Numinus Wellness Inc. Announces Third Quarter Fiscal 2024 Results

Rhea-AI Summary

Numinus Wellness released its Q3 Fiscal 2024 results, reporting a revenue of $4.3 million, a 1.9% decline from Q2 2024. The gross profit stood at $1.0 million, down 9.8% sequentially. The company ended the quarter with a cash position of $3.7 million.

Key operational updates include a transition out of Canadian clinical operations and an increase in enrolment to over 1,650 learners in its training programs. The company managed 15 clinical trials and facilitated 15,750 client appointments in the U.S., a 3.2% increase year-over-year.

Notable subsequent events include a letter of intent to acquire MedBright AI Investments, which will result in the issuance of approximately 204,729,372 Numinus shares. The company plans to rebrand as Numinus Intelligence post-acquisition.

Gross margin declined to 22% from 24% quarter-over-quarter, while operating expenditures were reduced by $1.2 million to $6.1 million. Clinical research revenues increased by 10.7%, and practitioner training revenues surged by 114%.

Positive

• Increased client appointments in U.S. clinics by 3.2% YoY.
• Managed 15 clinical trials, showing consistent research activity.
• Practitioner training revenues increased by 114.2% to $168,830.
• Operating expenses reduced by $1.2 million to $6.1 million.
• Cash position of $3.7 million.

Negative

• Revenue declined by 1.9% to $4.3 million.
• Gross profit decreased by 9.8% to $1.0 million.
• Gross margin declined to 22% from 24%.
• US Clinic Network revenues decreased by 7% to $3.4 million.
• Loss and comprehensive loss totaled $5.1 million.

Q3 Fiscal 2024 Highlights

• Revenue of $4.3 million, a 1.9% decline over Q2 2024
• Gross profit of $1.0 million, a 9.8% decline over Q2 2024
• Cash position of $3.7 million as of May 31, 2024
• Transitioned out of Canadian clinical operations through an agreement with the Canadian Centre for Psychedelic Healing ("Field Trip Health")
• Enrolment in Numinus training programs increased to over 1,650 learners, compared to over 1,400 in Q2 2024, with learners joining from 18 countries
• Managed 15 clinical trials at Cedar Clinical Research
• Provided 15,750 client appointments in U.S. Numinus Wellness Clinics; this represents a 3.2% increase from the prior year

Subsequent to Quarter End

• On June 20, 2024, the Company announced that it had executed a letter of intent ("LOI") to acquire MedBright AI Investments Inc. ("MedBright") by way of a statutory plan of arrangement. Under the terms of the LOI, the Company will issue 1.86 common shares of Numinus for each MedBright share, making up an aggregate of approximately 204,729,372 of the Company's shares.

All financial results are reported in Canadian dollars unless otherwise stated.

VANCOUVER, BC, July 11, 2024 /PRNewswire/ - Numinus Wellness Inc. ("Numinus" or the "Company") (TSX: NUMI) (OTCQX: NUMIF), a mental health care company advancing traditional and innovative behavioral health treatments with a focus on safe, evidence-based psychedelic-assisted therapies, today announced its financial results for the three months ended May 31, 2024 ("Q3 2024").

"In the third quarter of 2024, we continued to make progress on our program to transition Numinus to an operationally lean company prepared to benefit from the anticipated growth in psychedelic therapy. Key to the program is achieving profitability with our existing operations and leveraging our significant experience and expertise to opportunities in the broad market," said Payton Nyquvest, Numinus Founder and CEO. "In April, we transitioned out of our Canadian clinical operations through an agreement with the Canadian Centre for Psychedelic Healing while maintaining a connection with our Canadian therapists through our newly launched Numinus Network. This has allowed us to focus on optimizing our U.S. clinics and the significant opportunities with several novel drug therapies in late clinical trial stages. In Q3 2024, we maintained a cash burn rate of less than $1 million per month."

"Our proposed acquisition of MedBright AI further amplifies our opportunities by leveraging our experience and expertise in clinical care and insurance reimbursement into a licensed offering available to mental health clinics, therapists and practitioners across the U.S.," added Mr. Nyquvest.

Revenue from continuing operations

The Company's consolidated revenues decreased by 1.9% quarter over quarter compared to Q2 2024 as a result of a decrease in outpatient services revenue of approximately $100,000 due to the wind-down of the Arizona clinics.

