☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | Non-Accelerated Filer | ☒ | |||||
Emerging Growth Company | ☐ |
1 | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
US GAAP | International Financial Reporting Standards as issued | Other | ||||||
by the International Accounting Standards Board | ☒ |
Auditor Firm ID: 1263 | Auditor Name: Ernst & Young LLP | Auditor Location: Winnipeg, Manitoba, Canada |
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GENERAL
As used in this Annual Report, the “Corporation” or “Company” refers to Medicure Inc., a Canadian public company existing under the
The Company uses the Canadian dollar as its reporting currency. Unless otherwise indicated, all references to dollar amounts in this Annual Report are to Canadian dollars. As of December 31, 2021,2022, the rate for Canadian dollars was US $1.00 for CND $1.2678.$1.3544. See also Item 3 –
Except as noted, the information set forth in this Annual Report is as of April 27, 20226, 2023 and all information included in this document should only be considered correct as of such date.
GLOSSARY OF TERMS
The following words and phrases shall have the meanings set forth below:
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“angioplasty”
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“Apicore”
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“FDA”
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“myocardial infarction”
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1
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“TSXV”
FORWARD LOOKING STATEMENTS
Medicure Inc. cautions readers that certain important factors (including without limitation those set forth in this Form
• | The Company’s expectations in regard to the extent and impacts of COVID-19 including the timing surrounding these impacts; |
• | the Company’s intention to sell and market its acute care cardiovascular drug, AGGRASTAT®, in the United States and its territories through its U.S. subsidiary, Medicure Pharma Inc.; |
• | the Company’s intention to sell and market its cardiovascular drug, ZYPITAMAG®, in the United States and its territories through its U.S. subsidiary, Medicure Pharma Inc.; |
• | the Company’s intention to sell and market its cardiovascular drug, Sodium Nitroprusside 50mg/2ml (25mg/ml) (“SNP”), in the United States and its territories through its U.S. subsidiary, Medicure Pharma Inc.; |
• | the Company’s intention to sell and market its pharmaceutical products in the United States and its territories through its newly acquired U.S. subsidiary, Marley Drug, Inc. (“Marley Drug”); |
• | the Company’s intention to develop and implement clinical, regulatory and other plans to generate an increase in the value of AGGRASTAT®; |
• | the Company’s intention to expand or otherwise improve the approved indications and/or dosing information contained within AGGRASTAT®’s approved prescribing information; |
• | the Company’s intention to increase sales of AGGRASTAT®; ZYPITAMAG® and SNP; |
the Company’s intention to increase sales through Marley Drug;
• | the Company’s intention to develop MC-1 for the treatment of pyridox(am)ine 5’-phosphate oxidase (“PNPO”) deficiency; |
• | the likelihood of the Company to receive a priority review voucher from the United States Food and Drug Administration (“FDA”) in regards to its development work for MC-1; |
the Company’s intention to investigate and advance other product opportunities;
2
the Company’s intention to develop and commercialize additional cardiovascular generic drug products;
the Company’s intention and ability to obtain regulatory approval for its products and potential products;
the Company’s expectations with respect to the cost of testing and commercialization of its products and potential products;
the Company’s sales and marketing strategy;
the Company’s anticipated sources of revenue;
the Company’s intentions regarding the protection of its intellectual property;
the Company’s intention to identify, negotiate and complete business development transactions (e.g. the sale, purchase, or license of pharmaceutical products or services);
the Company’s business strategy; and
the Company’s expectation that it will not pay dividends in the foreseeable future.
Such forward-looking statements and information involve a number of assumptions as well as known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements and information including, without limitation:
general business and economic conditions;
• | the impact of changes in Canadian-U.S. dollar and other foreign exchange rates on the Company’s revenues, costs and results; |
the timing of the receipt of regulatory and governmental approvals for the Company’s research and development projects;
the availability of financing for the Company’s commercial operations and/or research and development projects, or the availability of financing on reasonable terms;
results of current and future clinical trials;
uncertainties associated with the acceptance and demand for new products;
changes in regards to pharmacy regulations;
clinical trials not being unreasonably delayed and expenses not increasing substantially;
government regulation not imposing requirements that significantly increase expenses or that delay or impede the Company’s ability to bring new products to market;
the Company’s ability to attract and retain skilled management and staff;
the Company’s ability, amid circumstances and decisions beyond the Company’s control, to maintain adequate supply of product for commercial sale;
inaccuracies and deficiencies in the scientific understanding of the interaction and effects of pharmaceutical treatments when administered to patients;
3
market competition;
tax benefits and tax rates; and
the Company’s ongoing relations with its employees and its business partners.
These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements and information. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements and information contained herein to reflect future results, events or developments, except as otherwise required by applicable law. Additional risks and uncertainties relating to the Company and its business can be found in the “Risk Factors” section of this Annual Report.
4
PART I
ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
A. Directors and Senior Management
Not applicable
B. Advisers
Not applicable
C. Auditors
Not applicable
ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE |
Not applicable
ITEM 3. | KEY INFORMATION |
A. Selected Financial Data
The selected financial data of the Company as at December 31, 20212022 and 2020,2021, and for the fiscal years ended December 31, 2022, 2021 2020 and 2019,2020, was extracted from the audited consolidated financial statements of the Company included in this Annual Report on Form
5
Under International Financial Reporting Standards (in Canadian dollars):
Statement of Financial Position Data | December 31, 2022 | December 31, 2021 | December 31, 2020 | December 31, 2019 | December 31, 2018 | |||||||||||||||
(as at period end) | $ | $ | $ | $ | $ | |||||||||||||||
Current Assets | 14,847,000 | 12,554,000 | 15,676,000 | 31,364,000 | 89,587,000 | |||||||||||||||
Property and Equipment | 1,187,000 | 1,611,000 | 1,640,000 | 1,282,000 | 316,000 | |||||||||||||||
Intangible Assets | 10,624,000 | 11,212,000 | 13,596,000 | 9,599,000 | 1,705,000 | |||||||||||||||
Goodwill | 3,177,000 | 2,974,000 | 2,986,000 | — | — | |||||||||||||||
Other Assets | 63,000 | 57,000 | 156,000 | 39,000 | 12,153,000 | |||||||||||||||
Total Assets | 29,898,000 | 28,408,000 | 34,054,000 | 42,284,000 | 103,761,000 | |||||||||||||||
Current Liabilities | 8,390,000 | 8,512,000 | 12,310,000 | 11,662,000 | 16,931,000 | |||||||||||||||
Non-current Liabilities | 503,000 | 1,485,000 | 2,598,000 | 3,680,000 | 3,236,000 | |||||||||||||||
Total Liabilities | 8,893,000 | 9,997,000 | 14,908,000 | 15,342,000 | 20,167,868 | |||||||||||||||
Net Assets / (Deficiency) | 21,005,000 | 18,411,000 | 19,146,000 | 26,942,000 | 83,594,000 | |||||||||||||||
Capital Stock, Warrants and Contributed Surplus | 91,393,000 | 91,346,000 | 91,211,000 | 95,341,000 | 132,464,000 | |||||||||||||||
Accumulated Other Comprehensive Income | (5,458,000 | ) | (6,640,000 | ) | (6,497,000 | ) | (5,751,000 | ) | 1,268,000 | |||||||||||
Deficit | (64,930,000 | ) | (66,295,000 | ) | (65,568,000 | ) | (62,648,000 | ) | (50,138,000 | ) | ||||||||||
Statement of Net (Loss) Income (for the fiscal year ended on) | ||||||||||||||||||||
Product Sales | 23,065,000 | 21,744,000 | 11,610,000 | 20,173,000 | 29,109,000 | |||||||||||||||
Net (Loss) Income for the Period from continuing operations | 1,365,000 | (727,000 | ) | (6,845,000 | ) | (19,786,000 | ) | 3,926,000 | ||||||||||||
Net income for the Period from discontinued operations | — | — | — | — | — | |||||||||||||||
Comprehensive (Loss) Income for the Period | 1,182,000 | (870,000 | ) | (7,591,000 | ) | (26,805,000 | ) | 4,521,000 | ||||||||||||
(Loss) Income Per Share from continuing operations | ||||||||||||||||||||
Basic | 0.13 | (0.07 | ) | (0.64 | ) | (1.32 | ) | 0.25 | ||||||||||||
Diluted | 0.13 | (0.07 | ) | (0.64 | ) | (1.32 | ) | 0.24 | ||||||||||||
Income Per Share from discontinued operations | ||||||||||||||||||||
Basic | — | — | — | — | — | |||||||||||||||
Diluted | — | — | — | — | — | |||||||||||||||
(Loss) Income Per Share | ||||||||||||||||||||
Basic | 0.13 | (0.07 | ) | (0.64 | ) | (1.32 | ) | 0.25 | ||||||||||||
Diluted | 0.13 | (0.07 | ) | (0.64 | ) | (1.32 | ) | 0.24 | ||||||||||||
Weighted-Average Number of Common Shares Outstanding – Continuing Operations | ||||||||||||||||||||
Basic | 10,251,313 | 10,251,313 | 10,686,041 | 14,998,540 | 15,791,396 | |||||||||||||||
Diluted | 10,436,313 | 10,251,313 | 10,686,041 | 14,998,540 | 16,563,663 | |||||||||||||||
Weighted-Average Number of Common Shares Outstanding – Discontinued Operations | ||||||||||||||||||||
Basic | 10,251,313 | 10,251,313 | 10,686,041 | 14,998,540 | 15,791,396 | |||||||||||||||
Diluted | 10,436,313 | 10,251,313 | 10,686,041 | 14,998,540 | 16,563,663 | |||||||||||||||
Weighted-Average Number of Common Shares Outstanding | ||||||||||||||||||||
Basic | 10,251,313 | 10,251,313 | 10,686,041 | 14,998,540 | 15,791,396 | |||||||||||||||
Diluted | 10,436,313 | 10,251,313 | 10,686,041 | 14,998,540 | 16,563,663 |
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Statement of Financial Position Data | December 31, 2021 | December 31, 2020 | December 31, 2019 | December 31, 2018 | December 31, 2017 | |||||||||||||||
(as at period end) | $ | $ | $ | $ | $ | |||||||||||||||
Current Assets | 12,554,000 | 15,676,000 | 31,364,000 | 89,587,000 | 114,558,882 | |||||||||||||||
Property and Equipment | 1,611,000 | 1,640,000 | 1,282,000 | 316,000 | 221,622 | |||||||||||||||
Intangible Assets | 11,212,000 | 13,596,000 | 9,599,000 | 1,705,000 | 1,756,300 | |||||||||||||||
Goodwill | 2,974,000 | 2,986,000 | — | — | — | |||||||||||||||
Other Assets | 57,000 | 156,000 | 39,000 | 12,153,000 | 12,394,881 | |||||||||||||||
Total Assets | 28,408,000 | 34,054,000 | 42,284,000 | 103,761,000 | 128,931,685 | |||||||||||||||
Current Liabilities | 8,512,000 | 12,310,000 | 11,662,000 | 16,931,000 | 43,673,908 | |||||||||||||||
Non-current Liabilities | 1,485,000 | 2,598,000 | 3,680,000 | 3,236,000 | 4,548,617 | |||||||||||||||
Total Liabilities | 9,997,000 | 14,908,000 | 15,342,000 | 20,167,868 | 48,222,525 | |||||||||||||||
Net Assets / (Deficiency) | 18,411,000 | 19,146,000 | 26,942,000 | 83,594,000 | 80,709,160 | |||||||||||||||
Capital Stock, Warrants and Contributed Surplus | 91,346,000 | 91,211,000 | 95,341,000 | 132,464,000 | 134,579,798 | |||||||||||||||
Accumulated Other Comprehensive Income | (6,640,000 | ) | (6,497,000 | ) | (5,751,000 | ) | 1,268,000 | 673,264 | ||||||||||||
Deficit | (66,295,000 | ) | (65,568,000 | ) | (62,648,000 | ) | (50,138,000 | ) | (54,543,902 | ) | ||||||||||
Statement of Net (Loss) Income (for the fiscal year ended on) | ||||||||||||||||||||
Product Sales | 21,744,000 | 11,610,000 | 20,173,000 | 29,109,000 | 27,133,000 | |||||||||||||||
Net (Loss) Income for the Period from continuing operations | (727,000 | ) | (6,845,000 | ) | (19,786,000 | ) | 3,926,000 | 11,497,000 | ||||||||||||
Net income for the Period from discontinued operations | — | — | — | — | 31,924,000 | |||||||||||||||
Comprehensive (Loss) Income for the Period | (870,000 | ) | (7,591,000 | ) | (26,805,000 | ) | 4,521,000 | 43,412,000 | ||||||||||||
(Loss) Income Per Share from continuing operations | ||||||||||||||||||||
Basic | (0.07 | ) | (0.64 | ) | (1.32 | ) | 0.25 | 0.74 | ||||||||||||
Diluted | (0.07 | ) | (0.64 | ) | (1.32 | ) | 0.24 | 0.63 | ||||||||||||
Income Per Share from discontinued operations | ||||||||||||||||||||
Basic | — | — | — | — | 2.04 | |||||||||||||||
Diluted | — | — | — | — | 1.76 |
Statement of Net (Loss) Income | December 31, 2021 | December 31, 2020 | December 31, 2019 | December 31, 2018 | December 31, 2017 | |||||||||||||||
(for the fiscal year ended on) | $ | $ | $ | $ | $ | |||||||||||||||
(Loss) Income Per Share | ||||||||||||||||||||
Basic | (0.07 | ) | (0.64 | ) | (1.32 | ) | 0.25 | 2.78 | ||||||||||||
Diluted | (0.07 | ) | (0.64 | ) | (1.32 | ) | 0.24 | 2.39 | ||||||||||||
Weighted-Average Number of Common Shares Outstanding – Continuing Operations | ||||||||||||||||||||
Basic | 10,251,313 | 10,686,041 | 14,998,540 | 15,791,396 | 15,636,853 | |||||||||||||||
Diluted | 10,251,313 | 10,686,041 | 14,998,540 | 16,563,663 | 18,138,080 | |||||||||||||||
Weighted-Average Number of Common Shares Outstanding – Discontinued Operations | ||||||||||||||||||||
Basic | 10,251,313 | 10,686,041 | 14,998,540 | 15,791,396 | 15,636,853 | |||||||||||||||
Diluted | 10,251,313 | 10,686,041 | 14,998,540 | 16,563,663 | 18,138,080 | |||||||||||||||
Weighted-Average Number of Common Shares Outstanding | ||||||||||||||||||||
Basic | 10,251,313 | 10,686,041 | 14,998,540 | 15,791,396 | 15,636,853 | |||||||||||||||
Diluted | 10,251,313 | 10,686,041 | 14,998,540 | 16,563,663 | 18,138,080 |
Dividends
No cash dividends have been declared nor are any intended to be declared in the foreseeable future. The Company is not subject to legal restrictions respecting the payment of dividends except that they may not be paid if the Company is, or would after the payment be, insolvent. Dividend policy will be based on the Company’s cash resources and needs and it is anticipated that all available cash will be required to further the Company’s research and development activities for the foreseeable future.
Exchange Rates
Unless otherwise indicated, all reference to dollar amounts are to Canadian dollars. On April 26, 2022,05, 2023, the rate of exchange of the Canadian dollar, based on the daily exchange rate in Canada as published by the Bank of Canada, was US$1.00 = Canadian $1.2797.$1.3457. The exchange rates published by the Bank of Canada and made available on its website,
The following tables set out the exchange rates, based on the daily noon rates in Canada as published by the Bank of Canada for the conversion of Canadian Dollars into U.S. Dollars, for the periods indicated:
December 31, 2021 | December 31, 2020 | December 31, 2019 | December 31, 2018 | December 31, 2017 | ||||||||||||||||
Period End | 1.2678 | 1.2732 | 1.2988 | 1.3642 | 1.2545 | |||||||||||||||
Average for the Period* | 1.2535 | 1.3415 | 1.3269 | 1.2957 | 1.2986 | |||||||||||||||
High for the Period | 1.2942 | 1.4496 | 1.3600 | 1.3642 | 1.3743 | |||||||||||||||
Low for the Period | 1.2040 | 1.2718 | 1.2988 | 1.2288 | 1.2128 |
December 31, 2022 | December 31, 2021 | December 31, 2020 | December 31, 2019 | December 31, 2018 | ||||||||||||||||
Period End | 1.3544 | 1.2678 | 1.2732 | 1.2988 | 1.3642 | |||||||||||||||
Average for the Period* | 1.2984 | 1.2535 | 1.3415 | 1.3269 | 1.2957 | |||||||||||||||
High for the Period | 1.3856 | 1.2942 | 1.4496 | 1.3600 | 1.3642 | |||||||||||||||
Low for the Period | 1.2451 | 1.2040 | 1.2718 | 1.2988 | 1.2288 |
* | The average rate for each period is the average of the daily closing rates on the last day of each month during the period. |
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Month | High | Low | ||||||
March 2022 | 1.2867 | 1.2470 | ||||||
February 2022 | 1.2832 | 1.2677 | ||||||
January 2022 | 1.2772 | 1.2474 | ||||||
December 2021 | 1.2942 | 1.2642 | ||||||
November 2021 | 1.2792 | 1.2368 | ||||||
October 2021 | 1.2654 | 1.2329 | ||||||
September 2021 | 1.2828 | 1.2518 | ||||||
August 2021 | 1.2856 | 1.2462 | ||||||
July 2021 | 1.2759 | 1.2343 | ||||||
June 2021 | 1.2419 | 1.2040 | ||||||
May 2021 | 1.2315 | 1.2051 | ||||||
April 2021 | 1.2617 | 1.2285 | ||||||
March 2021 | 1.2668 | 1.2455 | ||||||
February 2021 | 1.2828 | 1.2530 | ||||||
January 2021 | 1.2824 | 1.2627 |
Month | High | Low | ||||||||||
February | 2023 | 1.3622 | 1.3312 | |||||||||
January | 2023 | 1.3658 | 1.3314 | |||||||||
December | 2022 | 1.3687 | 1.3433 | |||||||||
November | 2022 | 1.3749 | 1.3288 | |||||||||
October | 2022 | 1.3856 | 1.3547 | |||||||||
September | 2022 | 1.3726 | 1.2980 | |||||||||
August | 2022 | 1.3111 | 1.2753 | |||||||||
July | 2022 | 1.3138 | 1.2824 | |||||||||
June | 2022 | 1.3035 | 1.2540 | |||||||||
May | 2022 | 1.3039 | 1.2648 | |||||||||
April | 2022 | 1.2895 | 1.2451 | |||||||||
March | 2022 | 1.2867 | 1.2470 | |||||||||
February | 2022 | 1.2832 | 1.2677 | |||||||||
January | 2022 | 1.2772 | 1.2474 |
B. Capitalization and Indebtedness
Not applicable
C. Reasons for the Offer and Use of Proceeds
Not applicable
D. Risk Factors
An investment in the Company’s common shares is highly speculative and subject to a number of risks. Only those persons who can bear the risk of the entire loss of their investment should participate. An investor should carefully consider the risks described below and the other information that the Company furnishes to, or files with, the Securities and Exchange Commission and with Canadian securities regulators before investing in the Company’s common shares.
Uncertainties and risks include, but are not limited to, the risk that the Company may face with respect to importing raw materials, increased competition, acquisitions, contract manufacturing arrangements, delays or failure in obtaining product approvals from the FDA, general business and economic conditions, market trends, product development, regulatory, and other approvals and marketing.
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The following are significant factors known to us that could materially harm our business, financial position, or operating results or could cause our actual results to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statement made in this report. The risks described are not the only risks facing us. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, also may adversely affect our business, financial position, and operating results. If any of these risks occur, our business, financial position, and operating results could suffer significantly. As a result, the market price of our common stock could decline and investors could lose all or part of their investment.
The fact that the Company currently derives a significant portion of its revenue from a single product, AGGRASTAT
As at December 31, 2021,2022, the Company had AGGRASTAT
The long-term profitability of the Company’s operations is uncertain, and any profitability may not be sustained. The Company’s long-term profitability will depend in significant part on its ability to maintain or expand sales of AGGRASTAT
(a) | the success of the Company’s research and development activities; |
(b) | obtaining regulatory approvals to market any of its development products; |
(c) | the ability to contract for the manufacture of the Company’s products according to schedule and within budget, given the Company’s limited experience and lack of internal capabilities for manufacturing; |
(d) | the ability to develop, implement and maintain appropriate systems and structures to market and operate within applicable regulatory, industry and legal guidelines; |
(e) | the ability to identify, negotiate and complete business development transactions (e.g. the sale, purchase, or license of pharmaceutical products or services) with third parties; |
(f) | the ability to maintain current or higher pricing and margins for the Company’s products; |
(g) | the ability to successfully prosecute and defend its patents and other intellectual property; and |
(h) | the ability to successfully market the Company’s products, including AGGRASTAT ® , given that it has limited resources. |
(i) | The ability to successfully market pharmaceutical products through the Marley Drug business. |
Further, if the Company does achieve sustained profitability, it may not be able to increase profitability in the future.
9
There is no assurance that the Company will be successful in growing the sales of ZYPITAMAG
On September 30, 2019 the Company announced that through its subsidiary, Medicure International Inc., it had acquired the ownership of ZYPITAMAG
The Company’s product launch utilized its existing commercial infrastructure and while not an
ZYPITAMAG
The markets in which Marley Drug operates are very competitive and further increases in competition could adversely affect us.
The Company, through its recently acquired Marley Drug pharmacy business, faces intense competition with local, regional and national companies, including pharmacy chains, independently owned pharmacies, supermarkets, mass merchandisers and internet pharmacies. Competition from
Consolidation in the healthcare industry could adversely affect our business, financial condition and results of operations.
Many organizations in the healthcare industry have consolidated to create larger healthcare enterprises with greater market power, which has contributed to continued pricing pressures. If this consolidation trend continues, it could give the resulting enterprises even greater bargaining power, which may lead to further pressure on the prices for the Company’s pharmaceutical products sold through Marley Drug and/or reduce our access to customers. If these pressures result in reductions in prices and/or reduce our access to customers, the Company’s business will become less profitable unless we the Company can achieve corresponding reductions in costs or develop profitable new revenue streams. The Company expects that market demand, government regulation, third-party reimbursement policies, government contracting requirements, and societal pressures will continue to cause the healthcare industry to evolve, potentially resulting in further business consolidations and alliances among the industry participants, which may adversely impact the Marley Drug business, its financial condition and its results of operations.
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The availability of pharmacy drugs is subject to governmental regulations.
The continued conversion of various prescription drugs, including potential conversions of a number of popular medications, to
Certain risks are inherent in providing pharmacy services through Marley Drug and our insurance may not be adequate to cover any claims against us.
Pharmacies are exposed to risks inherent in the packaging and distribution of pharmaceuticals and other healthcare products, such as with respect to improper filling of prescriptions, labeling of prescriptions, adequacy of warnings, unintentional distribution of counterfeit drugs and expiration of drugs. In addition, federal and state laws that require pharmacists to offer counseling, without additional charge, to customers about medication, dosage, delivery systems, common side effects and other information the pharmacists deem significant can impact the business. Pharmacists may also have a duty to warn customers regarding any potential negative effects of a prescription drug if the warning could reduce or negate these effects. Although the Company maintains professional liability and errors and omissions liability insurance, from time to time, claims could result in the payment of significant amounts, some portions of which are not funded by insurance. There can be no assurance that the coverage limits under insurance programs will be adequate to protect the Company against future claims, or that the Company will be able to maintain this insurance on acceptable terms in the future. Results of operations, financial conditions or cash flows may be adversely affected if in the future insurance coverage proves to be inadequate or unavailable or there is an increase in liability for which the Company self-insures or we suffer reputational harm as a result of an error or omission.
We may be subject to significant liability should the consumption of any of our products cause injury, illness or death.
Products that are sold through Marley Drug could become subject to contamination, product tampering, mislabeling or other damage requiring us to recall our products. In addition, errors in the dispensing and packaging of pharmaceuticals could lead to serious injury or death. Product liability claims may be asserted against the Company with respect to any of the products or pharmaceuticals sold and the Company may be obligated to recall products. A product liability judgment against the Company or a product recall could have a material, adverse effect on business, financial condition or results of operations.
11
Failure to timely identify or effectively respond to changing consumer preferences and spending patterns, an inability to expand the products being purchased by our clients and customers, or the failure or inability to obtain or offer particular categories of products or maintain our pharmacy licenses in all 50 states in the U.S. could negatively affect our relationship with our clients and customers and the demand for our products and services.
The success of the Marley Drug business depends in part on the maintenance of all state licenses, customer loyalty, superior customer service and the ability to persuade customers to purchase products in additional categories. Failure to timely identify or effectively respond to changing consumer preferences and spending patterns, an inability to expand the products being purchased by customers, or the failure or inability to obtain or offer particular categories of products could negatively affect relationships with customers and the demand for products and services.
Moreover, customer expectations and new technology advances from competitors have required that evolution so that the Company is able to interface with retail customers not only
There is no assurance that the Company will be successful in growing market share for SNP and growing its revenues in the United States and its territories, and its failure to do so could have a material adverse effect on the Company’s long-term profitability.
Medicure’s SNP become available in the United States during 2020, with revenuesdue to increased competition, the Company did not recognize any revenue from SNP for the year endedyear-ended December 31, 2022. Revenue for the year-ended December 31, 2021 totalling $59,000, with $116,000 of revenues from SNP realized for the year ended December 31, 2020.
SNP was launched into a genericized market with several competitors already selling generic versions of the product and as such there is no assurance that the Company will be successful in growing its sales of SNP in 20222023 and beyond. The failure of the Company to successfully grow sales of SNP, or to establish a viable market for the Company’s version of the product, could have a material adverse effect on the Company’s long-term profitability.
The Company may never receive regulatory approval in the United States, Canada or abroad for any of its products in development. Therefore, the Company may not be able to sell any therapeutic products currently under development.
The Company’s failure to maintain or obtain necessary regulatory approvals to fully market its current and future development stage products in one or more significant markets may adversely affect its business, financial condition and results of operations. The process involved in obtaining regulatory approval from the competent authorities to market therapeutic products is long and costly and may delay product development. The approval to market a product may be applicable to a limited extent only or it may be refused entirely.
While the Company’s approved product portfolio includes AGGRASTAT
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If the Company fails to successfully complete its development projects, it will not obtain approval from the FDA and other international regulatory agencies, to market its these products. Regulatory approvals also may be subject to conditions that could limit the market its products can be sold in or make either products more difficult or expensive to sell than anticipated. Also, regulatory approvals may be revoked at any time for various reasons, including for failure to comply with regulatory requirements or poor performance of its products in terms of safety and effectiveness.
The Company’s business, financial condition and results of operations are likely to be adversely affected if it fails to maintain or obtain regulatory approvals in the United States, Canada and abroad to market and sell its current or future drug products, including any limitations imposed on the marketing of such products.
If the Company fails to acquire and develop additional product candidates or approved products, it will impair the Company’s ability to grow its business and to increase value for shareholders.
For the year ended December 31, 2021,2022, the Company generated its commercial product revenue from AGGRASTAT
If the Company does not comply with federal, state and foreign laws and regulations relating to the health care business, it could face substantial penalties.
The Company and its customers are subject to extensive regulation by the United States federal government, and the governments of the states in which the business is conducted. In the United States, the laws that directly or indirectly affect the Company’s ability to operate its business include the following:
the Federal Anti-Kickback Law, which prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual or furnishing or arranging for a good or service for which payment may be made under federal health care programs such as Medicare and Medicaid;
other Medicare laws and regulations that prescribe the requirements for coverage and payment for services performed by the Company’s customers, including the amount of such payment;
the Federal False Claims Act, which imposes civil and criminal liability on individuals and entities who submit, or cause to be submitted, false or fraudulent claims for payment to the government;
the Federal False Statements Act, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with delivery of or payment for health care benefits, items or services; and
various state laws that impose similar requirements and liability with respect to state healthcare reimbursement and other programs.
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If the Company’s operations are found to be in violation of any of the laws and regulations described above or any other law or governmental regulation to which the Company or its customers are or will be subject, the Company may be subject to civil and criminal penalties, damages, fines, exclusion from the Medicare and Medicaid programs and the curtailment or restructuring of its operations. Similarly, if the Company’s customers are found to be
Due to a material amount of the use of AGGRASTAT
AGGRASTAT
Due to the incidence and severity of cardiovascular diseases, the market for anticoagulant and antiplatelet therapies is large and competition is intense. There are a number of anticoagulant and antiplatelet drugs recently approved, currently on the market, awaiting regulatory approval or in development. AGGRASTAT
AGGRASTAT
There remain many hospitals in the United States where AGGRASTAT
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ZYPITAMAG
Due to the incidence and severity of cardiovascular diseases, the market for antihyperlipidemics is large and competition is intense. There are a number of approved antihyperlipidemic drugs approved, currently on the market, awaiting regulatory approval or in development. ZYPITAMAG
Although ZYPITAMAG
The development of generic treatment options may decrease or eliminate the cost advantage that AGGRASTAT
AGGRASTAT
Moreover, due to the previously seen growth in sales of AGGRASTAT
On December 5, 2019, the Company announced it had filed a patent infringement action against Nexus in the U.S. District Court for the Northern District of Illinois, alleging infringement of the ‘660 patent. On November 18, 2020, the Company announced the settlement of its ongoing patent infringement action against Nexus in the U.S. District Court for the Northern District of Illinois, which alleged infringement of the ’660 patent. As part of the settlement, Nexus has acknowledged that the ‘660 patent is valid, enforceable and infringed. The settlement results in the Company entering into a license agreement with Nexus with anticipated launch dates for Nexus’ generic products of November 1, 2022 for the 5 mg strength and January 1, 2023 for the 12.5 mg strength. The remaining terms of the settlement are confidential.
The patent infringement action was in response to Nexus’ filing of an ANDA seeking approval from the FDA to market a generic version of AGGRASTAT
The ‘660 patent is listed in the FDA’s orange book with an expiry date of May 1, 2023. Medicure defended the ’660 patent and pursued the patent infringement action against Nexus and will continue all other legal options available to protect its product.
As at December 31, 2022, the Nexus’ generic products have not been commercially available, however, the Company expects to see competition from Nexus and additional suppliers during 2023.
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Previously, on November 16, 2018, the Company filed a patent infringement action against Gland Pharma Ltd. (“
The Company may not be able to hire or retain the qualified scientific, technical and management personnel it requires.
The Company’s business prospects and operations depend on the continued contributions of certain of the Company’s executive officers and other key management and technical personnel, certain of whom would be difficult to replace.
The Company’s subsidiary, Medicure International, Inc., contracts with third parties to perform a significant amount of its research and development activities. Because of the specialized scientific nature of the Company’s business, the loss of services of any one or more of these parties may require the Company to attract and retain replacement qualified scientific, technical and management personnel. Competition in the biotechnology industry for such personnel is intense and the Company may not be able to hire or retain a sufficient number of qualified personnel, which may compromise the viability, pace and success of its research and development activities.
Also, certain of the Company’s management personnel are officers and/or directors of other companies and organizations, some publicly-traded, and will only devote part of their time to the Company. The loss of the services of one or more of the Company’s current executive officers or key personnel or the inability to continue to attract qualified personnel could have a material adverse effect on the Company’s business prospects, financial results and financial condition.
The Company faces substantial technological competition from many biotechnology and pharmaceutical companies with much greater resources, and it may not be able to effectively compete.
Technological and scientific competition in the pharmaceutical and biotechnology industry is intense. The Company competes with other companies in Canada, the United States and abroad to develop products designed to treat similar conditions. Most of these other companies have substantially greater financial, technical and scientific research and development resources, manufacturing and production and sales and marketing capabilities than the Company. Smaller companies may also prove to be significant competitors, whether acting independently or through collaborative arrangements with large pharmaceutical and biotechnology companies. Developments by other companies may adversely affect the competitiveness of the Company’s products or technologies or the commitment of its research and marketing collaborators to its programs or even render its products obsolete.
The pharmaceutical and biotechnology industry is characterized by extensive drug discovery and drug research efforts and rapid technological and scientific change. Competition can be expected to increase as technological advances are made and commercial applications for biopharmaceutical products increase. The Company’s competitors use different technologies or approaches to develop products similar to the products which it is developing, or develop new or enhanced products or processes that may be more effective, less expensive, safer or more readily available before or after the Company obtains approval of its products. The Company may not be able to successfully compete with its competitors or their products and, if it is unable to do so, the Company’s business, financial condition and results of operations may suffer.
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The Company may be unable to establish and maintain collaborative and commercial relationships with third parties, in which case the Company’s business, financial position and operating results could be materially adversely affected.
The Company’s success may depend to some extent on its ability to enter into and to maintain various arrangements with corporate partners, licensors, licensees and others for the research, development, clinical trials, manufacturing, marketing, sales and commercialization of its products. These relationships are crucial to the Company’s intention to license to or contract with other pharmaceutical companies for the manufacturing, marketing, sales and/or distribution of any its current or future products. There can be no assurance that any licensing or other agreements will be established on favourable terms, if at all. The failure to establish successful collaborative arrangements may negatively impact the Company’s ability to develop and commercialize its products, and may adversely affect its business, financial condition and results of operations.
The Company is currently dependent on third parties for the production of AGGRASTAT
The Company’s subsidiary, Medicure International, Inc., has a supply contract for raw materials (active pharmaceutical ingredient) used in the manufacture of AGGRASTAT
The Company’s subsidiary, Medicure Pharma, Inc., has both vial and bag manufacturers of final product that are approved by the FDA.
