Britannia Life Sciences Inc. Reports Third Quarter Financial Results and Provides Update on Operations
Toronto, Ontario–(Newsfile Corp. – March 1, 2022) – Britannia Life Sciences Inc. (CSE: BLAB) (“Britannia” or the “Company“) is pleased to provide its unaudited financial results for the three and nine months ended December 31, 2021. These filings and additional information regarding Britannia are available for review on SEDAR at www.sedar.com. All amounts are Canadian dollars unless otherwise stated.
Q3 2022 Highlights:
- The Company reports Adjusted EBITDA of$2.9m for the nine-month period ended December 31, 2021.
- On November 12, 2021, Britannia completed its transaction with Rise Life Science Corp (“RISE”). RISE has changed its name to Britannia Life Sciences Inc. and continues as the reporting issuer (BLAB: CSE).
- The transaction with RISE has been accounted for as a reverse takeover (“RTO”) by Britannia, such that these condensed interim consolidated financial statements reflect the accounts of Britannia acquiring RISE. As a result, the comparative information for prior periods provided in the financial statements represents the results of Britannia Bud Holdings Co. (“BBCH”), a wholly owned subsidiary of Britannia, and is therefore not directly comparable to current periods.
- In the nine-month period ended December 31, 2021, Britannia made principal and interest payments of $3.4m on the note representing amounts due to the vendors (the “Sellers’ Loan“) of Advanced Development & Safety Laboratory Limited (“ADSL“), Britannia’s largest operating subsidiary.
“Britannia is pleased to present its first set of financial results as a public company, after the successful completion of the reverse takeover transaction with RISE. We are grateful for the ongoing support from our shareholders as well as the vendors and our advisors, as we finalize our debt refinancing.”
On behalf of the Board
Sarah Zilik, CFO
Operational Update:
As of March 1st, 2022, the Company has made a number of productive operational developments:
- On January 17th 2022, Britannia entered into a supply agreement to import CBD Isolate and Distillate for the UK market. The company has begun to negotiate supply agreements with licensed producers of other cannabinoid products, including CBG, CBC, and THC.
- On February 22nd, 2022 Britannia launched its first CBD consumer trial with the objective of establishing the efficacy of using CBD as an active ingredient in products stimulating hair growth.
- Britannia is actively seeking acquisitions to expand its operational footprint and also evaluating opportunities to expand its range of services.
- The Company continues to expand its industry coverage, recently executing service contracts with material customers in the household goods and household accessories industries.
“Britannia is pleased with the continued momentum of its growth initiatives. We look forward to expanding our services and geographic presence throughout 2022, to deliver meaningful shareholder value.”
On behalf of the Board
Peter Shippen, CEO
Subsequent Events:
- Subsequent to the end of the quarter, Britannia executed a term sheet for a £5,000,000 loan facility with an external lender (the “Loan Facility“). The proceeds of the Loan Facility will be used to repay the remaining Sellers’ Loan in full and to fund the acquisition of an additional 10% of ADSL’s share capital. The Company expects to close the Loan Facility before its year-end of March 31, 2022.
About Britannia Life Sciences Inc.
Britannia Life Sciences Inc. is a global platform offering an integrated suite of services to assist companies along their product development journey. Britannia’s services, including product formulations, safety assessments, analytical and microbiological testing, global compliance and consumer evaluations are offered to companies ranging from multinationals to startups particularly in the cosmetics, food and wellness industries. Britannia has garnered significant expertise in the development and regulatory approval of topical and edible cannabis products, including preparation and support for novel food authorizations.
Britannia’s head office is located at 120 Adelaide Street West, Suite 2400, Toronto, Ontario, M5H 1T1.
For further information contact:
Britannia Life Sciences Inc.
