via NewMediaWire – Neovasc Inc. ("Neovasc" or the "Company")
(NASDAQ, TSX: NVCN) today reported financial results for the fourth
quarter and year ended December 31, 2021.
Highlights
- Achieved record revenue in Q4 of
$759,000, an increase of 48% over the same period in 2020
- Achieved record revenue in 2021
of $2.55 million, an increase of 30% over the prior year
- Commenced the COSIRA-II IDE
clinical trial for Reducer in the United States
- Expanded reimbursement for the
Reducer in the United States, UK, France and Germany
- Maintained strong financial
footing and cash run rate into fiscal year 2024
“The record fourth quarter and fiscal year 2021 were both
pivotal for Neovasc,” said Fred Colen, President and Chief
Executive Officer. “We began the year by solidifying our financial
footing, and have continued to make great strides and progress
against our value creation strategies, advancing towards wider
adoption and commercialization of the Reducer for the treatment of
refractory angina and furthering the development of Tiara. We
gained reimbursement for Reducer in the United States, United
Kingdom, France and Germany, and we began the COSIRA-II clinical
trial in the United States, all of which raised awareness of our
often life-changing technology. Finally, we added veteran
leadership to the team to prepare for our next phase of growth. We
are gratified to have finished the year with a strong quarter, and
look forward to continuing this momentum into 2022.”
Financial Results for the Fourth Quarter and Fiscal Year
Ended December 31, 2021
For the three months ended December 31, 2021, revenues increased
by 48% to $759,124, compared to revenues of $514,002 for the same
period in 2020. Revenues increased by 30% to $2,547,406 for the
fiscal year ended December 31, 2021, compared to revenues of
$1,957,362 for the same period in 2020.
The cost of goods sold for the three months ended December 31,
2021 was $209,355 compared to $96,504 for the same period in 2020.
The cost of goods sold for the year ended December 31, 2021 was
$555,697 compared to $446,239 for the same period in 2020.
The overall gross margin for the three months ended December 31,
2021 was 72% compared to 81% gross margin for the same period in
2020 as a non-material inventory adjustment was booked in the
fourth quarter of 2021. The overall gross margin for the fiscal
year ended December 31, 2021 was 78%, compared to 77% gross margin
for the same period in 2020.
Total expenses for the three months ended December 31, 2021 were
$5,669,518 compared to $9,602,999 for 2020, representing a decrease
of $3,933,481 or 41%. Total expenses for the year ended December
31, 2021 were $33,101,250 compared to $36,679,551 for 2020,
representing a decrease of $3,578,301. The decrease in total
expenses for the year ended December 31, 2021 compared to 2020 can
be substantially explained by a $2,452,872 decrease in employee
expenses due to the Company’s reduction in force at the end of 2020
and in June 2021, a $1,987,361 decrease in legal and underwriting
fees related to the 2020 financings and a $616,757 decrease in
other expenses as the Company indefinitely paused all activities
related to the Tiara TF transfemoral mitral valve replacement
program in June 2021.
The operating losses and comprehensive losses for the three
months ended December 31, 2021 were $5,119,749 and $6,056,348,
respectively, or $0.09 basic and diluted loss per share, as
compared with $9,185,501 operating losses and $4,869,468
comprehensive loss, or $0.18 basic and diluted loss per share, for
the same period in 2020. The operating losses and comprehensive
losses for the year ended December 31, 2021 were $31,109,541 and
$25,158,376, respectively, or $0.40 basic and diluted loss per
share, as compared with $35,168,428 operating losses and
$30,170,251 comprehensive losses, or $1.72 basic and diluted loss
per share, for the same period in 2020. The decrease of $4,058,887
in operating losses can be explained by a $3,578,301 decrease in
operating expenses and a $590,044 increase in revenue. The
$5,011,875 decrease in the comprehensive loss incurred for the year
ended December 31, 2021 compared to the same period in 2020 can be
substantially explained by the $4,058,887 decrease in operating
losses and a $1,795,287 increase in income related to the
accounting treatment of the 2019 Notes, 2020 Notes and the
derivative liability warrants offset by a $610,749 decrease in tax
recovery.
As of March 8, 2022, the Company had 67,748,061 common shares
issued and outstanding. The Company’s fully diluted share
count as of March 8, 2022 was 114,518,437.
