Newtopia Reports Fourth Quarter, Full Year 2023 and First Quarter 2024 Financial Results
In This Article:
Newtopia is emboldened by our immediate growth prospects based on three exciting developments in the market:
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Growth of GLP-1s opens a huge market for Newtopia to demonstrate sustainability and ROI.
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Rise of Health AI and next-gen clinical discovery requires Newtopia's novel data and capabilities.
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Expansion opportunities with Heartland Whole Health Institute based on Newtopia's best-ever reported outcomes.
TORONTO, May 23, 2024 /PRNewswire/ - Newtopia Inc. ("Newtopia" or the "Company") (TSXV: NEWU) (OTCQB: NEWUF), a tech-enabled whole health platform creating sustainable habits that prevent, slow, and reverse chronic disease, today announced its fourth quarter, fiscal 2023 and first quarter 2024 financial results, operational highlights and filing of its annual financial statements. These results pertain to the three months and year ended December 31, 2023 as well as the three months ended March 31, 2024. All amounts are expressed in Canadian dollars, unless otherwise noted. The foregoing is a summary of selected information for the years ended December 31, 2023 and 2022 in addition to the quarter ending March 31, 2024 and is qualified in its entirety by, and should be read in conjunction with, Newtopia's consolidated financial statements and management discussion and analysis for the respective periods. The Company expects such financial statements to be filed on May 28, 2024 and will be available on SEDAR+ at www.sedarplus.com.
Fourth Quarter 2023 Financial Highlights (vs. Q4 2022):
-
Revenue of $2.3 million, as compared to $3.1 million.
-
Gross profit margin1 of 63%, as compared to 65%.
Full Year 2023 Financial Highlights (vs. 2022):
-
Revenue of $9.8 million, as compared to $11.2 million.
-
Gross profit margin1 of 62%, as compared to 53%.
First Quarter 2024 Financial Highlights (vs. Q1 2023):
-
Revenue of $1.8 million, as compared to $2.6 million.
-
Gross profit margin1 of 50%, as compared to 60%.
"We see three distinct and exciting strategic areas of opportunity for growth for Newtopia including: (1) expanding our key innovation partnerships, such as Heartland Whole Health Institute; (2) combining Newtopia's proven habit change platform with GLP-1 drugs for obesity and type 2 diabetes; and (3) partnering with health AI and clinical discovery innovators to improve our collective ability to deliver best in breed outcomes that prevent, reverse and slow chronic disease, said Jeff Ruby, Founder and CEO of Newtopia.
"Throughout 2023 and in early 2024, we've made great strides in reducing our cost to serve participants while at the same time increasing our operational efficiencies – all while maintaining and improving our industry leading engagement and whole health outcomes. In the first quarter of 2024, we delivered our best ever outcomes for the first two cohorts of our innovative health coaching project with the Heartland Whole Health Institute in Northwest Arkansas," said Jeff Ruby, Founder and CEO of Newtopia.
"While we made great progress, revenue in Q4 2023 and Q1 2024 was impacted by a change with a long-standing incentive program at one of our largest clients. Fortunately, our relationship with the client remains incredibly strong, and commencing in Q2, we are working with them on strengthening new registrations through market expansion and the re-introduction of Newtopia to existing markets," Ruby concluded.
Fourth Quarter 2023 Financial Results
Revenue for the three months ended December 31, 2023, was $2.3 million, a decrease of 25% compared to $3.1 million in the prior-year period. This decline was driven by a change in a multi-year contract renewal. Actions are underway with this client to recoup lost volume associated with this change. Enrollment fee revenue, or revenue from Welcome Kit sales, totaled 8% of revenue for the quarter.
Gross profit for the fourth quarter 2023 totaled $1.5 million, as compared to $2.1 million in the prior-year period. Gross profit is comprised of Newtopia's revenue less direct expenses, which include the cost of Welcome Kits sold to new participants as well as labor costs associated with hiring and training of the Company's coaching team of Inspirators and amortization of intangibles. As a percentage of revenue, core gross profit totaled 63% compared to 65% in the prior-year period.
Adjusted operating expenses2 for the three months ended December 31, 2023, totaled $1.6 million, compared to $2.8 million in the prior-year period. For the fourth quarter, the Company was roughly EBITDA neutral with an adjusted operating loss3 of $66,000, compared with an adjusted operating loss of $714,000 in the prior-year period.
