Empower Clinics Inc. (CSE:CBDT, OTCQB:EPWCF) has achieved record revenue growth for both the full year 2021 and for the fourth quarter and said it will soon be announcing measures to improve its financial operations, talent and reporting.
Filing its audited consolidated financial statements for the fourth quarter and the year ended December 31, 2021, the company said it is immediately engaging securities regulators for the revocation of the cease trade order previously issued for not meeting filing deadlines.
"I'm pleased to report that we've achieved record revenue growth for fiscal year 2021. We're delivering this revenue growth because of our efforts to offer truly integrated health care solutions - made up of our clinics, a medical device company, at-home testing products, testing services and state-of-the-art diagnostics laboratory - in the United States and Canada," said Steven McAuley, chairman and CEO of Empower Clinics in a statement.
READ: Empower Clinics unveils medical diagnostics laboratory brand Medisure in the US
"Now that we are moving forward with our required filings in 2021, we will immediately engage securities regulators for the revocation of the cease trade order.
“While we share and understand the disappointment of late filings, we'll be soon announcing measures to improve our financial operations, talent, and reporting. We are looking forward to continuing our growth trajectory - especially in the US market - in the year ahead," he added.
2021 highlights
- Total revenues from continuing operations rose by 355% year-over-year to $4,368,916 for the full year 2021 compared to revenues of $961,099 in 2020.
- Gross margin from continuing operations of 31% for FY2021, compared to 45% in FY2020, representing a 14% reduction.
- Net loss from continuing operations of $31,736,245 of $0.10 per share compared to $16,696,224 or $0.09 per share for FY2020, which was primarily driven by a non-cash loss on the fair value adjustment related to the company's warrants outstanding that were impacted by the significant appreciation of the company's share price, a key input in determining the fair value.
- Cash at December 31, 2021 stood at $866,170, compared to $4,889,824 as at December 31, 2020.
- Cash used in operating activities of continuing operations was $3,637,180 for FY2021, compared to $1,597,965 for FY2020.
- In July 2021, the company acquired MediSure, a distributor of diabetic blood glucose monitors and test strips.
- In August 2021, Empower unveiled "The Medi-Collective", a Canadian clinic brand, and completed the opening of six clinic locations in the financial year.
Financial performance
- As part of total revenues, revenues from the Health & Wellness segment for 4Q and full year 2021 were $458,744 and $1,006,952, respectively, compared to 4Q and full year 2020 revenues of $85,284 and $307,974, respectively. This increase over the prior year is attributable to the launch of The Medi-Collective and revenues from Canadian clinics.
- Diagnostics & Technology revenue includes the sale of MediSure products and COVID-19 testing conducted by Kai Medical Laboratory dba Medisure Laboratory. Diagnostics & Technology revenue for 4Q and full year 2021 were $886,327 and $3,361,964, respectively, with 82% attributable to COVID-19 testing, compared to 4Q and full year 2020 revenues of $653,125 and $653,125, respectively.
- Direct expenses excluding depreciation and amortization for 4Q and full year 2021 were $1,428,074 and $3,020,412, respectively, compared to 4Q and full year 2020 direct clinic expenses of $419,940 and $526,840, respectively. This increase over the prior year is attributable to the ramping up of operations in The Medi-Collective and is primarily driven by salaries and wages.
- Loss from operations for 4Q and FY2021 were $2,361,586 and $5,441,952, respectively, compared to 4Q and FY2020 loss of $2,142,792 and $3,677,216, respectively. The wider loss is primarily attributable to the increase in direct expenses and operating expenses, as well as a reduced gross margin resulting in lower margin operations in The Medi-Collective.
- Net loss from continuing operations for 4Q and full year 2021 were $4,684,114 and $31,736,245, respectively, compared to 4Q and full year 2019 net loss of $15,289,130 and $16,696,224, respectively. This increase over the prior year is primarily attributable to the loss on change in fair value recognized on the warrant liability which resulted from the significant increase in the company's share price and therefore the value of the warrants exercisable.
- Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss in 4Q and FY2021 was $2,238,709 and $3,848,456, respectively, compared to $1,919,789 and $3,197,815 in 4Q and FY2020, respectively.
- During the year ended December 31, 2021, Empower Clinics used $3,637,180 of cash in the operating activities from continuing operations. It invested $2,946,207 and raised net cash from financing activities of $3,031,821 via proceeds from various issuances of shares and exercise of warrants and stock options, partially offset by lease payment and repayments of loans and notes payable.
Recent highlights
- In January 2022, the company received two Health Canada medical device licences for two new products including its Blood Glucose Monitoring System and its Vitamin D Rapid Test. The Vitamin D Rapid Test was launched in PharmaChoice pharmacies in April 2022 and the Blood Glucose Monitor was launched to Medisure customers in July 2022.
- In February 2022, the company announced its partnership with CERES Terminals Canada to conduct the COVID-19 testing and logistics at the cruise ship terminal at Canada Place in Vancouver, B.C. Empower Clinics provided testing for cruise lines, tour companies and the tourism industry from its three accredited testing centre locations in downtown Vancouver.
- On March 4, 2022, it completed the sale of Sun Valley Health Holdings LLC, allowing Empower to fully focus on developing its integrated healthcare vision through the growth of The Medi-Collective, MediSure and Kai Medical Laboratory dba Medisure Laboratory.
- In January and March 2022, the company raised $3.0 million and $2.1 million, respectively, through the issuance of convertible debentures.
Following an operational review, the company concluded that the Hamilton and Mississauga clinics did not meet the expansion goals of the Company. The Medi-Collective has six remaining clinic locations.
Empower Clinics is an integrated healthcare company that provides body and mind wellness for patients through its clinics, with digital and telemedicine care, a medical device company and world-class medical diagnostics laboratories.
Supported by an experienced leadership team, Empower is aggressively growing its clinical and digital presence across North America. Its Health & Wellness and Diagnostics & Technology business units are positioned to positively impact the integrated health of our patients, while simultaneously providing long-term value for our shareholders.
Contact the author at jon.hopkins@proactiveinvestors.com