The Company also announces that it expects to seek shareholder
approval of a reverse stock split at its upcoming annual general
and special meeting on April 12, 2022 in order to meet the Nasdaq
Capital Market’s minimum $1.00 bid price requirement. The
Company does not currently have to meet the $35 million minimum
market capitalization requirement as it currently meets the $2.5
million shareholders equity requirement instead.
Conference Call and Webcast Information
Neovasc will be hosting a conference call and audio webcast
today at 4:30 pm ET to discuss these results.
Domestic: 1-877-407-9208
International: 1-201-493-6784
Reference ID Code: 13726770
Parties wishing to access the call via webcast should use the
link in the Investors section of the Neovasc website at
https://www.neovasc.com/investors/. A replay of the webcast
will be available in the Investors sections of the website
approximately 30 minutes after the conclusion of the call.
About Neovasc
Neovasc is a specialty medical device company that develops,
manufactures, and markets products for the rapidly growing
cardiovascular marketplace. Its products include Reducer, for the
treatment of refractory angina, which is under clinical
investigation in the United States and has been commercially
available in Europe since 2015, and Tiara™ for the
transcatheter treatment of mitral valve disease, which is currently
under clinical investigation in the United States, Canada, Israel
and Europe. For more information, visit: www.neovasc.com.
NEOVASC INC.
Consolidated Statements of Financial
Position
As at December
31,(Expressed in U.S.
dollars)
|
2021 |
2020 |
2019 |
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ 51,537,367 |
$ 12,935,860 |
$ 5,292,833 |
Accounts receivable |
|
1,369,455 |
987,057 |
715,696 |
Finance lease receivable |
|
43,543 |
95,849 |
86,764 |
Inventory |
|
1,480,077 |
839,472 |
618,650 |
Research and development supplies |
|
- |
167,378 |
671,845 |
Prepaid expenses and other assets |
|
787,734 |
705,471 |
630,042 |
Total current assets |
|
55,218,176 |
15,731,087 |
8,015,830 |
|
|
|
|
|
Non-current assets |
|
|
|
|
Restricted cash |
|
469,808 |
470,460 |
462,874 |
Right-of-use asset |
|
456,339 |
830,551 |
720,473 |
Finance lease
receivable |
|
- |
42,841 |
138,690 |
Property and equipment |
|
182,041 |
803,280 |
767,973 |
Deferred loss on 2021 derivative warrant
liabilities |
|
9,898,475 |
- |
- |
Total non-current assets |
|
11,006,663 |
2,147,132 |
2,090,010 |
|
|
|
|
|
Total assets |
|
$ 66,224,839 |
$ 17,878,219 |
$ 10,105,840 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable and accrued liabilities |
|
$ 4,629,163 |
$ 7,243,500 |
$ 7,794,456 |
Lease liabilities |
|
273,145 |
342,910 |
436,352 |
2017 Convertible notes |
|
- |
- |
5,400,189 |
2019 Convertible notes |
|
38,633 |
38,633 |
1,090,561 |
2020 Convertible notes, warrants and
derivative warrant liabilities |
|
40,587 |
37,525 |
- |
Total current liabilities |
|
4,981,528 |
7,662,568 |
14,721,558 |
|
|
|
|
|
Non-Current Liabilities |
|
|
|
|
Accounts payable and accrued liabilities |
|
- |
- |
1,186,601 |
Lease liabilities |
|
272,652 |
596,881 |
468,527 |
2019 Convertible notes |
|
6,548,796 |
6,156,724 |
8,174,919 |
2020 Convertible notes, warrants and
derivative warrant liabilities |
|
1,788,244 |
1,484,529 |
- |
2021 Derivative warrant liabilities |
|
405,508 |
- |
- |
Total non-current liabilities |
|
9,015,200 |
8,238,134 |
9,830,047 |
|
|
|
|
|
Total liabilities |
|
$ 13,996,728 |
$ 15,900,702 |
$ 24,551,605 |
|
|
|
|
|
Equity |
|
|
|
|
Share capital |
|
$ 439,873,457 |
$ 369,775,383 |
$ 328,460,681 |
Contributed surplus |
|
40,355,952 |
35,045,056 |
29,766,225 |
Accumulated other comprehensive
loss |
|
(7,885,024) |
(7,615,717) |
(6,140,507) |
Deficit |
|
(420,116,274) |
(395,227,205) |
(366,532,164) |
Total equity |
|
52,228,111 |
1,977,517 |
(14,445,765) |
|
|
|
|
|
Total liabilities and equity |
|
$ 66,224,839 |
$ 17,878,219 |
$ 10,105,840 |
NEOVASC INC.
