Categories: News

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

Staff

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