If either the supply of raw material or the final product manufacturing agreement for AGGRASTAT
The Company is currently dependent on a third-party manufacturer for the supply of ZYPITAMAG
The Company’s subsidiary, Medicure Pharma, Inc., has entered into a supply arrangement with a third-party manufacturer of ZYPITAMAG
If the supply arrangement is interrupted, or if the Company and Medicure Pharma, Inc. are unable to renew or replace the supply arrangement, or if the Company and Medicure Pharma, Inc. are unable to obtain regulatory approval for commercial use of product made by a new supplier, the Company’s business, financial position and operating results could be materially adversely affected. It is also important to note that the establishment of new manufacturing sources of pharmaceutical raw materials or finished products takes a prolonged period of time.
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The Company is currently dependent on third parties for the production of SNP, and the loss of or other disruption to such third-party relationships could have a material adverse effect on the Company’s business, financial position and operating results.
The Company’s subsidiary, Medicure International, Inc., has a supply contract for raw materials (active pharmaceutical ingredient) used in the manufacture of SNP with a contract manufacturer which was approved by the FDA as the approved source of the raw material for SNP.
The Company’s subsidiary, Medicure Pharma, Inc., has a contracted manufacturer of final product that is approved by the FDA.
If either the supply of raw material or the final product manufacturing agreement for SNP is terminated or interrupted, or if, in the event of termination, the Company and its subsidiaries are unable to find a replacement raw material supplier or manufacturer, or obtain regulatory approval for commercial use of product made by a new raw material supplier or a new finished product manufacturer, the Company’s business, financial position and operating results could be materially adversely affected. It is also important to note that the establishment of new manufacturing sources of pharmaceutical raw materials or finished products takes a prolonged period of time.
During the year ended December 31, 2022, the Company placed the marketing of SNP on hold due to increased competition within the market and low margins for the product.
Loss of product inventory could have a material adverse effect on the Company’s financial results and financial condition.
If the Company’s existing inventories of AGGRASTAT
Consolidation and the formation of strategic partnerships among and between wholesale distributors, chain drug stores, and group purchasing organizations has resulted in a smaller number of companies, each controlling a larger share of pharmaceutical distribution channels.
Drug wholesalers and retail pharmacy chains, which represent an essential part of the distribution chain for generic pharmaceutical products, have undergone, and are continuing to undergo, significant consolidation. This consolidation may result in declines in the Company’s sales volumes if a customer is consolidated into another company that purchases products from a competitor. In addition, the consolidation of drug wholesalers and retail pharmacy chains could result in these groups gaining additional purchasing leverage and consequently increasing the product pricing pressures facing the Company’s business and enabling those groups to charge the Company increased fees. Additionally, the emergence of large buying groups representing independent retail pharmacies and the prevalence and influence of managed care organizations and similar institutions potentially enable those groups to extract price discounts on the Company’s products. The result of these developments may have a material adverse effect on the Company’s business, financial position, and operating results.
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The use of legal, regulatory, and legislative strategies by competitors, both branded and generic, including “authorized generics,” citizen’s petitions, and legislative proposals, may increase the costs to develop and market the Company’s generic products, could delay or prevent new product introductions, and could reduce significantly the Company’s profit potential. These factors could have a material adverse effect on the Company’s business, financial position, and operating results.
The Company’s competitors, both branded and generic, often pursue legal, regulatory, and/or legislative strategies to prevent or delay competition from generic alternatives to branded products. These strategies include, but are not limited to:
entering into agreements whereby other generic companies will begin to market an authorized generic, a generic equivalent of a branded product, at the same time generic competition initially enters the market;
launching a generic version of their own branded product at the same time generic competition initially enters the market;
filing citizen petitions with the FDA or other regulatory bodies, including timing the filings so as to thwart generic competition by causing delays of generic product approvals;
seeking to establish regulatory and legal obstacles that would make it more difficult to demonstrate bioequivalence or meet other approval requirements;
initiating legislative and regulatory efforts to limit the substitution of generic versions of branded pharmaceuticals;
filing suits for patent infringement that may delay regulatory approval of generic products;
introducing “next-generation” products prior to the expiration of market exclusivity for the reference product, which often materially reduces the demand for the first generic product;
obtaining extensions of market exclusivity by conducting clinical trials of branded drugs in pediatric populations or by other potential methods;
persuading regulatory bodies to withdraw the approval of branded name drugs for which the patents are about to expire, thus allowing the branded company to obtain new patented products serving as substitutes for the products withdrawn; and
seeking to obtain new patents on drugs for which patent protection is about to expire.
If the Company cannot compete with such strategies, its business, financial position, and operating results could be adversely impacted.
The pharmaceutical industry is subject to regulation by various federal authorities, including the FDA and the DEA, and state governmental authorities. Failure to comply with applicable legal and regulatory requirements can lead to sanctions which could have a material adverse effect on the Company’s business, financial position and operating results.
Federal and state statutes and regulations govern or influence the testing, manufacturing, packing, labeling, storage, record keeping, safety, approval, advertising, promotion, sale, and distribution of the Company’s products including licensing of the Company and its subsidiaries. Noncompliance with applicable legal and regulatory requirements can trigger action by various federal authorities, including the FDA and the DEA, as well as state governmental authorities, such as state Boards of Pharmacy. This can lead to a broad range of consequences which could have a material adverse effect on the Company’s business, financial position and operating results. The potential sanctions include warning letters, fines, seizure of products, product recalls, total or partial suspension of production and distribution, refusal to approve NDAs/ANDAs or other applications or revocation of approvals previously granted, withdrawal of product from marketing, injunctions, withdrawal of licenses or registrations necessary to conduct business, disqualification from supply contracts with the government, civil penalties, debarment, and criminal prosecution.
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The Company’s research, product development, and manufacturing activities involve the controlled use of hazardous materials, and it may incur significant costs in complying with numerous laws and regulations.
The Company is subject to laws and regulations enforced by the FDA and the DEA, and other regulatory statutes including the Occupational Safety and Health Act (“
The Company cannot eliminate the risk of contamination or injury, by accident or as the result of intentional acts, from these materials. In the event of an accident, the Company could be held liable for any damages that result, and any resulting liability could exceed its resources. The Company may also incur significant costs in complying with environmental laws and regulations in the future. The Company is also subject to laws generally applicable to businesses, including but not limited to, federal, state, and local regulations relating to wage and hour matters, employee classification, mandatory healthcare benefits, unlawful workplace discrimination, and whistle-blowing. Any actual or alleged failure to comply with any regulation applicable to our business or any whistle-blowing claim, even if without merit, could result in costly litigation, regulatory action or otherwise harm our business, financial position, and operating results.
The Company relies on third parties to assist with its research and development projects and clinical studies. If these third parties do not perform as required or expected, we may not be able to obtain regulatory approval for or commercialize the subject products.
The Company relies on third parties to assist with its clinical studies. If these third parties do not perform as required or expected, or if they are not in compliance with FDA rules and regulations, our clinical studies may be extended, delayed or terminated, or may need to be repeated, and we may not be able to obtain regulatory approval for or commercialize the products being tested in such studies. Further, we may be required to audit or redo previously completed trials or recall already-approved commercial products.
The Company may fail to obtain acceptable prices or appropriate reimbursement for its products and its ability to successfully commercialize its products may be impaired as a result.
Government and insurance reimbursements for healthcare expenditures play an important role for all healthcare providers, including physicians, medical device companies, pharmaceutical companies, medical supply companies, and companies, such as the Company, that offer or plan to offer various products in the United States and other countries. The Company’s ability to earn sufficient returns on its products will depend in part on the extent to which reimbursement for the costs of such products, related therapies and related treatments will be available from government health administration authorities, private health coverage insurers, managed care organizations, and other organizations. In the United States, the Company’s ability to have its products and related treatments and therapies eligible for Medicare or private insurance reimbursement is and will remain an important factor in determining the ultimate success of its products. If, for any reason, Medicare or the insurance companies decline to provide reimbursement for the Company’s products and related treatments, the Company’s ability to commercialize its products would be adversely affected. There can be no assurance that the Company’s products and related treatments will be eligible for reimbursement.
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There has been a trend toward declining government and private insurance expenditures for many healthcare items. Third-party payers are increasingly challenging the price of medical products and services.
If purchasers or users of the Company’s products and related treatments are not able to obtain appropriate reimbursement for the cost of using such products and related treatments, they may forgo or reduce such use. Even if the Company’s products and related treatments are approved for reimbursement by Medicare and private insurers, as is the case with AGGRASTAT
Significant uncertainty exists as to the reimbursement status of newly approved healthcare products, and there can be no assurance that adequate third-party coverage will be available for new products developed or acquired by the Company.
The Company does not have significant manufacturing experience and has limited marketing resources and may never be able to successfully manufacture or market certain of its products.
The Company has limited experience in commercial manufacturing and has limited resources for marketing or selling its products. The Company may never be able to successfully manufacture and market certain of its development products. If any other of its development products are approved for sale, the Company intends to contract with and rely on third parties to manufacture, and possibly also to market and sell its products. Accordingly, the quality, timing and commercial success of such products may be outside of the Company’s control. Failure of, or delays by, a third-party manufacturer to comply with good manufacturing practices or similar quality control regulations or satisfy regulatory inspections may have a material adverse effect on the Company and its products. Failure of, or delays by, a third party in the marketing or selling of the Company’s products or failure of the Company to successfully market and sell such products likewise may have a material adverse effect on the Company and its products.
The Company has limited product liability insurance and may not be able to obtain adequate product liability insurance in the future.
The sale and use of the Company’s commercial and development products, and the conduct of clinical studies involving human subjects, entails product and professional liability risks that are inherent in the testing, production, marketing and sale of pharmaceuticals to humans. While the Company has taken, and intends to continue to take, what it believes are appropriate precautions, there can be no assurance that it will avoid significant liability exposure. Although the Company currently carries product liability insurance, there can be no assurance that it has sufficient coverage, or can in the future obtain sufficient coverage at a reasonable cost. An inability to obtain insurance on economically feasible terms or to otherwise protect against potential product liability claims could inhibit or prevent the commercialization of products developed by the Company. The obligation to pay any product liability claim or recall for a product may have a material adverse effect on its business, financial condition and future prospects. In addition, even if a product liability claim is not successful, adverse publicity and the time and expense of defending such a claim may significantly impact the Company’s business.
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If the Company is unable to successfully protect its intellectual proprietary rights, its competitive position will be adversely affected.
The patent positions of pharmaceutical companies are generally uncertain and involve complex legal, scientific and factual issues. The Company’s success depends significantly on its ability to:
a) | obtain and maintain U.S. and foreign patents, including defending those patents against adverse claims; |
b) | secure patent term extensions for the patents covering its approved products; |
c) | protect trade secrets; |
d) | operate without infringing the proprietary rights of others; and |
e) | prevent others from infringing its proprietary rights. |
The Company’s success will depend to a significant degree on its ability to obtain and protect its patents and protect its proprietary rights in unpatented trade secrets.
The Company owns or jointly owns numerous patents from the United States Patent Office and other jurisdictions. The Company has additional pending United StatesAny future patent applications along with applications pending in other jurisdictions. The Company’s pending and any future patent applicationsmade by the Company may not be accepted by the United States Patent and Trademark Office or any other jurisdiction in which applications may be filed. Also, processes or products that may be developed by the Company in the future may not be patentable. Errors or
The patent protection afforded to biotechnology and pharmaceutical companies is uncertain and involves many complex legal, scientific and factual questions. There is no clear law or policy involving the degree of protection afforded under patents. As a result, the scope of patents issued to the Company may not successfully prevent third parties from developing similar or competitive products. Competitors may develop similar or competitive products that do not conflict with the Company’s patents. Litigation may be commenced by the Company to prevent infringement of its patents. Litigation may also commence against the Company to challenge its patents that, if successful, may result in the narrowing or invalidating of such patents. It is not possible to predict how any patent litigation will affect the Company’s efforts to develop, manufacture or market its products. However, the cost of litigation to prevent infringement or uphold the validity of any patents issued to the Company may be significant, in which case its business, financial condition and results of operations may suffer. Patents provide protection for only a limited period of time, and much of such time can occur well before commercialization commences.
The U.S. Congress is considering patent reform legislation. In addition, the U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. This combination of events has created uncertainty with respect to the value of patents, once obtained, and the Company’s ability to obtain patents in the future. Depending on decisions by the U.S. Congress, the federal courts, and the United States Patent and Trademark Office, the laws and regulations governing patents could change in unpredictable ways that would weaken the Company’s ability to obtain new patents or to enforce its existing patents and patents that it might obtain in the future.
Disclosure and use of the Company’s proprietary rights in unpatented trade secrets not otherwise protected by patents are generally controlled by written agreements. However, such agreements will not provide the Company with adequate protection if they are not honoured, others independently develop an equivalent technology, disputes arise concerning the ownership of intellectual property, or its trade secrets are disclosed improperly. To the extent that consultants or other research collaborators use intellectual property owned by others in their work with the Company, disputes may also arise as to the rights to related or resulting
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Others could claim that the Company infringes on their proprietary rights, which may result in costly, complex and time-consuming litigation.
The Company’s success will depend partly on its ability to operate without infringing upon the patents and other proprietary rights of third parties. The Company is not currently aware that any of its products or processes infringes the proprietary rights of third parties. However, despite its best efforts, the Company may be sued for infringing on the patent or other proprietary rights of third parties at any time in the future.
Such litigation, with or without merit, is time-consuming and costly and may significantly impact the Company’s financial condition and results of operations, even if it prevails. If the Company does not prevail, it may be required to stop the infringing activity or enter into a royalty or licensing agreement, in addition to any damages it may have to pay. The Company may not be able to obtain such a license or the terms of the royalty or license may be burdensome for it, which may significantly impair the Company’s ability to market its products and adversely affect its business, financial condition and results of operations.
The Company is subject to stringent governmental regulation, in the future may become subject to additional regulations and if it is unable to comply, its business may be materially harmed.
Pharmaceutical companies operate in a high-risk regulatory environment. The FDA and other national health agencies can be very slow to approve a product and can also withhold product approvals. In addition, these health agencies also oversee many other aspects of the Company’s operations, such as research and development, manufacturing, and testing and safety regulation of products. As a result, regulatory risk is normally higher than in other industry sectors.
The Company is or may become subject to various federal, provincial, state and local laws, regulations and recommendations. The Company and third parties providing manufacturing, research and/or development services to the Company is subject to various laws and regulations, relating to product emissions, use and disposal of hazardous or toxic chemicals or potentially hazardous substances, infectious disease agents and other materials, and laboratory and manufacturing practices used in connection with the activities. If the Company, or its contracted third party, fails to comply with these regulations, the Company may be fined or suffer other consequences that could materially affect the Company’s business, financial condition or results of operations.
The pharmaceutical sales and marketing industry within which the Company operates is a complex legal and regulatory environment. The failure to comply with applicable laws, rules and regulations may result in civil and criminal legal proceedings. As those rules and regulations change or as governmental interpretation of those rules and regulations evolve, prior conduct may be called into question. The Company may become subject of federal and/or state governmental investigations into pricing, marketing, and reimbursement of its prescription drug product. Any such investigation could result in related restitution or civil litigation on behalf of the federal or state governments, as well as related proceedings initiated against the Company by or on behalf of consumers and private payers. Such proceedings may result in trebling of damages awarded or fines in respect of each violation of law. Criminal proceedings may also be initiated against the Company. Any of these consequences could materially and adversely affect the Company’s financial results.
The Company is unable to predict the extent of future government regulations or industry standards; however, it should be assumed that government regulations or standards will increase in the future. New regulations or standards may result in increased costs, including costs for obtaining permits, delays or fines resulting from loss of permits or failure to comply with regulations.
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The Company’s new products may not gain market acceptance, and as a result it may be unable to generate additional significant revenues.
As at December 31, 2021,2022, the Company has various products in development which do not have the required manufacturing approvals or capabilities, clinical data and regulatory approvals necessary to be marketed in any jurisdiction; future clinical or preclinical results may be negative or insufficient to allow the Company to successfully market any of its products under development; and obtaining needed data and results may take longer than planned, and may not be obtained at all.
Even if the Company’s products under development are approved for sale, they may not be successful in the marketplace. Market acceptance of any of the Company’s products will depend on a number of factors, including: demonstration of clinical effectiveness and safety; the potential advantages of its products over alternative treatments; the availability of acceptable pricing and adequate third-party reimbursement; and the effectiveness of marketing and distribution methods for the products. Providers, payors or patients may not accept the Company’s products, even if they prove to be safe and effective and are approved for marketing by the FDA and other national regulatory authorities. The Company’s initial development product, SNP, became commercially available during the third quarter of 2019 in the United States with initial sales beginning in early 2020. If the Company’s products do not gain market acceptance among physicians, patients, and others in the medical community, its ability to generate significant revenues from its products would be limited.
The Company may not achieve its projected development and commercial goals in the time frames it announces and expects.
The Company sets goals for and may from time to time make public statements regarding timing of the accomplishment of objectives related to AGGRASTAT
The Company’s business involves the use of hazardous material, which requires it to comply with environmental regulations.
The Company’s research and development processes and commercial activities may involve the controlled storage, use, and disposal of hazardous materials and hazardous biological materials. The Company and the third-party service providers conducting manufacturing, research and development for the Company, are subject to laws and regulations governing the use, manufacture, storage, handling, and disposal of such materials and certain waste products. Although the Company believes that its safety procedures for handling and disposing of such materials comply with the standards prescribed by such laws and regulations, the risk of accidental contamination or injury from these materials cannot be eliminated. In the event of such an accident, the Company could be held liable for any damages that result, and any such liability could exceed its resources. There can be no assurance that the Company will not be required to incur significant costs to comply with current or future environmental laws and regulations, or that its business, financial condition, and results of operations will not be materially or adversely affected by current or future environmental laws or regulations.
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The Company’s insurance may not provide adequate coverage with respect to environmental matters.
Environmental regulations could have a material adverse effect on the results of the Company’s operations and its financial position.
The Company is subject to a broad range of environmental regulations imposed by federal, state, provincial, and local governmental authorities. Such environmental regulation relates to, among other things, the handling and storage of hazardous materials, the disposal of waste, and the discharge of contaminants into the environment. Although the Company believes that it is in material compliance with applicable environmental regulation, as a result of the potential existence of unknown environmental issues and frequent changes to environmental regulation and the interpretation and enforcement thereof, there can be no assurance that compliance with environmental regulation or obligations imposed thereunder will not have a material adverse effect on the Company in the future.
The Company operates in an industry that is more susceptible to legal proceedings. The Company may become involved in litigation.
The Company operates in an industry consisting of firms that are more susceptible to legal proceedings than firms in other industries. This susceptibility is due to several factors, including but not limited to, the fact that the Company’s shares and those of its competitors are publicly traded, and the uncertainty and complex regulatory environment involved in the development and sale of pharmaceuticals. The Company intends to vigorously defend such actions if and when they arise. Defense and prosecution of legal claims can be expensive and time consuming, may adversely affect the Company regardless of the outcome due to the diversion of financial, management and other resources away from the Company’s primary operations, and could impact the Company’s ability to continue as a going concern in the longer term. In addition, a negative judgment against the Company, even if the Company is planning to appeal such a decision, or even a settlement in a case, could negatively affect the cash reserves of the Company, and could have a material negative effect on the development and sale of its products.
Indemnification obligations to the Company’s directors and senior management may adversely affect its financial condition.
The Company has entered into agreements pursuant to which it will indemnify the directors and senior management in respect of certain claims made against them while acting in their capacity as such. If the Company is called upon to perform its indemnity obligations, the Company’s financial condition will be adversely affected. The Company is not currently aware of any matters pending or under consideration that may result in indemnification payments to any of its present or former directors or senior management.
The Company is exposed to foreign exchange movements as its sales are denominated in U.S. currency.
The majority of the Company’s sales revenues and a substantial portion of its selling, general and administrative expenses are denominated in U.S. dollars. The Company does not utilize derivatives, such as foreign currency forward contracts and futures contracts, to manage its exposure to currency risk and as a result a change in the value of the Canadian dollar against the U.S. dollar could have a negative impact on the Company’s business prospects, financial results and financial condition. In the future, the Company may begin to utilize foreign exchange rate mitigation and management strategies, however any such efforts, if they are not based on accurate predictions of future fluctuations in foreign exchange rates, may actually have a negative impact on the Company.
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The Company may need to raise additional capital through the sale of its securities, resulting in dilution to its existing shareholders. Such funds may not be available, or may not be available on reasonable terms, adversely affecting the Company’s operations.
To meet future cash needs or product acquisition requirements the Company may need to rely on the taking on of debt and/or the sale of such securities for future financing, resulting in dilution to its existing shareholders. The Company’s long-term capital requirements may be significant and will depend on many factors, including revenue and revenue growth, continued scientific progress in its product discovery and development program, progress in the maintenance and expansion of its sales and marketing capabilities, progress in its
The Company is exposed to risks given its significant dependence on revenue from the sale of AGGRASTAT
The Company is largely dependent upon revenue from the sale of AGGRASTAT
The Company’s effective tax rates could increase.
The Company has operations in various countries that have differing tax laws and rates. The Company’s tax reporting is supported by current domestic tax laws in the countries in which the Company operates and the application of tax treaties between the various countries in which the Company operates. The Company’s income tax reporting is subject to audit by domestic and foreign authorities. The effective tax rate of the Company may change from year to year based on changes in the mix of activities and income earned among the different jurisdictions in which the Company operates, changes in tax laws in these jurisdictions, changes in the tax treaties between various countries in which the Company operates, changes in the Company’s eligibility for benefits under those tax treaties and changes in the estimated values of tax provisions and deferred tax assets. Tax laws, regulations and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political and other conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes. Such changes could result in a substantial increase in the effective tax rate on all or a portion of the Company’s income.
The Company’s provision for income taxes is based on certain estimates and assumptions made by management. The Company’s consolidated income tax rate is affected by the amount of
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The Company’s provision for tax liabilities, deferred tax assets and any related valuation allowances are effect by events and transactions arising in the ordinary course of business, acquisitions of assets and businesses and non recurring items. The assessment of the appropriate amount of valuation allowance against the deferred tax assets is dependent upon several factors, including estimates of the realization of deferred income tax assets, which realization will be primarily based on future taxable income, including the reversal of existing taxable temporary differences. Significant judgement is applied to determine the appropriate amount of valuation allowance to record. Changes in the amount of any valuation allowance required could materially increase or decrease our provision for income taxes in a given period.
Future issuance of the Company’s common shares will result in dilution to its existing shareholders. Additionally, future sales of the Company’s common shares into the public market may lower the market price which may result in losses to its shareholders.
As of December 31, 2021,2022, the Company had 10,251,313 common shares issued and outstanding. A further 807,150638,400 common shares are issuable upon exercise of outstanding stock options (of which 706,750602,400 were exercisable at December 31, 2021)2022), all of which may be exercised in the future resulting in dilution to the Company’s shareholders. The Company’s stock option plan allowed for the issuance of stock options to purchase up to a maximum of 20% of the outstanding common shares at the time of the approval of the stock option plan, which resulted in a fixed number of stock options allowed to be granted totaling 2,934,403.
The Company did not purchase and cancel any of its own securities during the year ended December 31, 2021.
However, the Company may from time to time be required to finance its operations through the sale of equity securities. In addition, it may be required to issue equity securities as consideration for services or asset acquisition transactions. Sales of substantial amounts of the Company’s common shares into the public market, or even the perception by the market that such sales may occur, may lower the market price of its common shares.
The Company’s common shares may experience extreme price and volume volatility which may result in losses to its shareholders.
The Company’s common shares historically have been subject to extreme price and volume volatility. For example, during the period from January 1, 20212022 to December 31, 2021,2022, the high and low closing trading prices of the Company’s common shares on the
The Company expects that the trading price of its common shares will continue to be subject to wide fluctuations in response to a variety of factors including announcement of material events by the Company, such as the dependence of revenue on a single product, the status of required regulatory approvals for its products, competition by new products or new innovations, fluctuations in its operating results, general and industry-specific economic conditions and developments pertaining to patent and proprietary rights. The trading price of the Company’s common shares may be subject to wide fluctuations in response to a variety of factors and/or announcements concerning such factors, including:
• | actual or anticipated period-to-period fluctuations in financial results; |
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litigation or threat of litigation;
failure to achieve, or changes in, financial estimates of individual investors and/or by securities analysts;
new or existing products or generic equivalents to products or services or technological innovations by the Company or its competitors;
comments or opinions by securities analysts or major shareholders;
conditions or trends in the pharmaceutical, biotechnology and life science industries;
significant acquisitions, strategic partnerships, joint ventures or capital commitments;
results of, and developments in, the Company’s manufacturing, research and development efforts, including results and adequacy of, and developments in, its manufacturing activities, development activities, clinical trials and applications for regulatory approval;
additions or departures of key personnel;
sales of the Company’s common shares, including by holders of the notes on conversion or repayment by the Company in common shares;
economic and other external factors or disasters or crises;
limited daily trading volume; and
developments regarding the Company’s patents or other intellectual property or that of its competitors.
In addition, the securities markets in the United States and Canada have recently experienced a high level of price and volume volatility, and the market price of securities of pharmaceutical companies have experienced wide fluctuations in price which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies.
There may not be an active, liquid market for the Company’s common shares.
There is no guarantee that an active trading market for the Company’s common shares will be maintained on the
If there are substantial sales of the Company’s common shares, the market price of its common shares could decline.
Sales of substantial numbers of the Company’s common shares could cause a decline in the market price of its common shares. The Company has two significant shareholders that each own more than 10% of the outstanding common shares of the Company as of December 31, 2021.2022. Any sales by existing shareholders or holders of options may have an adverse effect on the Company’s ability to raise capital and may adversely affect the market price of its common shares.
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The Company has no history of paying dividends, does not intend to pay dividends in the foreseeable future and may never pay dividends.
Since incorporation, the Company has not paid any cash or other dividends on its common shares and does not expect to pay such dividends in the foreseeable future as all available funds will be invested to finance the growth of its business. The Company will need to achieve significant and prolonged profitability prior to any dividends being declared, which may never happen.
If the Company is classified as a “passive foreign investment company” for United States federal income tax purposes, it could have significant and adverse tax consequences to United States holders of its common shares.
The Company believes it was a “passive foreign investment company” (“
Risks associated with material weaknesses within the Company’s financial reporting and review process
Proper systems of internal control over financial reporting and disclosure controls and procedures are critical to the operation of a public company. However, we do not expect that our internal control over financial reporting or disclosure controls and procedures will prevent all errors and remove all risk of fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Furthermore, the design of a control system must reflect the fact that there are resource constraints and the benefits of such controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.
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In connection with its review of the Company’s Internal Control over Financial Reporting, the Company has identified material weaknesses with the Company’s financial reporting and disclosure controls and procedures and its review process, involving the accounting, tax and reporting for complex transactions, due to limitations in the size of the Company’s staff not allowing for appropriate reviews of such transactions. Failures to remediate material weaknesses, to implement the required new or improved controls, or difficulties encountered in their implementation, could cause the Company to fail to meet its reporting obligations on a timely basis or result in material misstatements in the annual or interim financial statements. Inadequate internal control over financial reporting could also cause investors to lose confidence in the Company’s reported financial information, which could cause the Company’s stock price to decline.
ITEM 4. | INFORMATION ON THE COMPANY |
A. History and Development of the Company
On December 22, 1999, the Company was formed by the amalgamation of Medicure Inc. with Lariat Capital Inc. pursuant to the provisions of the
The Company’s current legal and commercial name is Medicure Inc. and its current registered office and head office is
In August 2006, the Company acquired the U.S. rights to its first commercial product, AGGRASTAT
In September 2007, the Company monetized a percentage of its current and potential future commercial revenues by entering into a debt financing agreement with Birmingham Associates Ltd. (
In February 2008, the Company announced that its pivotal Phase III MEND-CABG II clinical trials with
Since March 2008, the Company has continued to focus on the sale and marketing of AGGRASTAT
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On July 18, 2011, the Company borrowed $5,000,000 from the Government of Manitoba, under the Manitoba Industrial Opportunities Program (“
On July 3, 2014, the Company and its newly formed and wholly owned subsidiary, Medicure U.S.A. Inc. (“
During calendar years 2014, 2015 and 2016, as a part of its effort to expand sales of AGGRASTAT®, the Company began to significantly increase the number of employees and otherwise increase expenses related to sales and marketing of AGGRASTAT® and related to General and Administrative costs of the Company.
On November 17, 2016, in connection with the exercise of the Company’s acquisition of the controlling ownership in Apicore, the Company received a term loan (the “
The Term Loan was used by the Company, acting through its wholly owned subsidiary, Medicure Mauritius Limited, to exercise the Company’s option rights to purchase interests in Apicore, Inc. and Apicore LLC. The 2016 Apicore Transaction was closed on December 1, 2016. Apicore, Inc. and Apicore LLC are affiliated entities that together operate the Apicore pharmaceutical business and are referred to together as “Apicore”. Apicore is a process research and development and Active Pharmaceutical Ingredients (“
Medicure continued to have additional option rights until July 3, 2017 to acquire additional shares in Apicore, Inc. and Apicore LLC at predetermined prices consistent with the value reflected in the 2016 Apicore Transaction. On July 3, 2017, the Company announced that its option to acquire additional shares in Apicore, which otherwise would have expired, had been extended. The option covered an additional minority interest in Apicore (the “
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On July 10, 2017, the Company, acting through Medicure Mauritius Limited, exercised the Company’s option rights to acquire the Minority Interest in Apicore Inc. and Apicore LLC from Apicore’s founding shareholders. The 2017 Apicore Transaction closed on July 12, 2017 and allowed for the acquisition of all of the shares of Apicore Inc. and Apicore LLC held by the founding shareholders (representing approximately 32% of the fully diluted ownership of Apicore) for US$24.5 million, being the price provided for under the option. This acquisition brought Medicure’s ownership in Apicore Inc. to approximately 98% (94% on a fully diluted basis).
On July 10, 2017, the Company announced that Apicore repaid the U.S.$9.8 million secured loan previously provided to Apicore by Medicure. Additionally, Apicore provided a U.S.$14.8 million loan to Medicure bearing interest at 12% per annum with a term of three years. These funds were obtained from Apicore’s current business which includes API sales, ANDA development partnership payments, and royalty and upfront payments from ANDA commercial partnerships. The loan proceeds were used by Medicure to help satisfy the purchase price of the 2017 Apicore Transaction.
During the year ended December 31, 2017, employees and former directors of Apicore exercised 292,500 stock options to acquire 292,500 Class E common shares of Apicore for gross proceeds to the company of U.S.$280,000. These shares, as well as 112,500 Class E common shares previously issued for gross proceeds of U.S.$48,000 were then purchased by the Company upon the employees and former directors exercising their put right to the Company. This resulted in the Company acquiring 405,000 Class E common shares of Apicore for a total cost of U.S.$2.0 million during 2017. As a result of the employees and former directors exercising their put right to the Company, the liability to repurchase Apicore Class E common shares on the statement of financial position in the Company’s consolidated financial statements was reduced.
On October 3, 2017, the Company announced that it sold its interests in Apicore (the “
In December 2017 and subsequently updated on March 7, 2018, the Company announced it had acquired, from Zydus Cadila (“Zydus”), an exclusive license to sell and market a branded cardiovascular drug, ZYPITAMAG® (pitavastatin magnesium) in the United States and its territories for a term of seven years with extensions to the term available. ZYPITAMAG® is used for the treatment of patients with primary hyperlipidemia or mixed dyslipidemia and was approved earlier in 2017 by the FDA for sale and marketing in the United States. The Company launched the product using its existing commercial infrastructure during May 2018.
On February 1, 2018, the Company announced that it had received the deferred purchase price proceeds of approximately U.S.$50.0 million from the Buyer as a result of the Apicore Sale Transaction. The U.S.$50.0 million was included in the total net proceeds of U.S.$105.0 million described earlier. The Company did not receive any contingent payments based on an earn out formula as certain financial results within the Apicore business were not met following the Apicore Sale Transaction.
On January 28, 2019, the Company entered into an agreement with Sensible Medical Innovations Inc. (“Sensible”) to become the exclusive marketing partner for ReDS™ in the United States. ReDS™ is a non-invasive, FDA-cleared medical device that provides an accurate, actionable and absolute measurement of lung fluid which is important in the management of congestive heart failure. ReDS™ was already being marketed to United States hospitals by Sensible and the Company has begun marketing ReDS™ immediately using its existing commercial organization. Under the terms of the agreement, Medicure will receive a percentage of total U.S. sales revenue of the device and must meet minimum annual sales quotas.
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The Company received approval in August of 2018 from the FDA for its first ANDA for SNP and Medicure’s product became available during the third quarter of 2019 in the United States with initial sales beginning in early 2020. As well, the Company is focused on the development of additional cardiovascular drugs.
On February 13, 2019, the Company announced that it had received notice from the purchaser of Medicure’s interests in Apicore of potential claims against funds held back in respect of representations and warranties under the Apicore sale agreement. The notice did not contain sufficiently detailed information to enable Medicure to assess the merits of the claims with the maximum exposure of the claims being the total holdback receivable. The Company continued to proceed diligently to investigate the potential claims and attempt to satisfactorily resolve them with a view to having the holdback funds released. In conjunction with the sale of Medicure’s interests in Apicore, representation and warranty insurance was obtained by the purchaser that could result in mitigation of the potential claims.
On December 5, 2019, the Company announced that it had reached a settlement agreement with the purchaser of the Company’s interests in Apicore with respect to the amounts heldback under the Apicore sale agreement. A settlement agreement was reached under which Medicure will receive a net payment of U.S. $5.1 million in relation to the holdback.
The funds received from the Apicore sales transaction will be invested and used for business and product development purposes and to fund operations as needed as well as funding the purchase of common shares under the Company’s substantial issuer bid in December of 2019.