The Company ended the fourth quarter 2023 with approximately $0.4 million in cash, with additional access to their revolving line of credit with a Canadian Schedule 1 bank. Of note, the Company finalized the refinancing of $2.5 million debt in October 2023.
Full Year 2023 Financial Results
Revenue for the full year ended December 31, 2023, was $9.8 million, a decrease of 12% compared to $11.2 million in the prior year. Engagements totaled 125,000 for the full year, a decrease of 16% year-over-year. Enrollment fee revenue, or revenue from Welcome Kit sales, totaled 12% of revenue for the year.
Gross profit for the year on an apples-to-apples basis totaled $6.1 million, consistent with 2022. As a percentage of revenue, gross profit totaled 62%, up from the prior year of 53%.
Adjusted operating expenses2 for the year totaled $7.3 million, as compared to $11.8 million in the prior year. For the full year ended December 31, 2023, the Company had an adjusted operating loss3 of $1.2 million, compared with a loss of $5.7 million in 2022.
First Quarter 2024 Financial Results
Revenue for the three months ended March 31, 2024 was $1.8 million, a decrease of 31% compared to $2.6 million in the prior-year period. This decline was driven by the aforementioned change made by a client with a long-standing incentive program. Enrollment fee revenue, or revenue from Welcome Kit sales, totaled 17% of revenue for the quarter.
Gross profit for the first quarter 2024 totaled $0.9 million, as compared to $1.6 million in the prior-year period. Gross profit is comprised of Newtopia's revenue less direct expenses, which include the cost of Welcome Kits sold to new participants as well as labor costs associated with hiring and training of the Company's coaching team of Inspirators. As a percentage of revenue, gross profit totaled 50%, compared to 60% in the prior-year period.
Adjusted operating expenses2 for the three months ended March 31, 2024, totaled $1.6 million, compared to $2.3 million in the prior-year period. For the first quarter, the Company posted an adjusted operating loss3 of $667,000, compared with an adjusted operating loss of $727,000 in the prior-year period.
The Company ended the first quarter 2024 with $0.33 million in cash, with additional access to their revolving line of credit with a Canadian Schedule 1 bank. Of note, the Company finalized a bridge equity round of $0.7 million in Feb 2024.
2024 Outlook
Despite a challenging macro environment, the Company remains bullish regarding the outlook of the healthcare industry in 2024. Newtopia will continue to execute on its pipeline to return to EBITDA positive.
Conference Call
The Company will host a conference call May 23rd at 5:00 p.m. Eastern Time to discuss these results in further detail. To access the conference call, please dial (800) 717-1738 (U.S.) or (646) 307-1865 (International) 10 minutes prior to the start time and reference Conference ID number 76573. The call will also be available via live webcast on the investor relations portion of the Company's website located at investor.newtopia.com.
A replay of the conference call will be available through June 5, 2024, which can be accessed by dialing (844) 512-2921 (U.S.) or (412) 317-6671 (International) and entering the passcode 11155888. The webcast will also be archived on the Company's website.
About Newtopia
Newtopia is a personalized whole health platform helping people create positive lifelong habits that prevent, slow, or reverse chronic disease while reducing healthcare costs. The platform leverages genetic, social, and behavioral insights to create individualized prevention programs with a focus on metabolic disease, diabetes, mental health challenges, hypertension, weight management and musculoskeletal disorders. With a person-centered approach that combines virtual care, digital tools, connected devices and actionable data science, Newtopia delivers sustainable clinical and financial outcomes. Newtopia serves some of the largest nationwide employers and health plans and is currently listed in Canada on the Toronto Stock Exchange (TSXV: NEWU) and is quoted in the US on the OTCQB? Venture Market (OTCQB: NEWUF). To learn more, visit newtopia.com, LinkedIn or X.
