Khiron Life Sciences Corp. (TSXV:KHRN) (OTCQX:KHRNF) (Frankfurt:A2JMZC) Q2 2022 total revenue was CA$4.5 million ($3.45 million), up 60% year-over-year, driven by growth in the medical cannabis segment in Colombia and the United Kingdom.
The decrease of 4% in total revenue for Q2 2022 compared to Q1 2022, is attributed to the reduction in medical cannabis sales in Germany while the corporation was closing its acquisition of Pharmadrug. Having obtained all permits and approvals from the German regulators, Pharmadrug will become Khiron's principal European distribution hub for its cannabis product portfolio, starting in late Q3 2022.
Q2 2022 Financial Highlights
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Gross profit before fair value adjustments for Q2 2022 was CA$2.2 million, up 5% quarter-over-quarter and 114% year-over-year, despite the lack of sale in Germany.
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Total gross margin before fair value adjustments for Q2 2022 increased to 50%, driven by growth in the highly profitable medical cannabis segment. Gross margin in medical cannabis segment increased to 76%.
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Net loss was CA$2.17 million compared to net loss CA$4.8 million in Q2 2021.
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Adjusted EBITDA was a loss of CA$2.29 million compared to a loss of CA$3.77 million in Q2 2021
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The corporation ended Q2 2022 with net cash of CA$5.8 million, having spent CA$2.0 million on operating activities during the quarter and a total of CA$4.8 million in the first half of the year.
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At the end of Q2 2022, the corporation had CA$40 million in total assets, with CA$13.7 million in property, plant and equipment, high-quality medical cannabis inventory of CA$8.2 million, healthy accounts receivables with credit-worthy clients in Colombia and Europe of CA$4.4 million and CA$600,000 in financial debt.
Alvaro Torres, Khiron CEO and director, stated, "The results of the first half of the year and Q2 2022 demonstrate that we are a disciplined company building sustainable growth, reducing costs and optimizing cashflow, able to reach profitability in the near term. During Q2 2022, we made key decisions to continue to build our global platform with the strategic acquisition of Pharmadrug in Germany, the opening of our new flagship clinic in Rio de Janeiro in Brazil, as well as our new mid-sized clinic and pharmacy in Bogota in one of the city's busiest shopping-centers.
“These steps, coupled with the growing patient loyalty we experience across our bigger markets, will continue to drive Khiron's leadership in Latin America and Europe. This is possible because of an incredible team across many countries and continents who are committed to improving the quality of life of patients, and who continue to work very diligently to ensure we become indispensable to our patients in every market," continued Torres.
Grant of Options and Restricted Unit Shares
On August 25, 2022, the board of directors granted a total of 2.34 million stock options and 650,000 restricted share units ("RSUs") to certain officers of the corporation. Certain of the options and RSUs are subject to performance-based vesting conditions. The options are exercisable at a price of CA$0.15 per share and will expire on August 24, 2032. Unvested RSUs will expire on December 15, 2025.
Photo by Richard T on Unsplash
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