On August 19, 2020, the Company announced the termination of Operation
The Company received approvalcontinues to hold an equity position in AugustSensible. The Company will continue to support Sensible in its transition to a new marketing and distribution arrangement in order to secure its investment in Sensible Medical. The termination of 2018 from the FDA formarketing and distribution agreement with Sensible followed an in-depth strategic review of its first abbreviated new drug application (“
On December 17, 2020, the Company acquired Marley Drug, a leading specialty pharmacy serving customers across the United States for an upfront payment on closing of USD $6.3 million, subject to certain holdbacks, as well as additional payments based on future performance of Marley Drug. Marley Drug generated unaudited revenue and EBITDA of approximately USD $7.0 million and over USD $1.7 million, respectively, for the
On January 27,7, 2021, the Company filedannounced that it intends to file an Investigational New Drug (“IND”IND”) application with the FDA pertaining to its legacy product
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The ongoing focus of the Company includes the sale of AGGRASTAT
On March 11, 2020, the COVID
For more than 10030 million Americans who do not have prescription drug coverage getting better and staying healthy can often depend on access to affordable medications. Marley Drug’s new
In addition to the typical
On February 22, 2022, the Company announced the integration of its subsidiary, Marley Drug pharmacy, as the sole mail-order pharmacy for RxSpark
Described as a much-needed disruptor in the health and pharmacy space, technology company RxSpark addresses an urgent need with its proprietary prescription drug savings program through www.rxspark.com. Poor-coverage or lack of health insurance, exacerbated by the economic impact of the
The integration of Marley Drug as the sole mail-order pharmacy for the RxSpark platform now allows consumers using the platform to receive medication directly to their door. The Marley Drug home delivery service will be available to all consumers regardless of where they may live in the U.S., as Marley Drug is licensed to provide medication in all 50 states and most territories.
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In 2023, the Company announced thatplans to further maintain selling, general and administrative expenditure levels as it would file an Investigational Newcontinues to focus on the sale of AGGRASTAT® and ZYPITAMAG®, as well as the Marley Drug (“
The Company’s future operations are dependent upon its ability to maintain sales of AGGRASTAT®, to increase sales of ZYPITAMAG®, to grow the Marley Drug business by increasing sales through its legacy product P5P”, also referred to as
If the Company is unable to maintain sales of AGGRASTAT®, grow sales of ZYPITAMAG®,grow the Marley Drug business and develop and/or acquire new products, and/or raise additional capital, management will proceed withconsider other strategies including cost curtailments, delays of research and development activities, asset divestures and/or monetization of certain intangible assets.
B. Business Overview
Plan of Operation
Medicure is a Phase 3 clinical trial to treat PNPO deficientcompany focused on the development and commercialization of pharmaceuticals and healthcare products for patients with a daily dose of
The Company’s first commercial product was AGGRASTAT
On December 17, 2020, the Company acquired 100% of Marley Drug, a leading specialty pharmacy serving customers across the United States.States for an upfront payment on closing of USD $6.3 million, subject to certain holdbacks, as well as additional payments based on future performance of Marley Drug. Marley Drug Marley Drug provides excellent customer service, cost competitive medications, immediate direct to patient delivery, and is licensed in 50 states, Washington D.C. and Puerto Rico. Its advanced operation includes automated pill dispensing, an extended supply generic drug program, and an effective customer communication system. Marley Drug has been successful in marketing directly to customers, providing access to medications without the need for insurance, and building a nationwide customer base in the United States.
The Company’s research and development program is focused on making selective research and development investments in certain additional cardiovascular generic and reformulation product opportunities, as well as continuing the development and implementation of its regulatory, brand and life cycle management strategy for AGGRASTAT® and ZYPITAMAG®.
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On January 27, 2021, the Company filed an IND application with the FDA pertaining to its legacy product, MC-1, for the treatment of seizures associated with PNPO deficiency. The majority of patients with PNPO deficiency have mutations in the PNPO gene, which is required for the production of normal levels of P5P. In connection with the IND, the Company will proceed with a Phase 3 clinical trial to treat PNPO deficient patients with a daily dose of MC-1.
On February 9, 2022, the Company announced that it has launched its national direct-to-consumerE-Commerce pharmacy platform – www.marleydrug.com through its subsidiary, Marley Drug® pharmacy. The new e-commerce platform allows home delivery of FDA approved medications and allows products to be delivered to Americans in all 50 states within the United States.
On February 22, 2022, the Company announced the integration of its subsidiary, Marley Drug pharmacy, as the sole mail-order pharmacy for RxSparkTM, a pharmacy discount program provider. The integration of Marley Drug with RxSparkTM will allow Marley Drug to fulfill all online orders made through the RxSparkTM platform.
The ongoing focus of the Company includes the sale of AGGRASTAT® and ZYPITAMAG®, the sale of pharmaceutical products including ZYPITAMAG® directly to patients through Marley Drug and the development of additional pharmaceutical products. In parallel with the Company’s ongoing commitment to support AGGRASTAT®, its valued customers and the continuing efforts of the commercial organization, the Company is in the process of developing and further implementing its regulatory, brand and life cycle management strategy for AGGRASTAT®. The objective of this effort is to further expand AGGRASTAT®’s share of the GPI inhibitor market in the United States. GPIs are injectable platelet inhibitors used in the treatment of patients with ACS. The marketing and sales of ZYPITAMAG® became a key focus of the Company during 2018 and the Marley Drug business became a key focus of the Company after its acquisition in December of 2020. In 2022, the Company launched the Marley Drug e-commerce site and will be focusing on attracting new customers to the site to bolster its Marley Drug pharmacy business, while also looking to partner with other companies within the healthcare industry to provide pharmacy fulfillment services.
Recent Developments
CHANGE IN BOARD OF DIRECTORS
On June 20, 2022 the Company announced the resignation of Manon Harvey as a Director of the Company, in addition to the appointment of James Kinley as a Director of the Company, effective June 16, 2022. James Kinley has a significant amount of experience working in the life sciences industry, and was the previous Chief Financial Officer of Medicure Inc.
Subsequent to December 31, 2022, on February 1, 2023, the Company announced that Gerald McDole, a Director of the Company, had resigned from his position, effective January 31, 2023.
RESIGNATION OF CHIEF FINANCIAL OFFICER AND SUCCESSION PLAN
On March 23, 2022, the Company announced the resignation of Chief Financial Officer David Gurvey effective March 25, 2022. The Company has initiated a search for a new Chief Financial Officer with the capabilities and qualifications to accelerate Medicure’s growth and business strategy. Dr. Neil Owens, Chief Operating Officer of the Company, will assume the role of interim Chief Financial Officer upon Mr. Gurvey’s resignation.
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On May 31, 2022, the Company announced the appointment of Haaris Uddin as Chief Financial Officer of Medicure Inc. Mr. Uddin has experience working within the life sciences industry, in addition to experience working as an external auditor.
Commercial:
The Company primarily sells finished AGGRASTAT® to drug wholesalers. These wholesalers subsequently sell AGGRASTAT® to hospitals where health care providers administer the drug to patients. Wholesaler management decisions to increase or decrease their inventory of AGGRASTAT® may result in sales of AGGRASTAT® to wholesalers that do not track directly with demand for the product at hospitals. The Company has set up a portal called Medicure Direct to market the Company’s branded and generic products directly to hospitals and pharmacies with initial sales occurring in the fourth quarter of 2020 through this initiative.
Net AGGRASTAT® product sales for year ended December 31, 2022 were $11.7 million compared to $11.6 million during the year ended December 31, 2021.
Hospital demand for AGGRASTAT® has been stable during 2022 when compared to the prior year, and the number of hospital customers using AGGRASTAT® continued to remain strong. The Company’s commercial team continues to work on expanding its customer base, however this continued increase in the customer base for AGGRASTAT® has not directly resulted in corresponding revenue increases as the Company continues to face increased competition resulting from the genericizing of the Integrilin market which continues to create pricing pressures on AGGRASTAT® combined with lower hospital demand for the product. The Company continues to expect strong patient market share despite reduced revenue from the AGGRASTAT® brand and diversifying revenues away from a single product became increasingly important to the Company. The Company expects the first generics of tirofiban hydrochloride to be launched in 2023.
All of the Company’s sales are denominated in U.S. dollars and the U.S. dollar increased in value against the Canadian dollar during the year ended December 31, 2022 when compared to the year ended December 31, 2021. This led to increased AGGRASTAT® revenues, offsetting the increasing price pressures facing AGGRASTAT® when comparing the two periods, offset by increased demand.
Marley Drug has been successful in marketing directly to customers, providing access to medications without the need for insurance, and building a nationwide customer base and contributed $6.9$7.8 million of revenue to the Company for the year ended December 31, 20212022 compared to $340,000$6.9 million in the previous year. The Company began selling ZYPITAMAG
On August 13, 2018, the Company announced that the FDA has approved its ANDA for SNP. SNP is indicated for the immediate reduction of blood pressure for adult and pediatric patients in hypertensive crisis. The product is indicated for producing controlled hypotension in order to reduce bleeding during surgery and for the treatment of acute congestive heart failure. The filing of the ANDA was previously announced by the Company on December 13, 2016. During 2020. Medicure’s SNP become available in the United States, with sales duringdue to increased competition, the year endedCompany pulled back on its marketing efforts and did not recognize any revenue from SNP for the year-ended December 31, 2022. Revenue for the year-ended December 31, 2021 totalled $59,000. The Company is evaluating the commercial viability of $59,000 being recorded compared to $116,000 for the year ended December 31, 2020.this product.
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Going forward and contingent on sufficient finances being available, the Company intends to further expand revenue through marketing and promotional activities, strategic investments related to AGGRASTAT
Research and Development:
The Company’s research and development activities are predominantly conducted by its wholly-owned Barbadian subsidiary, Medicure International Inc.
AGGRASTAT
One of the primary ongoing research and development activities is the continued development and further implementation of a new regulatory, brand and life cycle management strategy for AGGRASTAT
An aspect of the AGGRASTAT
The primary objective of
The first patient was enrolled in June 2012. Enrolment was completed during the fourth quarter of 2018 and on December 17, 2019, the Company announced the completion of the Shortened AGGRASTAT
The Company is also providingprovided funding for a number of investigator sponsored research projects targeting contemporary utilization of AGGRASTAT
FABOLUS-FASTER was funded by a grant from the Company. This study does not imply comparable efficacy, safety, or product interchangeability. Please note that the use of AGGRASTAT
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On June 29, 2020, the Company announced that results from the investigator sponsored FABOLUS-FASTER Phase 4 clinical trial, using AGGRASTAT
FABOLUS-FASTER studied different regimens of intravenous platelet inhibitors, notably AGGRASTAT
The results from the FABOLUS-FASTER trial showed cangrelor did not reach
Results from FABOLUS-FASTER were recently presented virtually at the PCR
On January 27, 2021, the Company announced the early completion of iSPASM, a randomized, double-blind, single-center, Phase 1/2a trial aimed at assessing the safety of long-term
Cardiovascular Generic and Reformulation Products
The Company is focused on the development of two additional cardiovascular generic drugs and expects to grow its commercial suite of products to at least four approved products in 2022.drugs.
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The Company had been devoting resources to its research and development programs, including, but not limited to the development of TARDOXAL
On January 7, 2021, the Company announced that it intends to file an IND application with the FDA pertaining to its legacy product P5P, also referred to as
The FDA and the EMA have both granted a Rare Pediatric Disease Designation to
The following table summarizes the Company’s research and development programs, their therapeutic focus and their stage of development.
Product Candidate | Therapeutic focus | Stage of Development | ||
AGGRASTAT ® | Acute Cardiology | Approved/Marketed | ||
ZYPITAMAG ® | Primary Hyperlipidemia or Mixed Dyslipidemia | Approved/Marketed | ||
SNP | Acute Cardiology | ANDA approved/ | ||
Marketing on hold | ||||
Generic ANDA 2 | Acute Cardiology | ANDA filed | ||
Generic ANDA 3 | Acute Cardiology | Formulation development | ||
on hold | ||||
TARDOXAL TM /P5P | TD/Neurological indications | TARDOXAL TM – On holdP5P – IND filed |
Other Products
The Company is investing in the research and development of other new product development opportunities. The Company is also exploring opportunities to grow the business through acquisition. The Company has evaluated and continues to evaluate the acquisition or license of other approved commercial products with the objective of further broadening its product portfolio and generating additional revenue.
As at December 31, 2021,2022, the Company had issued United States patents (see Item 5 –
Competitors’ Current Products
AGGRASTAT
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The initial launch of generic versions of eptifibatide (Integrilin) occurred in December 2015 and has impacted the utilization of AGGRASTAT
Due to the incidence and severity of cardiovascular diseases, the market for antihyperlipidemics is large and competition is intense. There are a number of approved antihyperlipidemic drugs, currently on the market, awaiting regulatory approval or in development. ZYPITAMAG
Although ZYPITAMAG
SNP was launched into a genericized market with several competitors already selling generic versions of the product and as such there is no assurance that the Company will be successful in launching SNP in 2020 and growing sales for the product. The failure of the Company to successfully launch and grow sales of SNP, or to establish a viable market for the Company’s version of the product, could have a material adverse effect on the Company’s long-term profitability.
The Company, through its recently acquired Marley Drug pharmacy business, operates a physical pharmacy location in Winston Salem, North Carolina with a significant mail order business throughout the United States. Through Marley Drug, the Company faces intense competition with local, regional and national companies, including pharmacy chains, independently owned pharmacies, supermarkets, mass merchandisers and internet pharmacies, such as Get Roman, as well as competition from
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Competitors’ Products in Development
At present the Company is not aware of any other intravenous glycoprotein IIb/IIIa inhibitors in mid to late stage clinical development. However, the choice and use of AGGRASTAT
There are other approved antihyperlipidemic drugs, currently on the market, awaiting regulatory approval or in development. ZYPITAMAG
SNP is being sold into a genericized market with several competitors already selling generic versions of the product and as such there is no assurance thatproduct. As a result, the Company will be successful at growing sales of its SNP in 2020. The failure ofdoes not anticipate the Company to successfully launch and grow sales of SNP, or to establish a viable market for the Company’s version of thethis product could have a material adverse effect on the Company’s long-term profitability.
Competitive Strategy and Position
The Company is primarily focusing on:
Maintaining and growing AGGRASTAT
The Company continues to work to maintain and expand the sales of AGGRASTAT
The Company is providingprovided funding for a number of investigator sponsored research projects targeting contemporary utilization of AGGRASTAT
Growing sales of ZYPITAMAG
The Company has continued to see an increase in the sales of ZYPITAMAG®throughout 2022. The acquisition of Marley Drug and the launch of the e-commerce platform allows the Company announced that through its subsidiary, Medicure International Inc.to reach consumers in all 50 states , it has acquired the ownership ofWashington D.C. and Puerto Rico. ZYPITAMAG
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Operation of the Marley Drug pharmacy business
The Company continues to operate Marley Drug as a separate segment of its business. During the year ended December 17, 2020, the Company acquired 100%31, 2022, Marley Drug launched its e-commerce platform, which allows consumers to purchase their FDA approved medications online and have them shipped directly to their residence. The addition of Marley Drug a specialty pharmacy serving customers across the United States. Marley Drug provides excellent customer service, cost competitive medications, immediate direct to patient delivery, and is licensedhas also helped facilitate an increase in 50 states, Washington D.C. and Puerto Rico. Its advanced operating systems include automated pill dispensing, an extended supply generic drug program, and an effective customer communication system. Marley Drug has been successful in marketing directly to customers, providing access to medications without the need for insurance, and building a nationwide customer base.
Acquisitions, licensing or marketing partnerships for new commercial products
The Company continues to explore additional opportunities for the acquisition or licensing of other cardiovascular products that fit the commercial organization.
Developing additional cardiovascular generic and reformulation products
Medicure is also developing two additional generic versions of acute cardiovascular drugs and is exploring other potential opportunities.
On January 7, 2021, the Company announced that it intends to file an IND application with the FDA pertaining to its legacy product, P5P, also referred to as
The FDA and the EMA have both granted a Rare Pediatric Disease Designation to
C. Organizational Structure
Medicure International, Inc., a wholly owned subsidiary of the Company, was incorporated pursuant to the laws of Barbados, West Indies, on May 23, 2000. Medicure International, Inc.’s registered office is located at Whitepark House, White Park Road, Bridgetown, Barbados. Medicure International Inc.’s head office is located at 1
Medicure Pharma, Inc., a wholly owned subsidiary of the Company, was incorporated pursuant to the laws of the State of Delaware, United States of America, on September 30, 2005. Medicure Pharma Inc.’s registered office is 2711 Centerville Road, Suite 400, Wilmington, Delaware, 19808. Medicure Pharma, Inc.’s head office is located at 116 Village Blvd. Suite 200, Princeton, NJ, 08540.
Medicure Pharma Inc. acquired Marley Drug, Inc. on December 17, 2020. Marley Drug, Inc. was incorporated pursuant to the laws of the State of North Carolina, United States of America, on September 30, 2005. Marley Drug, Inc.’s registered office is 5008 Peters Creek Pkwy, Winston Salem, North Carolina 27127. Marley Drug, Inc.’s head office is located at 5008 Peters Creek Pkwy, Winston Salem, North Carolina 27127.
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Medicure U.S.A., Inc., a wholly owned subsidiary of the Company, was incorporated pursuant to the laws of the State of Delaware, United States of America, on June 23, 2014. Medicure U.S.A. Inc.’s registered office is 2711 Centerville Road, Suite 400, Wilmington, Delaware, 19808.
Apigen Investments Limited, a wholly owned subsidiary of the Company, was incorporated pursuant to the laws of the Republic of Mauritius on June 27, 2014. Apigen Investments Limited’s registered office is 4
Medicure Pharma Europe Limited, a wholly owned subsidiary of the Company, was incorporated pursuant to the laws of Ireland on October 17, 2017. Medicure Pharma Europe Limited’s registered office is Block 3, Harcourt Centre, Harcourt Road, Dublin 2.
D. Property, Plant and Equipment
Office Space
Included within the
Through Marley Drug, the Company also leases 3,280 of retail and office space located at 5008 Peters Creek Pkwy, Winston Salem, North Carolina 27127.
ITEM 4A. | UNRESOLVED STAFF COMMENTS |
Not applicable
ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
This section contains forward-looking statements involving risks and uncertainties. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under part Item 3D—3D - Risk Factors. The following discussion of the financial condition, changes in financial conditions and results of operations of the Company for the years ended December 31, 20212022 and December 31, 20202021 should be read in conjunction with the consolidated financial statements of the Company. The Company’s consolidated financial statements are presented in Canadian dollars and have been prepared in accordance with IFRS included under Item 18 to this Annual Report.
Critical Accounting Policies and Estimates
The preparation of the Company’s consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
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Information about key assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amount of assets and liabilities within the next financial year are included in the following notes to the consolidated financial statements for the year ended December 31, 2021:
Note 3(c)(ii): The valuation of the royalty obligation
Note 3(e): The accruals for returns, chargebacks, rebates and discounts
Chargebacks are considered the most significant estimates and result from wholesalers selling the Company’s products to end hospitals at prices lower than the wholesaler acquisition cost, which results in variable consideration for the Company. The provision is estimated using historical chargeback experience, timing of actual chargebacks processed during the year, expected chargeback levels based on the remaining products in the wholesaler distribution channel and pricing differences. Estimating the chargeback accrual is complex and judgmental due to the level of uncertainty involved in management’s estimates for product that remains in the wholesaler distribution channel as period end,at year-end, the extent of product sales that were expected to be subject to chargebacks and pricing differences.
Note 3(i): The measurement and useful lives of intangible assets
Note 3(o): The measurement of the amount and assessment of the recoverability of income tax assets and income tax provisions
Note 3(q): The measurement and valuation of intangible assets and contingent consideration acquired and recorded as business combinations
• | Note 3(I): Impairment of non-financial assets |
The Company’s annual goodwill impairment test is based on
Note 3(r): The incremental borrowing rate (“IBR”) used in the valuation of leases
Valuation of financial instruments
Financial Assets
Initial recognition and measurement
Upon recognition of a financial asset, classification is made based on the business model for managing the asset and the asset’s contractual cash flow characteristics. The financial asset is initially recognized at its fair value and subsequently classified and measured as (i) amortized cost; (ii) Fair Value Through Other Comprehensive Income or Loss “FVOCI”fair value through other comprehensive income (“FVOCI”); or (iii) Fair Value Through Profitfair value through profit or Loss “FVTPL”loss (“FVTPL”). Financial assets are classified as FVTPL if they have not been classified as measured at amortized cost or FVOCI. Upon initial recognition of an equity instrument that is not
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Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets measured at amortized cost
A financial asset is subsequently measured at amortized cost, using the effective interest method and net of any impairment allowance, if the asset is held within a business whose objective is to hold assets in order to collect contractual cash flows;flows, and the contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and interest. Cash and cash equivalents, restricted cash, accounts receivable and other assets are classified within this category.
Financial assets at FVTPL
Financial assets measured at FVTPL are carried in the statementconsolidated statements of financial position at fair value with changes in fair value therein recognized in the consolidated statement of net income (loss) income.and comprehensive income (loss). There are presently no assets classified within this category.
Financial assets at FVOCI
Financial assets measured at FVOCI are carried in the statement of financial position at fair value with changes in fair value therein recognized in the statement of consolidated statement of net loss and comprehensive (loss) income.loss. The Investmentinvestment in Sensible Medical was designated within this category.
Financial liabilities
Initial recognition and measurement
The Company recognizes a financial liability on the trade date in which it becomes a party to the contractual provisions of the instrument at fair value plus any directly attributable costs. Financial liabilities are subsequently measured at amortized cost or FVTPL and are not subsequently reclassified. The Company’s financial liabilities are accounts payable and accrued liabilities, royalty obligation and acquisition payable and holdback which are recognized on an amortized cost basis. Financial liabilities measured at FVTPL include contingent consideration resulting from business combinations as defined by IFRS 9.
The royalty obligation was recorded at its fair value at the date at which the liability was incurred and subsequently measured at amortized cost using the effective interest rate method at each reporting date. Estimating fair value for this liability required determining the most appropriate valuation model which was dependent on its underlying terms and conditions. This estimate also required determining expected revenue from AGGRASTAT
The acquisition payable liabilities were recorded at its fair value at the date at which the liability was incurred and subsequently measured at amortized cost using the effective interest rate method at each reporting date. Estimating fair value for these liabilities required determining an appropriate discount rate.
Contingent consideration resulting from a business combination are valued at fair value at the acquisition date as part of the business combination and subsequently fair valued as described in the business combination policy below.
Derecognition
A financial asset or, where applicable a part of a financial asset or part of a group of similar financial assets is derecognized when the contractual rights to receive cash flows from the asset have expired; or the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
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A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in the consolidated statements of net loss and comprehensive loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset, and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.
Fair value of financial instruments
Fair value is determined based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is measured using the assumptions that market participants would use when pricing an asset or liability. Typically, fair value is determined by using quoted prices in active markets for identical or similar assets or liabilities. When quoted prices in active markets are not available, fair value is determined using valuation techniques that maximize the use of observable inputs. When observable valuation inputs are not available, significant judgement is required through determining the valuation technique to apply, the valuation techniques such as discounted cash flow analysis and selecting inputs. The use of alternative valuation techniques or valuation inputs may result in a different fair value.
Transaction costs
Transaction costs for all financial instruments measured at amortized cost, the transaction costs are included in the initial measurement of the financial asset or financial liability and are amortized using the effective interest rate method over a period that corresponds with the term of the financial instruments. Transaction costs for financial instruments classified as FVTPL are recognized as an expense in professional fees, in the period the cost was incurred.
Embedded Derivatives
For financial liabilities measured at amortized cost, under certain conditions, an embedded derivative must be separated from its host contract and accounted for as a derivative. An embedded derivative causes some or all of the cash flows that otherwise would be required by the contract to be modified according to a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, a credit rating or credit index, or other variable, provided in the case of a
Accruals for returns, chargebacks, rebates and discounts
As of December 31, 2021,2022, excluding Marley Drug, the Company has threetwo commercially available products that generated revenue for the year ended December 31, 2021,2022, AGGRASTAT
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Sales are made subject to certain discounts available for prompt payment, volume discounts, rebates or chargebacks. Revenue from these sales is recognized based on the price specified per the pricing terms of the sales invoices, net of the estimated discounts, rebates or chargebacks. Variable consideration is based on historical information, using the expected value method. Revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. A liability is included within accounts payable and accrued liabilities and is measured for expected payments that will be made to the customers for the discounts in which they are entitled. Sales do not contain an element of financing as sales are made with credit terms within the normal operating cycle of the date of the invoice, which is consistent with market practice.
Through Marley Drug, the Company operates a retail pharmacy and mail order pharmacy business selling pharmaceuticals directly to end users, being individual patients. Revenue for in storein-store sales is recognized upon payment by the customer. This is the point where all performance obligations have been met in regards to the product sold. Revenue for mail order sales is recognized upon the shipment of the products to the customer, generally at the time the product is picked up from the Company’s premises by the carrier. This is the point where all performance obligations have been met in regards to the product sold.
The measurement of intangible assets
Intangible assets that are acquired separately are measured at cost less accumulated amortization and accumulated impairment losses. Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate. All other expenditures are recognized in profit or loss as incurred.
Product licenses are amortized on a straight-line basis over the contractual term of the acquired license. Pharmacy licenses are amortized on a straight-line basis over their estimated useful life of approximately seven years. Patents and drug approvals are amortized on a straight-line basis over the legal life of the respective patent, ranging from five to twenty years, or its economic life, if shorter. Brand names are amortized on a straight-line basis over the estimated economic life of the brand name estimated at ten years. Trademarks are amortized on a straight-line basis over the legal life of the respective trademark, being ten years, or its economic life, if shorter. Customer lists are amortized on a straight-line basis over a period of seven to twelve years, or their economic life, if shorter.
Amortization on product licenses commences when the intangible asset is available for use, which would typically be in connection with the commercial launch of the associated product under the license.
Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses. The costcosts of servicing the Company’s patents and trademarks are expensed as incurred.
The amortization method and amortization period of an intangible asset with a finite useful life are reviewed at least annually. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates in the consolidated statements of net income (loss) income and comprehensive income (loss) income.
The measurement of the amount and assessment of the recoverability of income tax assets
The Company and its subsidiaries are generally taxable under the statutes of their country of incorporation.
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Income tax expense comprises current and deferred taxes. Current taxes and deferred taxes are recognized in profit or loss except to the extent that they relate to a business combination, or items recognized directly in equity or in other comprehensive income.
Current taxes are the expected tax receivable or payable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax receivable or payable in respect of previous years.
The Company follows the liability method of accounting for deferred taxes. Under this method, deferred taxes are recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred taxes are not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred taxes are not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred taxes are measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the tax laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax assets and liabilities, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax assets and liabilities on a net basis or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
The Company has provided for income taxes, including the impacts of tax legislation in various jurisdictions, in accordance with guidance issued by accounting regulatory bodies, the Canada Revenue Agency, the U.S. Internal Revenue Service, the Barbados Revenue Authority, the Mauritius Revenue Authority, as well as other state and local governments through the date of the issuance of these consolidated financial statements. Additional guidance and interpretations can be expected and such guidance, if any, could impact future results. While management continues to monitor these matters, the ultimate impact, if any, as a result of the application of any guidance issued in the future cannot be determined at this time.
The Company and its subsidiaries file federal income tax returns in Canada, the United States, Barbados and other foreign jurisdictions, as well as various provinces and states in Canada and the United States, respectively. Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws and the amount and timing of future taxable income. Given the Company operates within a complex structure internationally, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to taxable income and expenses recorded. The Company establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective countries in which it operates. The amount of such provisions are based on various factors, such as interpretations of tax regulations by each taxable entity and the responsible tax authority. The Company and its subsidiaries have open tax years, primarily from 2011 to 2021,2022, with significant taxing jurisdictions, including Canada, the United States and Barbados. These open years contain certain matters that could be subject to differing interpretations of applicable tax laws and regulations and tax treaties, as they relate to the amount, timing or inclusion of revenues and expenses, or the sustainability of income tax positions of the Company and its subsidiaries. Certain of these tax years may remain open indefinitely.
Such differences of interpretation may arise on a wide variety of issues, depending on the conditions prevailing in the respective company’s domicile. As the Company assesses the probability for litigation and subsequent cash outflow with respect to taxes as remote, no contingent liability has been recognized.
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Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, would be recognized subsequently if information about facts and circumstances changed. The adjustment would either be treated as a reduction to goodwill if it occurred during the measurement period or in profit or loss, when it occurs subsequent to the measurement period.
Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The consideration for an acquisition is measured at the fair values of the assets transferred, the liabilities assumed and the equity interests issued at the acquisition date. Transaction costs that are incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred. Identified assets acquired and liabilities and contingent liabilities assumed are measured initially at fair values at the date of acquisition. On an
Contingent consideration is measured at fair value on acquisition date and is included as part of the consideration transferred. The fair value of the contingent consideration liability is remeasured at each reporting date with the corresponding gain or loss being recognized in profit or loss.
Goodwill is initially measured at cost, being the excess of fair value of the cost of the business combinations over the Company’s share in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. Any negative difference is recognized directly in the consolidated statements of net income (loss) and comprehensive income.income (loss). If the fair values of the assets, liabilities and contingent liabilities can only be calculated on a provisional basis, the business combination is recognized using provisional values. Any adjustments resulting from the completion of the measurement process are recognized within twelve months of the date of the acquisition.
Leases
At inception of a contract, the Company must assess whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset over a period of time in exchange for consideration. The Company must assess whether the contract involves the use of an identified asset, whether it has the right to obtain substantially all of the economic benefits from the use of the asset during the term of the contract and if it has the right to direct the use of the asset. As a lessee, the Company recognizes a
Right-of-use
The
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Lease liability
A lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date discounted by the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate. The lease liability is subsequently measured at amortized cost using the effective interest method. Lease payments included in the measurement of the lease liability comprise:comprise fixed payments; variable lease payments that depend on an index or a rate; amounts expected to be payable under any residual value guarantee; the exercise price under any purchase option that the Company would be reasonably certain to exercise; lease payments in any optional renewal period if the Company is reasonably certain to exercise an extension option; and penalties for any early termination of a lease unless the Company is reasonably certain not to terminate early. The Company has elected to not include
The Company has elected not to recognize
Estimating the IBR
The Company cannot readily determine the interest rate implicit in its lease,lease; therefore, it uses its IBR to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the
New standard not yet adopted
Amendments to International Accounting Standard (“IAS”) 1 – presentationPresentation of financial statements:
In January 2020, the IASIASB issued an amendment to IAS 1 Presentation of Financial Statements that clarifies the criterion for classifying a liability as
Amendments to IAS 1 and IFRS Practice Statement (“PS”) 2 – Making Materiality Judgments:
In February 2021, the IASB issued amendments to IAS 1 and IFRS PS 2, which provide guidance and examples to help entities apply materiality judgment to accounting policy disclosures. Specifically, the amendments aim to replace the requirement for entities to disclosure their “significant” accounting policies and add guidance on how to apply the concept of materiality in making decisions about accounting policy disclosures. The amendment applies to annual reporting periods beginning on or after January 1, 2023. The Company will assess the impact, if any, of adoption of the amendment.
A. Operating Results
General
Through 2021,2022, the Company was focused on maintaining and growing the sales AGGRASTAT
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Historically, the Company concentrated primarily on research and development and continues to invest a significant amount of funds in research and development activities. To date, the Company has yet to and may never derive any revenues from its research and development products.
The Company has a limited operating history and its prospects must be considered in light of the risks, expenses and difficulties frequently encountered with the establishment of a business in a highly competitive industry, characterized by frequent new product introductions.
Twelve Months Ended December 31, 20212022 Compared to the Twelve Months Ended December 31, 2020
Net AGGRASTAT
The Company primarily sells finished AGGRASTAT
Hospital demand for AGGRASTAT® has been stable during 2022 when compared to the prior year, and the number of hospital customers using AGGRASTAT® continued to remain strong. The Company’s commercial team continues to work on expanding its customer base, however this continued increase in the customer base for AGGRASTAT® has not directly resulted in corresponding revenue increases as the Company continues to face increased competition resulting from further genericizing of the Integrilin market which has created pricing pressures on AGGRASTAT® combined with lower hospital demand for the product. The Company continues to expect strong patient market share despite reduced revenue from the AGGRASTAT® brand and diversifying revenues away from a single product became increasingly important to the Company.
All of the Company’s sales are denominated in U.S. dollars and the U.S. dollar increased in value against the Canadian dollar during the year ended December 31, 2022 when compared to the year ended December 31, 2021. This led to increased AGGRASTAT® revenues, offsetting the increasing price pressures facing AGGRASTAT® when comparing the two periods, offset by increased demand.
Net ZYPITAMAG® product sales for year ended December 31, 2022 were $3.6 million compared to $3.2 million for the year ended December 31, 2021.
The Company sells ZYPITAMAG® through its e-commerce and mail order pharmacy business in all 50 U.S. states through Marley Drug and to drug wholesalers. These wholesalers subsequently sell ZYPITAMAG®to pharmacies who in turn sell the product to patients. The growth in revenues in 2022 is a direct result of the Company obtaining additional contracts to sell ZYPITAMAG® through pharmacy benefit managers, in addition to growing sales through Marley Drug. The Company expects ZYPITAMAG® revenues to grow throughout 2023 and beyond.
The Company did not sell have any SNP product sales during the year ended December 31, 2022, compared to $59,000 for the year ended December 31, 2021. The increased competition within the market resulted in the Company placing a marketing hold on the product during the current year.