Forward Looking Information
This news release contains forward-looking information and forward-looking statements, within the meaning of applicable Canadian securities legislation, and forward looking statements, within the meaning of applicable United States securities legislation (collectively, "forward-looking statements"), which reflects management's expectations regarding Newtopia's future growth, results from operations (including, without limitation, future production and capital expenditures), performance (both operational and financial) and business prospects and opportunities. Wherever possible, words such as "predicts", "projects", "targets", "plans", "expects", "does not expect", "budget", "scheduled", "estimates", "forecasts", "anticipate" or "does not anticipate", "believe", "intend" and similar expressions or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. All statements other than statements of historical fact may be forward-looking ?information. Such statements reflect Newtopia's current views and intentions with respect to future ?events, based on information available to Newtopia, and are subject to certain risks, uncertainties, and ?assumptions. Material factors or assumptions were applied in providing forward-looking information. While forward-looking statements are based on data, assumptions and analyses that Newtopia believes are reasonable under the circumstances, whether actual results, performance or developments will meet Newtopia's expectations and predictions depends on a number of risks and uncertainties that could cause the actual results, performance and financial condition of Newtopia to differ materially from its expectations. These forward-looking statements include, among other things, statements with respect to the FFCTO, the expected filing of the Annual Filings and the completion of the audit MNP by the target date. Forward-looking statements are not a guarantee and are based on a number of estimates and assumptions management believes to be relevant and reasonable, whether actual results, performance or developments will meet Newtopia's expectations and predictions depends on a number of risks and uncertainties that could cause the actual results, performance and financial condition of Newtopia to differ materially from its expectations. Certain of the "risk factors" that could cause ?actual results to differ materially from Newtopia's forward-looking statements in this news release ?include, without limitation: ?disruptions to markets, economic activity, financing, supply chains and sales channels, ?and a ?deterioration of general economic conditions including a possible national or global ?recession; and other general economic, market and business conditions and factors, including the risk factors discussed or referred to in Newtopia's disclosure documents, filed with the securities ?regulatory authorities in certain provinces of Canada and available at www.sedarplus.ca, including Newtopia's final long form prospectus dated March 30, 2020.
For more information on these risks please see the "Risk Factors" in Newtopia's final long-form prospectus dated March 30, 2020. Should any factor affect Newtopia in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, Newtopia does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this news release is made as of the date of this news release, and Newtopia undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.
Preliminary Financial Metrics
This news release contains certain pre-released financial metrics. The financial metrics contained in this news release are preliminary and represent the most current information available to the Company's management, as financial closing procedures for the fourth quarter and year ended December 31, 2023 are not yet complete. The Company's actual audited financial statements for such period may result in material changes to the financial metrics summarized in this news release (including by any one financial metric, or all of the financial metrics, being below or above the figures indicated) as a result of the completion of normal quarter and year end accounting procedures and adjustments, and also what one might expect to be in the final financial statements based on the financial metrics summarized in this news release. Although the Company believes the expectations reflected in this news release are based upon reasonable assumptions, the Company can give no assurance that actual results will not differ materially from these expectations.
Non-GAAP Financial Measures
The Company's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). Management uses certain non-GAAP measures, which are defined in the appropriate sections of this press release, to better assess the Company's underlying performance. These measures are reviewed regularly by management and the Company's Board of Directors in assessing the Company's performance and in making decisions about ongoing operations. In addition, we use certain non-GAAP measures to determine the components of management compensation. We believe that these measures are also used by investors as an indicator of the Company's operating performance. Readers are cautioned that these terms are not recognized GAAP measures and do not have a standardized GAAP meaning under IFRS and should not be construed as alternatives to IFRS terms, such as net income.
Neither TSXV nor its Regulation Services Provider (as that term is defined in policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.
