Pathway Health (TSX-V:PHC) Corp has posted second-quarter revenue of C$2.8 million, a 9% increase over the first quarter, reflecting signs of recovery from COVID-19 restrictions experienced in various Canadian provinces in the first three months of the year.
"In the second half of fiscal 2022, we will remain focused on ways to control costs, streamline and leverage our existing business assets, including our partnerships with approximately 2,000 pharmacies, establish new partnerships, develop new integrated programs targeted to better serve patient groups such as veterans, first responders, and contractors, and exploring international opportunities, where we can leverage our experience, know-how and existing partnerships," Pathway CEO Ken Yoon said in a results statement.
"With the $3.5 million line of credit in place, Pathway can continue building a solid foundation to support its future growth," he added.
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The Canadian medical cannabis service provider said it entered into a bridge loan with a related party for available proceeds of up to $1 million. This facility was rolled into a larger $3.5 million revolving line of credit subsequent to quarter end. As of June 30, 2022, the company had drawn down $0.2 million from the bridge loan.
Gross margin in the three months ended June 30, 2022 was $1.3 million, compared to $1.5 million in the year-ago quarter, representing 47% and 53% of gross revenues, respectively. The company said the variance is mainly a result of the increase in products and provincially insured and non-insured physician services as a total percentage of overall revenue.
Cannabis education revenues were affected by a reduction in marketing fees previously provided by licensed producers as clinics moved to a telemedicine platform, it added.
Pathway said it incurred an adjusted EBITDA loss of $1.7 million for the three months ended June 30, 2022, compared to $0.6 million in the prior year.
Recent highlights
Pathway said it has applied for a non-possession sales license (Cannabis license Class-Federal sale for medical purposes without possession), which is currently under review with Health Canada. The company said it believes this license will help it deliver more efficient patient care, potentially assist in its international initiatives, and provide insights to inform future Cannabis Health Product (CHP) strategy.
The recent recommendations by the Science Advisory Committee to Health Canada on over-the-counter CBD based cannabis health products that included potentially having the CHPs only available in pharmacies are in-line with Pathway's CHP strategic direction. It would allow the company to leverage its relationship with over 2,000 pharmacies should the recommendations be implemented.
Pathway is an integrated healthcare company that provides products and services to patients suffering from chronic pain and related conditions. The company owns and operates eleven community-based clinics in four provinces where its team of health professionals work together to help patients through a variety of evidence-based approaches and products, including medical cannabis.
Pathway's patient care programs use an interdisciplinary approach that is guided by trained pain specialists, physical and occupational therapists, psychologists, nurses, and other healthcare providers.
Contact the author at susie@proactiveinvestors.com