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The Company recorded revenue of $7.8 million for the year ended December 31, 2022 compared to revenue of $6.9 million during the year ended December 31, 2021 pertaining to the Marley Drug in store and mail order pharmaceutical business. The increase in revenue at Marley Drug for the year ended December 31, 2022 is the result of the Company launching its e-commerce platform during the year, in addition to favorable foreign exchange rates during the current year.
Cost of goods sold represents direct product costs associated with AGGRASTAT®, ZYPITAMAG®, and SNP, including write-downs for obsolete inventory, amortization of the related intangible assets and royalties paid on ZYPITAMAG®. Additionally, Marley Drug, cost of goods sold includes direct product costs associated with the sale of products through the Marley Drug business, including its e-commerce platform.
AGGRASTAT® cost of goods sold for the year ended December 31, 2022 were $3.4 million compared to $4.2 million for the year ended December 31, 2021. AGGRASTAT® cost of goods sold for the year ended December 31, 2021 consisted of only product sold to end customers, while the cost of goods sold for the year ended December 31, 2021 included $3.0 million relating to product sold to customers and $1.2 million relating to a write-down of expired inventory. The decrease in cost of goods sold is the result of the write-down of expired inventory during the year ended December 31, 2021. Excluding this write-down, cost of goods sold remained relatively consistent between the two years.
ZYPITAMAG® cost of goods sold for year ended December 31, 2022 totaled $1.2 million and includes $441,000 relating to product sold to the Company’s customers, $589,000 from amortization of the ZYPITAMAG® intangible assets, $38,000 relating to a write-down of expired inventory and $151,000 relating to royalties on the sale of ZYPITAMAG®. This compares to ZYPITAMAG® cost of goods sold for the year ended December 31, 2021 of $2.4 million which was the result of $311,000 relating to product sold to the Company’s customers, $1.8 million from amortization of the ZYPITAMAG® intangible assets, $165,000 relating to a write-down of expired inventory and $62,000 relating to royalties on the sale of ZYPITAMAG®. The decrease in cost of goods sold between 2022 and 2021 is the result of lower amortization of the Company’s intangible assets relating to ZYPITAMAG®and lower write-downs of expired inventory, partially offset by a higher volume of product sold during 2022, which also led to higher royalties during the year ended December 31, 2022. The decrease in amortization is as a result of a prospective chance in the useful life of the ZYPITAMAG®intangible assets. The initial amortization period pertaining to the ZYPITAMAG® intangible assets was 4.3 years. During the year-ended December 31, 2021, management applied a prospective change to the amortization period of ZYPITAMAG® to extend the amortization period of the asset by 7 years, with the remaining amortization period being 8.1 years as at December 31, 2022.
The Company did not record any cost of goods sold related to SNP as the Company has placed a marketing hold on SNP due to increased competition within the market. Cost of goods sold during the year ended December 31, 2021 totaled $59,000 for SNP.
Cost of goods sold related to the Marley Drug business totaled $2.4 million for the year ended December 31, 2022, compared to $2.4 million for the year ended December 31, 2021. The slight decrease in cost of goods sold during the current year is the result of favorable shipping rates for mail order and e-commerce sales, offset by a higher volume of product sold during the current year.
Selling expenses include salaries and related costs for those employees involved in the commercial operations of the Company, as well as costs associated with marketing, promotion, distribution of the Company’s products as well as market access activities and other commercial activities. The expenditures are required to support sales and marketing efforts of AGGRASTAT®, ZYPITAMAG® and Marley Drug.
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Selling expenses for the year ended December 31, 2022 were $7.9 million compared to $10.3 million for the year ended December 31, 2021.
The decrease in selling expenses during the current year is the result of the Company decreasing travel expenditures and restructuring its sales team within the United States, leading to better staff utilization of its salesforce and additional cost savings.
General and administrative expenses include the cost of administrative salaries, ongoing business development and corporate stewardship activities and professional fees such as legal, audit, investor and public relations.
General and administrative expenses for the year ended December 31, 2022 were $4.2 million compared to $2.7 million for the year ended December 31, 2021.
The increase in general and administration expenses during the year ended December 31, 2022 when compared to the year ended December 31, 2021 is related to the Company increasing its employee headcount to improve the control processes within various departments, in addition to non-capitalized expenditures incurred during the current year related to improvements made to the Marley Drug e-commerce platform.
During the year ended December 31, 2022, the Company did not record any government assistance resulting from the Canada Emergency Wage Subsidy (2021 – $402,000, 2020 - $860,000). The funding has been recorded as a reduction of the related salary expenditures within general and administrative expenses for the year ended December 31, 2021.
Research and development expenditures include costs associated with the Company’s clinical development and preclinical programs including salaries, monitoring and other research costs. The Company expenses all research costs and has not had any development costs that meet the criteria for capitalization under IFRS. Prepaid research and development costs represent advance payments under contractual arrangements for clinical activity outsourced to research centers.
Net research and development expenditures for the year ended December 31, 2022 totaled $2.8 million compared to $1.8 million for the year ended December 31, 2021. Research and development expenditures include costs associated with the Company’s on-going clinical development and preclinical programs including salaries, research centered costs and monitoring costs, as well as research and development costs associated with the development projects being undertaken to develop additional cardiovascular products.
The increase in expenses during the year ended December 31, 2022 when compared to the year ended December 31, 2021 is primarily the result of the timing of research and development expenditures relating to each development project. The Company’s research and development activities for the year ended December 31, 2022 primarily pertain to the MC-1 development project.
During the year ended December 31, 2022, the Company recorded a gain of $346,000 on the revaluation of the contingent consideration pertaining to the Marley Drug acquisition. During the year ended December 31, 2021, the Company recorded a gain of $1.8 million as a result of the revaluation of the contingent consideration pertaining to the Marley Drug acquisition. For more information regarding the assessment of the contingent consideration, see note 4 of Item 17 – Financial Statements.
Intangible assets are reviewed for impairment on an ongoing basis whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The amount and timing of impairments and write-downs may vary substantially from period to period depending on the business and research activities being undertaken at any one time and changes in the Company’s commercial strategy.
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The Company has considered indicators of impairment as at December 31, 2022 and 2021 and the Company did not record any write-down of intangible assets during the years ended December 31, 2022 and 2021.
The Company had determined there were no indicators of impairment as at December 31, 2022. Finance expense for the year ended December 31, 2022 totaled $206,000 and primarily relates to remeasurement of the of the Company’s AGGRASTAT® royalty obligation of $169,000 and accretion on the ZYPITAMAG® acquisition payable of $44,000. For the year ended December 31, 2021, the Company recorded finance expense of $525,000 primarily due to remeasurement of the Company’s AGGRASTAT® royalty obligation of $262,000 and accretion on the ZYPITAMAG® acquisition payable of $273,000.
The Company recorded a foreign exchange gain of $52,000 for the year ended December 31, 2022 compared to a foreign exchange gain of $31,000 for the year ended December 31, 2021. The changes to foreign exchange gains and losses results from changes in the US dollar exchange rate during the respective periods, which led to the foreign exchange gains and losses as it applies to the significant US dollar cash balances held by the Company as at the end of both periods.
For the year ended December 31, 2022, the Company recorded a net profit of $1.4 million or $0.13 per share ($0.13 per share diluted) compared to a net loss of $727,000 or $0.07 per share ($0.07 per share diluted) for the year ended December 31, 2021.
As discussed above, the main factors contributing to net profit during the year ended December 31, 2022 compared to a net loss during the year ended December 31, 2021 were the increased revenues through Marley Drug, a decrease in cost of goods sold as a result of improved inventory management, partially offset by increased research and development expenses primarily due to timing of research and development projects the Company is undertaking.
For the year ended December 31, 2022, the Company recorded a total comprehensive income of $2.5 million compared to total comprehensive loss of $870,000 for the year ended December 31, 2021. The change in comprehensive loss results from the factors described above as well as fluctuations in the US dollar exchange rate during the periods.
The weighted average number of common shares outstanding used to calculate basic and diluted earnings per share for the year ended December 31, 2022 were 10,251,313 and 10,436,313, respectively. The weighted average number of common shares outstanding used to calculate basic and diluted loss per share for the year ended December 31, 2021 was 10,251,313.
As at December 31, 2022, the Company had 10,251,313 common shares outstanding and 638,400 stock options, of which 602,400 were exercisable, to purchase common shares outstanding.
As at April 6, 2023, the Company had 10,296,313 common shares outstanding and 1,743,400 stock options, of which 502,400 were exercisable, to purchase common shares outstanding.
As at December 31, 2021, the Company had 10,251,313 common shares outstanding and 807,150 stock options, of which 706,750 were exercisable, to purchase common shares outstanding.
Twelve Months Ended December 31, 2021 Compared to the Twelve Months Ended December 31, 2020
Net AGGRASTAT® product sales for year ended December 31, 2021 were $11.6 million compared to $10.6 million during the year ended December 31, 2020.
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The Company primarily sells finished AGGRASTAT® to drug wholesalers. These wholesalers subsequently sell AGGRASTAT® to hospitals where health care providers administer the drug to patients. Wholesaler management decisions to increase or decrease their inventory of AGGRASTAT® may result in sales of AGGRASTAT® to wholesalers that do not track directly with demand for the product at hospitals. The Company has set up a portal called Medicure Direct to market the Company’s branded and generic products directly to hospitals and pharmacies with initial sales occurring in the fourth quarter of 2020 through this initiative.
Hospital demand for AGGRASTAT®has been stable during 2021 when compared to the prior year, and the number of hospital customers using AGGRASTAT
All of the Company’s sales are denominated in U.S. dollars and the U.S. dollar increased in value against the Canadian dollar during the year ended December 31, 2021 when compared to the year ended December 31, 2020. This led to increased AGGRASTAT
Net ZYPITAMAG
The Company sells ZYPITAMAG
Net SNP product sales for year ended December 31, 2021 were $59,000 compared to $116,000 for the year ended December 31, 2020. The Company primarily sells finished SNP to drug wholesalers. These wholesalers subsequently sell SNP
to hospitals where health care providers administer the drug to patients. Wholesaler management decisions to increase or decrease their inventory of SNP may result in sales of SNPto wholesalers that do not track directly with demand for the product at hospitals. The Company has set up a portal called Medicure Direct to market the Company’s branded and generic products directly to hospitals and pharmacies.As a result of the acquisition of Marley Drug, which was completed on December 17, 2020, the Company recorded revenue of $6.9 million for the year ended December 31, 2021 compared to revenue of $340,000 during the year ended December 31, 2020 pertaining to the Marley Drug in store and mail order pharmaceutical business. The increase in revenue at Marley Drug for the year ended December 31, 2021 is the result of the Company owing the business for the full 2021 year compared to only a two week period of ownership for the year ended December 31, 2020. Marley Drug sells pharmaceutical and over the counter products directly to patients in a retail setting and has a strong mail order business throughout all 50 states in the United States. In 2022, the Company launched the Marley Drug
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During the year ended December 31, 2020, ReDS
Cost of goods sold represents direct product costs associated with AGGRASTAT
AGGRASTAT
ZYPITAMAG
The cost of goods sold related to SNP totaled $59,000 for the year ended December 31, 2021 compared to $524,000 for the year ended December 31, 2020. For year ended December 31, 2021, the cost of goods sold totaling $59,000 related to product sold to the Company’s customers. For year ended December 31, 2020, the cost of goods sold totaling $116,000 related to product sold to the Company’s customers as well as an impairment loss on the write-down of inventory of $408,000 as a result of reduced selling prices for the product experienced in the market pertaining to SNP relating to inventory.
The cost of goods sold related to the Marley Drug business totaled $2.4 million for the year ended December 31, 2021. As a result of the acquisition of Marley Drug, which was completed on December 17, 2020, the Company recorded cost of goods sold of $104,000 during the year ended December 31, 2020 pertaining to the cost of products sold by Marley Drug’s in store and mail order pharmaceutical business. The increase in cost of goods sold at Marley Drug for the year ended December 31, 2021 is the result of the Company owing the business for the full 2021 year compared to only a two week period of ownership for the year ended December 31, 2020.
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Selling expenses include salaries and related costs for those employees involved in the commercial operations of the Company, as well as costs associated with marketing, promotion, distribution of the Company’s products as well as market access activities and other commercial activities. The expenditures are required to support sales and marketing efforts of AGGRASTAT
Selling expenses for the year ended December 31, 2021 were $10.3 million compared to $5.4 million for the year ended December 31, 2020.
Commercial sales expenses, excluding costs pertaining to the Marley Drug business, remained consistent for the year ended December 31, 2021 as compared to the prior year. The increase in selling expenses is as a result of the Company owning and operating the Marley Drug business for the full year in 2021 compared to a two week period during 2020.
General and administrative expenses include the cost of administrative salaries, ongoing business development and corporate stewardship activities and professional fees such as legal, audit, investor and public relations.
General and administrative expenses for the year ended December 31, 2021 were $2.7 million compared to $4.6 million for the year ended December 31, 2020.
The decrease in general and administration expenses during the year ended December 31, 2021 when compared to the year ended December 31, 2020 is primarily related to lower legal costs associated with the Company’s patent challenge, which was settled in the fourth quarter of 2020, lower professional fees as a result of the Marley Drug acquisition in the fourth quarter of 2020 and cost reductions implemented by the Company during 2021.
During the year ended December 31, 2021, the Company recorded $402,000 (2020 – $860,000, 2019—nil) in government assistance resulting from the Canada Emergency Wage Subsidy. The funding has been recorded as a reduction of the related salary expenditures within general and administrative expenses for the year ended December 31, 2021.
Research and development expenditures include costs associated with the Company’s clinical development and preclinical programs including salaries, monitoring and other research costs. The Company expenses all research costs and has not had any development costs that meet the criteria for capitalization under IFRS. Prepaid research and development costs represent advance payments under contractual arrangements for clinical activity outsourced to research centers.
Net research and development expenditures for the year ended December 31, 2021 totaled $1.8 million compared to $3.3 million for the year ended December 31, 2020. Research and development expenditures include costs associated with the Company’s
The decrease experienced during the year ended December 31, 2021 when compared to the year ended December 31, 2020 is primarily the result of the timing of research and development expenditures relating to each development project and a declining research and development budget. The Company’s research and development activities for the year ended December 31, 2021 primarily pertain to the
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During the year ended December 31, 2021, the Company recorded a gain on the revaluation of the contingent consideration pertaining to the Marley Drug acquisition.
Intangible assets are reviewed for impairment on an ongoing basis whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The amount and timing of impairments and write-downs may vary substantially from period to period depending on the business and research activities being undertaken at any one time and changes in the Company’s commercial strategy. The Company has considered indicators of impairment as at December 31, 2021 and 2020 and the Company did not record any write-down of intangible assets during the years ended December 31, 2021 and 2020.
The Company had determined there were no indicators of impairment as at December 31, 2021.
The finance expense for the year ended December 31, 2021 for the year ended December 31, 2021 totaled $525,000 and primarily relates to remeasurement of the of the Company’s AGGRASTAT
The foreign exchange gain of $31,000 for the year ended December 31, 2021 compares to $497,000 for the year ended December 31, 2020. The changes to foreign exchange gains and losses results from changes in the US dollar exchange rate during the respective periods, which led to the foreign exchange gains and losses as it applies to the significant US dollar cash balances held by the Company as at the end of both periods.
For the year ended December 31, 2021, the Company recorded a net loss of $727,000 or $0.07 per share ($0.07 per share diluted) compared to $6.8 million or $0.64 per share ($0.64 per share diluted) for the year ended December 31, 2020.
As discussed above, the main factors contributing to the reduction in the net loss were the increased revenues as a result of the operations of Marley Drug being included for the full 2021 year compared to a two week period in 2020, reduced general and administrative and research and development expenses and the gain on the revaluation of the contingent consideration pertaining to the Marley Drug acquisition, partially offset by higher cost of goods sold and selling expenses as a result of the full year of Marley Drug operation.
For the year ended December 31, 2021, the Company recorded a total comprehensive loss of $870,000 compared to $7.6 million for the year ended December 31, 2020. The change in comprehensive loss results from the factors described above as well as fluctuations in the US dollar exchange rate during the periods.
The weighted average number of common shares outstanding used to calculate basic and diluted loss per share for the year ended December 31, 2021 was 10,251,313. The weighted average number of common shares outstanding used to calculate basic and diluted loss per share for the year ended December 31, 2020 was 10,686,041.
As at December 31, 2021, the Company had 10,251,313 common shares outstanding and 807,150 stock options, of which 706,750 were exercisable, to purchase common shares outstanding.
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As at December 31, 2020, the Company had 10,251,313 common shares outstanding and 1,326,958 stock options, of which 1,110,958 were exercisable, to purchase common shares outstanding.
B. Liquidity and Capital Resources
Since the Company’s inception, it has financed operations primarily through the net revenue received from the sale of its commercial products, the sale of its equity securities, the issuance and subsequent exercises of warrants and stock options, interest on excess funds held and the issuance of debt.
Cash from operating activities for the year ended December 31, 20212022 was $4.0$1.8 million compared to cash used infrom operating activities of $2.2$4.0 million for the year ended December 31, 2020.2021. The improvementdecrease in cash from operating activities is primarily due to royalty payments made during the decreasedcurrent year, in addition to a higher accounts receivable balance at year end, offset by a net profit during the current year compared to a net loss incurred duringin the year ended December 31, 2021 compared to 2020.
Cash used in or from investing activities for the year ended December 31, 2021was $2.7 million2022 was $310,000 compared to $7.2$2.7 million for the year ended December 31, 2020.2021. The cash used in investing activities for the year ended December 31, 2022 primarily capitalized investments into the Marley Drug e-commerce platform. The cash used in investing activities for the year ended December 31, 2021 related to payments of the holdback payable from the Marley Drug transaction totaling $1,876, acquisitions of property and equipment totaling $378 and $441 relating to the acquisition of intangible assets consisting of investing in the Marley Drug
Cash used in financing activities for the year ended December 31, 20212022 totaled $316,000$355,000 compared to $766,000$316,000 for the year ended December 31, 2020.2021. The cash used in financing activities for the year ended December 31, 2022 and December 31, 2021 related to repayments of the Company’s lease liabilities. The cash used in financing activities for the year ended December 31, 2020 related to cash paid to acquire the Company’s common shares under its normal course issuer bid of $522,000 and $244,000 related to repayments of the Company’s lease liabilities.
As at December 31, 2021,2022, the Company had unrestricted cash totaling $3.7$4.9 million compared to $2.7$3.7 million as of December 31, 2020.2021. As at December 31, 2021,2022, the Company had working capital of $4.0$6.5 million compared to $3.4$4.0 million as at December 31, 2020.
C. Research and Development, Patents and Licenses, Etc.
Research and Development
The Company’s research and development activities are predominantly conducted by its wholly-owned Barbadian subsidiary, Medicure International Inc.
AGGRASTAT
One of the primary ongoing research and development activities is the continued development and further implementation of a new regulatory, brand and life cycle management strategy for AGGRASTAT
An aspect of the AGGRASTAT
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The primary objective of
The first patient was enrolled in June 2012. Enrolment was completed during the fourth quarter of 2018 and on December 17, 2019, the Company announced the completion of the Shortened AGGRASTAT
The Company is also providing funding for a number of investigator sponsored research projects targeting contemporary utilization of AGGRASTAT
FABOLUS-FASTER was funded by a grant from the Company. This study does not imply comparable efficacy, safety, or product interchangeability. Please note that the use of AGGRASTAT
On June 29, 2020, the Company announced that results from the investigator sponsored FABOLUS-FASTER Phase 4 clinical trial, using AGGRASTAT
FABOLUS-FASTER studied different regimens of intravenous platelet inhibitors, notably AGGRASTAT
The results from the FABOLUS-FASTER trial showed cangrelor did not reach
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Results from FABOLUS-FASTER were recently presented virtually at the PCR
On January 27, 2021, the Company announced the early completion of iSPASM, a randomized, double-blind, single-center, Phase 1/2a trial aimed at assessing the safety of long-term
Cardiovascular Generic and Reformulation Products
The Company is focused on the development of two additional cardiovascular generic drugs and expectsdrugs; however, these have been delayed due to grow its commercial suite of products to at least four approved products in 2022.
The Company had been devoting significant resources to its research and development programs, including, but not limited to the development of TARDOXAL
On January 7, 2021, the Company announced that it intends to file an IND application with the FDA pertaining to its legacy product P5P, also referred to as
The FDA and the EMA have both granted a Rare Pediatric Disease Designation to
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The following table summarizes the Company’s research and development programs, their therapeutic focus and their stage of development.
Product Candidate | Therapeutic focus | Stage of Development | ||
AGGRASTAT ® | Acute Cardiology | Approved/Marketed | ||
ZYPITAMAG ® | Primary Hyperlipidemia or Mixed Dyslipidemia | Approved/Marketed | ||
SNP | Acute Cardiology | ANDA approved/ | ||
Generic ANDA 2 | Acute Cardiology | ANDA filed/Regulatory delay | ||
Generic ANDA | Acute Cardiology | Formulation development on hold | ||
TARDOXALTM/P5P | TD/Neurological indications | |||
TARDOXAL TM | P5P – IND filed, |
Other Products
The Company is investing in the research and development of other new product development opportunities. The Company is also exploring opportunities to grow the business through acquisition. The Company has evaluated and continues to evaluate the acquisition or license of other approved commercial products with the objective of further broadening its product portfolio and generating additional revenue.
As at December 31, 2021,2022, the Company had numerous issued United States patents (see Item 5 –
Patents and Licenses
The Company has 2 issued patent from the United States Patent Office providing protection for AGGRASTAT
Patent Number | Issue Date | Title | ||
6,770,660 | August 3, 2004 | Method for Inhibiting Platelet Aggregation | ||
8,829,186 | July 14, 2017 | Method for preparation of pitavastatin and pharmaceutical acceptable sales thereof |
Patents 5,965,581, 5,972,967, 5,978,698, 6,136,794, 6,538,112 and 6,770,660 were purchased by the Company from MGI GP, INC. (a Delaware corporation doing business as MGI PHARMA and its Affiliate, Artery, LLC). Pursuant to an Asset Purchase Agreement dated August 8, 2006, MGI GP, INC. sold the exclusive use of the patents to the Company in the specified territory (the United States of America including the Commonwealth of Puerto Rico; Guam; and the United States Virgin Islands). Pursuant to the Asset Purchase Agreement the Company agreed to pay MGI GP, INC. a
Much of the work, including some of the research methods, that is important to the success of the Company’s business is germane to the industry and may not be patentable. For this reason, all employees, contracted researchers and consultants are bound by
Given that the patent applications for these technologies involve complex legal, scientific and factual questions, there can be no assurance that patent applications relating to the technology used by the Company will result in patents being issued, or that, if issued, the patents will provide a competitive advantage or will afford protection against competitors with similar technology, or will not be challenged successfully or circumvented by competitors.
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The Company has filed patents in accordance with the Patent Cooperation Treaty (the ‘‘
Although the Company is no longer developing
Medicure International, Inc. subsequently entered into a development agreement with CanAm on June 1, 2000 to perform research and development of
The development agreements may be terminated under a number of circumstances and, in any event, by Medicure International, Inc. at any time by providing CanAm with at least 30 days prior written notice of its intention to terminate, or by CanAm at any time by providing Medicure International, Inc., with at least 90 days prior written notice of its intention to terminate the development agreement.
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The agreements provide that all confidential information developed or made known during the course of the relationship with the Company is to be kept confidential except in specific circumstances.
D. Trend Information
Net AGGRASTAT
The Company primarily sells finished AGGRASTAT
Hospital demand for AGGRASTAT
All of the Company’s sales are denominated in U.S. dollars and the U.S. dollar increased in value against the Canadian dollar during the year ended December 31, 20212022 when compared to the year ended December 31, 2020,2021, This led to increased AGGRASTAT
Net ZYPITAMAG
The Company sells ZYPITAMAG
The Company did not sell have any SNP product sales forduring the year ended December 31, 2021 were $59,0002022, compared to $116,000$59,000 for the year ended December 31, 2020.2021. The increased competition within the market has resulted in the Company placing a marketing hold on the product. The Company primarily sells finished SNP to drug wholesalers. These wholesalers subsequently sell SNP
The Company has set up a portal called Medicure Direct to market the Company’s branded and generic products directly to hospitals and pharmacies.
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E.
As of December 31, 2021,2022, the Company does not have any
F. Contractual Obligations
The following tables set forth the Company’s contractual obligations as of December 31, 2021:
Contractual Obligations Payment Due by Period | ||||||||||||||||||||||||||||
(in thousands of CDN$) | Total | 2022 | 2023 | 2024 | 2025 | 2026 | Thereafter | |||||||||||||||||||||
Accounts Payable and Accrued Liabilities | $ | 6,669 | $ | 6,669 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Income Taxes Payable | 114 | 114 | — | — | — | — | — | |||||||||||||||||||||
Lease Obligation | 1,262 | 330 | 331 | 333 | 136 | 99 | 33 | |||||||||||||||||||||
Acquisition Payable | 1,225 | 634 | 591 | — | — | — | — | |||||||||||||||||||||
Contingent consideration | 333 | 293 | 40 | — | — | — | — | |||||||||||||||||||||
Purchase Agreement Commitments | 2,259 | 1,879 | 190 | 190 | — | — | — | |||||||||||||||||||||
Total | $ | 11,862 | $ | 9,919 | $ | 1,152 | $ | 523 | $ | 136 | $ | 99 | $ | 33 | ||||||||||||||
Contractual Obligations Payment Due by Period | ||||||||||||||||||||||||
(in thousands of CDN$) | Total | 2023 | 2024 | 2025 | 2026 | Thereafter | ||||||||||||||||||
Accounts Payable and Accrued Liabilities | $ | 7,128 | $ | 7,128 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Income Taxes Payable | 60 | 60 | — | — | — | — | ||||||||||||||||||
Lease Obligation | 849 | 346 | 269 | 99 | 92 | 43 | ||||||||||||||||||
Acquisition Payable | 677 | 677 | — | — | — | — | ||||||||||||||||||
Purchase Agreement Commitments | 3,516 | 3,313 | 203 | — | — | — | ||||||||||||||||||
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Total | $ | 12,230 | $ | 11,524 | $ | 472 | $ | 99 | $ | 92 | $ | 43 | ||||||||||||
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Payments in connection with the Company’s royalty obligation, as described below, are excluded from the table above:
Commitments
The Company has entered into a manufacturing and supply agreement to purchase a minimum quantity of AGGRASTAT
On December 28, 2022, the Company entered into a technology services agreement with its manufacturer of AGGRASTAT®as part of the Company’s decision to transfer the manufacturing of all strengths of AGGRASTAT®to one supplier. The total value of the commitment is €872, and €490,000 annually (basedis only due if certain milestones within the agreement are met. As at December 31, 2022, included within accounts payable and accrued liabilities on current pricing) until 2022.
Subsequent to December 31, 20212022 and effective January 1, 2022,2023, the Company renewed its business and administration services agreement with GVI, as described in note 18(b), under which the Company is committed to pay $7,000$7 per month or $85,000$85 per year for a
Contracts with contract research organizations are payable over the terms of the associated agreements and clinical trials, and timing of payments is largely dependent on various milestones being met, such as the number of patients recruited, number of monitoring visits conducted, the completion of certain data management activities, trial completion, and other trial relatedtrial-related activities.
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On October 31, 2017, the Company acquired an exclusive license to sell and market PREXXARTAN
The Company periodically enters into research agreements with third parties that include indemnification provisions customary in the industry. These guarantees generally require the Company to compensate the other party for certain damages and costs incurred as a result of claims arising from research and development activities undertaken on behalf of the Company. In some cases, the maximum potential amount of future payments that could be required under these indemnification provisions could be unlimited. These indemnification provisions generally survive termination of the underlying agreement. The nature of the indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay. Historically, the Company has not made any indemnification payments under such agreements and no amount has been accrued in the consolidated financial statements with respect to these indemnification obligations.
As a part of the Birmingham debt settlement described in note 12 to10 of the Company’s consolidated financial statements, beginning on July 18, 2011, the Company is obligated to pay a royalty to Birmingham based on future commercial AGGRASTAT
Beginning with the acquisition of ZYPITAMAG
In the normal course of business, the Company may from time to time be subject to various claims or possible claims. Although management currently believes there are no claims or possible claims that if resolved would either individually or collectively result in a material adverse impact on the Company’s financial position, results of operations, or cash flows, these matters are inherently uncertain and management’s view of these matters may change in the future.
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Claims and Possible Claims
In the normal course of business, the Company may from time to time be subject to various claims or possible claims. Although management currently believes that aside from the information noted below, there are no claims or possible claims that if resolved would either individually or collectively result in a material adverse impact on the Company’s financial position, results of operations, or cash flows, these matters are inherently uncertain and management’s view of these matters may change in the future.
There are currently no claims outstanding against the Company.
G. Safe Harbor
Statements in Item 5.E and Item 5.F of this Annual Report on Form
ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
A. Directors and Senior Management
Directors and Senior Management
The members of the board of directors and senior officers of the Company including a brief biography of each are as follows:
Dr. Albert D. Friesen, Winnipeg, Manitoba, Canada – Canada—Director, Chairman and Chief Executive Officer
The founder, President, CEO and Chair of the Board of Medicure Inc., Dr. Friesen holds a Ph.D. in protein chemistry from the University of Manitoba. Dr. Friesen played a key role in founding several health industry companies including the first employee and President of the Winnipeg Rh Institute for over 20 years, where he oversaw the development of WinRho (then acquired by Cangene Inc. and more recently by Emergent BioSolutions), ABI Biotechnology (acquired by Apotex Inc.), Viventia Biotech Inc., Genesys Pharma Inc., Waverley Pharma Inc. DiaMedica Inc, Miraculins Inc., Kane Biotech Inc. and KAM Scientific Inc. Dr. Friesen has experience in the establishment of pharmaceutical production facilities and has also managed and initiated the research and clinical development of several pharmaceutical candidates. Dr. Friesen is a founder of the Industrial Biotechnology Association of Canada (IBAC) and past Chairman of its board of directors and former member of the Industrial Advisory Committee to the Biotechnology Research Institute in Montreal. In addition to his role with the Company, Dr. Friesen is currently the President and Chairman of Genesys Venture Inc., a biotech incubator, based in Winnipeg and a member of the Board of Directors of Waverley Pharma Inc, a
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Dr. Arnold Naimark, Winnipeg, Manitoba, Canada – Canada—Director
Dr. Arnold Naimark, O.C., O.M., M.D., L.L.D., F.R.C.P.(C), F.R.S.C, FCAHS, FAAAS,. has had a distinguished career in biomedical research, medicine and higher education. He is President Emeritus and Dean of Medicine Emeritus and Professor of Medicine and Physiology at the University of Manitoba. He is currently Director of the Centre for the Advancement of Medicine, Chair of Genome Prairie Immediate Past-Chair of CancerCare Manitoba. Dr. Naimark serves on the National Statistics Council of Canada and is Vice-Chair of the Statistics Canada Audit Committee. He was formerly on the Research Council of the Canadian Institute for Advanced Research, Chair of Health Canada’s Ministerial Science Advisory Board, Member of the International Advisory Committee on Research of the Alberta Cancer Board, Vice-Chair of the Manitoba Health Research Council and Director of the Robarts Research Institute. He is the founding Chairman of the North Portage Development Corporation, the Canadian Health Services Research Foundation and the Canadian Biotechnology Advisory Committee. He has served as President of several academic bodies including, the Canadian Physiological Society, the Canadian Society for Clinical Investigation, the Association of Canadian Medical Colleges, the Association of Universities and Colleges of Canada and as Chairman of the Association of Commonwealth Universities. Dr. Naimark is an Officer of the Order of Canada, a Member of the Order of Manitoba and a Fellow of the Royal College of Physicians and Surgeons of Canada, the Royal Society of Canada, and the Canadian Academy of Health Sciences. He is recipient of the G. Malcolm Brown Award of the Royal College of Physicians and Surgeons and Medical Research Council of Canada, the Osler Award, the Distinguished Service Award of Ben Gurion University, the Symons Award of the Association of Commonwealth Universities; and of honorary doctorates from Mount Allison University and the University of Toronto, and of several other awards and distinctions related to his professional, academic and civic activities. Date of birth is August 24, 1933.
Gerald P. McDole, Mississauga, Ontario, Canada, MBA – Director
Mr. McDole is currently a director of one Canadian healthcare company. Mr. McDole is Past President of AstraZeneca Canada Inc. He was named President and CEO of AstraZeneca Canada Inc.’s pharmaceutical operations in 1999 and immediately led the merger of Astra Pharma and Zeneca Pharma Inc. Prior to this, Mr. McDole was president and CEO of Astra Pharma Inc., a position he assumed in 1985 after having served as Executive Vice-President. Mr. McDole is a member of the Canadian Healthcare Marketing Hall of Fame, and has been recognized by Canadian Healthcare Manager Magazine with the Who’s Who in Healthcare Award in the pharmaceutical category. In recognition of Mr. McDole’s outstanding contributions to the biotech and pharmaceutical industries, the University of Manitoba established The Gerry McDole Fellowship in Health Policy and Economic Growth. Mr. McDole holds a Bachelor of Science and a Certificate of Business Management from the University of Manitoba, an MBA from Simon Fraser University, and a Business Administration diploma from the University of Toronto. DateSubsequent to December 31, 2022, on February 1, 2023, Gerald McDole resigned as a director of birth is January 25, 1940.the Company.