Key Financial Measures and Schedule of Non-GAAP Reconciliations
| Unaudited Gross Profit Information - including amortization [1] | | | | | | | |
| | | | | | | | |
| | Three Months Ended December 31, | | Twelve Months Ended December 31, | ||||
| | 2023 | | 2022 | | 2023 | | 2022 |
| | $ | | $ | | $ | | $ |
| Revenue | 2,343,249 | | 3,114,317 | | 9,783,546 | | 11,166,428 |
| Cost of revenue | (1,004,225) | | (1,079,576) | | (4,505,888) | | (5,140,369) |
| Gross profit | 1,339,024 | | 2,034,741 | | 5,277,658 | | 6,026,059 |
| Gross profit margin | 57 % | | 65 % | | 54 % | | 54 % |
| | | | | | | | |
| Reconciliation of Total Operating Expenses to Adjusted Operating Expenses [2] | | | | | |||
| | | | | | | | |
| | Three Months Ended December 31, | | Twelve Months Ended December 31, | ||||
| | 2023 | | 2022 | | 2023 | | 2022 |
| | $ | | $ | | $ | | $ |
| Total expenses | 4,564,810 | | 3,624,640 | | 11,878,005 | | 13,726,522 |
| Add (Subtract) | | | | | | | |
| Share-based compensation | (88,929) | | (88,608) | | (555,816) | | (492,720) |
| Depreciation of property and equipment | (970) | | (6,713) | | (5,935) | | (46,387) |
| Loss on disposal of property and equipment | - | | (15,534) | | - | | (15,534) |
| Depreciation of right-of-use asset | - | | (30,791) | | - | | (169,370) |
| Impairment of intangible asset | (2,409,314) | | - | | (2,409,314) | | - |
| Impairment of right-of-use asset | - | | (200,168) | | - | | (200,168) |
| Lease modification | - | | (150,907) | | - | | (150,907) |
| Interest and accretion expense | (314,174) | | (111,564) | | (908,153) | | (388,448) |
| Interest on lease obligations | (1,326) | | (10,050) | | (28,110) | | (70,797) |
| Finance charges | (132,248) | | (125,920) | | (509,238) | | (273,736) |
| Amortization of deferred finance charges | (42,396) | | (56,903) | | (149,896) | | (248,813) |
| Foreign exchange loss (gain) | (7,769) | | (9,945) | | (44,560) | | 19,053 |
| Capitalized borrowing costs | - | | - | | - | | 67,000 |
| Debt modification | 63,928 | | - | | 54,972 | | - |
| Loss on settlement of related party payable | (20,400) | | - | | (10,086) | | - |
| Adjusted operating expenses | 1,611,212 | | 2,817,537 | | 7,311,869 | | 11,755,695 |
| | | | | | | | |
| | | | | | | | |
| Adjusted Unaudited Operating Loss [3] | | | | | | | |
| | Three Months Ended December 31, | | Twelve Months Ended December 31, | ||||
| | 2023 | | 2022 | | 2023 | | 2022 |
| | $ | | $ | | $ | | $ |
| Gross profit | 1,339,024 | | 2,034,741 | | 5,277,658 | | 6,026,059 |
| Add amortization of intangible asset | 206,513 | | 68,838 | | 826,050 | | 68,838 |
| Adjusted gross profit | 1,545,537 | | 2,103,579 | | 6,103,708 | | 6,094,897 |
| Adjusted operating expenses | (1,611,212) | | (2,817,537) | | (7,311,869) | | (11,755,695) |
| Adjusted operating loss | (65,675) | | (713,958) | | (1,208,161) | | (5,660,798) |
NEWTOPIA INC.
Unaudited Statements of Financial Position
As at December 31, 2023 and 2022
(Expressed in Canadian Dollars)
| | | | 2023 | 2022 |
| | | | | |
| | | | $ | $ |
| Assets | | | | |
| Current assets | | | | |
| Cash | | | 387,339 | 345,950 |
| Trade and other receivables | | | 1,400,959 | 1,557,640 |
| Contract asset | | | 259,072 | 190,000 |
| Prepaid expenses and deposits | | | 101,043 | 205,843 |
| Inventories | | | 115,232 | 325,571 |
| Deferred costs | | | 64,583 | 76,269 |
| | | | 2,328,228 | 2,701,273 |
| Property and equipment | | | 4,665 | 8,052 |
| Intangible asset | | | - | 3,235,363 |
| | | | 2,332,893 | 5,944,688 |
| | | | | |
| Liabilities | | | | |
| Current liabilities | | | | |
| Trade and other payables | | | 1,825,356 | 2,584,039 |
| Credit facility | | | 4,767,006 | 4,823,545 |
| Lease obligations | | | - | 544,700 |
| Deferred revenue | | | 48,185 | 48,185 |
| Debentures | | | 3,723,530 | 2,409,103 |
| | | | 10,364,077 | 10,409,572 |
| | | | | |
| Debentures | | | 1,387,476 | 1,068,772 |
| | | | 11,751,553 | 11,478,344 |
| | | | | |
| Equity/Deficit | | | | |
| Common shares | | | 49,404,596 | 47,978,992 |
| Contributed surplus | | | 14,151,188 | 12,861,449 |
| Deficit | | | (72,974,444) | (66,374,097) |
| | | | (9,418,660) | (5,533,656) |
| | | | 2,332,893 | 5,944,688 |
NEWTOPIA INC.