Consolidated Statements of Loss and
Comprehensive Loss
For the years ended
December 31, (Expressed in U.S.
dollars)
|
|
2021 |
2020 |
2019 |
|
|
|
|
|
REVENUE |
|
$ 2,547,406 |
$ 1,957,362 |
$ 2,092,032 |
COST OF GOODS SOLD |
|
555,697 |
446,239 |
458,436 |
GROSS PROFIT |
|
1,991,709 |
1,511,123 |
1,633,596 |
|
|
|
|
|
EXPENSES |
|
|
|
|
Selling expenses |
|
2,996,292 |
2,196,803 |
1,645,985 |
General and administrative expenses |
|
14,655,957 |
14,081,153 |
10,013,732 |
Product development and clinical trials expenses |
|
15,449,001 |
20,401,595 |
20,020,959 |
TOTAL EXPENSES |
|
33,101,250 |
36,679,551 |
31,680,676 |
|
|
|
|
|
OPERATING LOSS |
|
(31,109,541) |
(35,168,428) |
(30,047,080) |
|
|
|
|
|
OTHER INCOME/ (EXPENSE) |
|
|
|
|
Interest and other income |
|
551,940 |
1,394,035 |
184,912 |
Interest and other expense |
|
(631,199) |
(1,035,957) |
(133,082) |
Impairment on right-of-use asset |
|
- |
- |
(104,544) |
Loss on foreign exchange |
|
(50,798) |
(256,585) |
(74,209) |
Unrealized gain/(loss) on warrants, derivative liability |
|
|
|
|
warrants and convertible notes |
|
17,404,002 |
8,528,255 |
(3,235,591) |
Realized (loss)/gain on exercise or conversion of warrants, |
|
|
|
|
derivative liability warrants and convertible
notes |
|
(1,898,092) |
814,083 |
(1,692,628) |
Amortization of deferred loss |
|
(9,068,689) |
(3,494,501) |
- |
TOTAL OTHER INCOME/ (EXPENSE) |
|
6,307,164 |
5,949,330 |
(5,055,142) |
LOSS BEFORE TAX |
|
(24,802,377) |
(29,219,098) |
(35,102,222) |
|
|
|
|
|
Tax (expense)/recovery |
|
(86,692) |
524,057 |
(28,793) |
LOSS FOR THE YEAR |
|
$(24,889,069) |
$(28,695,041) |
$(35,131,015) |
|
|
|
|
|
OTHER COMPREHENSIVE (LOSS)/INCOME FOR THE
YEAR |
|
|
|
|
Fair market value changes in convertible notes due to changes in
own credit risk |
|
(269,307) |
(1,475,210) |
1,512,521 |
|
|
(269,307) |
(1,475,210) |
1,512,521 |
LOSS AND OTHER COMPREHENSIVE LOSS FOR THE
YEAR |
|
$(25,158,376) |
$(30,170,251) |
$(33,618,494) |
|
|
|
|
|
LOSS PER SHARE |
|
|
|
|
Basic and diluted loss per share |
|
$ ($0.40) |
$ (1.72) |
$ (5.40) |
Forward-Looking Statement
Disclaimer
Certain statements in this news release contain
forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995 and applicable Canadian
securities laws that may not be based on historical fact. When used
herein, the words "expect", "anticipate", "estimate", "may",
"will", "should", "intend," "believe", and similar expressions, are
intended to identify forward-looking statements. Forward-looking
statements may involve, but are not limited to, the Company’s
expectations to continue the momentum of a strong fourth quarter
into 2022, the Company’s plans with respect to a reverse-stock
split and the growing cardiovascular marketplace. Forward-looking
statements are based on estimates and assumptions made by the
Company in light of its experience and its perception of historical
trends, current conditions and expected future developments, as
well as other factors that the Company believes are appropriate in
the circumstances. Many factors and assumptions could cause
the Company's actual results, performance or achievements to differ
materially from those expressed or implied by the forward-looking
statements, including, without limitation, risks around the
Company's ability to continue as a going concern; risks around the
Company’s history of losses and significant accumulated deficit;
risks related to the recent COVID-19 coronavirus outbreak or other
health epidemics, which could significantly impact the Company's
operations, sales or ability to raise capital or enroll patients in
clinical trials and complete certain Tiara development milestones
on the Company's expected schedule; risks relating to the Company's
need for significant additional future capital and the Company's
ability to raise additional funding; risks relating to the sale of
a significant number of Common Shares; risks relating to the
possibility that the Company's common shares (the "Common Shares")
may be delisted from the Nasdaq or the TSX, which could affect
their market price and liquidity; risks relating to the Company's
conclusion that it did have effective internal control over
financial reporting as of December 31, 2021 and 2020 but not at
December 31, 2019; risks relating to the Common Share price being
volatile; risks relating to the Company's significant indebtedness,
and its effect on the Company's financial condition; risks relating
to the influence of significant shareholders of the Company over
its business operations and share price; risks relating to lawsuits
that the Company is subject to, which could divert the Company's
resources and result in the payment of significant damages and
other remedies; risks relating to claims by third-parties alleging
infringement of their intellectual property rights; risks relating
to the Company's ability to establish, maintain and defend
intellectual property rights in the Company's products; risks
