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Nov. 15, 2021, 9:45 p.m. EST

VIVO Cannabis(TM) Announces Third Quarter 2021 Results

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  • Net revenue $6.2 million

  • Net loss reduced to $1.1 million; EBITDA loss reduced to $2.1 million

  • First shipment to Germany completed; Australia sales $2.2 million

Toronto, Ontario--(Newsfile Corp. - November 15, 2021) - VIVO Cannabis Inc. (otcqx:VVCIF) /zigman2/quotes/207808743/delayed CA:VIVO 0.00% (" VIVO " or the " Company ") today released its third quarter 2021 financial and operating results.

Management Commentary

At the start of the third quarter of 2021, significant changes were made to focus VIVO's strategy on the medical cannabis segment in Canada, Australia and Germany, and to fully leverage the efforts and investments the Company has made in medical cannabis in these geographies over the years. We expect that shareholders and patients alike will be pleased as the business becomes more focused on medical products, services and profitability. The Company has many assets and capabilities that position it as a strong player in the medical cannabis market. By developing these assets, the Company intends to establish itself as a global medical leader focused on enhancing the lives of its patients.

Financial Summary

Net revenue for Q3 2021 was $6.2 million, representing a 3% decline quarter-over-quarter as compared to Q2 2021.

Sales, general and administrative expenses were $3.4 million in Q3 2021, compared to $4.3 million in Q2 2021, a decrease of 21% driven by reductions in salaries and wages, and in professional fees.

The Company's adjusted EBITDA [(] [1)] was ($2.1) million for the quarter, compared to ($3.0) million in Q2 2021, a 30% improvement. The improvement in EBITDA is driven by diligent expense reductions.

Cash and cash equivalents decreased from $15.7M in Q1 2021 to $12.4M in Q3 2021, driven by the Company's operating losses and changes in working capital.

Key Performance Indicators

KPI (P&L amounts in millions) Q3 2021 Quarter-over-Quarter Change Q2 2021
Net Revenue $6.2 -3% $6.4
SG&A $3.4 -21% $4.3
Adjusted EBITDA [ (1)] ($2.1) 30% ($3.0)
Cash and equivalents $12.4 -21% $15.7
Net flower price per gram (Canada only) $6.18 +13% $5.46

 

(1) Adjusted EBITDA is not a measure of financial performance under IFRS. For the Company's definition of Adjusted EBITDA, see the Company's management's discussion and analysis for the three- and nine-months ended September 30, 2021, available under the Company's profile at www.sedar.com .

Business Overview

In Q3 2021, VIVO began to focus on leveraging its assets to create value in the medical cannabis segment in Canada, Australia and Germany. VIVO believes that leveraging these assets will generate long-term shareholder value and accelerate its path to profitability. The Company's assets, highlighted below, support its strategy of focusing on the medical cannabis segment.

Canna Farms and ABcann Medicinals

Canna Farms and ABcann Medicinals together have more than fifteen years of experience supporting tens of thousands of cannabis medical patients with a wide range of conditions and symptoms and together have amassed a deep understanding of patient motivations.

Canna Farms was established in 2013, as the first licensed producer in British Columbia, and since that time has established deep roots in the medical cannabis community. It is now a respected and recognized cannabis brand with thousands of positive patient self-reported outcomes. According to Vivintel's Spring 2021 Canadian Cannabis Consumer Study, Canna Farms™ is one of the top health and wellness brands in Canada. Canna Farms was BC's first licensed producer and proudly holds itself to the highest cultivation standards. In 2020, it was recognized by Brightfield Group as the brand with the 4 [th] highest Brand Awareness.

Canna Farms has many thousands of patients who have tracked themselves and self-reported their outcomes using the Strainprint app on nearly 100 different Canna Farms™, Beacon Medical™, Fireside™ and Lumina™ products in over 200,000 sessions. Due to it being the first licensed producer to partner with Strainprint, Canna Farms has the largest data set within the mobile app and the efficacy of specific strains used for various conditions have been published in several independent academic peer-reviewed articles. Canna Farms operates an industry-leading online medical cannabis platform, ( https://www.cannafarms.ca/product-medical ) that combines the Company's brands with products from third-party cultivators in one online medical store. In this way patients can access a broad selection of medical cannabis products from some of the largest medical cannabis suppliers in Canada.

ABcann Medicinals' operations in Napanee Ontario focus on ethanol extraction, product formulation, and EU-GMP related processes. This operation's ethanol extraction suite produces high quality cannabis extracts and distillates for use in many of VIVO's products including oils, distillates, concentrates and more advanced formulations of VIVO's current and anticipated portfolio of medical products, as well as edibles and topicals.

Australia, Germany and other International Markets

VIVO continues to make headway with its international expansion strategy, leveraging its experience and leadership to enter new high-growth markets. The Company's initial focus is on the German and Australian markets, which, combined, have a population of over 100 million people.

The Company currently has a strong medical brand established in Australia and leverages its Canadian knowledge base to accelerate product efficacy, cannabis medical information sharing, and sales growth in that market. With the Company's recent EU-GMP certification, it is now in a position to repeat its Australian success in Germany and in other global markets, all of which are exclusively medically focused. The Company's products and brands prove their value in Canada first, and this success is then replicated in international markets, as regulations allow.

On July 29, 2021, the Company announced that its EU-GMP/GDP licensed subsidiary, Beacon Medical Germany GmbH, received its first import permit from Germany's BfArM, the Federal Institute for Drugs and Medical Devices (Bundesinstitut für Arzneimittel und Medizinprodukte), allowing for the import of Canadian grown dried flower medical cannabis from the Company's ABcann Medicinal affiliate's GMP-certified Napanee, Ontario site, into Europe. This followed the March 11, 2021 announcement that VIVO's Vanluven facility in Napanee, Ontario had received EU-GMP (European Union Good Manufacturing Practices) certification from Germany's Brandenburg health authority, the Landesamt für Arbeitsschutz, Verbraucherschutz und Gesundheit ("LAVG"). The certification took effect immediately and has enabled VIVO, through its ABcann Medicinals subsidiary, to export product for sale into European and other markets requiring products to be manufactured under EU-GMP standards. ABcann has harvested and bottled its first lot of whole-flower to Germany under EU-GMP production conditions. In October 2021 30 kgs of dry flower was successfully shipped to Germany. This was an enormous milestone for the company and paves the way for higher volumes to be shipped in the near future.

Australia's Therapeutics Goods Administrator ("TGA") continues to report a record number of new patient approvals and the growth in the market has been matched by the growth in VIVO's Beacon Medical™ Australia business. VIVO currently sells five products under the Beacon Medical™ brand in Australia.

/zigman2/quotes/207808743/delayed
CA : Canada: Toronto
$ 0.05
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Volume: 102,070
May 20, 2022 3:56p
P/E Ratio
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Dividend Yield
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Market Cap
$18.54 million
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