Unaudited Statements of Loss and Comprehensive Loss
Years Ended December 31, 2023 and 2022
(Expressed in Canadian Dollars)
| | | | 2023 | 2022 |
| | | | | |
| | | | $ | $ |
| | | | | |
| Revenue | | | 9,783,546 | 11,166,428 |
| Cost of revenue | | | 4,505,888 | 5,140,369 |
| Gross profit | | | 5,277,658 | 6,026,059 |
| | | | | |
| Operating expenses | | | | |
| Technology and development | | | 2,329,837 | 3,923,663 |
| Sales and marketing | | | 1,386,548 | 2,720,728 |
| General and administrative | | | 3,595,484 | 5,111,304 |
| Share-based compensation | | | 555,816 | 492,720 |
| Depreciation of property and equipment | | | 5,935 | 46,387 |
| Impairment of intangible asset | | | 2,409,314 | - |
| Impairment of right-of-use asset | | | - | 200,168 |
| Loss on disposal of property and equipment | | | - | 15,534 |
| Depreciation of right-of-use asset | | | - | 169,370 |
| Lease modification | | | - | 150,907 |
| | | | 10,282,934 | 12,830,781 |
| | | | | |
| Other expenses (income) | | | | |
| Interest on lease obligations | | | 28,110 | 70,797 |
| Interest and accretion expense | | | 908,153 | 388,448 |
| Finance charges | | | 509,238 | 273,736 |
| Capitalized borrowing costs | | | - | (67,000) |
| Foreign exchange (gain)/loss | | | 44,560 | (19,053) |
| Loss on settlement of related party payable | | | 10,086 | - |
| Amortization of deferred finance charges | | | 149,896 | 248,813 |
| Debt modification | | | (54,972) | - |
| | | | 1,595,071 | 895,741 |
| | | | | |
| Net loss and comprehensive loss | | | (6,600,347) | (7,700,463) |
NEWTOPIA INC.
Unaudited Statements of Changes in Equity (Deficit)
Years Ended December 31, 2023 and 2022
(Expressed in Canadian Dollars)
| | | Common Shares | Contributed Surplus |
Deficit |
Total |
| | | $ | $ | $ | $ |
| Balance, January 1, 2022 | | 45,177,120 | 11,652,200 | (58,673,634) | (1,844,314) |
| Net loss and comprehensive loss | | - | - | (7,700,463) | (7,700,463) |
| Share-based compensation | | - | 492,720 | - | 492,720 |
| Private Placement Offering of Units, net of issuance costs | | 2,624,495 | 511,839 | - | 3,136,334 |
| Compensation options issued to brokers | | (83,230) | 83,230 | - | - |
| Adjustment of issuance costs of 8% Debenture Units | | - | 4,733 | - | 4,733 |
| Shares issued on issuance of 13% Debenture Units | | 260,607 | - | - | 260,607 |
| Settlement of related party payable | | - | 116,727 | - | 116,727 |
| Balance, December 31, 2022 | | 47,978,992 | 12,861,449 | (66,374,097) | (5,533,656) |
| Net loss and comprehensive loss | | - | - | (6,600,347) | (6,600,347) |
| Share-based compensation | | - | 555,816 | - | 555,816 |
| March 2023 private placement offering, net of issuance costs | | 930,218 | 537,077 | - | 1,467,295 |
| March 2023 private placement offering, compensation options | | (26,443) | 26,443 | - | - |
| Bonus shares issued on July 2023 Debenture Offering | | 91,331 | 6,341 | - | 97,672 |
| Bonus Amendment Shares | | 78,262 | - | - | 78,262 |
| Bonus Replacement Shares | | 34,171 | 15,744 | - | 49,915 |
| Exercise of warrants | | 318,065 | (59,766) | - | 258,299 |
| Settlement of related party payable | | - | 208,084 | - | 208,084 |
| Balance, December 31, 2023 | | 49,404,596 | 14,151,188 | (72,974,444) | (9,418,660) |
.NEWTOPIA INC.
