Empower Clinics Suffered Massive 2021 Loss Despite Rising Revenue

The news comes a few months after the Vancouver-based biomedical company was issued a cease trade order.

Empower Clinics Inc. (CSE:CBDT) (OTCQB:EPWCF) has finally filed its audited financial statements for last fiscal year ending December 31, 2021.

The news comes a few months after the Vancouver-based biomedical company was issued a cease trade order by the British Columbia Securities Commission for failing to file its annual synopsis by the July cutoff date.

Total revenues in 2021 totaled $4.37 million, a 355% year-over-year rise versus $961,099 in 2020.

Net loss from continuing operations of $31.7 million, or $0.10 per share, almost double the $16.7 million, or $0.09 per share, loss in 2020. The company said that the rising loss was mostly due to non-cash loss on the fair value adjustment related to the company’s warrants outstanding that were impacted by the significant appreciation of the company’s share price (a key input in determining the fair value).

“I’m pleased to report that we’ve achieved record revenue growth for fiscal year 2021. We’re delivering this revenue growth because of our efforts to offer truly integrated health care solutions – made up of our clinics, a medical device company, at-home testing products, testing services and state-of-the-art diagnostics laboratory – in the United States and Canada,” said chairman and CEO Steven McAuley.

“Now that we are moving forward with our required filings in 2021, we will immediately engage securities regulators for the revocation of the cease trade order. While we share and understand the disappointment of late filings, we’ll be soon announcing measures to improve our financial operations, talent, and reporting. We are looking forward to continuing our growth trajectory – especially in the US market – in the year ahead.”

Gross margin last year was 31%, a 14% dip versus 45% gross margin in the year prior. Empower had $866,170 worth of cash at the end of 2021, versus $4.9 million in the same time the year prior.

The company spent $3.6 million in 2021 for operating activities versus $1.6 million in 2020.

Empower sold off its cannabis assets over the past year in order to focus on the healthcare space, particularly diabetes and Covid-19 test kits — citing limits on banking access, advertising leeway and other implications that come with federal prohibition of marijuana.

Earlier this year, the company received two Health Canada medical device licenses to monitor blood glucose and vitamin D. The vitamin D rapid test was launched in PharmaChoice pharmacies in April and the blood glucose monitor was launched to Medisure customers in July.

In February, Empower said that it would be partnering with CERES Terminals Canada to conduct the COVID-19 testing and logistics at the cruise ship terminal at Canada Place in Vancouver, B.C. Empower Clinics provided testing for cruise lines, tour companies and the tourism industry from its three testing locations in downtown Vancouver.

The company raised $5.1 million since January through the issuance of convertible debentures.

Empower also closed two clinics in Hamilton and Mississauga, saying that they did not meet the expansion goals of the company. The Medi-Collective has six remaining clinic locations.

Adam Jackson

Adam Jackson covers the cannabis industry for The Green Market Report. He previously covered the Missouri statehouse for The Columbia Missourian and has written for The Missouri Independent. He most recently covered retail, restaurants, and other consumer companies for Bloomberg Business News. You can find him on Twitter @adam_sjackson and email him at adam.jackson@crain.com.


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