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Peter Quick, Mill Neck, New York, USA – Director
Peter Quick has over 35 years experience in the securities and financial services industries. He is a recognized leader in the securities industry with experience in the domestic and international equities market, equities market making, market structure reform, trading technology and clearing operations. Mr. Quick was a Partner of Burke and Quick Partners Holdings LLP, the parent company of Burke & Quick Partners LLC a broker dealer. Mr. Quick was President at the American Stock Exchange from 2000 to 2005. Prior to joining the American Stock Exchange, he served as President of Quick & Reilly Inc., a Quick & Reilly subsidiary and a national discount brokerage firm. He also served as President of Quick & Reilly/Fleet Securities. Mr. Quick is a graduate from the University of Virginia with a B.S. in Engineering and attended Stanford University’s Graduate School of Petroleum Engineering. He served four years active duty from 1978 to 1982 as an Officer in the United States Navy. He is a member of the Boards of Directors of First of Long Island Corporation (FLIC: NASDAQ) and First National Bank of Long Island. Mr. Quick serves as the Mayor of the Incorporated Village of Mill Neck, NY. He is a former member of the Board of Alliance Capital Money Market Fund, Chicago Stock Exchange Inc (CHX), The Depository Trust & Clearing Corporation (DTCC), The Midwest Trust Company, Securities Industry Automation Corporation (SIAC), National Security Clearing Corporation, The American Stock Exchange , Quick & Reilly, Inc., (NYSE: BQR), Reckson Associates Realty Corp (NYSE: RX), The Bear Stearns Current Yield Fund (AMEX:YYY) and Gain Capital (GCAP:NYSE). He is a former Chairman of the Board of Governors of St. Francis Hospital, Roslyn, NY and Mercy Medical Center, Rockville Centre, NY. Date of birth is February 11, 1956.
Brent Fawkes, Winnipeg, Manitoba, Canada – Director
Mr. Fawkes is a Chartered Professional Accountant with over 20 years of experience in accounting and finance. Mr. Fawkes is currently the Vice President of Finance with Standard Aero Limited, one of the world’s largest independent providers of a variety of aerospace services serving a diverse array of customers in business and general aviation, airline, military, helicopter, components and energy markets. In his current role, Mr. Fawkes is responsible for the oversight of the finance department including external reporting, budgeting and planning and treasury management. Date of birth is December 21, 1969.
James Kinley, Winnipeg, Manitoba, Canada – Director
James Kinley is a Chartered Professional Accountant (“CPA, CA”) and is currently the UBC Okanagan Campus as Director, Integrated Planning and Chief Budget Officer in January 2019 where she is responsible for supporting the University’s mission through long range financial planning, financial advice and effective resource allocation strategies. For the prior 21 years as Vice-President, Finance and Corporate Services for the Canada Foundation for Innovation, Manon was responsible for the finance function, human resources, information technology, and administrative services. She was anFinancial Officer of the CFI Boarda publicly traded, clinical stage drug development company, Algernon Pharmaceuticals Inc. (CSE: AGN). Mr. Kinley has over 15 years of Directors,experience in building, leading, and served as the Secretary and Treasurer. Ms Harvey is a CPA, CA, with membership in British Columbia. She has her ICD.D designation from the Institute of Corporate Directors. Manon holds a Bachelor of Commerce (
Neil Owens – President and Chief Operating Officer and Interim Chief Financial Officer
Dr. Neil Owens Ph.D. is responsible for implementing Medicure’s strategic plans and overseeing
Haaris Uddin – Chief Financial Officer
Effective June 28,1, 2022 , Mr. David GurveyHaaris Uddin was appointed as CFOChief Financial Officer of the Company, replacing James Kinley,Dr. Neil Owens, who hashad served as Interim Chief Financial Officer since September 21, 2011. UntilMarch 25, 2022. Prior to joining Medicure, Mr. Gurvey’s appointment, Dr. Neil Owns acted as Interim Chief Financial Officer. Previous toUddin was a Senior Accountant in Assurance Services at Ernst & Young. A chartered professional accountant, Mr. Uddin has significant experience working with life science companies in both Canada and the United States. Mr. Uddin obtained his time at the Company, he was Chief Financial Officer , at Diamedica Therapeutics Inc. and was involved in all aspects of financial reporting, including publicly filed documents such as their financial statements. David is a CPA, CMA and holds a Bachelor of ScienceCommerce (Hons.) degree from the University of Manitoba.Manitoba and is a member of the Chartered Professional Accountants of Canada.
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Dr. Reuben Saba – Vice-President, Scientific and Medical Affairs
Dr. Reuben Saba Ph.D. was appointed Vice President of Scientific and Medical Affairs in July 2019 and is responsible for clinical development and medical activities at Medicure Inc. Dr. Saba began his tenure at Medicure as a Medical Science Liaison in the U.S. Midwest Regions and was appointed Regional Medical Affairs Manager in 2015 for the US Midwest and Northeast regions. Dr. Saba was appointed to Director of Medical Affairs, Medical Information and Medical-Technical Marketing in 2019. Dr. Saba joined Medicure from the Public Health Agency of Canada (PHAC) in the Molecular Pathobiology Department focusing on the host genetics involved in prion pathobiology. Dr. Saba obtained his M.Sc. and Ph.D. at the University of Manitoba and did further post-doctoral training at the Interdisciplinary Center for Neurosciences (IZN) at the University of Heidelberg (Heidelberg, Germany).
Management
Dr.
Dr.
Haaris Uddin – Chief Financial Officer:
Dr.
B. Compensation
Compensation paid to the directors, and executive officers of the Company during the year ended December 31, 2021,2022, is described below and stock-based compensation described in Item 6(E) below:
The Company recorded $31,000$76,000 in total fees paid or payable to Board members for attendance at meetings between January 1, 20212022 and December 31, 2021 and2022. In addition, included within this amount were additional $5,000 payments to the chairs of the Audit and Finance Committee and executive compensation, nominatingExecutive Compensation, and corporate governance committeeCorporate Governance Committee were paid an additional $5,000 each for services as committee chairs.
Effective October 1, 2001, a compensation agreement was entered into between2021, the Company and A.D. Friesen Enterprises Ltd.signed a consulting agreement with its Chief Executive Officer, through ADF Family Holding Corp., a corporationcompany owned by Dr. Friesen and subsequently amended on October 1, 2003, October 1, 2005, October 1, 2006, October 1, 2007, July 18, 2011, July 18, 2016,the Chief Executive Officer, for a term of 36 months, at a rate of $18,000 per month. The aforementioned monthly fee shall be reviewed at January 1, 2017,2023, and then annually thereafter on January 1 2019 and October 1, 2021. For the years ended December 31, 2021 and 2020, the Company recorded payable to A.D. Friesen Enterprises Ltd., $302,000 and 331,000, respectively, in consulting compensation, including taxable benefits. Dr. Friesen is eligible for an annual bonus, if certain objectives of the Company are met, as determined by the Board of Directors. DuringDirectors of the Company for each succeeding year ended December 31, 2018, a bonus of $31,500 was accrued to Dr. Friesen, which was paid to him during the year ended December 31, 2019. No bonus has been accrued asterm of the agreement, and may be adjusted at the sole discretion of the Board of Directors. The Company may terminate the agreement at any time upon 120 days’ written notice. As at December 31, 2021 or 2020. 2022, included in accounts payable and accrued liabilities is $23,000 (2021 – nil) payable to ADF Family Holding Corp. as a result of this consulting agreement. Any amounts payable to ADF Family Holding Corp are unsecured, payable on demand and non-interest bearing.
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Dr. Neil Owens serves the Company as President and Chief Operating Officer beginning on July 1, 2019 and received a salary of $68,000 for during the year ended December 31, 2019 in relation to the portion of the year he was the President and Chief Operating Officer. For the year ended December 31, 2021 and 2020,2022 the President and Chief Operating Officer received a salary of $170,000 and $155,000, respectively, and a bonus of $15,000 was earned during the year ended December 31, 2020.
Effective JanuaryJune 1, 2016, the business and administration services agreement with GVI no longer included the Chief Financial Officer’s services and2022, the Company signed a consulting agreement with its Chief Financial Officer, through JFK Enterprises10055098 Manitoba Ltd., a company owned by the Chief Financial Officer for a
Dr. Reuben Saba serves the Company as Vice-President, Clinical and Medical Affairs and received a salary of $139,000$145,000 for the year ended December 31, 2021.
Effective March 25, Mr. David Gurvey resigned as Chief Financial Officer. During the period between January 1, 2022 and December 31, 2022, Mr. Gurvey received a salary of $37,000 for the portion of the year in which he was employed.
During the year ended December 31, 2021,2022, the Company paid directors a total of Nilnil (December 31, 2020: Nil;2021- nil; December 31, 2019: Nil, December 31, 2018: Nil and December 31, 2017: Nil)2020—nil) for consulting fees.
The Company has agreed to provide its independent directors $2,000 for each quarterly board meeting they personally attend ($1,000 via telephone),attended and $1,500 for each quarterly executive compensation, nominating and corporate governance committee meeting or audit and finance committee meeting they attend that is not held in conjunction with a regular Board meeting.
As at December 31, 2021,2022, the Company did not have anyhad $12,000 in accrued compensation owing to the independent members of the Board of Directors relating to Directors fees (2020 – $14,000, 2019 – (2021—nil).
The Company does not provide any cash compensation for its directors who are also officers of the Company for their services as directors.
No pension, retirement fund and other similar benefits have been set aside for the officers and directors of the Company.
C. Board Practices
The Board of Directors presently consists of sixfive directors, who were all elected at the Company’s annual general meeting of the shareholders held on June 22, 2020.16, 2022. Each director holds office until the next annual general meeting of the Company or until his successor is elected or appointed, unless his office is earlier vacated in accordance with the
Dr. Albert D. Friesen has served as a director of the Company since September 1997. Dr. Arnold Naimark has served as a director of the Company since March 2000. Gerald McDole has served as a director of the Company since January 2004. On February 1, 2023, Gerald McDole resigned as a director of the Company. Peter Quick has served as a director of the Company since November 2005. Brent Fawkes has served as a director of the Company since January 2013. Manon HarveyJames Kinley has served as a director of the Company since May 2019.
As discussed in more detail below, the Board of Directors maintains an Audit and Finance Committee and an Executive Compensation, Nominating and Corporate Governance Committee.
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Corporate Governance
The Canadian Securities Administrators (the “
The Board believes that a clearly defined system of corporate governance is essential to the effective and efficient operation of the Company. The system of corporate governance should reflect the Company’s particular circumstances, having always as its ultimate objective, the best long-term interests of the Company and the enhancement of value for all shareholders.
Directors are considered to be independent if they have no direct or indirect material relationship with the Company. A “material relationship” is a relationship which could, in the view of the Company’s board of directors, be reasonably expected to interfere with the exercise of a director’s independent judgment.
The Executive Compensation, Nominating and Corporate Governance Committee has reviewed the independence of each director on the basis of the definition in section 1.4 of National Instrument
The Board has an orientation program in place for new directors which the Board feels is appropriate having regard to the current makeup of the Board. Each director receives relevant corporate and business information on the Company, the Board, and its committees. The directors regularly meet with Management and are given periodic presentations on relevant business issues and developments.
Presentations are made to the Board from time to time to educate and keep it informed of changes within the Company and of regulatory and industry requirements and standards.
The Company’s Board has adopted a Code of Ethics applicable to directors, officers and employees, copies of which are available on the Company’s website (www.medicure.com). A copy may also be obtained upon request to the Secretary of the Company at its head office,
Audit and Finance Committee
Pursuant to Section 171 of the
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Pursuant to section 6.1 of NI
Part 3 of NI
Part 5 of NI
Notwithstanding the exemption available under section 6.1 of NI
As a result of their education and experience, each member of the audit committee has familiarity with, an understanding of, or experience in:
the accounting principles used by the Company to prepare its financial statements, and the ability to assess the general application of those principles in connection with estimates, accruals and reserves;
reviewing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements, and
an understanding of internal controls and procedures for financial reporting.
Under the Sarbanes-Oxley Act of 2002, the independent auditor of a public Company is prohibited from performing certain
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AUDIT AND FINANCE COMMITTEE CHARTER
GENERAL FUNCTIONS, AUTHORITY, AND ROLE
The purpose of the Audit and Finance Committee (the “Committee”) is to oversee the accounting, financial reporting and disclosure processes of the Company and the audits of its financial statements, and thereby assist the Board of Directors of the Company (the “Board”) in monitoring the following:
(1) the integrity of the financial statements of the Company;
(2) compliance by the Company with ethical policies and legal and regulatory requirements related to financial reporting and disclosure;
(3) the appointment, compensation, qualifications, independence and performance of the Company’s internal and external auditors;
(4) the performance of the Company’s independent auditors;
(5) performance of the Company’s internal controls and financial reporting and disclosure processes; and
(6) that management of the Company has assessed areas of potential significant financial risk to the Company and taken appropriate measures.
The Committee has the power to conduct or authorize investigations into any matters within its scope of responsibilities, with full access to all books, records, facilities and personnel of the Company, its auditors and its legal advisors. In connection with such investigations or otherwise in the course of fulfilling its responsibilities under this charter, the Committee has the authority to independently retain, and set and pay compensation to, special legal, accounting, or other consultants to advise it, and may request any officer or employee of the Company, its independent legal counsel or independent auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. The Committee has the power to create specific sub-committees with all of the power to conduct or authorize investigations into any matters within the scope of the mandate of the sub-committee, with full access to all books, records, facilities and personnel of the Company, its auditors and its legal advisors.
In the course of fulfilling its specific responsibilities hereunder, the Committee has authority to, and must, maintain free and open communication between the Company’s independent auditor, Board and Company management. The responsibilities of a member of the Committee are in addition to such member’s duties as a member of the Board.
While the Committee has the responsibilities and powers set forth in this charter, it is not the duty of the Committee to plan or conduct audits or to determine that the Company’s financial statements are complete, accurate, and in accordance with International Financial Reporting Standards (“IFRS”). This is the responsibility of management and the independent auditor. Nor is it the duty of the Committee to conduct investigations, to resolve disagreements, if any, between management and the independent auditor or to assure compliance with laws and regulations and the Company’s Code of Ethics. Any responsibilities that the Committee has the power to act upon, may be recommended to the Board to act upon.
MEMBERSHIP
The membership of the Committee will be as follows:
The Committee shall consist of a minimum of three members of the Board, appointed from time to time, each of whom is affirmatively confirmed as independent by the Board in accordance with the definition of independence for audit committee members set out in Appendix I hereto, with such affirmation disclosed in the Company’s Management Information Circular for its annual meeting of shareholders. All members of the Committee should be “financially literate”, as defined in Appendix I, and at least one of the members shall be an “audit committee financial expert” as defined in as defined in Appendix I.
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The Board will elect, by a majority vote, one member as chairperson. In the absence of the Chair of the Committee, the members shall appoint an acting Chair.
The members of the Committee shall meet all independence and financial literacy requirements of The TSX Venture Exchange, and the requirements of such other securities exchange or quotations system or regulatory agency as may from time to time apply to the Company.
Any member of the Committee may be removed and replaced at any time by the Board and will automatically cease to be a member of the Committee as soon as such member ceases to be a Director. The Board may fill vacancies in the Committee by election from among the members of the Board. If and whenever a vacancy exists on the Committee, the remaining members may exercise all its powers so long as a quorum remains in office.
A quorum shall be a majority of the members provided that if the number of members is an even number, one half of the number plus one shall constitute a quorum.
A member of the Committee may not, other than in his or her capacity as a member of the Committee, the Board, or any other Board committee, accept any consulting, advisory, or other compensatory fee from the Company, and may not be an affiliated person of the Company or any subsidiary thereof.
RESPONSIBILITIES
The responsibilities of the Committee shall be as follows:
Frequency of Meetings
Meet quarterly or more often as may be deemed necessary or appropriate in its judgment, either in person or telephonically.
The Committee will meet with the independent auditor at least annually, either in person or telephonically.
Reporting Responsibilities
Provide to the Board proper Committee minutes.
Report Committee actions to the Board with such recommendations as the Committee may deem appropriate.
Committee and Charter Evaluation
The Committee shall annually review, discuss and assess its own performance. In addition, the Committee shall periodically review its role and responsibilities.
Annually review and reassess the adequacy of this Charter and recommend any proposed changes to the Board for approval.
Whistleblower Mechanism
Adopt and review annually a procedure through which employees and others can confidentially and anonymously inform the Committee regarding any concerns about the Company’s accounting, internal accounting controls or auditing matters. The procedure shall include responding to and the retention of, any such complaints.
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Legal Responsibilities
Perform such functions as may be assigned by law, by the Company’s certificate of incorporation, memorandum, articles or similar documents, or by the Board.
INDEPENDENT AUDITOR
Nomination, Compensation and Evaluation
The Company’s independent auditor is ultimately accountable to the Committee and the Board and shall report directly to the Committee. The Committee shall review the independence and performance of the auditor and annually recommend to the Board the appointment and compensation of the independent auditor or approve any discharge of auditor when circumstances warrant.
Review of Work
The Committee is directly responsibility for overseeing the work of the independent auditor engaged to prepare or issue an audit report or perform other audit, review or attest services for the Company, including the resolution of disagreements between management and the independent auditor regarding financial reporting.
Approval in Advance of Related Party Transactions
Pre-approval of all “related party transactions,” which are transactions or loans between the Company and a related party involving goods, services, or tangible or intangible assets that are:
(1) material to the Company or the related party; or
(2) unusual in their nature or conditions.
A related party includes an affiliate, major shareholder, officer, other key management personnel or director of the Company, a company controlled by any of those parties or a family member of any of those parties.
Engagement Procedures for Audit and Non-Audit Services
Approve in advance all audit services to be provided by the independent auditor. Establish policies and procedures that establish a requirement for approval in advance of the engagement of the independent auditor to provide permitted non-audit services provided to the Company or its subsidiary entities and to prohibit the engagement of the independent auditor for any activities or services not permitted by any of the Canadian provincial securities commissions, the Securities Exchange Commission (“SEC”) or any securities exchange on which the Company’s shares are traded including any of the following non-audit services:
Bookkeeping or other services related to accounting records or financial statements of the Company;
Financial information systems design and implementation consulting services;
• | Appraisal or valuation services, fairness opinions, or contributions-in-kind reports; |
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Actuarial services;
Internal audit outsourcing services;
Any management or human resources function;
Broker, dealer, investment advisor, or investment banking services;
Legal services;
Expert services related to the auditing service; and
Any other service the Board determines is not permitted.
Hiring Practices
Review and approve the Company’s hiring policy regarding the partners, employees and former partners and employees of the present and former independent auditor of the Company. Ensure that no individual who is, or in the past three years has been, affiliated with or employed by a present or former auditor of the Company or an affiliate, is hired by the Company as a senior officer until at least three years after the end of either the affiliation or the auditing relationship.
Independence Test
Take reasonable steps to confirm the independence of the independent auditor, which shall annually include:
Ensuring receipt from the independent auditor of a formal written statement delineating all relationships between the independent auditor and the Company, consistent with the Independence Standards Board Standard No. 1 and related Canadian regulatory body standards;
• | Considering and discussing with the independent auditor any relationships or services provided to the Company, including non-audit services, that may impact the objectivity and independence of the independent auditor; and |
As necessary, taking, or recommending that the Board take, appropriate action to oversee the independence of the independent auditor and evaluate whether it is appropriate to rotate the independent auditor on a regular basis.
Audit and Finance Committee Meetings
Notify the independent auditor of every Committee meeting and permit the independent auditor to appear and speak at those meetings.
At the request of the independent auditor, convene a meeting of the Committee to consider matters the auditor believes should be brought to the attention of the directors or shareholders.
Keep minutes of its meetings and report to the Board for approval of any actions taken or recommendations made.
Restrictions
Confirm with management and the independent auditor that no restrictions are placed on the scope of the auditors’ review and examination of the Company’s accounts.
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OTHER PROFESSIONAL CONSULTING SERVICES
Engagement Review
As necessary, consider with management the rationale and selection criteria for engaging professional consulting services firms.
Ultimate authority and responsibility to select, evaluate and approve professional consulting services engagements.
AUDIT AND REVIEW PROCESS AND RESULTS
Scope
Consider, in consultation with the independent auditor, the audit scope, staffing and planning of the independent auditor.
Review Process and Results
Consider and review with the independent auditor the matters required to be discussed by such auditing standards as may be applicable.
Review and discuss with management and the independent auditor at the completion of annual and quarterly examinations, if any:
The Company’s audited and unaudited financial statements and related notes;
The Company’s Management Discussion & Analysis (“MD&A”) and news releases related to financial results;
The Company’s management certifications of the financial statements and accompanying MD&A as required under applicable securities laws;
The Company’s annual information form (“AIF”), if one is prepared and filed.
The independent auditor’s audit of the financial statements and its report thereon;
Any significant changes required in the independent auditor’s audit plan;
• | The appropriateness of the presentation of any non-IFRS related financial information; |
Any serious difficulties or disputes with management encountered during the course of the audit; and
Other matters related to the conduct of the audit, which are to be communicated to the Committee under generally accepted auditing standards.
Review the management letter, if any, delivered by the independent auditor in connection with the audit.
Following such review and discussion, if so determined by the Committee, recommend to the Board that the annual financial statements be included in the Company’s annual report.
Review and discuss with management and the independent auditor the adequacy of the Company’s internal accounting and financial controls that management and the Board have established and the effectiveness of those systems, and inquire of management and the independent auditor about significant financial risks or exposures and the steps management has taken to minimize such risks to the Company.
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Meet separately with the independent auditor and management, as necessary or appropriate, to discuss any matters that the Committee or any of these groups believe should be discussed privately with the Committee.
Review and discuss with management and the independent auditor the accounting policies which may be viewed as critical, including all alternative treatments for financial information within IFRS that have been discussed with management, and review and discuss any significant changes in the accounting policies of the Company and industry accounting and regulatory financial reporting proposals that may have a significant impact on the Company’s financial reports.
Review with management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures, if any, on the Company’s financial statements.
Review with management and the independent auditor any correspondence with regulators or governmental agencies and any employee complaints or published reports which raise material issues regarding the Company’s financial statements or accounting policies.
Review with the Company’s legal counsel legal matters that may have a material impact on the financial statements, the Company’s financial compliance policies and any material reports or inquiries received from regulators or governmental agencies related to financial matters.
SECURITIES REGULATORY FILINGS
Review filings with the Canadian provincial securities commissions and the SEC and other published documents containing the Company’s financial statements.
Review, with management, prior to public disclosure, the Company’s financial statements and MD&A and related press releases. The chairperson of the Committee may represent the entire Committee for purposes of this review.
Ensure that adequate procedures are in place for the review of the Company’s public disclosure of financial information extracted or derived from the Company’s financial statements, other than the disclosure stated above, and periodically assess the adequacy of those procedures.
RISK ASSESSMENT
Meet periodically with management to review the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures.
Assess risk areas and policies to manage risk including, without limitation, environmental risk, insurance coverage and other areas as determined by the Board from time to time.
Review and discuss with management, and approve changes to, the Company’s Corporate Investment Policy.
LIMITATION ON DUTIES OF AUDIT AND FINANCE COMMITTEE
In contributing to the Committee’s discharging of its duties under this charter, each member of the Committee shall be obliged only to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Nothing in this charter is intended, or may be construed, to impose on any member of the Committee a standard of care or diligence that is in any way more onerous or extensive than the standard to which all Board members are subject.
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ADOPTION OF CHARTER
This charter was originally adopted by the Board on August 23, 2004 and revised on January 17, 2012.
APPENDIX I
GLOSSARY OF TERMS
“Independent”
A “
For greater certainty, certain individuals will be deemed not to be independent:
a) | an individual who is, or has been within the last three years, an employee or executive officer of the Company; |
b) | an individual whose immediate family member is, or has been within the last three years, an executive officer of the Company; |
c) | an individual who is a partner of, or employed by the Company’s internal or external auditor or who was, within the last three years, a partner or employee of that audit firm and personally worked on the Company’s audit within that time. For this purpose, “partner” does not include a fixed income partner; |
d) | an individual whose child or stepchild shares a home with the individual or whose spouse, is a partner of the Company’s internal or external auditor, or is an employee of the audit firm and participates in its audit, assurance or tax compliance practice or who was within the last three years a partner or employee of the audit firm and personally worked on the Company’s audit within that time. For this purpose, “partner” does not include a fixed income partner; |
e) | an individual who, or whose immediate family member, is or has been within the last three years, an executive officer of an entity if any of the Company’s current executive officers serve or served at the same time on the entity’s compensation committee; and |
f) | an individual who received, or whose immediate family member who is employed as an executive officer of the Company received, more than $75,000 in direct compensation from the Company during any 12 month period within the last three years. For purposes hereof, direct compensation does not include remuneration for acting as a member of the Board or of any Board committee or remuneration consisting of fixed amounts of compensation under a retirement plan for prior service provided that such compensation is not contingent on any way on continued service. |
For purposes hereof, “
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Notwithstanding the foregoing, a person will not be considered to have a material relationship with the Company solely because he or she:
a) | has previously acted as an interim chief executive officer of the issuer, or |
b) | acts, or has previously acted, as a chair or vice-chair of the Board or any Board committee, on a part-time basis. |
Meaning Of “Independence” For Audit Committees
In addition to the requirement of being an Independent Director as described above, members of the Audit Committee will not be considered “independent” for that purpose where the individual:
a) | accepts, directly or indirectly, any consulting, advisory or other compensatory fee from the Company or subsidiary of the Company, other than as remuneration for acting in his or her capacity as a member of the Board or any Board committee, or as a part-time or vice-chair of the Board or any Board Committee; or |
b) | is an affiliated entity (as defined in National Instrument 52-110 Audit Committees) of the Company or any of its subsidiaries. |
For purposes hereof, indirect acceptance by an individual of any consulting, advisory or other compensatory fee includes acceptance of a fee by (i) an individual’s spouse, minor child or stepchild, or child or stepchild who shares the individual’s home, or (ii) an entity in which such individual is a partner, member, executive officer or managing director (or comparable position) and which provides accounting, consulting, legal, investment banking or financial advisory services to the Company or any subsidiary of the Company. Notwithstanding the foregoing, compensatory fees do not include receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the issuer if the compensation is not contingent in any way on continued service.
Meaning of “financially literate”
For purposes hereof, an individual is financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements.
Meaning of “audit committee financial expert”
An “audit committee financial expert” means a person who has the following attributes:
(1) An understanding of generally accepted accounting principles and financial statements;
(2) The ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves;
(3) Experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements, or experience actively supervising one or more persons engaged in such activities;
(4) An understanding of internal controls over financial reporting;
(5) An understanding of audit committee functions.
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A person shall have acquired such attributes through:
(1) Education and experience as a principal financial officer, principal accounting officer, controller, public accountant or auditor or experience in one or more positions that involve the performance of similar functions;
(2) Experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor or person performing similar functions;
(3) Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements; or
(4) Other relevant experience.
Executive Compensation, Nominating and Corporate Governance Committee
The Executive Compensation, Nominating and Corporate Governance Committee is responsible for determining the compensation of executive officers of the Company. The current members of the Committee are Dr. Arnold Naimark (Chair), Gerald McDole Manon Harvey,(until his resignation on February 1, 2023), Peter Quick and Brent Fawkes, none of whom is a current or former executive officer of the Company. The Committee meets at least once a year.
The Committee has developed a policy to govern the Company’s approach to corporate governance issues and provides a forum for concerns of individual directors about matters not easily or readily discussed in a full board meeting, e.g., the performance of management. The Committee ensures there is a clear definition and separation of the responsibilities of the Board, the Committees of the Board, the Chief Executive Officer and other management employees. It also ensures there is a process in place for the orientation and education of new directors and for continuing education of the Board. The Committee also assesses the effectiveness of the Board and its committees on an ongoing ad hoc basis. It also reviews at least annually the Company’s responsiveness to environmental impact, health and safety and other regulatory standards.
The Committee reviews the objectives, performance and compensation of the Chief Executive Officer at least annually and makes recommendations to the Board for change. The Committee makes recommendations based upon the Chief Executive Officer’s suggestions regarding the salaries and incentive compensation for senior officers of the Company. The Committee also reviews significant changes to compensation, benefits and human resources policies and compliance with current human resource management practices, such as pay equity, performance review and staff development. The Committee is responsible for reviewing and recommending changes to the compensation of directors as necessary.
The charter of the Executive Compensation, Nominating and Corporate Governance Committee can be found on the Company’s website at
D. Employees
In addition to the individuals disclosed in Section A. Directors and Senior Management of this item, the Company has 25 employees through Medicure as at December 31, 2021.2022. During the year ended December 31, 2021,2022, the Company’s total employment decreased slightlywas consistent from the previous year as part of the Company’s cost curtailment activities.year. The Company’s subsidiary, Medicure Pharma Inc. has one direct employee as at December 31, 2021. Additional, Marley Drug has 19eight direct employees as at December 31, 2021.2022, an increase from the prior year. Additional, Marley Drug has 15 direct employees as at December 31, 2022, a slight decrease from the prior year.
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E. Share Ownership
The following table discloses the number of shares (each share possessing identical voting rights), stock options and percent of the shares outstanding held by the directors and officers of the Company, and their respective affiliates, directly and indirectly, at December 31, 2021.
Title of Class | Identity of Person or Group | Amount Owned | Percentage of Class | |||||||
Common shares | Dr. Albert D. Friesen (1) | 2,508,527 | (1) | 24.47 | % | |||||
Common shares | Dr. Arnold Naimark | 39,194 | 0.38 | % | ||||||
Common shares | Gerald P. McDole | 48,950 | 0.48 | % | ||||||
Common shares | Peter Quick | 28,150 | 0.27 | % | ||||||
Common shares | Brent Fawkes | 12,376 | 0.12 | % | ||||||
Common shares | Manon Harvey | — | — | |||||||
Common shares | Dr. Neil Owens | 2,000 | 0.02 | % | ||||||
Common shares | David Gurvey | 1,000 | 0.01 | % | ||||||
Common shares | Reuben Saba | — | — |
Title of Class | Identity of Person or Group | Amount Owned | Percentage of Class | |||||||
Common shares | Dr. Albert D. Friesen(1) | 2,674,827 | (1) | 26.09 | % | |||||
Common shares | Dr. Arnold Naimark | 39,194 | 0.38 | % | ||||||
Common shares | Gerald P. McDole(2) | 48,950 | 0.48 | % | ||||||
Common shares | Peter Quick | 28,150 | 0.27 | % | ||||||
Common shares | Brent Fawkes | 12,376 | 0.12 | % | ||||||
Common shares | James Kinely | 47,100 | 0.46 | % | ||||||
Common shares | Dr. Neil Owens | 2,000 | 0.02 | % | ||||||
Common shares | Haaris Uddin | — | — | |||||||
Common shares | Reuben Saba | — | — |
(1) | Dr. Albert D. Friesen holds 721,267 shares personally or in an RRSP, a Canadian individual retirement plan. The rest of the shares are held by ADF Family Holding Corp. ADF Enterprises Inc., his wife Mrs. Leona M. Friesen, and CentreStone Ventures Limited Partnership Fund. Dr. Friesen is the General Partner of CentreStone Ventures Limited Partnership Fund. |
(2) | Gerald McDole resigned from being a director of the Company on February 1, 2023. |
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Incentive Stock Options
The Company has established an Incentive Stock Option Plan (the ‘‘
The number of Common Shares allocated to the Plan, the exercise period for the options, and the vesting provisions for the options will be determined by the board of directors of the Company from time to time. The Company’s stock option plan allowed for the issuance of stock options to purchase up to a maximum of 20% of the outstanding common shares at the time of approval of the stock option plan, which resulted in a fixed number of stock options allowed to be granted totaling 2,934,403. The Plan was adopted by the shareholders of the Company on June 22, 2016.
The Common Shares issued pursuant to the exercise of options, when fully paid for by a participant, are not included in the calculation of Common Shares allocated to or within the Plan. Should a participant cease to be eligible due to the loss of corporate office (being that of an officer or director) or employment, the option shall cease for varying periods not exceeding 90 days. Loss of eligibility for consultants is regulated by specific rules imposed by the directors when the option is granted to the appropriate consultant. The Plan also provides that estates of deceased participants can exercise their options for a period not exceeding one year following death.
The following table discloses the stock options beneficially held by the directors and officers of the Company, and their respective affiliates, directly and indirectly, as of December 31, 2021.2022. The stock options are subject to the Plan and are for shares of Common Stock of the Company.