Unaudited Statements of Cash Flows
Years Ended December 31, 2023 and 2022
(Expressed in Canadian Dollars)
| | | | 2023 | 2022 |
| | | | | |
| | | | $ | $ |
| Cash flows used in operating activities | | | | |
| Net loss and comprehensive loss | | | (6,600,347) | (7,700,463) |
| Items not involving cash: | | | | |
| Depreciation of property and equipment | | | 5,935 | 46,387 |
| Depreciation of right-of-use asset | | | .- | 169,370 |
| Impairment of intangible asset | | | 2,409,314 | - |
| Impairment of right-of-use asset | | | - | 200,168 |
| Lease modification | | | - | 150,907 |
| Amortization of intangible asset | | | 826,049 | 68,838 |
| Amortization of deferred finance charges | | | 149,896 | 248,813 |
| Capitalized borrowing costs | | | - | (67,000) |
| Debenture interest and accretion expense | | | 558,311 | 184,848 |
| Interest on lease obligations | | | 28,110 | 70,797 |
| Loss on disposal of property and equipment | | | - | 15,534 |
| Debt modification | | | (54,972) | - |
| Share-based compensation | | | 555,816 | 492,720 |
| Loss on settlement of related party payable | | | 10,086 | - |
| | | | (2,111,802) | (6,119,081) |
| Change in non-cash working capital | | | | |
| Trade and other receivables | | | 156,681 | (175,663) |
| Prepaid expenses and deposits | | | 104,800 | 125,149 |
| Inventories | | | 210,339 | (194,571) |
| Trade and other payables | | | (560,689) | 794,346 |
| Contract asset/liability | | | (69,072) | (334,034) |
| Deferred revenue | | | - | (11,364) |
| | | | (2,269,743) | (5,915,218) |
| Cash flows used in investing activities | | | | |
| Purchase of property and equipment | | | (2,548) | (3,826) |
| Intangible asset development costs | | | - | (985,349) |
| | | | (2,548) | (989,175) |
| Cash flows from financing activities | | | | |
| Credit facility withdrawals | | | 6,570,269 | 9,396,285 |
| Credit facility repayments | | | (6,626,808) | (6,904,054) |
| Credit facility financing costs | | | (138,210) | (162,210) |
| Proceeds from promissory notes | | | - | 550,000 |
| Repayment of promissory notes | | | - | (550,000) |
| Proceeds from debenture units, net of closing costs | | | 2,165,645 | 1,316,964 |
| Repayment of lease obligation | | | (572,810) | (344,560) |
| Proceeds from private placement offering, net of share issuance costs | | | 1,467,295 | 3,136,334 |
| Proceeds from exercise of warrants | | | 258,299 | - |
| Repayment of debentures | | | (810,000) | - |
| | | | 2,313,680 | 6,438,759 |
| Net change in cash during the year | | | 41,389 | (465,634) |
| Cash, beginning of year | | | 345,950 | 811,584 |
| Cash, end of year | | | 387,339 | 345,950 |
| Supplemental cash flow information | | | | |
| Non-cash settlement of related party payable | | | 208,084 | 116,727 |
| Interest paid | | | 788,908 | 449,073 |
| Unaudited Gross Profit Information | | | |
| | | | |
| | Three Months Ended March 31, | ||
| | 2024 | | 2023 |
| | $ | | $ |
| Revenue | 1,814,000 | | 2,648,657 |
| Cost of revenue | (899,396) | | (1,275,682) |
| Gross profit | 914,604 | | 1,372,975 |
| | | | |
| Gross profit margin | 50 % | | 52 % |
| | | | |
| | | | |
| Reconciliation of Total Operating Expenses to Adjusted Operating Expenses | |||
| | | | |
| | Three Months Ended March 31, | ||
| | 2024 | | 2023 |
| | $ | | $ |
| Total expenses | 2,123,975 | | 2,745,802 |
| Add (Subtract) | | | |
| Share-based compensation | (73,665) | | (93,290) |
| Depreciation of property and equipment | (735) | | (1,549) |
| Interest and accretion expense | (267,361) | | (169,695) |
| Interest on lease obligations | - | | (12,590) |
| Finance charges | (129,025) | | (109,648) |
| Amortization of deferred finance charges | (58,013) | | (33,815) |
| Foreign exchange loss | (3,308) | | (18,272) |
| Adjusted operating expenses | 1,591,868 | | 2,306,943 |
| | | | |
| | | | |
| Unaudited Adjusted Operating Loss | | | |
| | Three Months Ended March 31, | ||
| | 2024 | | 2023 |
| | $ | | $ |
| Gross profit | 914,604 | | 1,372,975 |
| Add amortization of intangible | - | | 206,514 |
| Adjusted gross profit | 914,604 | | 1,579,489 |
| Adjusted operating expenses | (1,591,868) | | (2,306,943) |
| Adjusted operating loss | (677,264) | | (727,454) |
NEWTOPIA INC.