Email: investors@britannia.life
Condensed Interim Consolidated Statements of Financial Position
(Unaudited)
| As at | December 31, 2021 | March 31, 2021 | |||||
| $ | $ | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash | 1,533,778 | 828,321 | |||||
| Accounts receivable | 1,723,018 | 1,686,152 | |||||
| Prepaid expenses | 90,830 | – | |||||
| Total current assets | 3,347,626 | 2,514,473 | |||||
| Non-current assets: | |||||||
| Property and equipment | 612,722 | 702,684 | |||||
| Goodwill and intangible assets | 17,479,369 | 18,234,344 | |||||
| Total non-current assets | 18,092,091 | 18,937,028 | |||||
| Total assets | 21,439,717 | 21,451,501 | |||||
| Liabilities and Shareholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable and accrued liabilities | 3,415,040 | 2,031,506 | |||||
| Interest payable | – | 163,076 | |||||
| Current portion of lease liability | 49,663 | 42,906 | |||||
| Director’s loan | – | 225,000 | |||||
| Sellers’ loan | 4,978,182 | 7,726,776 | |||||
| Total current liabilities | 8,442,885 | 10,189,264 | |||||
| Non-current liabilities: | |||||||
| Lease liability | 151,394 | 188,173 | |||||
| Convertible notes | – | 2,363,154 | |||||
| Embedded derivative | – | 2,982,172 | |||||
| Warrant liability | 645,705 | 543,124 | |||||
| Put option liability | 1,677,592 | 2,435,100 | |||||
| Other debt | 126,284 | – | |||||
| Deferred income taxes | 76,677 | 87,904 | |||||
| Total non-current liabilities | 2,679,652 | 8,599,627 | |||||
| Total liabilities | 11,122,537 | 18,788,891 | |||||
| Shareholders’ equity: | |||||||
| Share capital | 16,492,175 | 441,204 | |||||
| Contributed surplus | 157,101 | 157,101 | |||||
| Non-controlling interest | 3,975,388 | 2,864,935 | |||||
| Warrant reserve | 1,272,445 | – | |||||
| Options reserve | 149,622 | – | |||||
| Accumulated other comprehensive loss | (846,586 | ) | (61,579 | ) | |||
| Deficit | (10,882,965 | ) | (739,051 | ) | |||
| Total shareholders’ equity | 10,317,180 | 2,662,610 | |||||
| Total liabilities and shareholders’ equity | 21,439,717 | 21,451,501 | |||||
Condensed Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
(Unaudited)
| Three months | Nine months | ||||||||||||
| Periods ended December 31, | 2021 | 2020 | 2021 | 2020 | |||||||||
| $ | $ | $ | $ | ||||||||||
| Product sales and other income | 1,658,611 | – | 5,553,178 | – | |||||||||
| Cost of sales | 434,221 | – | 1,297,410 | – | |||||||||
| Gross Margin | 1,224,390 | – | 4,255,768 | – | |||||||||
| Expenses | |||||||||||||
| Selling, general and administration | 453,548 | 84,821 | 1,905,864 | 245,034 | |||||||||
| Finance | 279,326 | – | 1,047,908 | – | |||||||||
| Share-based compensation | 149,622 | 149,622 | |||||||||||
| 882,496 | 84,821 | 3,103,394 | 245,034 | ||||||||||
| Income (loss) from operations | 341,894 | (84,821 | ) | 1,152,374 | (245,034 | ) | |||||||
| Other income (expense) | |||||||||||||
| Change in fair value of embedded derivative | 236,201 | – | 598,722 | – | |||||||||
| Foreign currency translation gain (loss) | 39,263 | – | 167,152 | – | |||||||||
| Change in fair value of put option liability | 211,895 | – | 757,507 | – | |||||||||
| Change in fair value of warrant liability | (78,953 | ) | – | 55,842 | – | ||||||||
| Accretion expense | (237,422 | ) | – | (1,077,164 | ) | – | |||||||
| Listing fees | (9,933,566 | ) | – | (9,933,566 | ) | – | |||||||
| (9,762,582 | ) | – | (9,431,507 | ) | – | ||||||||
| Loss before income taxes | (9,420,688 | ) | (84,821 | ) | (8,279,133 | ) | (245,034 | ) | |||||
| Provision for (recovery of) income taxes | |||||||||||||
| Current income taxes | 232,152 | – | 728,315 | – | |||||||||
| Deferred income taxes | (3,807 | ) | – | (9,227 | ) | – | |||||||
| Total income taxes | 228,345 | – | 719,088 | – | |||||||||
| Net loss | (9,649,033 | ) | (84,821 | ) | (8,998,221 | ) | (245,034 | ) | |||||
| Other comprehensive income (loss) | |||||||||||||
| Currency translation differences | 34,319 | 11,848 | (820,247 | ) | 25 | ||||||||
| Comprehensive loss for the period | (9,614,714 | ) | (72,973 | ) | (9,818,468 | ) | (245,009 | ) | |||||
| Net income (loss) for the period attributable to: | |||||||||||||
| Non-controlling interest | 317,898 | – | 1,145,693 | – | |||||||||
| Equity shareholders of the Company | (9,966,931 | ) | (84,821 | ) | (10,143,914 | ) | (245,034 | ) | |||||
| Total | (9,649,033 | ) | (84,821 | ) | (8,998,221 | ) | (244,855 | ) | |||||
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited)
| For the nine months ended December 31, 2021 |
For the nine months ended December 31, 2020 |
|||||||
| $ | $ | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net Income (loss) | (8,998,221 | ) | (245,034 | ) | ||||
| Adjustments for items not involving cash | ||||||||