Name of Person | Number of Shares Subject to Issuance | Exercise Price per | Expiry Date | |||||||
Dr. Albert D. Friesen | | 15,000 100,000 15,000 7,500 9,000 | | $ $ $ $ $ | 7.20 7.30 4.95 1.90 1.90 | | December 19, 2022 January 31, 2023 June 26, 2024 July 7, 2024 March 27, 2025 | |||
Dr. Arnold Naimark | | 5,000 45,000 5,000 4,500 7,200 | | $ $ $ $ $ | 7.20 0.30 4.95 1.90 1.90 | | December 19, 2022 May 10, 2023 June 26, 2024 July 7, 2024 March 27, 2025 | |||
Gerald P. McDole | | 5,000 45,000 5,000 4,500 7,200 | | $ $ $ $ $ | 7.20 0.30 4.95 1.90 1.90 | | December 19, 2022 May 10, 2023 June 26, 2024 July 7, 2024 March 27, 2025 | |||
Peter Quick | | 5,000 45,000 5,000 4,500 7,200 | | $ $ $ $ $ | 7.20 0.30 4.95 1.90 1.90 | | December 19, 2022 May 10, 2023 June 26, 2024 July 7, 2024 March 27, 2025 |
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Name of Person | Number of Shares Subject to Issuance | Exercise Price per Share | Expiry Date | |||||||
7,200 | $ | 1.90 | March 27, 2025 | |||||||
Brent Fawkes | | 5,000 45,000 5,000 4,500 7,200 | | $ $ $ $ $ | 7.20 0.30 4.95 1.90 1.90 | | December 19, 2022 May 10, 2023 June 26, 2024 July 7, 2024 March 27, 2025 | |||
Manon Harvey | 15,000 | $ | 4.95 | June 26, 2024 | ||||||
Dr. Neil Owens | | 4,000 100,000 3,500 1,350 40,000 | | $ $ $ $ $ | 7.20 4.95 1.90 1.90 1.10 | | December 19, 2022 June 26, 2024 July 7, 2024 March 27, 2025 July 30, 2026 | |||
David Gurvey | 30,000 | $ | 1.10 | July 30, 2026 | ||||||
Reuben Saba | | 3,000 30,000 7,500 20,000 | | $ $ $ $ | 7.20 4.95 1.90 1.10 | | December 19, 2022 June 26, 2024 July 7, 2024 July 30, 2026 |
Brent Fawkes | | 5,000 45,000 5,000 4,500 7,200 |
| $ $ $ $ $ | 7.20 0.30 4.95 1.90 1.90 |
| December 19, 2022 May 10, 2023 June 26, 2024 July 7, 2024 March 27, 2025 | |||
Dr. Neil Owens | | 4,000 100,000 3,500 1,350 40,000 |
| $ $ $ $ $ | 7.20 4.95 1.90 1.90 1.10 |
| December 19, 2022 June 26, 2024 July 7, 2024 March 27, 2025 July 30, 2026 | |||
Haaris Uddin | 20,000 | $ | 1.20 | June 1, 2027 | ||||||
Reuben Saba | | 3,000 30,000 7,500 20,000 |
| $ $ $ $ | 7.20 4.95 1.90 1.10 |
| December 19, 2022 June 26, 2024 July 7, 2024 July 30, 2026 |
On May 30, 2022, the Company announced that the Board of Directors had approved the grant of 20,000 stock options to Mr. Uddin to purchase a total of 20,000 common shares at a price of $1.20 per common share. The stock options vest immediately, are exercisable for a period of five years and have been granted in accordance with the terms of the Company’s current stock option plan. The grant of stock options is subject to the approval of the TSX Venture Exchange.
On July 30, 2021, the Company announced that the Board of Directors had approved the grant of an aggregate of 90,000 stock options to certain officers of the Company pursuant to its stock option plan. These options, which were subject to the approval of the TSX Venture Exchange, are set to expire on the fifth anniversary of the date of grant and were issued at an exercise price of $1.10 per share.
ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
A. Major Shareholders
As of December 31, 2021,2022, the following table sets forth the beneficial ownership of the Company’s common shares by each person known by the Company to own beneficially more than 5% of the issued and outstanding common shares of the Company. Information as to shares beneficially owned, directly or indirectly, by each nominee or over which each nominee exercises control or direction, not being within the knowledge of the Company, has been furnished by the respective nominees individually. The Company does not know the majority of the ultimate beneficial owners of these common shares.
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Title of Class | Identity of Person or Group | Amount Owned (3) | Percentage of Class | |||||||
Common shares | Dr. Albert D. Friesen Winnipeg, Manitoba | 2,508,527 | (1) | 24.47 | % | |||||
Common shares | MM Asset Management Inc. Toronto, Ontario | 2,410,567 | 23.51 | % |
Title of Class | Identity of Person or Group | Amount Owned | Percentage of Class | |||||||
Common shares | Dr. Albert D. Friesen | 2,674,827 | (1) | 26.09 | % | |||||
Common shares | MM Asset Management Inc. | 2,410,567 | 23.51 | % |
Notes:
(1) | Dr. Albert Friesen holds |
To the best of the Company’s knowledge, it is not owned or controlled, directly or indirectly, by another Company, by any foreign government or by any other natural or legal person severally or jointly.
As of December 31, 2021,2022, the total number of issued and outstanding common shares of the Company beneficially owned by the directors and executive officers of the Company as a group was 2,640,1972,852,597 (or 25.75%27.83% of common shares).
To the best of the Company’s knowledge, there are no arrangements, the operation of which at a subsequent date will result in a change in control of the Company.
The major shareholders do not have any special voting rights.
Insider Reports under Canadian Securities Legislation
Since the Company a reporting issuer under the Securities Acts of each of the provinces of Canada, certain “insiders” of the Company (including its directors, certain executive officers, and persons who directly or indirectly beneficially own, control or direct more than 10% of its common shares) are generally required to file insider reports of changes in their ownership of the Company’s common shares five days following the trade under National Instrument
The U.S. rules governing the ownership threshold above which shareholder ownership must be disclosed are more stringent than those discussed above. Section 13 of the Exchange Act imposes reporting requirements on persons who acquire beneficial ownership (as such term is defined in the Rule
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B. Related Party Transactions
Except as disclosed below, the Company has not, since January 1, 2015, and does not at this time propose to:
(1) | enter into any transactions which are material to the Company or a related party or any transactions unusual in their nature or conditions involving goods, services or tangible or intangible assets to which the Company or any of its former subsidiaries was a party; |
(2) | make any loans or guarantees directly or through any of its former subsidiaries to or for the benefit of any of the following persons: |
(a) | enterprises directly or indirectly through one or more intermediaries, controlling or controlled by or under common control with the Company; |
(b) | associates of the Company (unconsolidated enterprises in which the Company has significant influence or which has significant influence over the Company) including shareholders beneficially owning 10% or more of the outstanding shares of the Company; |
(c) | individuals owning, directly or indirectly, shares of the Company that gives them significant influence over the Company and close members of such individuals families; |
(d) | key management personnel (persons having authority in responsibility for planning, directing and controlling the activities of the Company including directors and senior management and close members of such directors and senior management); or |
(e) | enterprises in which a substantial voting interest is owned, directly or indirectly, by any person described in (c) or (d) or over which such a person is able to exercise significant influence. |
Effective July 18, 2016, the Company renewed its consulting agreement with its Chief Executive Officer, through A.D. Friesen Enterprises Ltd., a company owned by the Chief Executive Officer.Officer, for a term of five years, at a rate of $300,000 annually, increasing to $315,000 annually, effective January 1, 2017,and increasing to $331,000 annually, effective January 1, 20192019. On September 30, 2021, the consulting agreement with A.D. Friesen Enterprises Ltd. was mutually terminated, and decreasing to $216,000 annually, effectivesuperseded with a new consulting agreement with its Chief Executive Officer, through ADF Family Holding Corp.
Effective October 1, 2021.2021, the Company signed a consulting agreement with its Chief Executive Officer, through ADF Family Holding Corp., a company owned by the Chief Executive Officer, for a term of 36 months, at a rate of $18 per month. The aforementioned monthly fee shall be reviewed at January 1, 2023, and then annually thereafter on January 1 by the Board of Directors of the Company for each succeeding year during the term of the agreement, and may be adjusted at the sole discretion of the Board of Directors. The Company may terminate thisthe agreement at any time upon 120 days’ written notice. As at December 31, 2021 and 2020, there were no amounts2022, included in accounts payable and accrued liabilities is $23,000 (2021 – nil) payable to A. D. Friesen Enterprises Ltd.ADF Family Holding Corp. as a result of this consulting agreement. Any amounts payable to A. D. Friesen Enterprises Ltd.ADF Family Holding Corp are unsecured, payable on demand and
Effective June 1, 2022, the Company signed a consulting agreement with its Chief Financial Officer, through 10055098 Manitoba Ltd., a company owned by the Chief Financial Officer for a monthly rate of $6, increasing to $9 effective October 1, 2022. The aforementioned fee shall be reviewed annually on January 1, 2023. The Company can terminate the agreement with 30 days’ written notice; otherwise, the agreement has an indefinite term. As at December 31, 2022, included within accounts payable and accrued liabilities is $20,000 (2021 – nil) payable to 10055098 Manitoba Limited. Any amounts payable to 10055098 Manitoba Ltd are unsecured, payable on demand and non-interest bearing.
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During the year ended December 31, 2018, the Company recorded a bonus of $32,000 to its Chief Executive Officer which was recorded within general and administrative expenses. During the year ended December 31, 2017, the Company recorded a bonus of $125,000 to its Chief Executive Officer which is recorded within the gain on the sale of Apicore, which was paid during fiscal 2018. During the year ended December 31, 2016, the Company recorded a bonus of $54,000 to its Chief Executive Officer which is recorded within selling, general and administrative expenses. During the year ended December 31, 2015, the Company recorded a bonus of $100,000 to its Chief Executive Officer which is recorded within selling, general and administrative expenses.
Clinical research services summarized aboveare provided through a consulting agreement with GVI-CDS, a company controlled by the Chief Executive Officer. Pharmacovigilance and safety, regulatory support, quality control and clinical support are provided to the Company through a consulting agreement with GVI. Until December 31, 2015, the GVI agreement included the Chief Financial Officer’s services to the Company, as well as accounting, payroll, human resources and some information technology services. The business and administration services agreement entered into effective January 1, 2016 and subsequently no longer includes the Chief Financial Officer’s services, which effective January 1, 2016, have been paid directly by the Company through a consulting or employmentGVI-CDS agreement.
Research and development services are provided through a consulting agreement with CanAm Bioresearch Inc. (“
These transactions have been measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.
As at December 31, 2021,2022, included in accounts payable and accrued liabilities is $48,000 (2020$11,000 (2021 – $56,000)$48,000) payable to GVI $61,000 (2020and $15,000 (2021 – $99,000)$61,000) payable to GVI CDS, and no amounts (2020 – $7,000) payable to CanAm.CDS. These amounts are unsecured, payable on demand and
C. Interests of Experts and Counsel
Not applicable
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ITEM 8. | FINANCIAL INFORMATION |
A. Consolidated Statements or Other Financial Information
Financial Statements
The consolidated financial statements of the Company as at December 31, 20212022 and 20202021 and for the years ended December 31, 2022, 2021 2020 and 20192020 have been prepared in accordance with IFRS, as issued by the IASB, and are included under Item 18 of this Annual Report. The consolidated financial statements including related notes are accompanied by the report of the Company’s independent registered public accounting firm, Ernst & Young LLP (PCAOB ID: 1263) as at and for the years ended December 2022, 2021 and 2020 and PricewaterhouseCoopers LLP for the year ended December 31, 2019.
Legal Proceedings
There are currently no claims outstanding against the Company.
Dividend Policy
The Company has not paid dividends in the past and it has no present intention of paying dividends on its shares as it anticipates that all available funds will be invested to finance the growth of its business. The directors of the Company will determine if and when dividends should be declared and paid in the future based upon the Company’s financial position at the relevant time. All of the Company’s Shares are entitled to an equal share of any dividends declared and paid.
B. Significant Changes
There have been no significant changes to the accompanying financial statements since December 31, 2019, except as disclosed in this Annual Report on Form
ITEM 9. | THE OFFERING AND LISTING |
A. Listing Details
On October 24, 2011, the Company’s common shares commenced trading on the
By Articles of Amendment filed by the Company under the
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The following table sets forth for the periods indicated the price history of the Company’s common shares on the
TSX-V | TSX-V | |||||||
High ($) | Low ($) | |||||||
Fiscal Quarter Ended | ||||||||
December 31, 2021 | 1.16 | 0.92 | ||||||
September 30, 2021 | 1.36 | 0.92 | ||||||
June 30, 2021 | 1.68 | 1.10 | ||||||
March 31, 2021 | 1.71 | 1.15 | ||||||
December 31, 2020 | 1.25 | 0.70 | ||||||
September 30, 2020 | 1.39 | 0.83 | ||||||
June 30, 2020 | 2.80 | 0.93 |
TSX-V | TSX-V | |||||||
High ($) | Low ($) | |||||||
March 31, 2020 | 4.40 | 1.50 | ||||||
December 31, 2019 | 5.24 | 3.00 | ||||||
September 30, 2019 | 5.02 | 4.15 | ||||||
June 30, 2019 | 6.35 | 4.68 | ||||||
March 31, 2019 | 6.90 | 5.95 | ||||||
December 31, 2018 | 7.15 | 5.71 | ||||||
September 30, 2018 | 7.38 | 6.60 | ||||||
June 30, 2018 | 7.55 | 5.90 | ||||||
March 31, 2018 | 7.40 | 6.70 |
TSX-V | TSX-V | |||||||
High ($) | Low ($) | |||||||
Fiscal Quarter Ended | ||||||||
December 31, 2022 | 1.15 | 0.96 | ||||||
September 30, 2022 | 1.37 | 0.90 | ||||||
June 30, 2022 | 1.44 | 0.80 | ||||||
March 31, 2022 | 1.09 | 0.90 | ||||||
December 31, 2021 | 1.16 | 0.92 | ||||||
September 30, 2021 | 1.36 | 0.92 | ||||||
June 30, 2021 | 1.68 | 1.10 | ||||||
March 31, 2021 | 1.71 | 1.15 | ||||||
December 31, 2020 | 1.25 | 0.70 | ||||||
September 30, 2020 | 1.39 | 0.83 | ||||||
June 30, 2020 | 2.80 | 0.93 | ||||||
March 31, 2020 | 4.40 | 1.50 |
B. Plan of Distribution
Not applicable.
C. Markets
The Company’s common shares are listed for trading on the
D. Selling Shareholders
Not applicable.
E. Dilution
Not applicable.
F. Expenses of the Issue
Not applicable.
ITEM 10. | ADDITIONAL INFORMATION |
A. Share Capital
Not applicable
B. Memorandum and Articles of Association
1. | Objects and Purposes of the Company |
The Articles of Continuance (as amended, the “
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2. | Directors |
Under applicable Canadian law, the directors and officers of the Company, in exercising their powers and discharging their duties, must act honestly and in good faith with a view to the best interests of the Company. The directors and officers must also exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
Section 4.18 of
The Company’s Articles provide that the Company’s board shall consist of a minimum of one and a maximum of 15 directors. The exact number of directors to form the board, between the minimum and maximum number of directors prescribed by the Articles, is determined from time to time by the board. Section 4.01 of the
Section 3.01 of the
i) | borrow money upon the credit of the Company; |
ii) | issue, reissue, sell or pledge debt obligations of the Company, including bonds, debentures, notes or other evidences of indebtedness or guarantees, whether secured or unsecured; |
iii) | subject to section 44 of the Act, give a guarantee on behalf of the Company to secure performance of any present or future indebtedness, liability or obligation of any person; and |
iv) | mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the Company, owned or subsequently acquired, to secure any obligation of the Company. |
The borrowing powers of the directors can be varied by amending the
There is no provision in the
Section 4.02 of the
Under section 4.03 of the
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3. | Shares |
The Articles of the Company provide that the Company is authorized to issue an unlimited number of shares designated as Common Shares, Class A Common Shares and Preferred Shares. Except for meetings at which only holders of another specified class or series of shares of the Company are entitled to vote separately as a class or series, each holder of the Common and Class A shares is entitled to receive notice of, to attend and to vote at all meetings of the shareholders of the Company. Subject to the rights, privileges, restrictions and conditions attached to any other class of shares of the Company, the holders of the Common and Class A shares are also entitled to receive dividends if, as and when declared by the directors of the Company and are entitled to share equally in the remaining property of the Company upon liquidation, dissolution or
The Preferred Shares may from time to time be issued in one or more series and, subject to the following provisions, and subject to the sending of articles of amendment in respect thereof, the directors may fix from time to time and before issue a series of Preferred Shares, the number of shares which are to comprise that series and the designation, rights, privileges, restrictions and conditions to be attached to that series of Preferred Shares including, without limiting the generality of the foregoing, the rate or amount of dividends or the method of calculating dividends, the dates of payment of dividends, the redemption, purchase and/or conversion, and any sinking fund or other provisions.
The Preferred Shares of each series shall, with respect to the payment of dividends and the distribution of assets or return of capital in the event of liquidation, dissolution or
If any cumulative dividends or amounts payable on the return of capital in respect of a series of Preferred Shares are not paid in full, all series of Preferred Shares shall participate rateably in respect of accumulated dividends and return of capital.
Unless the directors otherwise determine in the articles of amendment designating a series of Preferred Shares, the holder of each share or a series of Preferred Shares shall not, as such, be entitled to receive notice of or vote at any meeting of shareholders, except as otherwise specifically provided in the Act.
4. | Rights of Shareholders |
Under the Act, shareholders of the Company are entitled to examine, during its usual business hours, the Company’s articles and
Shareholders of the Company may obtain a list of shareholders upon payment of a reasonable fee and sending an affidavit to the Company or its transfer agent stating, among other things, that the list of shareholders will not be used by any person except in connection with an effort to influence the voting of shareholders of the Company, an offer to acquire shares of the Company or any other matter relating to the affairs of the Company.
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Under the Act, shareholders of the Company may apply to a court having jurisdiction directing an investigation to be made of the Company. If it appears to the court that the formation, business or affairs of the Company were conducted for fraudulent or unlawful purposes, or that the powers of the directors were exercised in a manner that is oppressive or unfairly disregards the interests of the shareholders, the court may order an investigation to be made of the Company.
To change the rights of holders of stock, where such rights are attached to an issued class or series of shares, requires the consent by a separate resolution of the holders of the class or series of shares, as the case may be, requiring a majority of
The Company is organized under the laws of Canada. The majority of the Company’s directors, officers, and affiliates of the Company, as well as the experts named in this registration statement, are residents of Canada and, to the best of the Company’s knowledge, all or a substantial portion of their assets and all of the Company’s assets are located outside of the United States. As a result, it may be difficult for shareholders of the Company in the United States to effect service of process on the Company or these persons above within the United States, or to realize in the United States upon judgments rendered against the Company or such persons. Additionally, a shareholder of the Company should not assume that the courts of Canada (i) would enforce judgments of U.S. courts obtained in actions against the Company or such persons predicated upon the civil liability provisions of the U.S. federal securities laws or other laws of the United States, or (ii) would enforce, in original actions, liabilities against the Company or such persons predicated upon the U.S. federal securities laws or other laws of the United States.
Laws in the United States and judgments of U.S. courts would generally be enforced by a court of Canada unless such laws or judgments are contrary to public policy in Canada, are or arise from foreign penal laws or laws that deal with taxation or the taking of property by a foreign government and are not in compliance with applicable laws in Canada regarding the limitation of actions. Further, a judgment obtained in a U.S. court would generally be recognized by a court of Canada, except under the following examples:
i) | the judgment was rendered in a U.S. court that had no jurisdiction according to applicable laws in Canada; |
ii) | the judgment was subject to ordinary remedy (appeal, judicial review and any other judicial proceeding which renders the judgment not final, conclusive or enforceable under the laws of the applicable state) or not final, conclusive or enforceable under the laws of the applicable state; |
iii) | the judgment was obtained by fraud or in any manner contrary to natural justice or rendered in contravention of fundamental principles of procedure; and |
iv) | a dispute between the same parties, based on the same subject matter has given rise to a judgment rendered in a court of Canada or has been decided in a third country and the judgment meets the necessary conditions for recognition in a court of Canada. |
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5. | Meetings |
Subject to the provisions of the Act, the annual general meeting of the shareholders shall be on such date in each year as the board of directors may determine, and a special meeting of the shareholders may be convened at any time by order of the President or by the board on their own motion or on the requisition of shareholders as provided for in the Act. Notice of the time and place of each meeting of shareholders shall be given not less than 21 days nor more than 60 days before the date of the meeting to each director and shareholder. A meeting of shareholders may be held without notice at any time and at any place provided a waiver of notice is obtained in accordance with section 136 of the Act. The quorum for the transaction of business at meetings of the shareholders shall consist of not less than two shareholders present or represented by proxy and holding in all not less than 10% percent of the outstanding shares entitled to vote at the meeting. At any meeting of shareholders, every person shall be entitled to vote who, at the time of the taking of a vote (or, if there is a record date for voting, at the close of business on such record date) is entered in the register of shareholders as the holder of one or more shares carrying the right to vote at such meeting, subject to the provisions of the Act.
6. | Ownership of Securities |
There are no limitations imposed by the Act, or by the Articles or
The following discussion summarizes the principal features of the Investment Canada Act for a
The Investment Canada Act is a federal statute of broad application regulating the establishment and acquisition of Canadian businesses by
An investment in the Company’s common shares by a
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A
a) | the acquisition of voting shares or other voting interests by any person in the ordinary course of that person’s business as a trader or dealer in securities; |
ii) | the acquisition of control of the Company in connection with the realization of security granted for a loan or other financial assistance and not for any purpose related to the provisions of the Investment Canada Act Bank Act Cooperative Credit Associations Act Insurance Companies Act Trust and Loan Companies Act |
iii) | the acquisition of control of the Company by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control of the Company, through the ownership of voting interests, remains unchanged. |
7. | Change in Control of Company |
No provision of the Company’s Articles or
C. Material Contracts
The following are the material contracts of the Company, other than those mentioned elsewhere in this Form, to which the Company or any member of the group is a party, for the two years immediately preceding publication of this registration statement.
N/A
D. Exchange Controls
There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to a
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Except as provided in the Investment Canada Act (Canada), which has rules regarding certain acquisitions of shares by
E. Taxation
Material U.S. Federal Income Tax Considerations
The following is a summary of the anticipated material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership, and disposition of the Company’s common shares (“
This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder as a result of the acquisition, ownership, and disposition of Common Shares. In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares for such U.S. Holder. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any particular U.S. Holder. Except as specifically set forth below, this summary does not discuss applicable tax reporting requirements. Each U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. state and local, and
No opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the “
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Scope of this Summary
Authorities
This summary is based on the Internal Revenue Code of 1986, as amended (the “
U.S. Holders
For purposes of this summary, a “
Non-U.S.
For purposes of this summary, a “
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U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed
This summary does not address the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares to U.S. Holders that are subject to special provisions under the Code, including the following U.S. Holders: (a) U.S. Holders that are
If an entity that is classified as a partnership (or other “pass-through” entity) for U.S. federal income tax purposes holds Common Shares, the U.S. federal income tax consequences to such partnership (or other “pass-through” entity) and the partners of such partnership (or owners of such other “pass-through” entity) generally will depend on the activities of the partnership (or other “pass-through” entity) and the status of such partners (or owners). This summary does not address the U.S. federal income tax consequences for any such partner or partnership (or other “pass-through” entity or owner). Partners of entities that are classified as partnerships (or owners of other “pass-through” entities) for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal tax consequences of the acquisition, ownership, and disposition of Common Shares.
Tax Consequences Other than U.S. Federal Income Tax Consequences Not Addressed
This summary does not address the U.S. state and local, U.S. federal estate and gift, U.S. Medicare contribution, or
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U.S. Federal Income Tax Consequences of the Acquisition, Ownership, and Disposition of Common Shares
Distributions on Common Shares
General Taxation of Distributions
Subject to the “passive foreign investment company” rules discussed below, a U.S. Holder that receives a distribution, including a constructive distribution, with respect to Common Shares will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of the current or accumulated “earnings and profits” of the Company, as computed for U.S. federal income tax purposes. To the extent that a distribution exceeds the current and accumulated “earnings and profits” of the Company, such distribution will be treated (a) first, as a
Reduced Tax Rates for Certain Dividends
A dividend paid by the Company generally will be taxed at the preferential tax rates applicable to long-term capital gains if (a) the Company is a “qualified foreign corporation” (as defined below), (b) the U.S. Holder receiving such dividend is an individual, estate, or trust, and (c) such dividend is paid on Common Shares that have been held by such U.S. Holder for at least 61 days during the
However, even if the Company satisfies one or more of such requirements, the Company will not be treated as a QFC if the Company is a “passive foreign investment company,” or “PFIC” (as defined below) for the taxable year during which the Company pays a dividend or for the preceding taxable year.
As discussed below, the Company does not believe that it was a PFIC for the taxable year ended December 31, 2019, and does not expect that it will be a PFIC for the taxable year ending December 31, 2021. (See more detailed discussion at “Additional Rules that May Apply to U.S. Holders” below). However, there can be no assurance that the IRS will not challenge the determination made by the Company concerning its PFIC status or that the Company will not be a PFIC for the current taxable year or any subsequent taxable year.
Accordingly, although the Company expects that it may be a QFC for the taxable year ending December 31, 2021, there can be no assurance that the IRS will not challenge the determination made by the Company concerning its QFC status, or that the Company will be a QFC for the taxable year ending December 31, 2021, or any subsequent taxable year.
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If the Company is not a QFC, subject to the PFIC rules discussed below, a dividend paid by the Company to a U.S. Holder, including a U.S. Holder that is an individual, estate, or trust, generally will be taxed at ordinary income tax rates (and not at the preferential tax rates applicable to long-term capital gains). The dividend rules are complex, and each U.S. Holder should consult its own tax advisor regarding the dividend rules.
Distributions Paid in Foreign Currency
The amount of a distribution paid to a U.S. Holder in foreign currency generally will be equal to the U.S. dollar value of such distribution based on the exchange rate applicable on the date of receipt. A U.S. Holder that does not convert foreign currency received as a distribution into U.S. dollars on the date of receipt generally will have a tax basis in such foreign currency equal to the U.S. dollar value of such foreign currency on the date of receipt. Such a U.S. Holder generally will recognize ordinary income or loss on the subsequent sale or other taxable disposition of such foreign currency (including an exchange for U.S. dollars).
Dividends Received Deduction
Dividends paid on Common Shares generally will not be eligible for the “dividends received deduction.” The availability of the dividends received deduction is subject to complex limitations that are beyond the scope of this discussion, and a U.S. Holder that is a corporation should consult its own tax advisor regarding the dividends received deduction.
Disposition of Common Shares
Subject to the PFIC rules discussed below, a U.S. Holder will recognize capital gain or loss on the sale or other taxable disposition of Common Shares in an amount equal to the difference, if any, between (a) the amount of cash plus the fair market value of any property received and (b) such U.S. Holder’s tax basis in the Common Shares sold or otherwise disposed of. A U.S. Holder’s tax basis in Common Shares generally will be such U.S. Holder’s U.S. dollar cost for such Common Shares. Such gain or loss will be long-term capital gain or loss if the Common Shares have been held for more than one year at the time of sale or other taxable disposition. Gain or loss recognized by a U.S. Holder on the sale or other taxable disposition of Common Shares generally will be treated as “U.S. source” for purposes of applying the U.S. foreign tax credit rules.
Preferential tax rates apply to long-term capital gains of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates for long-term capital gains of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations under the Code.
The amount realized on a sale or other taxable disposition of Common Shares for an amount in foreign currency will generally be the U.S. dollar value of this amount on the date of sale or disposition. On the settlement date, the U.S. Holder will recognize U.S. source foreign currency gain or loss (taxable as ordinary income or loss) equal to the difference (if any) between the U.S. dollar value of the amount received based on the exchange rates in effect on the date of sale or other disposition and the settlement date.
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Foreign Tax Credit
A U.S. Holder that pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on Common Shares or gain from the sale or other taxable disposition of Common Shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian income tax paid. Generally, a credit will reduce a U.S. Holder’s U.S. federal income tax liability on a
Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holder’s U.S. federal income tax liability that such U.S. Holder’s “foreign source” taxable income bears to such U.S. Holder’s worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income and deduction must be classified, under complex rules, as either “foreign source” or “U.S. source.” In addition, this limitation is calculated separately with respect to specific categories of income. Dividends paid by the Company generally will constitute “foreign source” income and generally will be categorized as “passive income.” The foreign tax credit rules are complex, and each U.S. Holder should consult its own tax advisor regarding the foreign tax credit rules.
Information Reporting; Backup Withholding Tax
Payments made within the U.S., or by a U.S. payor or U.S. middleman, of distributions with respect to, or proceeds arising from the sale or other taxable disposition of, Common Shares generally will be subject to information reporting and backup withholding tax, at the rate of 24%, if a U.S. Holder (a) fails to furnish such U.S. Holder’s correct U.S. taxpayer identification number (generally on IRS Form
Additional Rules that May Apply to U.S. Holders
The Company believes it was a PFIC in one or more previous taxable years. If the Company is or becomes a PFIC, or U.S. Holders held Common Shares while the Company was a PFIC, the preceding sections of this summary may not describe the U.S. federal income tax consequences to U.S. Holders of the acquisition, ownership, and disposition of Common Shares.
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Passive Foreign Investment Company
The Company generally will be a PFIC if, for a taxable year, (a) 75% or more of the gross income of the Company for such taxable year is passive income (“income test”) or (b) on average for such taxable year, 50% or more of the assets held by the Company either produce passive income or are held for the production of passive income (“asset test”), based on the fair market value of such assets. Passive income includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions. Passive income does not include any interest, dividends, rents, or royalties that are received or accrued by the Company from a “related person” (as defined in Section 954(d)(3) of the Code), to the extent such items are properly allocable to the income of such related person that is not passive income. Assets that produce or are held for the production of passive income generally include cash, even if held as working capital or raised in a public offering, marketable securities and other assets that may produce passive income.
For purposes of the income test and asset test, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other corporation and (b) received directly a proportionate share of the income of such other corporation. , In addition, if the Company is a PFIC and owns shares of another foreign corporation that also is a PFIC (“subsidiary PFIC”), a disposition of the shares of such other foreign corporation or a distribution received from such other foreign corporation generally will be treated as an indirect disposition by a U.S. Holder or an indirect distribution received by a U.S. Holder, subject to the rules of Section 1291 of the Code discussed below. Accordingly, U.S. Holders should be aware that they could be subject to tax even if no distributions are received and no redemptions or other dispositions of Common Shares are made. To the extent that gain recognized on the actual disposition by a U.S. Holder of Common Shares or income recognized by a U.S. Holder on an actual distribution received on Common Shares was previously subject to U.S. federal income tax under these indirect ownership rules, such amount generally should not be subject to U.S. federal income tax.
If the Company is a PFIC, or a U.S. Holder held Common Shares while the Company was a PFIC, the U.S. federal income tax consequences to a U.S. Holder of the acquisition, ownership, and disposition of Common Shares will depend on whether such U.S. Holder makes an election to treat the Company and any subsidiary PFIC as a “qualified electing fund” or “QEF” under Section 1295 of the Code (a “
Under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of Common Shares, and any “excess distribution” (as defined in Section 1291(b) of the Code) paid on the Common Shares, must be ratably allocated to each day in a
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A U.S. Holder that makes a QEF Election generally will not be subject to the rules of Section 1291 of the Code discussed above. Instead, a U.S. Holder that makes a QEF Election generally will be subject to U.S. federal income tax on such U.S. Holder’s pro rata share of (a) the “net capital gain” of the Company, which will be taxed as long-term capital gain to such U.S. Holder, and (b) the “ordinary earnings” of the Company, which will be taxed as ordinary income to such U.S. Holder. A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for each taxable year in which the Company is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by the Company. Taxable gains on the disposition of Common Shares by a U.S. Holder that has made a timely and effective QEF Election are generally capital gains. Each U.S. Holder should consult its own tax advisor regarding the availability and desirability of, and procedure for, making a timely and effective QEF Election for the Company and any subsidiary PFIC.
A U.S. Holder that makes a
The Company believes it was a PFIC in one or more prior taxable years but does not believe that it was a PFIC for the taxable years ended December 31, 20212022 and December 31, 2020,2021, and, based on current operations and financial projections, does not expect that it will be a PFIC for the taxable year ending December 31, 2022. The determination of whether the Company was, or will be, a PFIC for a taxable year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether the Company will be a PFIC for the taxable year ending December 31, 2022,2023, and each subsequent taxable year depends on the assets and income of the Company over the course of each such taxable year and, as a result, cannot be predicted with certainty as of the date of this Annual Report. Accordingly, there can be no assurance that the IRS will not challenge the determination made by the Company concerning its PFIC status or that the Company was not, or will not be, a PFIC for any taxable year.
If the Company meets the income test or asset test for any taxable year during which a U.S. Holder owns Common Shares, the Company will be treated as a PFIC with respect to such U.S. Holder for that taxable year and for all subsequent taxable years, regardless of whether the Company meets the PFIC income test or asset test for such subsequent taxable years, unless the U.S. Holder elects to recognize any unrealized gain in the Common Shares or makes a timely and effective QEF Election or
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The PFIC rules are complex, and each U.S. Holder should consult its own tax advisor regarding the PFIC rules and how the PFIC rules may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares.
THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL U.S. FEDERAL INCOME TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF COMMON SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR PARTICULAR CIRCUMSTANCES.
Canadian Federal Income Tax Considerations for United States Residents
The following, as of the date hereof, is a summary of the principal Canadian federal income tax considerations generally applicable to the holding and disposition of common shares by a holder (a) who, for the purposes of the Income Tax Act (Canada) (the “
Holders who meet all such criteria in clauses (a) and (b) above are referred to in this summary as a “U.S. Holder” or “U.S. Holders”, and this summary only addresses such U.S. Holders. The summary does not deal with special situations, such as particular circumstances of traders or dealers, limited liability companies,
This summary is based on the current provisions of the Tax Act, and the regulations thereunder, all proposed amendments to the Tax Act and regulations publicly announced by the Minister of Finance (Canada) to the date hereof, the current provisions of the Convention and our understanding of the current administrative practices of the Canada Revenue Agency. It has been assumed that all currently proposed amendments to the Tax Act and regulations will be enacted as proposed and that there will be no other relevant change in any governing law, the Convention or administrative policy, although no assurance can be given in these respects. This summary does not take into account provincial, U.S. or other foreign income tax considerations, which may differ significantly from those discussed herein.
This summary is not exhaustive of all possible Canadian income tax consequences. It is not intended as legal or tax advice to any particular U.S. Holder and should not be so construed. The tax consequences to a U.S. Holder will depend on that U.S. Holder’s particular circumstances. All holders, including U.S. Holders or prospective U.S. Holders as defined above, should consult their own tax advisors with respect to the tax consequences applicable to them having regard to their own particular circumstances. The discussion below is qualified accordingly.