Condensed Interim Consolidated Statements of Financial Position (Unaudited)
As at March 31, 2024 and December 31, 2023
(Expressed in Canadian Dollars)
| | | | March 31, | December 31, |
| | | | 2024 | 2023 |
| | | | | |
| | | | $ | $ |
| Assets | | | | |
| Current assets | | | | |
| Cash | | | 329,562 | 387,339 |
| Trade and other receivables | | | 1,367,427 | 1,400,959 |
| Contract asset | | | 162,236 | 259,072 |
| Prepaid expenses and deposits | | | 273,287 | 101,043 |
| Inventories | | | 111,496 | 115,232 |
| Deferred costs | | | 52,850 | 64,583 |
| | | | 2,296,858 | 2,328,228 |
| | | | | |
| Property and equipment | | | 3,930 | 4,665 |
| | | | 2,300,788 | 2,332,893 |
| Liabilities | | | | |
| Current liabilities | | | | |
| Trade and other payables | | | 2,318,781 | 1,825,356 |
| Credit facility | | | 4,588,213 | 4,767,006 |
| Deferred revenue | | | 48,185 | 48,185 |
| Debenture | | | 3,836,502 | 3,723,530 |
| | | | 10,791,681 | 10,364,077 |
| Debentures | | | 1,412,236 | 1,387,476 |
| | | | 12,203,917 | 11,751,553 |
| Equity/Deficit | | | | |
| Common shares | | | 49,754,858 | 49,404,596 |
| Contributed surplus | | | 14,525,828 | 14,151,188 |
| Deficit | | | (74,183,815) | (72,974,444) |
| | | | (9,903,129) | (9,418,660) |
| | | | 2,300,788 | 2,332,893 |
NEWTOPIA INC.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Unaudited)
Three Months Ended March 31, 2024 and 2023
(Expressed in Canadian Dollars)
| | | | 2024 | 2023 |
| | | | | |
| | | | $ | $ |
| | | | | |
| Revenue | | | 1,814,000 | 2,648,657 |
| Cost of revenue | | | 899,396 | 1,275,682 |
| Gross profit | | | 914,604 | 1,372,975 |
| | | | | |
| Operating expenses | | | | |
| Technology and development | | | 435,242 | 922,065 |
| Sales and marketing | | | 248,372 | 426,170 |
| General and administrative | | | 898,457 | 958,708 |
| Share-based compensation | | | 73,665 | 93,290 |
| Depreciation of property and equipment | | | 735 | 1,549 |
| | | | 1,656,471 | 2,401,782 |
| Other expenses | | | | |
| Interest on lease obligations | | | - | 12,590 |
| Interest and accretion expense | | | 267,361 | 169,695 |
| Finance charges | | | 129,025 | 109,648 |
| Foreign exchange loss | | | 3,308 | 18,272 |
| Loss on settlement of related party payable | | | 9,797 | - |
| Amortization of deferred finance charges | | | 58,013 | 33,815 |
| | | | 467,504 | 344,020 |
| Net loss and comprehensive loss | | | (1,209,371) | (1,372,827) |
| Loss per share | | | | |
| Basic and diluted | | | (0.01) | (0.01) |
| Weighted average number of common shares outstanding | | | | |
| Basic and diluted | | | 163,585,413 | 133,083,887 |
NEWTOPIA INC.