relating to results from clinical trials of the Company's products,
which may be unfavorable or perceived as unfavorable; risks
associated with product liability claims, insurance and recalls;
risks relating to use of the Company's products in unapproved
circumstances, which could expose the Company to liabilities; risks
relating to competition in the medical device industry, including
the risk that one or more competitors may develop more effective or
more affordable products; risks relating to the Company's ability
to achieve or maintain expected levels of market acceptance for the
Company's products, as well as the Company's ability to
successfully build its in-house sales capabilities or secure
third-party marketing or distribution partners; risks relating to
the Company's ability to convince public payors and hospitals to
include the Company's products on their approved products lists;
risks relating to new legislation, new regulatory requirements and
the efforts of governmental and third-party payors to contain or
reduce the costs of healthcare; risks relating to increased
regulation, enforcement and inspections of participants in the
medical device industry, including frequent government
investigations into marketing and other business practices; risks
relating to the extensive regulation of the Company's products and
trials by governmental authorities, as well as the cost and time
delays associated therewith; risks relating to post-market
regulation of the Company's products; risks relating to health and
safety concerns associated with the Company's products and
industry; risks relating to the Company's manufacturing operations,
including the regulation of the Company's manufacturing processes
by governmental authorities and the availability of two critical
components of the Reducer; risks relating to the possibility of
animal disease associated with the use of the Company's products;
risks relating to the manufacturing capacity of third-party
manufacturers for the Company's products, including risks of supply
interruptions impacting the Company's ability to manufacture its
own products; risks relating to the Company's dependence on limited
products for substantially all of the Company's current revenues;
risks relating to the Company's exposure to adverse movements in
foreign currency exchange rates; risks relating to the possibility
that the Company could lose its foreign private issuer status under
U.S. federal securities laws; risks relating to the possibility
that the Company could be treated as a "passive foreign investment
company"; risks relating to breaches of anti-bribery laws by the
Company's employees or agents; risks relating to future changes in
financial accounting standards and new accounting pronouncements;
risks relating to the Company's dependence upon key personnel to
achieve its business objectives; risks relating to the Company's
ability to maintain strong relationships with physicians; risks
relating to the sufficiency of the Company's management systems and
resources in periods of significant growth; risks relating to
consolidation in the health care industry, including the downward
pressure on product pricing and the growing need to be selected by
larger customers in order to make sales to their members or
participants; risks relating to the Company's ability to
successfully identify and complete corporate transactions on
favorable terms or achieve anticipated synergies relating to any
acquisitions or alliances; risks relating to conflicts of interests
among the Company's officers and directors as a result of their
involvement with other issuers; risks relating to future issuances
of equity securities by the Company, or sales of common shares or
conversions of convertible notes, and exercise of warrants, options
and restricted stock units by the Company’s existing security
holders, causing the price of the Company’s securities to fall; and
risks relating to anti-takeover provisions in the Company's
constating documents which could discourage a third-party from
making a takeover bid beneficial to the Company's shareholders.
These risk factors and others relating to the Company are discussed
in greater detail in the "Risk Factors" section of the Company's
Annual Report on Form 20-F and in the Management's Discussion and
Analysis for the year ended December 31, 2021 (copies of which may
be obtained at www.sec.gov or www.sedar.com). The Company has no
intention and undertakes no obligation to update or revise any
forward-looking statements beyond required periodic filings with
securities regulators, whether because of new information, future
events or otherwise, except as required by law.
ContactsInvestors:Mike CavanaughICR
WestwickePhone:
+1.617.877.9641Email: Mike.Cavanaugh@westwicke.com
Media:Sean LeousICR WestwickePhone:
+1.646.866.4012Email: Sean.Leous@westwicke.com
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