| Depreciation and amortization | 143,581 | – | ||||||
| Non-cash listing fees | 10,078,561 | – | ||||||
| Share-based compensation | 149,622 | – | ||||||
| Interest on lease liability | 26,767 | – | ||||||
| Foreign currency translation gain | (415,650 | ) | (25 | ) | ||||
| Change in fair value of embedded derivative | (598,722 | ) | – | |||||
| Change in fair value of put liability | (757,507 | ) | – | |||||
| Change in fair of warrant liability | (55,842 | ) | – | |||||
| Accretion expense | 1,077,164 | – | ||||||
| Deferred income tax | (9,227 | ) | – | |||||
| Allocation to non-controlling interest | 1,110,453 | – | ||||||
| 1,750,979 | (245,059 | ) | ||||||
| Changes in non-cash working capital items | ||||||||
| Accounts receivable | 52,181 | 393 | ||||||
| Prepaid expenses | (84,020 | ) | – | |||||
| Accounts payable and accrued liabilities | 788,420 | (107,789 | ) | |||||
| Total changes in non-cash working capital items | 756,581 | (107,396 | ) | |||||
| NET CASH FLOWS FROM OPERATING ACTIVITIES | 2,507,560 | (352,455 | ) | |||||
| INVESTING ACTIVITIES | ||||||||
| Cash acquired on reverse takeover | 741,032 | |||||||
| Purchase of equipment | (73,162 | ) | – | |||||
| NET CASH FLOWS FROM INVESTING ACTIVITIES | 667,870 | – | ||||||
| FINANCING ACTIVITIES | ||||||||
| Proceeds on issuance of convertible debt | 1,628,855 | – | ||||||
| Director’s loan | – | 225,000 | ||||||
| Share issuance costs | – | (777 | ) | |||||
| Principal and interest payment on Sellers’ loan | (3,439,102 | ) | ||||||
| Costs incurred related to reverse takeover | (596,037 | ) | ||||||
| Lease payments | (57,217 | ) | – | |||||
| NET CASH FLOWS FROM FINANCING ACTIVITIES | (2,463,501 | ) | 224,223 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (6,472 | ) | – | |||||
| Increase (decrease) in cash and cash equivalents | 705,457 | (128,232 | ) | |||||
| Cash and cash equivalents at beginning of period | 828,321 | 140,894 | ||||||
| Cash and cash equivalents at end of period | 1,533,778 | 12,662 | ||||||
Adjusted EBITDA (Non-IFRS Financial Measurement)
Adjusted EBITDA represents net loss or income adjusted to exclude amortization, depreciation, interest expense and finance costs, foreign exchange gains and losses, income tax expense, listing expense and other charges. Other expenses consist primarily of other income and expenses related to the accounting treatment for the Britannia convertible debenture financing and adjustments in the fair value of certain liabilities.
Adjusted EBITDA is not a recognized, defined or standardized measure under IFRS. The Company’s definition of Adjusted EBITDA will likely differ from that used by other companies and therefore comparability may be limited. Adjusted EBITDA should not be considered a substitute for or in isolation from measures prepared in accordance with IFRS. Investors are encouraged to review the Company’s financial statements and disclosures in their entirety and are cautioned not to put undue reliance on non-IFRS measures and view them in conjunction with the most comparable IFRS financial measures. The Company has reconciled Adjusted EBITDA to the most comparable IFRS financial measure as follows:
| For the three months ended December 31, | For the nine months ended December 31, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| $ | $ | $ | $ | |||||||||
| Loss before income taxes | (9,420,688 | ) | 84,821 | (8,279,133 | ) | (245,034 | ) | |||||
| Finance expense | 279,326 | – | 1,047,908 | – | ||||||||
| Share based compensation expense | 149,622 | – | 149,622 | – | ||||||||
| Depreciation and amortization | 53,106 | – | 143,581 | – | ||||||||
| Foreign exchange loss (gain) | (39,263 | ) | – | (167,152 | ) | – | ||||||
| Listing expense | 9,933,566 | – | 9.933.566 | – | ||||||||
| Other expenses | (131,721 | ) | – | 115,433 | – | |||||||
| Adjusted EBITDA | 823,948 | (84,821 | ) | 2,943,825 | (245,034 | ) | ||||||
Forward Looking Information
This press release may contain certain “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of applicable Canadian securities legislation regarding Britannia and its business. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected” “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”. “estimates”, “believes” or intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Except as required by law, Britannia assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change. The reader is cautioned not to place undue reliance on forward-looking statements.
For a detailed description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company’s filings statement available on SEDAR under the Company’s profile at www.sedar.com.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/115296