Revenues in the Company's US Clinic Network during Q3 2024 decreased by 7% from $3.6 million during Q2 2024 to $3.4 million because of a decrease in outpatient service revenue. 

Revenues from Clinical Research operations during Q3 2024 increased by 10.7% from $0.7 million during Q2 2024 to $0.8 million. The increase in revenue resulted from psychedelic clinical trials with additional patient appointments.  

Revenues from Practitioner Training during Q3 2024 increased by 114% from $78,837 during Q2 2024 to $168,830. The increase in revenue resulted from revenue-generating efforts related to new training programs.

Gross Margin

Sequentially, gross margin declined 200 basis points in Q3 2024 to 22.0% from 24.0% in Q2 2024.  

Operating expenditures

Operating expenditures and other items were $6.1 million in Q3 2024, compared to $7.3 million in the previous quarter. The decrease is a result of the Company's cost-cutting initiatives, including reduced legal, consulting and marketing expenses and reflects the Company's shift in operational focus to a more asset-light model.

Operational Highlights

Numinus Wellness Clinic Network

Numinus Wellness clinics generated revenue of $3.36 million during Q3 2024, a 7% decrease compared to $3.6 million during Q2 2024, and a decrease of 18% compared to $4.1 million during Q3 2023. The decrease in clinic network revenues during Q3 2024 is due to a decrease in outpatient service revenues.

• 15,750 clinical appointments in Q3 2024, compared to 14,841 in Q2 2024
• 48,945 clinical appointments year to date in 2024, compared to 47,810 in 2023
• Average of 250.0 appointments per operating day in Q3 2024, compared to 251.54 in Q2 2024
• 6.7% of appointments during Q3 2024 were made by new clients
• 23.0% of appointments during Q3 2024 were KAT or Ketamine/Spravato medicine-related
• 6.3% of appointments during Q3 2024 were for TMS services

On May 7, 2024, the Company announced as part of its strategic plan, Numinus has entered into an agreement with the Canadian Centre for Psychedelic Healing ("Field Trip Health"), which provides psychedelic-assisted therapy in five Canadian clinics under the Field Trip Health brand. Therapists in Canada who are contracted with Numinus will have the option to transition to Field Trip Health. Through the arrangement, the Company will earn a portion of the revenue generated from the referral of patients of its existing Canadian business to Field Trip Health. Once the operation transfer is finished, Numinus clinics in Montreal, Toronto, and Vancouver will be closed.

Numinus Clinical Research

Revenues from Cedar Clinical Research ("CCR") during Q3 2024 were $0.8 million, an increase of 11% compared to Q2 2024, and a 20.0% decrease compared to Q3 2023.

CCR managed 15 clinical trials, including 233 patient appointments in Q3 2024, compared to 15 clinical trials and 260 patient appointments in Q2 2024. On April 17, 2024, the Company announced that CCR was chosen as one of multiple sites for Cybin's Phase 3 pivotal, multinational clinical trial of CYB003 for the adjunctive treatment of Major Depressive Disorder ("MDD"). On May 20, 2024, the Company announced that Health Canada had approved its Clinical Trial Application to examine the feasibility of a group model in MDMA-assisted psychotherapy, enrolling trainee practitioners as participants. It is anticipated that the clinical trials will be conducted at a clinic in Vancouver, Canada.

Practitioner Training

The Company has built a fulsome certification program to train practitioners in ketamine, 3,4-Methyl enedioxy methamphetamine ("MDMA"), and psilocybin-assisted therapy ("Numinus Training Program") that leverages its expertise in clinic-based treatment and clinical research. The program is accredited by major regulatory bodies in Canada and the U.S. and is provided in a blended learning format to optimize adult learning.

• As of May 2024, over 1,650 learners have enrolled in Numinus Training Programs, with learners coming from 18 countries
• Became accredited as a psychedelic therapy training provider by the Oregon Health Authority
• Expanded its offering with the initiation of a contract with a leading research institution to train their research providers on evidence-based practices and protocols to support clients in specific psychedelic clinical trials
• Training revenue increased by 114.2% in Q3 2024 to $168,830, compared to $78,837 in Q2 2024

Corporate Updates

On June 24, 2024, the Company announced that Donna Wong had resigned as a director from the Board of Numinus.