Condensed Interim Consolidated Statements of Changes in Equity (Deficit) (Unaudited)
Three Months Ended March 31, 2024 and 2023
(Expressed in Canadian Dollars)
| | | Common Shares | Contributed Surplus |
Deficit |
Total |
| | | $ | $ | $ | $ |
| Balance, December 31, 2023 | | 49,404,596 | 14,151,188 | (72,974,444) | (9,418,660) |
| Net loss and comprehensive loss | | - | - | (1,209,371) | (1,209,371) |
| Share-based compensation | | - | 73,665 | - | 73,665 |
| Private Placement Offering of Units, net of issuance costs | | 373,549 | 267,891 | - | 641,440 |
| Compensation options issued to brokers | | (23,287) | 23,287 | - | - |
| Settlement of related party payable | | - | 9,797 | - | 9,797 |
| Balance, March 31, 2024 | | 49,754,858 | 14,525,828 | (74,183,815) | (9,903,129) |
| | | | | | |
| Balance, December 31, 2022 | | 47,978,992 | 12,861,449 | (66,374,097) | (5,533,656) |
| Net loss and comprehensive loss | | - | - | (1,372,827) | (1,372,827) |
| Share-based compensation | | - | 93,290 | - | 93,290 |
| Settlement of related party payable | | - | 38,542 | - | 38,542 |
| Private placement offering of Units, net of issuance costs | | 930,218 | 537,077 | - | 1,467,295 |
| Compensation options | | (26,443) | 26,443 | - | - |
| Balance, March 31, 2023 | | 48,882,767 | 13,556,801 | (67,746,924) | (5,307,356) |
NEWTOPIA INC.
Condensed Interim Consolidated Statements of Cash Flows (Unaudited)
Three months Ended March 31, 2024 and 2023
(Expressed in Canadian Dollars)
| | | | Three months Ended March 31, | |
| Note | | | 2024 | 2023 |
| | | | | |
| | | | $ | $ |
| Cash flows used in operating activities: | | | | |
| Net loss and comprehensive loss | | | (1,209,371) | (1,372,827) |
| Items not involving cash: | | | | |
| Depreciation of property and equipment | | | 735 | 1,549 |
| Amortization of intangible asset | | | - | 206,513 |
| Amortization of deferred finance charges | | | 58,013 | 33,816 |
| Debenture interest and accretion expense | | | 137,728 | 74,920 |
| Interest on lease obligations | | | - | 12,590 |
| Share-based compensation | | | 73,665 | 93,290 |
| Loss on settlement of related party payable | | | 9,797 | - |
| | | | (929,433) | (950,149) |
| Net change in non-cash working capital | | | | |
| Trade and other receivables | | | 33,532 | 87,753 |
| Prepaid expenses and deposits | | | (172,244) | 22,112 |
| Inventories | | | 3,736 | 110,595 |
| Trade and other payables | | | 493,424 | (225,458) |
| Contract asset/liability | | | 96,836 | 134,600) |
| | | | (474,149) | (820,547) |
| Cash flows used in investing activities | | | | |
| Purchase of property and equipment | | | - | (1,099) |
| | | | - | (1,099) |
| Cash flows from (used in) financing activities: | | | | |
| Credit facility withdrawals | | | 1,433,004 | 1,415,546 |
| Credit facility repayments | | | (1,611,792) | (1,804,900) |
| Credit facility financing costs | | | (46,280) | (14,500) |
| Repayment of lease obligations | | | - | (249,375) |
| Proceeds from private placement issuance of Units, net of issuance costs | | | 641,440 | 1,467,295 |
| | | | 416,372 | 814,066 |
| Increase/(Decrease) in cash | | | (57,777) | (7,580) |
| Cash, beginning of period | | | 387,339 | 345,950 |
| Cash, end of period | | | 329,562 | 338,370 |
| _________________________________ | |
| 1 | Core gross profit is defined as revenue, which is comprised of onboarding welcome revenue, ongoing engagement fees and success fees, less cost of sales, which is comprised of Welcome Kit costs, compensation expense for Inspirators and care specialists and genetic testing costs. Gross margin percentage is calculated by dividing gross profit by total revenue for the defined period. The financial statements formally include intangible asset amortization in the gross profit calculation, although core gross profit is considered by management to be an integral measure of financial performance and represents the amount of revenues retained by the Company after incurring direct cash costs. However, gross profit is not a recognized measure of profitability under IFRS. |
| 2 | Adjusted operating expenses consist of all cash-based technology, sales and marketing and administrative expenses. Adjusted operating expense is not a measure of financial performance under IFRS and should not be considered a substitute for total operating expenses, which we believe to be the most directly comparable IFRS measure. |
| 3 | Adjusted operating loss consists of adjusted gross profit less adjusted operating expenses. Adjusted gross profit and operating loss is not a measure of financial performance under IFRS and should not be considered a substitute for loss from operations which we believe to be the most directly comparable IFRS measure. |
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SOURCE Newtopia Inc.