked extremely hard over the past few months to
vastly improve its overall efficiency by significantly reducing
operating costs with aggressive headcount cuts and facility changes,
resulting in a much leaner organization that is positioned for new
growth. We dramatically improved financial accounting and reporting
controls to ensure we have the best possible corporate governance
systems in place to protect our shareholder interests.” Said Steven McAuley, Chairman & CEO of Empower.
“With our improved stable foundation, the closing of our two recent
financings and the closing of the Sun Valley Clinics acquisition, we are
positioned to take advantage of the many growth initiatives ahead of
us, as we continue on our path to becoming a growth-oriented global
health & wellness brand.”
2018 Highlights
- 7,607 patient visits generating revenue of $1,091,386 or $0.02 per share, compared to 9,705 patient visits generating $1,507,050 or $0.03 per share for fiscal 2017.
- Net loss of $3,789,918 or $0.06 per share, compared to $3,109,921 or $0.06 per share for fiscal 2017, which was primarily driven by the Company’s listing fee of $1,308,808 as part of the Company’s listing on to the Canadian Securities Exchange.
- Cash used in operating activities was $2,835,710 or $0.04 per share, compared to $1,587,760 or $0.03 per share for fiscal 2017.
- Cash at December 31, 2018 of $157,668, compared to bank indebtedness of $7,148 at December 31, 2017, which was primarily driven by equity and debt financings during the year ended December 31, 2018.
- On April 23, 2018, the Company completed its previously
disclosed reverse takeover transaction (“RTO”) of Adira Energy Ltd.
Following the RTO, on April 30, 2018 the Company listed on
the Canadian Securities Exchange (the “CSE”) under ticker symbol “CBDT”,
on the OTC, part of the OTC Markets Group, under the ticker “EPWCF” and
on the Frankfurt Stock Exchange under the ticker “8EC”. On closing of
the RTO, the Company’s name was changed from Adira Energy Ltd to Empower
Clinics Inc.
Recent Highlights Subsequent to Year End
-
Strategic redirection: The Company has been
re-positioning its overall strategy to become a vertically integrated
health and wellness company that connects to its 120,000 patients using a
data driven focus to improve patients’ lives with products, technology
and health systems.
-
Strengthened Management Team: In January 2019, seasoned entrepreneur and executive officer and former GE Capital Managing Director Steven McAuley
was appointed as Empower’s Chairman & CEO. The Empower management
team has since been augmented with critical hires made from the ranks of
investment banking, accounting, marketing and clinic operations among
other disciplines. CFO Mat Lee, appointed on March 19, 2019,
is an experienced accounting and finance executive. To further support
financial and accounting restructuring, the Company engaged the services
of Invictus Accounting Group, a top-tier boutique advisory firm based
in Vancouver, BC.
-
Strategic Acquisition: On April 30, 2019,
the Company completed the acquisition of Sun Valley Certification
Clinics Holdings LLC (“Sun Valley”) from Andrea Klein and Dustin Klein
and a minority shareholder, through its wholly-owned subsidiary, Empower
Healthcare Assets Inc., for cash and share consideration having an
aggregate value of $3,835,000 (CAD$5,160,376). Sun Valley operates a
network of professional medical cannabis and pain management practices,
with five clinics in Arizona, one clinic in Las Vegas, a tele-medicine
platform serving California, and a fully developed franchise business
model for domestic and international markets.
-
Strategic Development: On February 28, 2019 the Company announced that it intends to open a fully functioning hemp-based CBD extraction facility in greater Portland, Oregon
in Q2 2019 with the first extraction system expected to have the
capacity to produce 6,000 kg of extracted product per year. The new
facility has been secured and the Company takes possession June 1, 2019.
2019 Outlook and Catalysts
-
Enhanced Corporate Governance: The Company has
prioritized strengthening corporate governance practices under
the leadership of its Board of Directors and Chairman Steven McAuley, in order to address certain best practices suggested by North American securities regulators and senior stock exchanges.
-
Improved Capital Markets Profile: Empower is
diversifying its business model to become a vertically integrated
operator in the global cannabis sector with a focus on patient care, CBD
product distribution, research & development and CBD product
extraction. The Company believes this will appeal to a broader base of
shareholders and investors and provide greater access to capital and
improved trading liquidity.
-
Increased Patient Access: With a rapidly expanding
company-owned clinic network and significant expansion opportunity
through the Sun Valley franchise model, Empower anticipates it will grow
its total patient list substantially in the years ahead. This is
expected to provide greater opportunity for treatment analysis using
artificial intelligence (AI), validating the Company as a leader in
understanding the efficacy of cannabis-related therapies.
-
Focus on CBD Product Sales: Empower’s patient base and
customers are expected to benefit from access to high margin derivative
products, including CBD lotion, tinctures, spectrum oils, capsules,
lozenges, patches, e-drinks, topical lotions, gel caps, hemp extract
drops and pet elixir hemp extract drops. Patients and customers will be
able to access Empower’s customer service, home delivery and e-commerce
platform.