Balance Sheet and Liquidity

Numinus ended the quarter with a total cash balance of $3.7 million and working capital of $2.0 million.

Q3 2024  Performance Metrics

	For the quarter ended:
	May 31, 2024 (Q3 2024)	Feb. 29, 2024 (Q2 2024)	% change
Numinus U.S. Clinic Network revenues	3,355,869	3,609,324	-7.0 %
Practitioner Training revenues	168,830	78,837	114.2 %
Numinus Clinical Research revenues	824,082	744,136	10.7 %
Total Revenue	$4,348,781	$4,432,297	-1.9 %
Cost of revenue	(3,390,965)	(3,370,529)	0.6 %
Gross Profit (Loss)	$957,816	$1,061,768	-9.8 %
Gross profit margin	22.0 %	24.0 %	-200 bps
Operating expenses and other items	6,092,503	7,334,204	-16.9 %
Loss and comprehensive loss	$(5,134,687)	$(5,705,901)	n/a

Numinus' unaudited condensed consolidated interim financial statements for the three months ended May 31, 2024, and related management's discussion and analysis are available on Numinus' Investor Relations website at www.investors.numinus.com and under the Company's profile on SEDAR+ at www.sedarplus.ca. These documents were prepared in accordance with IFRS.

Proposed Transaction

On June 20, 2024, the Company announced that it had executed a letter of intent to acquire MedBright AI Investments ((CSE: MBAI) by way of a statutory plan of arrangement ("Proposed Transaction").

The strategic combination of MedBright's AI machine-learning platform with Numinus' significant expertise in traditional therapy, clinic management, patient care, insurance reimbursement, and psychedelic-assisted treatment is expected to enhance revenue generation through a unique AI-enabled offering available to the growing number of U.S. mental health providers. Specifically, the AI Offering will leverage Numinus' industry-leading experience and data related to providing reimbursed care for drug-assisted therapy to allow therapists to address a key challenge in building out the infrastructure necessary to generate reimbursed revenue.

To signify its new strategic direction and focus, the Company intends to rebrand as Numinus Intelligence upon closing, a name that reflects the commitment to leveraging AI and data science to expand mental health services and solutions across the U.S. The Company's ticker symbol of the Toronto Stock Exchange will remain NUMI. In preparation for the transaction, a transition team has been formed to reduce costs, preserve cash and work to increase revenues through the period before the Proposed Transaction is complete.

Pursuant to the terms of the LOI, as consideration for the acquisition of all of the issued and outstanding common shares in the capital of MedBright AI ("MedBright AI Shares"), Numinus will issue 1.86 common shares of Numinus ("Numinus Shares") for each MedBright AI Share such that it is anticipated that Numinus will issue an aggregate of approximately 204,729,372 Numinus Shares, which will represent ownership of approximately 39% of the pro forma company on an undiluted basis, based on the current capitalization of Numinus and MedBright AI.

The Proposed Transaction is subject to a number of conditions precedent, including, among other things, the negotiation and execution of a definitive arrangement agreement, completion of satisfactory due diligence by each party, receipt of certain regulatory approvals and the approval of the Proposed Transaction by shareholders of each of Numinus and MedBright AI. The LOI is binding with respect to exclusivity and non-binding in all other aspects and serves as an important step in advance of a definitive arrangement agreement.

Conference Call and Webcast Details

Interested parties are invited to participate in the Company's Q3 2024 results conference call and webcast occurring on July 11 at 5:30 p.m. Eastern time / 2:30 p.m. Pacific time. During the call, Numinus executives will review the Company's performance and recent initiatives and answer questions from analysts and previously provided investor questions.

To listen to the live webcast, please register at:
https://events.q4inc.com/attendee/881868667 

The webcast will also be archived on the Events and Presentations page of Numinus' Investor Relations website:
www.investors.numinus.com/events-and-presentations. 

To participate in the live conference call, please use the following dial-in information:

• 1 (888) 330-3632 (Toll-free North America)
• 1 (646) 960-0837 (International)
• Please ask to participate in Numinus' Q3 2024 Results Call.

To avoid any delays in joining the call, please dial in at least five minutes prior to the call start time. If prompted, please provide the conference passcode 3547386.