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For the purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of the common shares must be converted into Canadian dollars based on the relevant exchange rate applicable thereto.
Dividends
Dividends paid or deemed to be paid or credited by the Company to a U.S. Holder are subject to Canadian withholding tax. In general terms, the Tax Act provides for withholding at the rate of 25% unless the holder is able to substantiate a reduced rate under an applicable tax treaty or convention.
The rate of withholding tax on dividends paid to a U.S. Holder who can substantiate eligibility for benefits under the Convention is generally limited to 15% of the gross amount of the dividends (or 5%, if the beneficial owner of the dividends is a company that owns at least 10% of the voting stock of the Company).
Dispositions
A U.S. Holder is generally not subject to tax under the Tax Act in respect of a capital gain realized on the disposition of a common share in the open market, unless the share is “taxable Canadian property” to the holder thereof and the U.S. Holder is not entitled to relief under the Convention.
Provided that the Company’s common shares are listed on a “designated stock exchange” for purposes of the Tax Act (which currently includes the TSX Venture) at the time of disposition, a common share will generally not constitute taxable Canadian property to a U.S. Holder unless, at any time during the 60 month period ending at the time of disposition, (i) the U.S. Holder, persons with whom the U.S. Holder did not deal at arm’s length, partnerships in which the U.S. Holder or such
While intended to address material Canadian federal income tax considerations relevant to the holding or disposition of common shares by U.S. Holders, this summary is for general information purposes only, and is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of common shares. No opinion was requested by the Company, or is provided by its legal counsel and/or auditors. Accordingly, holders and prospective holders of common shares (including U.S. Holders as defined above) should consult their own tax advisors regarding the consequences of purchasing, owning, and disposing of common shares of the Company.
F. Dividends and Paying Agents
Not applicable
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G. Statement by Experts
Not applicable
H. Documents on Display
Exhibits attached to this Annual Report are available for viewing on EDGAR, or may be inspected at the head office of Company at 2 – 1250 Waverley Street, Winnipeg, Manitoba, Canada R3T 6C6, during normal business hours. Copies of the Company’s financial statements and other continuous disclosure documents required under Canadian securities legislation are available for viewing on the internet at
I. Subsidiary Information
Not applicable
ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
INTEREST RATE RISK
The primary objective of the Company’s investment activities is to preserve principal by maximizing the income the Company receives from such activities without significantly increasing risk. Securities that the Company invests in are generally highly liquid short-term investments such as term deposits with terms to maturity of less than one year.
Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is not exposed to any significant interest rate risk as it does not have any variable rate borrowings.
FOREIGN EXCHANGE RISK
The Company’s primary currency of operations is the Canadian dollar. Its wholly-owned operating subsidiaries primary currency of operations is the US dollar. The Company has expenditures and holds investments denominated in US dollars. During the year ended December 31, 2021,2022, it is estimated that approximately 65%90% of the Company’s consolidated expenditures were denominated in a foreign currency, primarily being the US dollar and 100% of the Company’s consolidated product revenues were denominated in the US dollar. To date the Company has not entered into any future or forward contracts, or other derivative instruments, for either hedging or speculative purposes, to mitigate the impact of foreign exchange fluctuations on these costs or revenues. Based on the net exposures as at December 31, 2021, assuming that all other variables remain constant, a 5% appreciation or deterioration of the Canadian dollar against the U.S. dollar would result in a corresponding increase or decrease, respectively, on the Company’s net loss of approximately $64,000 (2020$162,000 (2021 – $205,000)$64,000).
The Company is also exposed to currency risk on the Euro and had an accounts payable balance of €983,000€369,000 at December 31, 2021.2022. Based on that exposure, as at December 31, 2021,2022, assuming that all other variables remain constant, a 5% appreciation or deterioration of the Canadian dollar against the Euro would result in an increase or decrease, respectively, of $71,000$27,000 on the Company’s net loss.profit. As at December 31, 2020,2021, the Company had a nominal balance of payables denominated in Euros and assuming that all other variables remained constant, a 5% appreciation or deterioration of the Canadian dollar against the U.S. dollar would not have had a material impactresult in an increase or decrease, respectively, of $71,000 on the Company’s net loss.
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ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
Not applicable
PART II
ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
Not applicable
ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
Not applicable
ITEM 15. | CONTROLS AND PROCEDURES |
Disclosure Controls and Procedures
The Company’s disclosure controls and procedures, as such term is defined in Rules
Management’s Annual Report on Internal Control over Financial Reporting
The management of the Company, including the CEO and CFO, is responsible for establishing and maintaining adequate internal controls over financial reporting (as defined in Rule
1. | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
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2. | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and |
3. | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the design and operation of internal control over financial reporting as of December 31, 2021,2022, based on the framework set forth in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management concluded that the Company’s ICFR was not effective as at December 31, 20212022 due to the following material weaknesses:
Due to the limited number of staff with an appropriate level of technical accounting knowledge, experience and training and the inability to attract outside expert advice on a cost-effective basis, there is a risk of material misstatements related to the accounting and reporting for complex and
Attestation Report of the Registered Public Accounting Firm
This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report is not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report.
Changes in Internal Control over Financial Reporting and Planned Remediation Activities
Certain remedial measures were undertaken in the full extentsecond quarter of the procedures2022 that would be required to be implementedresulted in order to remediate the material weaknesses withinan effective control design over the Company’s internal control environment described in the preceding paragraph
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ITEM 16. | RESERVED |
Not applicable
ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT |
As of December 31, 2021,2022, Mr. Brent Fawkes CPA, CA, a
ITEM 16B. | CODE OF ETHICS |
On August 23, 2004, the Company adopted a written Code of Business Conduct and Ethics (“
During the most recently completed fiscal year, the Company has neither: (a) amended its Code of Ethics; nor (b) granted any waiver (including any implicit waiver) form any provision of its Code of Ethics.
ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
In accordance with the requirements of the Sarbanes-Oxley Act of 2002 and the Audit Committee’s charter, all audit and audit-related work and all
(a) Audit fees | 2022 | 2021 | ||||||
$ | 227,000 | $ | 198,000 | |||||
Audit fees consist of fees billed for the audit of the Company’s annual financial statements. |
| |||||||
(b) Audit-related fees | 2022 | 2020 | ||||||
$ | — | $ | — | |||||
Audit-related fees consist of fees billed for accounting consultations. |
| |||||||
(c) Tax fees | 2022 | 2020 | ||||||
$ | — | $ | — | |||||
(d) All other fees | 2022 | 2020 | ||||||
$ | — | $ | — |
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(a) Audit fees | ||||||||||||
2021 | 2020 | |||||||||||
$ | 198,000 | $ | 194,000 | |||||||||
Audit fees consist of fees billed for the audit of the Company’s annual financial statements. |
(b) Audit-related fees | ||||||||||||
2021 | 2020 | |||||||||||
$ — | $ — | |||||||||||
Audit-related fees consist of fees billed for accounting consultations. | ||||||||||||
(c) Tax fees | ||||||||||||
2021 | 2020 | |||||||||||
$ — | $ — | |||||||||||
(d) All other fees | ||||||||||||
2021 | 2020 | |||||||||||
$ — | $ — |
(e) Audit Committee’s Pre-approval Policies
All Ernst & Young LLP services and fees are approved by the Audit Committee.
ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
Not applicable
ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
On June 29, 2020, the Company announced that the TSX Venture Exchange (“
Under the terms of the NCIB, Medicure may acquire up to an aggregate of 533,116 common shares. In the opinion of the Company, its common shares have been trading at prices that do not reflect its underlying value. Accordingly, the Company believes that purchasing its common shares for cancellation, at present pricing, represents an opportunity to enhance value for its shareholders.
As of June 29, 2020, the Company had 10,662,313 common shares outstanding, of which 4,655,353 common shares represent the public float of the Company. Under TSXV policies, the Company is entitled to purchase up to the maximum of 533,116 common shares, representing 5% of the common shares outstanding, over the
The NCIB commenced on June 30, 2020 and will end on June 29, 2021, or on such earlier date as the Company may complete its maximum purchases under the NCIB. The actual number of common shares which will be purchased, if any, and the timing of such purchases will be determined by the Company. All common shares purchased by the Company will be purchased on the open market through the facilities of TSXV by PI Financial Corp. (“
The Company also announces that it has entered into an automatic share purchase plan (the “
Purchases under the Plan will be made by PI based upon parameters prescribed by the TSXV, applicable Canadian securities laws and terms of the Plan.
During period from June 30 2020 to December 31, 2020, that the 2020 NCIB was in place, the Company purchased and cancelled 411,000 common shares for a total cost of $364,000. The prices that the Company paid for the common shares purchased was the market price of the shares at the time of purchase.
There were purchases of common shares during the year ended December 31, 2022 or December 31, 2021.
ITEM 16F. | CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
The Board of Directors, upon the recommendation of the Audit and Finance Committee, decided notelected to renew PwC’s appointment as auditor. The Audit and Finance Committee reviewed the situation and determined that the appointment ofappoint Ernst & Young LLP (“EY”) as auditors of the Corporation would be infor the best interests of the Corporation. As such, the Company’s Audit and Finance Committee recommended that EY be appointed as the successor auditor and theyear ended December 31, 2020. The Board of Directors approved the same on October 6, 2020.
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There have been no reservations in the auditor’s reports for the audits of the three most recently completed fiscal years.
There have been, in the opinion of the Corporation, no reportable events, as that term is defined in NI
ITEM 16G. | CORPORATE GOVERNANCE |
Not applicable.
ITEM 16H. | MINE SAFETY DISCLOSURE |
Not applicable.
PART III
ITEM 17. | FINANCIAL STATEMENTS |
Not applicable. See “Item 18 –
ITEM 18. | FINANCIAL STATEMENTS |
The consolidated financial statements were prepared in accordance with IFRS, as issued by the IASB, and are presented in thousands of Canadian dollars.
The consolidated financial statements are in the following order:
1. | Reports of Independent Registered Public Accounting Firms; |
2. | Consolidated Statements of Financial Position; |
3. | Consolidated Statements of Net Income (Loss) |
4. | Consolidated Statements of Changes in Equity |
5. | Consolidated Statements of Cash Flows; and |
6. | Notes to Consolidated Financial Statements. |
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/s/ Albert Friesen | ||||
/s/ | ||||
Chief Executive Officer | Chief Financial Officer |
Description of the matter | As described in Auditing the estimated chargeback | |
How we addressed the matter in our audit | To test the Company’s estimated chargeback |
Description of the matter | Auditing management’s annual goodwill impairment test | |
How we addressed the matter in our audit | To test the estimated recoverable amount of the Company’s Retail and Mail Order Pharmacy CGU, we performed audit procedures that included, among others, testing the significant assumptions discussed above and the underlying data used by the Company in its analysis. We compared the significant assumptions used by management to |
Winnipeg, Canada | ||||
April 6, 2023 |
As at December 31 | Note | 2021 | 2020 | |||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 3,694 | $ | 2,716 | ||||||||
Restricted cash | 4 | 3 | 1,394 | |||||||||
Accounts receivable | 5 | 4,659 | 5,253 | |||||||||
Inventories | 6 | 3,329 | 5,139 | |||||||||
Prepaid expenses | 869 | 1,174 | ||||||||||
Total current assets | 12,554 | 15,676 | ||||||||||
Non-current assets: | ||||||||||||
Property and equipment | 7 | 1,611 | 1,640 | |||||||||
Intangible assets | 8 | 11,212 | 13,596 | |||||||||
Goodwill | 9 | 2,974 | 2,986 | |||||||||
Other assets | 4 | 57 | 156 | |||||||||
Total non-current assets | 15,854 | 18,378 | ||||||||||
Total assets | $ | 28,408 | $ | 34,054 | ||||||||
Liabilities and Equity | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable and accrued liabilities | $ | 6,668 | $ | 6,979 | ||||||||
Current portion of royalty obligation | 11 | 423 | 362 | |||||||||
Current portion of acquisition payable | 8 | 634 | 637 | |||||||||
Holdback payable | 4 | — | 1,876 | |||||||||
Current portion of contingent consideration | 4 | 293 | 1,925 | |||||||||
Current income taxes payable | 1 6 | 114 | 164 | |||||||||
Current portion of lease obligation | 12 | 380 | 367 | |||||||||
Total current liabilities | 8,512 | 12,310 | ||||||||||
Non-current liabilities | ||||||||||||
Royalty obligation | 11 | 65 | 335 | |||||||||
Acquisition payable | 8 | 591 | 1,132 | |||||||||
Contingent consideration | 4 | 40 | 51 | |||||||||
Lease obligation | 4 & 12 | 789 | 1,080 | |||||||||
Total non-current liabilities | 1,485 | 2,598 | ||||||||||
Total liabilities | 9,997 | 14,908 | ||||||||||
Equity: | ||||||||||||
Share capital | 15(b | ) | 80,917 | 80,917 | ||||||||
Contributed surplus | 10,429 | 10,294 | ||||||||||
Accumulated other comprehensive loss | (6,640 | ) | (6,497 | ) | ||||||||
Deficit | (66,295 | ) | (65,568 | ) | ||||||||
Total Equity | 18,411 | 19,146 | ||||||||||
Total liabilities and equity | $ | 28,408 | $ | 34,054 | ||||||||
Commitments and contingencies | 18(a) & 18(d | ) | 0 | 0 |
For the year ended December 31 | Note | 2021 | 2020 | 2019 | ||||||||||||
Revenue, net | ||||||||||||||||
Product sales, net | $ | 21,744 | $ | 11,610 | $ | 20,173 | ||||||||||
Cost of goods sold | 6 & 8 | 9,032 | 6,480 | 7,272 | ||||||||||||
Gross profit | 12,712 | 5,130 | 12,901 | |||||||||||||
Expenses | ||||||||||||||||
Selling | 20 | 10,312 | 5,359 | 13,399 | ||||||||||||
General and administrative | 20 | 2,697 | 4,579 | 3,395 | ||||||||||||
Research and development | 20 | 1,796 | 3,299 | 4,349 | ||||||||||||
14,805 | 13,237 | 21,143 | ||||||||||||||
Other expense (income): | ||||||||||||||||
Other Income | 4 | (1,828 | ) | |||||||||||||
Revaluation of holdback | 14 | — | — | 3,623 | ||||||||||||
Impairment loss on intangible assets | 8 | — | — | 6,321 | ||||||||||||
(1,828 | ) | — | 9,944 | |||||||||||||
Finance (income) costs: | ||||||||||||||||
Finance (income) expense, net | 12 & 17 | 525 | (765 | ) | (1,115 | ) | ||||||||||
Foreign exchange (gain) loss, net | (31 | ) | (497 | ) | 2,570 | |||||||||||
494 | (1,262 | ) | 1,455 | |||||||||||||
Net loss before income taxes | $ | (759) | $ | (6,845 | ) | $ | (19,641 | ) | ||||||||
Income tax recovery ( expense) | ||||||||||||||||
Current | 16 | 32 | — | (22 | ) | |||||||||||
Deferred | 16 | — | — | (123 | ) | |||||||||||
32 | — | (145 | ) | |||||||||||||
Net loss | $ | (727 | ) | $ | (6,845 | ) | $ | (19,786 | ) | |||||||
Item that may be reclassified to profit or loss | ||||||||||||||||
Exchange differences on translation of foreign subsidiaries: | (143 | ) | (746 | ) | (683 | ) | ||||||||||
Item that will not be reclassified to profit and loss | ||||||||||||||||
Revaluation of investment in Sensible Medical at FVOCI | 10 | — | — | (6,336 | ) | |||||||||||
Comprehensive loss | $ | (870 | ) | $ | (7,591 | ) | $ | (26,805 | ) | |||||||
Loss per share | ||||||||||||||||
Basic | 15(e | ) | $ | (0.07 | ) | $ | (0.64 | ) | $ | (1.32 | ) | |||||
Diluted | 15(e | ) | $ | (0.07 | ) | $ | (0.64 | ) | $ | (1.32 | ) | |||||
Note | Share Capital | Contributed Surplus | Accumulated other comprehensive income (loss) | Equity (Deficit) | Total | |||||||||||||||||||
Balance, December 31, 2020 | $ | 80,917 | $ | 10,294 | $ | (6,497 | ) | $ | (65,568 | ) | $ | 19,146 | ||||||||||||
Net loss for the year ended December 31, 2021 | — | — | — | (727 | ) | (727 | ) | |||||||||||||||||
Other comprehensive loss for the year ended December 31, 2021 | — | — | (143 | ) | — | (143 | ) | |||||||||||||||||
Transactions with owners, recorded directly in equity | ||||||||||||||||||||||||
Share-based compensation | 15 | (c) | — | 135 | — | — | 135 | |||||||||||||||||
Total transactions with owners | — | 135 | — | — | 135 | |||||||||||||||||||
Balance, December 31, 2021 | $ | 80,917 | $ | 10,429 | $ | (6,640 | ) | $ | (66,295 | ) | $ | 18,411 | ||||||||||||
Attributable to shareholders of the Company | ||||||||||||||||||||||||||||
Note | Share Capital | Warrants | Contributed Surplus | Accumulated other comprehensive income (loss) | Equity (Deficit) | Total | ||||||||||||||||||||||
Balance, December 31, 2019 | $ | 85,364 | $ | 1,949 | $ | 8,028 | $ | (5,751 | ) | $ | (62,648 | ) | $ | 26,942 | ||||||||||||||
Net loss for the year ended December 31, 2020 | — | — | — | — | (6,845 | ) | (6,845 | ) | ||||||||||||||||||||
Other comprehensive loss for the year ended December 31, 2020 | — | — | — | (746 | ) | — | (746 | ) | ||||||||||||||||||||
Transactions with owners, recorded directly in equity | ||||||||||||||||||||||||||||
Buy-back of common shares under normal course issuer bid | 15(b | ) | (4,447 | ) | — | — | — | 3,925 | (522 | ) | ||||||||||||||||||
Transfer on expiry of warrants | 15(d | ) | — | (1,949 | ) | 1,949 | — | — | — | |||||||||||||||||||
Share-based compensation | 15(c | ) | — | — | 317 | — | — | 317 | ||||||||||||||||||||
Total transactions with owners | (4,447 | ) | (1,949 | ) | 2,266 | — | 3,925 | (205 | ) | |||||||||||||||||||
Balance, December 31, 2020 | $ | 80,917 | — | $ | 10,294 | $ | (6,497 | ) | $ | (65,568 | ) | $ | 19,146 | |||||||||||||||
Attributable to shareholders of the Company | ||||||||||||||||||||||||||||
Note | Share Capital | Warrants | Contributed Surplus | Accumulated other comprehensive income | Equity (Deficit) | Total | ||||||||||||||||||||||
Balance, December 31, 2018 | $ | 122,887 | $ | 1,949 | $ | 7,628 | $ | 1,268 | $ | (50,138 | ) | $ | 83,594 | |||||||||||||||
Net loss for the year ended December 31, 2019 | — | — | — | — | (19,786 | ) | (19,786 | ) | ||||||||||||||||||||
Other comprehensive loss for the year ended December 31, 2019 | — | — | — | (7,019 | ) | — | (7,019 | ) | ||||||||||||||||||||
Transactions with owners, recorded directly in equity | ||||||||||||||||||||||||||||
Buy-back of common shares under normal course issuer bid | 15(b | ) | (5,955 | ) | — | — | — | 1,810 | (4,145 | ) | ||||||||||||||||||
Buy-back of common shares under substantial issuer bid | 15(b | ) | (31,605 | ) | — | — | — | 5,466 | (26,139 | ) | ||||||||||||||||||
Stock options exercised | 15(c | ) | 37 | — | (17 | ) | — | — | 20 | |||||||||||||||||||
Share-based compensation | 15(c | ) | — | — | 417 | — | — | 417 | ||||||||||||||||||||
Total transactions with owners | (37,523 | ) | — | 400 | — | 7,276 | (29,847 | ) | ||||||||||||||||||||
Balance, December 31, 2019 | $ | 85,364 | $ | 1,949 | $ | 8,028 | $ | (5,751 | ) | $ | (62,648 | ) | $ | 26,942 | ||||||||||||||
As at December 31 | Note | 2022 | 2021 | |||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 4,857 | $ | 3,694 | ||||||||
Restricted cash | 4 | — | 3 | |||||||||
Accounts receivable | 5 | 5,635 | 4,659 | |||||||||
Inventories | 6 | 3,221 | 3,329 | |||||||||
Prepaid expenses | 1,134 | 869 | ||||||||||
Total current assets | 14,847 | 12,554 | ||||||||||
Non-current assets: | ||||||||||||
Property and equipment | 7 | 1,187 | 1,611 | |||||||||
Intangible assets | 8 | 10,624 | 11,212 | |||||||||
Goodwill | 9 | 3,177 | 2,974 | |||||||||
Other assets | 4 | 63 | 57 | |||||||||
Total non-current assets | 15,051 | 15,854 | ||||||||||
Total assets | $ | 29,898 | $ | 28,408 | ||||||||
Liabilities and Equity | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable and accrued liabilities | $ | 7,128 | $ | 6,668 | ||||||||
Current portion of royalty obligation | 10 | 179 | 423 | |||||||||
Current portion of acquisition payable | 8 | 677 | 634 | |||||||||
Current portion of contingent consideration | 4 | — | 293 | |||||||||
Current income taxes payable | 14 | 60 | 114 | |||||||||
Current portion of lease obligations | 11 | 346 | 380 | |||||||||
Total current liabilities | 8,390 | 8,512 | ||||||||||
Non-current liabilities | ||||||||||||
Royalty obligation | 10 | — | 65 | |||||||||
Acquisition payable | 8 | — | 591 | |||||||||
Contingent consideration | 4 | — | 40 | |||||||||
Lease obligations | 11 | 503 | 789 | |||||||||
Total non-current liabilities | 503 | 1,485 | ||||||||||
Total liabilities | 8,893 | 9,997 | ||||||||||
Equity: | ||||||||||||
Share capital | 13(b) | 80,917 | 80,917 | |||||||||
Contributed surplus | 10,476 | 10,429 | ||||||||||
Accumulated other comprehensive loss | (5,458 | ) | (6,640 | ) | ||||||||
Deficit | (64,930 | ) | (66,295 | ) | ||||||||
Total equity | 21,005 | 18,411 | ||||||||||
Total liabilities and equity | $ | 29,898 | $ | 28,408 | ||||||||
Commitments and contingencies | 16(a) & 16(d) |
“Dr. Albert D. Friesen” | “Mr. Brent Fawkes” | |||
Director | Director |
For the year ended December 31 | Note | 2022 | 2021 | 2020 | ||||||||||||
Revenue, net | ||||||||||||||||
Product sales, net | $ | 23,065 | $ | 21,744 | $ | 11,610 | ||||||||||
Cost of goods sold | 6 & 8 | 6,990 | 9,032 | 6,480 | ||||||||||||
Gross profit | 16,075 | 12,712 | 5,130 | |||||||||||||
Expenses | ||||||||||||||||
Selling | 18 | 7,935 | 10,312 | 5,359 | ||||||||||||
General and administrative | 18 | 4,193 | 2,697 | 4,579 | ||||||||||||
Research and development | 18 | 2,754 | 1,796 | 3,299 | ||||||||||||
14,882 | 14,805 | 13,237 | ||||||||||||||
Other Income: | ||||||||||||||||
Other Income | 4 | (346 | ) | (1,828 | ) | — | ||||||||||
(346 | ) | (1,828 | ) | — | ||||||||||||
Finance (income) costs: | ||||||||||||||||
Finance (income) expense, net | 10 & 15 | 206 | 525 | (765 | ) | |||||||||||
Foreign exchange (gain) loss, net | (52 | ) | (31 | ) | (497 | ) | ||||||||||
154 | 494 | (1,262 | ) | |||||||||||||
Net income (loss) before income taxes | $ | 1,385 | $ | (759 | ) | $ | (6,845 | ) | ||||||||
Income tax recovery (expense) | ||||||||||||||||
Current | 14 | (20 | ) | 32 | — | |||||||||||
Deferred | 14 | — | — | — | ||||||||||||
(20 | ) | 32 | — | |||||||||||||
Net profit (loss) | $ | 1,365 | $ | (727 | ) | $ | (6,845 | ) | ||||||||
Item that may be reclassified to profit or loss | ||||||||||||||||
Exchange differences on translation of foreign subsidiaries: | 1,182 | (143 | ) | (746 | ) | |||||||||||
Comprehensive Income (loss) | $ | 2,547 | $ | (870 | ) | $ | (7,591 | ) | ||||||||
Earnings (loss) per share | ||||||||||||||||
Basic | 13(e) | $ | 0.13 | $ | (0.07 | ) | $ | (0.64 | ) | |||||||
Diluted | 13(e) | $ | 0.13 | $ | (0.07 | ) | $ | (0.64 | ) | |||||||
Note | Share capital | Contributed surplus | Accumulated other comprehensive loss | Deficit | Total | |||||||||||||||||||
Balance, December 31, 2021 | $ | 80,917 | $ | 10,429 | $ | (6,640 | ) | $ | (66,295 | ) | $ | 18,411 | ||||||||||||
Net profit for the year ended December 31, 2022 | — | — | — | 1,365 | 1,365 | |||||||||||||||||||
Other comprehensive Income for the year ended December 31, 2022 | — | — | 1,182 | — | 1,182 | |||||||||||||||||||
Transactions with owners, recorded directly in equity | ||||||||||||||||||||||||
Share-based compensation | 13(c) | — | 47 | — | — | 47 | ||||||||||||||||||
Total transactions with owners | — | 47 | — | — | 47 | |||||||||||||||||||
Balance, December 31, 2022 | $ | 80,917 | $ | 10,476 | $ | (5,458 | ) | $ | (64,930) | $ | 21,005 | |||||||||||||
Attributable to shareholders of the Company | ||||||||||||||||||||||||
Note | Share capital | Contributed surplus | Accumulated other comprehensive loss | Deficit | Total | |||||||||||||||||||
Balance, December 31, 2020 | $ | 80,917 | $ | 10,294 | $ | (6,497 | ) | $ | (65,568 | ) | $ | 19,146 | ||||||||||||
Net loss for the year ended December 31, 2021 | — | — | — | (727 | ) | (727 | ) | |||||||||||||||||
Other comprehensive loss for the year ended December 31, 2021 | — | — | (143 | ) | — | (143 | ) | |||||||||||||||||
Transactions with owners, recorded directly in equity | ||||||||||||||||||||||||
Share-based compensation | 13(c) | — | 135 | — | — | 135 | ||||||||||||||||||
Total transactions with owners | — | 135 | — | — | 135 | |||||||||||||||||||
Balance, December 31, 2021 | $ | 80,917 | $ | 10,429 | $ | (6,640 | ) | $ | (66,295 | ) | $ | 18,411 | ||||||||||||
Attributable to shareholders of the Company | ||||||||||||||||||||||||||||
Note | Share capital | Warrants | Contributed surplus | Accumulated other comprehensive loss | Deficit | Total | ||||||||||||||||||||||
Balance, December 31, 2019 | $ | 85,364 | $ | 1,949 | $ | 8,028 | $ | (5,751 | ) | $ | (62,648 | ) | $ | 26,942 | ||||||||||||||
Net loss for the year ended December 31, 2020 | — | — | — | — | (6,845 | ) | (6,845 | ) | ||||||||||||||||||||
Other comprehensive loss for the year ended December 31, 2020 | — | — | — | (746 | ) | — | (746 | ) | ||||||||||||||||||||
Transactions with owners, recorded directly in equity | ||||||||||||||||||||||||||||
Buy-back of common shares under normal course issuer bid | 13(b) | (4,447 | ) | — | — | — | 3,925 | (522 | ) | |||||||||||||||||||
Transfer on expiry of warrants | 13(d) | — | (1,949 | ) | 1,949 | — | — | — | ||||||||||||||||||||
Share-based compensation | 13(c) | — | — | 317 | — | — | 317 | |||||||||||||||||||||
Total transactions with owners | (4,447 | ) | (1,949 | ) | 2,266 | — | 3,925 | (205 | ) | |||||||||||||||||||
Balance, December 31, 2020 | $ | 80,917 | — | $ | 10,294 | $ | (6,497 | ) | $ | (65,568 | ) | $ | 19,146 | |||||||||||||||
For the year ended December 31 | Note | 2022 | 2021 | 2020 | ||||||||||||
Cash (used in) provided by: | ||||||||||||||||
Operating activities: | ||||||||||||||||
Net profit (loss) for the year | $ | 1,365 | $ | (727 | ) | $ | (6,845 | ) | ||||||||
Adjustments for: | ||||||||||||||||
Current income tax expense (recovery) | 14 | 20 | (32 | ) | — | |||||||||||
Amortization of property and equipment | 7 | 461 | 406 | 307 | ||||||||||||
Amortization of intangible assets | 8 | 1,594 | 2,739 | 2,466 | ||||||||||||
Share-based compensation | 13(c) | 47 | 135 | 317 | ||||||||||||
Write-down of inventories | 6 | 38 | 1,339 | 682 | ||||||||||||
Change in fair value of contingent consideration | 4 | (346 | ) | (1,803 | ) | — | ||||||||||
Finance (income) expense, net | 15 | 190 | 525 | (765 | ) | |||||||||||
Unrealized foreign exchange (gain) loss | (52 | ) | (31 | ) | (497 | ) | ||||||||||
Change in the following: | ||||||||||||||||
Accounts receivable | (864 | ) | 593 | 5,081 | ||||||||||||
Inventories | 166 | 471 | 723 | |||||||||||||
Prepaid expenses | (194 | ) | 305 | 703 | ||||||||||||
Other assets | (2 | ) | 99 | — | ||||||||||||
Accounts payable and accrued liabilities | 568 | 20 | (3,802 | ) | ||||||||||||
Interest received (paid), net | 15 | (16 | ) | 49 | 22 | |||||||||||
Income taxes paid | 14 | (91 | ) | — | (306 | ) | ||||||||||
Royalties paid | 16(c) | (1,056 | ) | (99 | ) | (326 | ) | |||||||||
Cash flows from (used in) operating activities | 1,828 | 3,989 | (2,240 | ) | ||||||||||||
Investing activities: | ||||||||||||||||
Acquisition of Marley Drug, Inc, net of cash acquired | 4 | — | — | (7,238 | ) | |||||||||||
Repayment of holdback payable | 4 | — | (1,876 | ) | — | |||||||||||