-
Market Leading Technology: Empower utilizes a
market-leading patient electronic management and POS system that is
HIPAA compliant and provides deep insight to patient care. The Company
supports remote patients using its tele-medicine portal, enabling
patients who do not live near one of its clinic locations, or are
disabled or unable to come to a location, to still benefit from a doctor
consultation.
Financial Summary
|
$, except where noted
|
Three months ended
December 31,
|
Year ended
December 31,
|
| |
2018
|
2017
|
2018
|
2017
|
|
Patient visits
|
1,314
|
1,893
|
7,607
|
9,705
|
|
Clinic Revenues
|
196,909
|
291,721
|
1,091,386
|
1,507,050
|
|
Direct Clinic Expenses
|
(115,655)
|
(114,252)
|
(417,047)
|
(638,834)
|
|
Loss from operations
|
(592,899)
|
(560,231)
|
(4,309,373)
|
(2,408,638)
|
|
Net income (loss)
|
1,342,930
|
(814,539)
|
(3,789,918)
|
(3,109,921)
|
|
Net income (loss) per share
|
0.01
|
(0.02)
|
(0.06)
|
(0.06)
|
Financial Performance
Clinic revenues for Q4 and full year 2018 were $196,909 and $1,091,386, respectively, compared to Q4 and full year 2017 revenues of $291,721 and $1,507,050, respectively. This decrease over prior year is attributable to three factors. The introduction of recreational cannabis to Oregon,
a reduction in marketing spend while we reposition our brand and its
treatment through online, social and mobile upgrades and competitive
introduction and pressure. The Company believes all three areas are
being addressed effectively and will be reflected in future revenues.
Direct clinic expenses for Q4 and full year 2018 were $115,655 and $417,047, respectively, compared to Q4 and full year 2017 direct clinic expenses of $114,252 and $638,834, respectively. This decrease over prior year is attributable to the decrease in number of patient visits described above.
Net loss from operations for Q4 and full year 2018 were $592,899 and $4,309,373, respectively, compared to Q4 and full year 2017 net loss of $560,231 and $2,408,638,
respectively. This increase over prior year is primarily attributable
two factors. Operating expense increased due to an increase in salaries
and benefits during fiscal 2018 as a result of additional senior
management joining the Company in conjunction with the RTO.
Additionally, share-based payments increased as a result of the RTO
which resulted in options being granted to Adira option holders and new
members of management.
Net income for Q4 and net loss for the full year 2018 were $1,342,930 and $3,789,918, respectively, compared to Q4 and full year 2017 net loss of $814,539 and $3,109,921, respectively. This increase over prior year is primarily attributable to the listing fee of $1,308,808 as a result of the RTO, share-based compensation expense of $892,417
and restructuring expenses incurred during the year as the Company
completed several changes towards its new strategic direction. Partially
offsetting these one-time expense is a $1,598,425 gain on change in fair value of the warrant liability and a $890,136
gain on change in conversion option on convertible debentures that
resulted from the decrease in the Company’s share price and therefore
the value of the warrants and convertible debentures exercisable.
During the year ended December 31, 2018, the Company used $2,835,710 in cash from operations after changes in non-cash working capital. The Company invested $100,227 towards property and equipment and raised $3,093,604 via proceeds from various issuances of shares, notes, and convertible debentures.
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 a leading multi-state operator of a network of
physician-staffed clinics focused on helping patients improve and
protect their health through innovative physician recommended treatment
options. It is expected that Empower’s proprietary product line
“Sollievo” will offer patients a variety of delivery methods of doctor
recommended cannabidiol (CBD) based products in its clinics, online and
at major retailers. With over 165,000 patient records, an expanding
clinic footprint, a focus on new technologies, including tele-medicine,
and an expanded product development strategy, Empower is undertaking new
growth initiatives to be positioned as a vertically integrated,
diverse, market-leading service provider for complex patient
requirements in 2019 and beyond.
ON BEHALF OF THE BOARD OF DIRECTORS:
Steven McAuley
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.
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 direction and
growth prospects of the Company, the expansion of the company’s clinic
and distribution network, the expected effect of the Vendors in their
new roles with the Company, the effect on the lives of patients, the
growth into a national brand, the effect of the Transaction, the
diversification of the Company’s business model, the potential appeal to
shareholders, the growth of the Company’s patient list and the effect
thereof, the expected benefits for the company’s patient base and
customers, the release of the cash consideration, the release of Shares
being held in escrow in connection with the Transaction and statements
regarding the Company’s proprietary product line “Sollievo”. 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 the Company may not be able to expand, that the
Transaction may not have the expected results, 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.
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/June2019/04/c5579.html
Investors: Steve Low, Boom Capital Markets, 647-620-5101; Steven McAuley, CEO, 604-789-2146, [email protected]; French inquiries: Remy Scalabrini, Maricom Inc., 604-789-2146Copyright CNW Group 2019
