Completed evaluation of and restated Q2 2023 interim financial statements
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SASKATOON, Saskatchewan–(BUSINESS WIRE)–ZYUS Life Sciences Corporation («ZYUS» or the “Company”) (TSX-V: ZYUS), a Canadian-based life sciences company leading scientific research and global development of innovative cannabinoid-based pharmaceutical drug products, today announced its 2023 Third Quarter Business results.
During the third quarter of 2023, the Company completed an evaluation of the transactions relating to the Arrangement Agreement with Phoenix and the accounting treatment of those transactions. During this review, Management determined that it was necessary to revise the initial accounting for the transaction and adjust the following financial statement line items previously reported for Q2 2023:
- Share capital (1)
- Listing expense (2)
- Finance costs (1)
- General and administrative (1)
- Calculation of weighted average shares outstanding of the Resulting Issuer
|
(1) |
With respect to Finance costs, Share capital and General and administrative, the Company erroneously accelerated accretion on certain loans and borrowings balances that converted to Share capital of the Company upon the Reverse Takeover Transaction, where the amount transferred should have been at the carrying value as at the date of the Reverse Takeover Transaction. Correction of this error resulted in a $4.8 million adjustment to Share capital and Finance costs. In addition, $1.5 million of costs treated as share issue costs have been reclassified and treated as General and administrative expense. |
|
(2) |
With respect to Listing expense, the Company erroneously recorded the settlement of the Phoenix Unit, a pre-existing contractual relationship, at the carrying value as opposed to estimating the fair value of the Unit and recording any resulting gain or loss on settlement. Correction of this error resulted in a $0.1 million adjustment to the Listing expense and Finance costs. |
In addition, in conjunction with this review, Management also identified a revision required respecting General and Administrative expense and a corresponding entry to Accounts payable in the amount of $0.6 million. To correct these items, the Company has recorded adjustments to its Q2 2023 condensed consolidated interim financial statements (unaudited). The Company has restated the Consolidated Statements of Financial Position, Consolidated Statement of Changes in Shareholders’ Equity, Consolidated Statement of Operations and Comprehensive Loss and the Consolidated Statement of Cash Flows to correct these errors.
Third Quarter 2023 Financial Results
The following tables outline select data relating to the Company’s Results of operations for the three and nine months ended September 30, 2023 and 2022.
|
Three months ended September 30, |
|
2023 |
|
|
2022 |
|
Financial Data |
|
|
|
|
|
|
Sales |
$ |
99 |
|
$ |
84 |
|
Cost of sales |
$ |
46 |
|
$ |
26 |
|
General and administrative |
$ |
2,837 |
|
$ |
2,208 |
|
Research and development |
$ |
222 |
|
$ |
277 |
|
Depreciation and amortization |
$ |
760 |
|
$ |
1,090 |
|
Share-based compensation |
$ |
1 |
|
$ |
9 |
|
Medical education, branding and marketing |
$ |
86 |
|
$ |
127 |
|
Finance costs |
$ |
301 |
|
$ |
1,487 |
|
Derivative loss (gain) |
$ |
– |
|
$ |
(11) |
|
Loss before income tax |
$ |
(4,214) |
|
$ |
(7,350) |
|
Net loss |
$ |
(4,193) |
|
$ |
(7,333) |
|
EBITDA (1) |
$ |
(3,153) |
|
$ |
(4,773) |
|
Adjusted EBITDA (1) |
$ |
(2,892) |
|
$ |
(2,376) |
|
Nine months ended September 30, |
|
|
|
|
|
|
Financial Data |
|
|
|
|
|
|
Sales |
$ |
254 |
|
$ |
223 |
|
Cost of sales |
$ |
100 |
|
$ |
73 |
|
General and administrative |
$ |
8,421 |
|
$ |
6,925 |
|
Research and development |
$ |
840 |
|
$ |
2,033 |
|
Depreciation and amortization |
$ |
2,291 |
|
$ |
3,272 |
|
Share-based compensation |
$ |
31 |
|
$ |
90 |
|
Medical education, branding and marketing |
$ |
223 |
|
$ |
530 |
|
Finance costs |
$ |
3,565 |
|
$ |
3,855 |
|
Derivative loss (gain) |
$ |
1,115 |
|
$ |
(548) |
|
Loss before income tax |
$ |
(18,164) |
|
$ |
(18,720) |
|
Net loss |
$ |
(18,106) |
|
$ |
(18,663) |
|
EBITDA (1) |
$ |
(12,308) |
|
$ |
(11,593) |
|
Adjusted EBITDA (1) |
$ |
(8,319) |
|
$ |
(7,576) |
|
(1) |
EBITDA and Adjusted EBITDA are non-IFRS measures with no standard definition under IFRS. See description and reconciliation of non-IFRS measures in the Non-IFRS Financial Measures and Reconciliations section of the Company’s MD&A. |
Grant of Stock Options
Pursuant to the Company’s omnibus equity compensation plan (the “Omnibus Plan”), the Company announced that it has granted stock options to officers, senior management and employees to purchase up to an aggregate of 1,640,000 common shares of the Company; of this amount, 625,000 stock options have been granted to officers of the Company. The stock options have been priced at $1.45 per option share, have various vesting periods and are exercisable for a period of five years.
About ZYUS Life Sciences Corporation
ZYUS is a publicly traded Canadian-based life sciences company focused on the global development and commercialization of regulated cannabinoid-based pharmaceutical drug product candidates. Through clinical research, ZYUS is committed to furthering the understanding of cannabinoids with the clinical development of its pharmaceutical drug product candidates and intellectual property activities to protect its novel formulations. Additionally, ZYUS is dedicated to delivering high quality, cGMP/EU GMP-compliant cannabinoid products to patients through the exempt global medical market. The ZYUS vision is to reimagine the potential of pain therapeutics by pursuing regulatory approval of cannabinoid formulations and elevating cannabinoids as a standard of care in pursuit of transformational impact on patients’ lives. ZYUS: Advancing the Science of Well-Being. For additional information, visit www.zyus.com or follow us on X (formerly known as Twitter) @ZYUSCorp.
Cautionary Note Regarding Forward-Looking Statements
This news release contains “forward-looking information” within the meaning of applicable securities laws relating to the Company’s business, the Company’s ability to advance clinical research activities and further operations, realize on its objectives and obtain regulatory approval of cannabinoid-based pharmaceutical drug product candidates and introduce products that act as alternatives to current pain management therapies. Any such forward-looking statements may be identified by words such as “expects”, “anticipates”, “intends”, “contemplates”, “believes”, “projects”, “plans” and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. Statements about, among other things, the Company’s business, the Company’s ability to advance clinical research activities and further operations, realize on its objectives and obtain regulatory approval of cannabinoid-based pharmaceutical drug product candidates and introduce products that act as alternatives to current pain management therapies are all forward-looking information. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. Although such statements are based on management’s reasonable assumptions, there can be no assurance that the Company will be able to advance its clinical research activities and further operations, realize its objectives and obtain regulatory approval of cannabinoid-based pharmaceutical drug product candidates or introduce products that act as alternatives to current pain management therapies. The Company assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances or actual results unless required by applicable law. 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.
Contacts
ZYUS Media Inquiries
[email protected]
1-833-651-7723
ZYUS Investor Relations
[email protected]