About Numinus

Numinus Wellness Inc. (TSX: NUMI) (OTCQX: NUMIF) helps people to heal and be well through the development and delivery of innovative mental health care and access to safe, evidence-based psychedelic-assisted therapies. The Numinus model – including psychedelic research and clinic care – is at the forefront of a transformation aimed at healing rather than managing symptoms for depression, anxiety, trauma, pain and substance use. At Numinus, we are leading the integration of psychedelic-assisted therapies into mainstream clinical practice and building the foundation for a healthier society.

Learn more at www.numinus.com and follow us on LinkedIn, Facebook, Twitter, and Instagram.

Forward-looking statements

This press release contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are "forward-looking statements". Forward-looking statements can be identified by the use of words such as "expects", "does not expect", "is expected", "believes", "intends", "anticipates", "does not anticipate", "believes" or variations of these words, expressions or statements, that certain actions, events or results "may", "could", "would", "might" or "will be" taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, ability of Numinus to maintain or increase earnings; ability of Numinus to achieve or maintain profitability; results of changes to operations from a financial or business perspective; the effect of cost containment measures on Numinus business and financial position; changes to cash burn rate, expenses, corporate programs or priorities, or unanticipated costs affecting cash runway or the pathway to positive cashflow or profitability, the effect of any transaction or other activity undertaken by the company in connection with the strategic review; interest in, uptake of and the ability to commercialize the Numinus Training; receipt of and/or continued approval of the clinical trial application by Health Canada for experiential opportunities for practitioners training to offer MDMA-assisted therapy;  availability of subjects and trainers for experiential opportunities in practitioners training, if approved; dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate the Company's facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, if any, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company's need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers; the effect, if any, that the Consolidation may have on the liquidity and price of the Company's common shares and its ability to maintain its listing on the TSX and OTCQB; Numinus' expectation that leveraging its expertise in psychedelic-assisted therapy, clinic management, patient care, and insurance reimbursement will create a unique AI-enabled offering; Numinus' intentions regarding rebranding as "Numinus Intelligence"; the expectation that leveraging AI and data science will expand mental health service and solutions across the U.S.; the expectation that Numinus' transition team will be able to reduce costs, preserve cash and increase revenues; the expectation that the parties will be able to satisfy the conditions precedent to closing the Proposed Transaction, including execution of a definitive arrangement agreement, completion of satisfactory due diligence by each party, receipt of certain regulatory approvals and the approval of the Proposed Transaction by shareholders of each of Numinus and MedBright AI; the belief that Numinus' expertise and intellectual property will complement MedBright's AI technology and amplify the combined entity's ability to help those in need of care while driving revenue growth and profitability; the belief that the merger will generate value for MedBright AI and Numinus shareholders; the belief that the merger will accelerate the mission and opportunities for the combined entity; and the belief that the merger will create a pathway for revenue growth and profitability, and other risk factors set forth in our annual information form dated November 29, 2023 and available on SEDAR+ at www.sedarplus.ca. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company's efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws.

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SOURCE Numinus Wellness Inc.

FAQ

What were Numinus Wellness' Q3 2024 revenues?

Numinus Wellness reported Q3 2024 revenues of $4.3 million, a 1.9% decline from Q2 2024.

How did Numinus Wellness' gross profit and margin change in Q3 2024?

The gross profit for Q3 2024 was $1.0 million, down 9.8% from Q2 2024. The gross margin declined to 22% from 24% quarter-over-quarter.

What is the cash position of Numinus Wellness at the end of Q3 2024?

As of May 31, 2024, Numinus Wellness had a cash position of $3.7 million.

What is the status of Numinus Wellness' acquisition of MedBright AI?

Numinus Wellness has signed a letter of intent to acquire MedBright AI and will issue approximately 204,729,372 shares. The deal is subject to regulatory and shareholder approvals.

How did the US Clinic Network perform in Q3 2024?

Revenues from Numinus Wellness' US Clinic Network were $3.4 million in Q3 2024, a decrease of 7% from Q2 2024.

What were the operating expenses for Numinus Wellness in Q3 2024?

Operating expenses for Numinus Wellness in Q3 2024 were $6.1 million, down from $7.3 million in Q2 2024.

How many client appointments did Numinus Wellness Clinics provide in Q3 2024?

Numinus Wellness Clinics provided 15,750 client appointments in Q3 2024, a 3.2% increase from the previous year.