Acquisition of property and equipment | 7 | (14 | ) | (377 | ) | (2 | ) | |||||||||
Acquisition of intangible assets | 8 | (296 | ) | (441 | ) | — | ||||||||||
Cash flows (used in) from investing activities | (310 | ) | (2,694 | ) | (7,240 | ) | ||||||||||
Financing activities: | ||||||||||||||||
Repurchase of common shares under normal course issuer bid | 13(b) | — | — | (522 | ) | |||||||||||
Repayment of lease liability | 11 | (355 | ) | (316 | ) | (244 | ) | |||||||||
Cash flows used in financing activities | (355 | ) | (316 | ) | (766 | ) | ||||||||||
Foreign exchange loss on cash held in foreign currency | — | (1 | ) | (3 | ) | |||||||||||
Increase (decrease) in cash | 1,163 | 978 | (10,249 | ) | ||||||||||||
Cash and cash equivalents, beginning of period | 3,694 | 2,716 | 12,965 | |||||||||||||
Cash and cash equivalents, end of year | $ | 4,857 | $ | 3,694 | $ | 2,716 | ||||||||||
For the year ended December 31 | Note | 2021 | 2020 | 2019 | ||||||||||||
Cash (used in) provided by: | ||||||||||||||||
Operating activities: | ||||||||||||||||
Net loss for the year | $ | (727 | ) | $ | (6,845 | ) | $ | (19,786 | ) | |||||||
Adjustments for: | ||||||||||||||||
Current income tax expense (recovery) | 1 6 | (32 | ) | — | 22 | |||||||||||
Deferred income tax expense | 1 6 | — | — | 123 | ||||||||||||
Impairment of property and equipment | 7 | — | — | 95 | ||||||||||||
Impairment of intangible assets | 8 | — | — | 6,321 | ||||||||||||
Revaluation of holdback receivable | 13 | — | — | 3,623 | ||||||||||||
Amortization of property and equipment | 7 | 406 | 307 | 485 | ||||||||||||
Amortization of intangible assets | 8 | 2,739 | 2,466 | 1,438 | ||||||||||||
Share-based compensation | 15(c | ) | 135 | 317 | 417 | |||||||||||
Write-down of inventories | 6 | 1,339 | 682 | 1,983 | ||||||||||||
Change in fair value of contingent consideration | 4 | (1,803 | ) | — | — | |||||||||||
Finance (income) expense, net | 17 | 525 | (765 | ) | (1,115 | ) | ||||||||||
Unrealized foreign exchange (gain) loss | (31 | ) | (497 | ) | 362 | |||||||||||
Change in the following: | ||||||||||||||||
Accounts receivable | 593 | 5,081 | (318 | ) | ||||||||||||
Inventories | 471 | 723 | (4,072 | ) | ||||||||||||
Prepaid expenses | 305 | 703 | 842 | |||||||||||||
Other assets | 99 | — | 78 | |||||||||||||
Accounts payable and accrued liabilities | 20 | (3,802 | ) | (4,992 | ) | |||||||||||
Interest received (paid), net | 1 7 | 49 | 22 | 1,685 | ||||||||||||
Income taxes paid | 16 | — | (306 | ) | (477 | ) | ||||||||||
Royalties paid | 1 8 | (c) | (99 | ) | (326 | ) | (1,355 | ) | ||||||||
Cash flows (used in) from operating activities | 3,989 | (2,240 | ) | (14,641 | ) | |||||||||||
Investing activities: | ||||||||||||||||
Acquisition of Marley Drug, Inc, net of cash acquired | 4 | — | (7,238 | ) | — | |||||||||||
Investment in Sensible Medical | 9 | — | — | (6,337 | ) | |||||||||||
Receipt of holdback receivable funds | 13 | — | — | 6,719 | ||||||||||||
Redemptions of short-term investments | — | — | 47,747 | |||||||||||||
Repayment of holdback payable | 4 | (1,876 | ) | — | ||||||||||||
Acquisition of property and equipment | 7 | (377 | ) | (2 | ) | (186 | ) | |||||||||
Acquisition of intangible assets | 8 | (441 | ) | — | (13,660 | ) | ||||||||||
Cash flows (used in) from investing activities | (2,694 | ) | (7,240 | ) | 34,283 | |||||||||||
Financing activities: | ||||||||||||||||
Repurchase of common shares under substantial issuer bid | 15(b | ) | — | — | (26,139 | ) | ||||||||||
Repurchase of common shares under normal course issuer bid | 15(b | ) | — | (522 | ) | (4,145 | ) | |||||||||
Proceeds from exercise of stock options | 15(c | ) | — | — | 20 | |||||||||||
Repayment of lease liability | 12 | (316 | ) | (244 | ) | — | ||||||||||
Cash flows used in financing activities | (316 | ) | (766 | ) | (30,264 | ) | ||||||||||
Foreign exchange loss on cash held in foreign currency | (1 | ) | (3 | ) | (552 | ) | ||||||||||
(Decrease) increase in cash | 978 | (10,249 | ) | (11,174 | ) | |||||||||||
Cash and cash equivalents, beginning of period | 2,716 | 12,965 | 24,139 | |||||||||||||
Cash and cash equivalents, end of period | $ | 3,694 | $ | 2,716 | $ | 12,965 | ||||||||||
1. | Reporting entity |
2. | Basis of preparation of the consolidated financial statements |
(a) | Statement of compliance |
(b) | Basis of presentation |
(c) | Functional and presentation currency |
2. | Basis of preparation of the consolidated financial statements (continued) |
(d) | Use of estimates and judgments |
3. | Significant accounting policies |
(a) | Basis of consolidation |
(b) | Foreign currency |
3. | Significant accounting policies (continued) |
(c) | Financial instruments |
(ii) Financial liabilities |
3. | Significant accounting policies (continued) |
(c) | Financial instruments (continued) |
(ii) Financial liabilities (continued) |
(iii) Derecognition |
(iv) Offsetting of financial instruments |
(v) Fair value of financial instruments |
(vi) Transaction costs |
3. | Significant accounting policies (continued) |
(c) | Financial instruments (continued) |
(d) | Impairment of financial assets |
(e) | Revenue from contracts with customers |
3. | Significant accounting policies (continued) |
(e) | Revenue from contracts with customers (continued) |
(f) | Cash and cash equivalents |
(g) | Inventories |
(h) | Property and equipment |
(i) | Recognition and measurement |
3. | Significant accounting policies (continued) |
(h) | Property and equipment (continued) |
(ii) | Amortization |
Asset | Basis | Rate | ||||||
Computers, pharmacy equipment, office equipment, u re and fixtures | Straight-line | 20% to | ||||||
Leasehold improvements | Straight-line | Term of lease | ||||||
Straight-line | Term of lease |
(i) | Intangible assets |
(j) | Research and development |
3. | Significant accounting policies (continued) |
(j) | Research and development |
(k) | Government assistance |
(l) | Impairment of non-financial assets |
(m) | Employee benefits |
(i) | Short-term employee benefits |
3. | Significant accounting policies (continued) |
(m) | Employee benefits (continued) |
(ii) | Long-term employee benefits |
(iii) | Share-based payment transactions |
(n) | Finance income and finance costs |
3. | Significant accounting policies (continued) |
(o) | Income taxes |
3. | Significant accounting policies (continued) |
(o) | Income taxes (continued) |
(p) | Earnings per share |
(q) | Business combinations and goodwill |
(r) | Leases |
3. | Significant accounting policies (continued) |
(r) | Leases |
(i) | Right-of-use |
(ii) Lease liability |
(iii) Estimating the IBR |
(s) | New standard not yet adopted |
4. | Business combinations |
4. | Business combinations (continued) |
Net assets acquired | ||||||||
Cash and cash equivalents | $ | 542 | $ | 542 | ||||
Restricted cash | 20 | 20 | ||||||
Accounts receivable | 104 | 104 | ||||||
Inventories | 215 | 215 | ||||||
Prepaid expenses | 22 | 22 | ||||||
Property and equipment, including right of use asset | 664 | |||||||
Property and equipment, including right-of-use asset | 664 | |||||||
Pharmacy licenses | 1,183 | 1,183 | ||||||
Customer lists | 4,860 | 4,860 | ||||||
Brand name | 495 | 495 | ||||||
Goodwill | 2,991 | 2,991 | ||||||
Other assets | 131 | 131 | ||||||
Accounts payable and accrued liabilities | (416 | ) | (416 | ) | ||||
Current portion of lease obligation | (98 | ) | (98 | ) | ||||
Lease obligation | (455 | ) | (455 | ) | ||||
Net assets acquired | $ | 10,258 | $ | 10,258 | ||||
Summary of purchase consideration | ||||||||
Net cash paid | 6,407 | 6,407 | ||||||
Holdback payable | 1,878 | 1,878 | ||||||
Contingent consideration | 1,973 | 1,973 | ||||||
Purchase consideration | $ | 10,258 | $ | 10,258 | ||||
5. | Accounts receivable |
As at December 31 | 2022 | 2021 | ||||||
Trade accounts receivable | $ | 5,525 | $ | 4,593 | ||||
Other accounts receivable | 110 | 66 | ||||||
$ | 5,635 | $ | 4,659 | |||||
As at December 31 | 2021 | 2020 | ||||||
Trade accounts receivable | $ | 4,593 | $ | 5,097 | ||||
Other accounts receivable | 66 | 156 | ||||||
$ | 4,659 | $ | 5,253 | |||||
6. | Inventories |
As at December 31 | 2021 | 2020 | 2022 | 2021 | ||||||||||||
Finished commercial product available-for-sale | $ | 2,345 | $ | 4,032 | ||||||||||||
Finished commercial product available for sale | $ | 2,365 | $ | 2,345 | ||||||||||||
Finished retail pharmacy product available for sale | 266 | 216 | 267 | 266 | ||||||||||||
Unfinished product and packaging materials | 718 | 891 | 589 | 718 | ||||||||||||
$ | 3,329 | $ | 5,139 | $ | 3,221 | $ | 3,329 | |||||||||
7. | Property and equipment |
Cost | Computers and equipment | Leasehold improvements | Right of use assets | Total | ||||||||||||
At December 31, 2019 | $ | 520 | $ | 170 | $ | 1,362 | $ | 2,052 | ||||||||
Acquisition under business combinations (note 4) | 117 | — | 547 | 664 | ||||||||||||
Additions | 2 | — | — | 2 | ||||||||||||
Disposals | (96 | ) | — | — | (96 | ) | ||||||||||
Effect of movements in exchange rates | — | — | (1 | ) | (1 | ) | ||||||||||
At December 31, 2020 | $ | 543 | $ | 170 | $ | 1,908 | $ | 2,621 | ||||||||
Additions | 366 | 12 | — | 378 | ||||||||||||
Effect of movements in exchange rates | — | — | (1 | ) | (1 | ) | ||||||||||
At December 31, 2021 | $ | 909 | $ | 182 | $ | 1,907 | $ | 2,998 | ||||||||
Accumulated amortization | Computer and office equipment | Leasehold improvements | Right of use assets | Total | ||||||||||||
At December 31, 2019 | $ | 323 | $ | 170 | $ | 277 | $ | 770 | ||||||||
Amortization | 88 | — | 219 | 307 | ||||||||||||
Disposals | (96 | ) | — | — | (96 | ) | ||||||||||
At December 31, 2020 | $ | 315 | $ | 170 | $ | 496 | $ | 981 | ||||||||
Amortization | 116 | 1 | 289 | 406 | ||||||||||||
At December 31, 2021 | $ | 431 | $ | 171 | $ | 785 | $ | 1,387 | ||||||||
Cost | Computers and equipment | Leasehold improvements | Right of use assets | Total | ||||||||||||||||||||||||||||
At December 31, 2020 | $ | 543 | $ | 170 | $ | 1,908 | $ | 2,621 | ||||||||||||||||||||||||
Additions | 366 | 12 | — | 378 | ||||||||||||||||||||||||||||
Effect of movements in exchange rates | — | — | (1 | ) | (1 | ) | ||||||||||||||||||||||||||
At December 31, 2021 | $ | 909 | $ | 182 | $ | 1,907 | $ | 2,998 | ||||||||||||||||||||||||
Additions | — | — | 56 | 56 | ||||||||||||||||||||||||||||
Disposals | — | — | (70 | ) | (70 | ) | ||||||||||||||||||||||||||
Effect of movements in exchange rates | 39 | 1 | 37 | 77 | ||||||||||||||||||||||||||||
At December 31, 2022 | $ | 948 | $ | 183 | $ | 1,930 | $ | 3,061 | ||||||||||||||||||||||||
Accumulated amortization | Computer and office equipment | Leasehold improvements | Right of use assets | Total | ||||||||||||||||||||||||||||
At December 31, 2020 | $ | 315 | $ | 170 | $ | 496 | $ | 981 | ||||||||||||||||||||||||
Amortization | 116 | 1 | 289 | 406 | ||||||||||||||||||||||||||||
At December 31, 2021 | $ | 431 | $ | 171 | $ | 785 | $ | 1,387 | ||||||||||||||||||||||||
Amortization | 158 | 2 | 301 | 461 | ||||||||||||||||||||||||||||
Effect of movements in exchange rates | 16 | — | 10 | 26 | ||||||||||||||||||||||||||||
At December 31, 2022 | $ | 605 | $ | 173 | $ | 1,096 | $ | 1,874 | ||||||||||||||||||||||||
Carrying amounts | Computer and office equipment | Leasehold improvements | Right of use assets | Total | Computer and office equipment | Leasehold improvements | Right of use assets | Total | ||||||||||||||||||||||||
At December 31, 2020 | $ | 228 | $ | 0 | $ | 1,412 | $ | 1,640 | ||||||||||||||||||||||||
At December 31, 2021 | $ | 478 | $ | 11 | $ | 1,122 | $ | 1,611 | $ | 478 | $ | 11 | $ | 1,122 | $ | 1,611 | ||||||||||||||||
At December 31, 2022 | $ | 343 | $ | 10 | $ | 834 | $ | 1,187 | ||||||||||||||||||||||||
8. | Intangible assets |
Cost | Licenses | Patents and Drug Approvals | Brand Names and Trademarks | Customer list | Software | Total | ||||||||||||||||||
At December 31, 2019 | $ | 0 | $ | 24,929 | $ | 4,156 | $ | 733 | $ | 0 | $ | 29,818 | ||||||||||||
Acquisitions under business combinations (note 4) | 1,183 | — | 495 | 4,860 | — | 6,538 | ||||||||||||||||||
Effect of movements in exchange rates | (2 | ) | (491 | ) | (83 | ) | (22 | ) | 0 | (598 | ) | |||||||||||||
At December 31, 2020 | $ | 1,181 | $ | 24,438 | $ | 4,568 | $ | 5,571 | $ | 0 | $ | 35,758 | ||||||||||||
Additions | — | — | — | — | 441 | 441 | ||||||||||||||||||
Effect of movements in exchange rates | (5 | ) | �� | (104 | ) | (19 | ) | (24 | ) | 5 | (147 | ) | ||||||||||||
At December 31, 2021 | $ | 1,176 | $ | 24,334 | $ | 4,549 | $ | 5,547 | $ | 446 | $ | 36,052 | ||||||||||||
Accumulated amortization | Licenses | Patents and Drug Approvals | Brand Names and Trademarks | Customer list | Software | Total | ||||||||||||||||||
At December 31, 2019 | $ | 0 | $ | 15,330 | $ | 4,156 | $ | 733 | $ | 0 | $ | 20,219 | ||||||||||||
Amortization | 7 | 2,428 | 2 | 29 | — | 2,466 | ||||||||||||||||||
Effect of movements in exchange rates | — | (426 | ) | (82 | ) | (15 | ) | — | (523 | ) | ||||||||||||||
At December 31, 2020 | $ | 7 | $ | 17,332 | $ | 4,076 | $ | 747 | $ | 0 | $ | 22,162 | ||||||||||||
Amortization | 166 | 1,841 | 49 | 683 | — | 2,739 | ||||||||||||||||||
Effect of movements in exchange rates | 2 | (50 | ) | (18 | ) | 5 | 0 | (61 | ) | |||||||||||||||
At December 31, 2021 | $ | 175 | $ | 19,123 | $ | 4,107 | $ | 1,435 | $ | 0 | $ | 24,840 | ||||||||||||
Cost | Licenses | Patents and drug approvals | Brand names and trademarks | Customer list | Software | Total | ||||||||||||||||||||||||||||||||||||||||||
At December 31, 2020 | $ | 1,181 | $ | 24,438 | $ | 4,568 | $ | 5,571 | $ | — | $ | 35,758 | ||||||||||||||||||||||||||||||||||||
Additions | — | — | — | — | 441 | 441 | ||||||||||||||||||||||||||||||||||||||||||
Effect of movements in exchange rates | (5 | ) | (104 | ) | (19 | ) | (24 | ) | 5 | (147 | ) | |||||||||||||||||||||||||||||||||||||
At December 31, 2021 | $ | 1,176 | $ | 24,334 | $ | 4,549 | $ | 5,547 | $ | 446 | $ | 36,052 | ||||||||||||||||||||||||||||||||||||
Additions | 296 | 296 | ||||||||||||||||||||||||||||||||||||||||||||||
Effect of movements in exchange rates | 80 | 1,662 | 311 | 379 | 39 | 2,471 | ||||||||||||||||||||||||||||||||||||||||||
At December 31, 2022 | $ | 1,256 | $ | 25,996 | $ | 4,860 | $ | 5,926 | $ | 781 | $ | 38,819 | ||||||||||||||||||||||||||||||||||||
Accumulated amortization | Licenses | Patents and drug approvals | Brand names and trademarks | Customer list | Software | Total | ||||||||||||||||||||||||||||||||||||||||||
At December 31, 2020 | $ | 7 | $ | 17,332 | $ | 4,076 | $ | 747 | $ | — | $ | 22,162 | ||||||||||||||||||||||||||||||||||||
Amortization | 166 | 1,841 | 49 | 683 | 2,739 | |||||||||||||||||||||||||||||||||||||||||||
Effect of movements in exchange rates | 2 | (50 | ) | (18 | ) | 5 | — | (61 | ) | |||||||||||||||||||||||||||||||||||||||
At December 31, 2021 | $ | 175 | $ | 19,123 | $ | 4,107 | $ | 1,435 | $ | — | $ | 24,840 | ||||||||||||||||||||||||||||||||||||
Amortization | 172 | 589 | 50 | 709 | 74 | 1,594 | ||||||||||||||||||||||||||||||||||||||||||
Effect of movements in exchange rates | 19 | 1,330 | 284 | 126 | 2 | 1,761 | ||||||||||||||||||||||||||||||||||||||||||
At December 31, 2022 | $ | 366 | $ | 21,042 | $ | 4,441 | $ | 2,270 | $ | 76 | $ | 28,195 | ||||||||||||||||||||||||||||||||||||
Carrying amounts | Licenses | Patents and Drug Approvals | Brand Names and Trademarks | Customer list | Software | Total | Licenses | Patents and drug approvals | Brand names and trademarks | Customer list | Software | Total | ||||||||||||||||||||||||||||||||||||
At December 31, 2020 | $ | 1,174 | $ | 7,106 | $ | 492 | $ | 4,824 | $ | 0 | $ | 13,596 | ||||||||||||||||||||||||||||||||||||
At December 31, 2021 | $ | 1,001 | $ | 5,211 | $ | 442 | $ | 4,112 | $ | 446 | $ | 11,212 | $ | 1,001 | $ | 5,211 | $ | 442 | $ | 4,112 | $ | 446 | $ | 11,212 | ||||||||||||||||||||||||
At December 31, 2022 | $ | 890 | $ | 4,954 | $ | 419 | $ | 3,656 | $ | 705 | $ | 10,624 | ||||||||||||||||||||||||||||||||||||
8. | Intangible assets (continued) |
9. | Goodwill |
Retail and Mail Order Pharmacy | ||||
At December 31, 2019 | $ | 0 | ||
Additions through business combinations | 2,986 | |||
At December 31, 2020 | $ | 2,986 | ||
Effects of movements in exchange rates | (12 | ) | ||
Ending Balance | $ | 2,974 | ||
Retail and Mail Order Pharmacy | ||||
At December 31, 2020 | $ | 2,986 | ||
Effects of movements in exchange rates | (12 | ) | ||
At December 31, 2021 | $ | 2,974 | ||
Effects of movements in exchange rates | 203 | |||
At December 31, 2022 | $ | 3,177 | ||
(a) | Key |
(i) | Discount rate |
(ii) | Operating margin |
(iii) | Revenue growth rates |
10. |
Lease |
Incremental borrowing rate % | Maturity | 2021 | 2020 | |||||||||||||
Current | 3.00 -5.00 | 2022 | $ | 380 | $ | 367 | ||||||||||
Non-Current | 3.00 -5.00 | 2023 -2027 | 789 | 1,080 | ||||||||||||
Lease Liability | $ | 1,169 | $ | 1,447 | ||||||||||||
Incremental borrowing rate % | Maturity | 202 2 | 2021 | |||||||||||||
Current | 3.00 - 5.00 | 2022 | $ | 346 | $ | 380 | ||||||||||
Non-current | 3.00 - 5.00 | 2023 - 2027 | 503 | 789 | ||||||||||||
Lease liability | $ | 849 | $ | 1,169 | ||||||||||||
Government assistance |
(a) | Authorized |
(b) | Shares issued and outstanding |
Number of Common Shares | Amount | |||||||
Balance, December 31, 2019 | 10,804,013 | $ | 85,364 | |||||
Shares repurchased and cancelled under a normal course issuer bid (1) | (552,700 | ) | (4,447 | ) | ||||
Balance, December 31, 2020 | 10,251,313 | $ | 80,917 | |||||
Balance, December 31, 2021 | 10,251,313 | $ | 80,917 | |||||
Number of common shares | Amount | |||||||
Balance, December 31, 2020 (1) | 10,251,313 | $ | 80,917 | |||||
Balance, December 31, 2021 | 10,251,313 | $ | 80,917 | |||||
Balance, December 31, 2022 | 10,251,313 | $ | 80,917 | |||||
(1) | year ended December 31, |
(c) | Stock option plan |
Year ended December 31, 2022 | Options | Weighted average exercise price | ||||||
Balance, beginning of year | 807,150 | $ | 3.73 | |||||
Granted | 20,000 | 1.20 | ||||||
Forfeited, cancelled or expired | (188,750 | ) | (5.77 | ) | ||||
Balance, end of year | 638,400 | $ | 3.05 | |||||
Options exercisable, end of year | 602,400 | $ | 2.93 | |||||
Year ended December 31, 2021 | Options | Weighted average exercise price | ||||||
Balance, beginning of period | 1,326,958 | $ | 3.67 | |||||
Granted | �� | 90,000 | 1.10 | |||||
Forfeited, cancelled or expired | (609,808 | ) | (2.99 | ) | ||||
Balance, end of period | 807,150 | $ | 3.73 | |||||
Options exercisable, end of period | 706,750 | $ | 3.49 | |||||
13. | Capital stock (continued) |
(c) | Stock option plan (continued): |
Year ended December 31 | 2021 | 2020 | ||||||||||||||
Options | Weighted average exercise price | Options | Weighted average exercise price | |||||||||||||
Balance, beginning of period | 1,326,958 | $ | 3.67 | 1,428,408 | $ | 3.67 | ||||||||||
Granted | 90,000 | 1.10 | — | — | ||||||||||||
Forfeited, cancelled or expired | (609,808 | ) | (2.99 | ) | (101,450 | ) | (5.06 | ) | ||||||||
Balance, end of period | 807,150 | $ | 3.73 | 1,326,958 | $ | 3.67 | ||||||||||
Options exercisable, end of period | 706,750 | $ | 3.49 | 1,110,958 | $ | 3.12 | ||||||||||
Year ended December 31 | 2020 | 2019 | ||||||||||||||
Options | Weighted average exercise price | Options | Weighted average exercise price | |||||||||||||
Balance, beginning of period | 1,428,408 | $ | 3.67 | 1,394,642 | $ | 3.91 | ||||||||||
Granted | 0 | 0 | 262,000 | 4.95 | ||||||||||||
Exercised | 0 | 0 | (8,001 | ) | (2.45 | ) | ||||||||||
Forfeited, cancelled or expired | (101,450 | ) | (5.06 | ) | (220,233 | ) | (6.75 | ) | ||||||||
Balance, end of period | 1,326,958 | $ | 3.67 | 1,428,408 | $ | 3.67 | ||||||||||
Options exercisable, end of period | 1,110,958 | $ | 3.12 | 1,059,308 | $ | 2.88 | ||||||||||
Range of exercise prices | Number outstanding | Weighted average remaining contractual life | Options outstanding weighted average exercise price | Number exercisable | Number outstanding | Weighted average remaining contractual life | Options outstanding weighted average exercise price | Number exercisable | ||||||||||||||||||||||||
$0.30 | 185,000 | 1.35 years | $ | 0.30 | 185,000 | 185,000 | 0.35 years | $ | 0.30 | 185,000 | ||||||||||||||||||||||
$0.31 - $1.50 | 90,000 | 4.58 years | $ | 1.10 | 90,000 | 80,000 | 3.79 years | $ | 1.13 | 80,000 | ||||||||||||||||||||||
$1.51 - $3.00 | 100,900 | 3.01 years | $ | 1.90 | 100,900 | 93,400 | 1.99 years | $ | 1.90 | 93,400 | ||||||||||||||||||||||
$3.01 - $5.00 | 201,000 | 2.49 years | $ | 4.95 | 120,600 | 180,000 | 1.49 years | $ | 4.95 | 144,000 | ||||||||||||||||||||||
$5.01 - $7.30 | 230,250 | 1.02 years | $ | 7.24 | 210,250 | 100,000 | 0.08 years | $ | 7.30 | 100,000 | ||||||||||||||||||||||
$0.30 - $7.30 | 807,150 | 2.11 years | $ | 3.73 | 706,750 | 638,400 | 1.30 years | $ | 3.05 | 602,400 | ||||||||||||||||||||||
Years ended December 31: | 2022 | 2021 | 2020 | |||||||||
Expected option life | 4.6 years | 4.6 years | n/a | |||||||||
Risk-free interest rate | 2.63 | % | 0.75 | % | n/a | |||||||
Dividend yield | nil | nil | n/a | |||||||||
Expected volatility | 73.85 | % | 69.03 | % | n/a |
Years ended December 31: | 2021 | 2020 | 2019 | |||||||||
Expected option life | 4.6 years | n/a | 4.4 years | |||||||||
Risk free interest rate | 0.75 | % | n/a | 1.40 | % | |||||||
Dividend yield | NaN | n/a | NaN | |||||||||
Expected volatility | 69.03 | % | n/a | 47.10 | % |
13. | Capital stock (continued) |
Warrants |
Years ended December 31 | 2021 | 2020 | 2019 | |||||||||||||||||||||
Warrants | Weighted average exercise price | Warrants | Weighted average exercise price | Warrants | Weighted average exercise price | |||||||||||||||||||
Balance, beginning of period | — | $ | — | 900,000 | $ | 6.50 | 900,000 | $ | 6.50 | |||||||||||||||
Expired | — | (900,000 | ) | (6.50 | ) | 0— | 0— | |||||||||||||||||
Balance, end of period | — | $ | — | 0— | $ | 0— | 900,000 | $ | 6.50 | |||||||||||||||
Warrants exercisable, end of period | — | $ | — | 0 | $ | 0— | 900,000 | $ | 6.50 | |||||||||||||||
Years ended December 31 | 2022 | 2021 | 2020 | |||||||||||||||||||||
Warrants | Weighted average exercise price | Warrants | Weighted average exercise price | Warrants | Weighted average exercise price | |||||||||||||||||||
Balance, beginning of year | — | $ | — | — | $ | — | 900,000 | $ | 6.50 | |||||||||||||||
Expired | — | — | (900,000 | ) | (6.50 | ) | ||||||||||||||||||
Balance, end of year | — | $ | — | — | $ | — | — | $ | — | |||||||||||||||
Warrants exercisable, end of year | — | $ | — | — | $ | — | — | $ | — | |||||||||||||||
Per share amounts |
Year ended December 31 | 2021 | 2020 | 2019 | 2022 | 2021 | 2020 | ||||||||||||||||||
Basic and diluted net loss | $ | (0.07 | ) | $ | (0.64 | ) | $ | (1.32 | ) | |||||||||||||||
Basic net income (loss) per share | $ | 0.133 | $ | (0.07 | ) | $ | (0.64 | ) | ||||||||||||||||
Diluted income (loss) per share | $ | 0.131 | $ | (0.07 | ) | $ | (0.64 | ) | ||||||||||||||||
Year ended December 31 | 2021 | 2020 | 2019 | |||||||||
Net loss | $ | (727 | ) | $ | (6,845 | ) | $ | (19,786 | ) | |||
Year ended December 31 | 2022 | 2021 | 2020 | |||||||||
Net profit (loss) | $ | 1,365 | $ | (727 | ) | $ | (6,845 | ) | ||||
Year ended December 31 | 2021 | 2020 | 2019 | |||||||||
Weighted average shares outstanding for basic loss per share | 10,251,313 | 10,686,041 | 14,998,540 | |||||||||
Weighted average shares outstanding for diluted loss per share | 10,251,313 | 10,686,041 | 14,998,540 | |||||||||
Year ended December 31 | 2022 | 2021 | 2020 | |||||||||
Weighted average shares outstanding for basic earnings (loss) per share | 10,251,313 | 10,251,313 | 10,251,313 | |||||||||
Weighted average shares outstanding for diluted earnings (loss) per share | 10,436,313 | 10,251,313 | 10,251,313 | |||||||||
14. | Income taxes |
As at December 31 | 2022 | 2021 | ||||||
Deferred tax assets | ||||||||
Scientific research and experimental development | $ | 3,358 | $ | 3,358 | ||||
Non-capital losses | 3,147 | 2,778 | ||||||
Other | 839 | 798 | ||||||
Total deferred tax assets | $ | 7,344 | $ | 6,934 | ||||
Year ended December 31 | 2022 | 2021 | 2020 | |||||||||
Profit (loss) for the year | ||||||||||||
Canadian | $ | (1,217 | ) | $ | (1,195 | ) | $ | (519) | ||||
Foreign | 2,602 | 436 | (6,326 | ) | ||||||||
$ | 1,385 | $ | (759 | ) | $ | (6,845 | ) | |||||
Year ended December 31 | 2022 | 2021 | 2020 | |||||||||
Canadian federal and provincial income taxes at 27% (2021 – 27%; 2020 – 27%) | $ | (374 | ) | $ | 205 | $ | 1,848 | |||||
Permanent differences and other items | 274 | 165 | (159 | ) | ||||||||
Fair value adjustments | 100 | 453 | — | |||||||||
Foreign tax rate in foreign jurisdictions | 390 | (167 | ) | (1,551 | ) | |||||||
Change in unrecognized deferred tax assets | (410 | ) | (624 | ) | (138 | ) | ||||||
(Expense) recovery | $ | (20 | ) | $ | 32 | $ | — | |||||
2037 | $ | 5,275 | ||
2040 | 2,774 | |||
2041 | 969 | |||
2042 | 1,307 | |||
$ | 10,325 | |||
As at December 31 | 2021 | 2020 | ||||||
Deferred tax assets | ||||||||
Scientific research and experimental development | $ | 3,358 | $ | 3,358 | ||||
Non-capital losses | 2,778 | 2,356 | ||||||
Other | 798 | 595 | ||||||
Total deferred tax assets | $ | 6,934 | $ | 6,309 | ||||
14. | Income taxes (continued) |
2028 | $ | 2,505 | ||
2029 | 4,022 | |||
$ | 6,527 | |||
15. | Finance income (expense) |
Year ended December 31 | 2022 | 2021 | 2020 | |||||||||
Interest income | $ | 10 | $ | 78 | $ | 43 | ||||||
Remeasurement of royalty obligation | (169 | ) | (262 | ) | 953 | |||||||
Accretion of acquisition payable | (44 | ) | (96 | ) | (155 | ) | ||||||
Change in fair value of contingent consideration | — | (178 | ) | (6 | ) | |||||||
Bank charges and other interest | (26 | ) | (29 | ) | (21 | ) | ||||||
Finance expense from lease obligation | 23 | (38 | ) | (49 | ) | |||||||
$ | (206 | ) | $ | (525 | ) | $ | 765 | |||||
Year ended December 31 | 2022 | 2021 | 2020 | |||||||||
Interest received | $ | 10 | $ | 78 | $ | 43 | ||||||
Other interest, net and banking fees | (26 | ) | (29 | ) | (21 | ) | ||||||
$ | (16 | ) | $ | 49 | $ | 22 | ||||||
16. | Commitments and contingencies |
(a) | Commitments |
2023 | $ | 3,313 | ||
2024 | 203 | |||
$3,516 | ||||
16. |
Year ended December 31 | 2021 | 2020 | 2019 | |||||||||
(Loss) Income for the year | ||||||||||||
Canadian | $ | (1,195 | ) | $ | (519 | ) | $ | (7,013 | ) | |||
Foreign | 436 | (6,326 | ) | (12,628 | ) | |||||||
$ | (759 | ) | $ | (6,845 | ) | $ | (19,641 | ) | ||||
Year ended December 31 | 2021 | 2020 | 2019 | |||||||||
Canadian federal and provincial income taxes at 27% (2020 – 27%; 2019 – 27%) | $ | 205 | $ | 1,848 | $ | 5,303 | ||||||
Permanent differences and other items | 165 | (159 | ) | (330 | ) | |||||||
Fair value adjustments of earnout payments | 453 | — | — | |||||||||
Foreign tax rate in foreign jurisdictions | (167 | ) | (1,551 | ) | (1,308 | ) | ||||||
Change in unrecognized deferred tax assets | (624 | ) | (138 | ) | (3,810 | ) | ||||||
$ | 32 | $ | 0 | $ | (145 | ) | ||||||
2037 | $ | 5,276 | ||
2040 | 2,774 | |||
2041 | 969 | |||
$ | 9,019 | |||
2022 | $ | 128 | ||
2028 | 2,345 | |||
2029 | 3,765 | |||
$ | 6,237 | |||
Year ended December 31 | 2021 | 2020 | 2019 | |||||||||
Interest income | $ | 78 | $ | 43 | $ | 886 | ||||||
Remeasurement of royalty obligation | (262 | ) | 953 | 316 | ||||||||
Accretion of acquisition payable | (96 | ) | (155 | ) | (41 | ) | ||||||
Change in fair value of contingent consideration | (178 | ) | (6 | ) | 0— | |||||||
Bank charges and other interest | (29 | ) | (21 | ) | (24 | ) | ||||||
Finance expense from lease obligation | (38 | ) | (49 | ) | (22 | ) | ||||||
$ | (525 | ) | $ | 765 | $ | 1,115 | ||||||
Year ended December 31 | 2021 | 2020 | 2019 | |||||||||
Interest received | $ | 78 | $ | 43 | $ | 1,731 | ||||||
Other interest, net and banking fee s | (29 | ) | (21 | ) | (46 | ) | ||||||
$ | 49 | $ | 22 | $ | 1,685 | |||||||
(a) | Commitments (continued) |
2022 | $ | 1,879 | ||
2023 | 190 | |||
2024 | 190 | |||
2025 | 0 | |||
2026 | 0 | |||
Thereafter | 0 | |||
$ 2,259 | ||||
(b) | Guarantees |
16. | Commitments and contingencies (continued) |
(c) | Royalties |
(d) | Contingencies |
Related party transactions |
(a) | Key management personnel compensation |
Year ended December 31 | 2021 | 2020 | 2019 | 2022 | 2021 | 2020 | ||||||||||||||||||
Salaries, fees and short-term benefits | $ | 662 | $ | 771 | $ | 781 | $ | 595 | $ | 662 | $ | 771 | ||||||||||||
Share-based payments | 50 | 230 | 208 | 38 | 50 | 230 | ||||||||||||||||||
$ | 712 | $ | 1,001 | $ | 989 | $ | 633 | $ | 712 | $ | 1,001 | |||||||||||||
17. | Related party transactions (continued) |
(b) | Transactions with related parties |
Year ended December 31 | 2021 | 2020 | 2019 | |||||||||
Personnel expenses | ||||||||||||
Salaries, fees and short-term benefits | $ | 4,513 | $ | 3,199 | $ | 6,394 | ||||||
Share-based payments | 135 | 317 | 417 | |||||||||
4,648 | 3,515 | 6,811 | ||||||||||
Depreciation, amortization and impairment | 3,132 | 2,772 | 2,017 | |||||||||
Research and development | 1,547 | 1,996 | 2,887 | |||||||||
Manufacturing | 249 | 943 | 752 | |||||||||
Inventory material costs | 5,790 | 3,355 | 3,851 | |||||||||
Write-down of inventory | 1,339 | 682 | 1,983 | |||||||||
Medical affairs | 58 | 161 | 718 | |||||||||
Administration | 1,395 | 398 | 821 | |||||||||
Selling and logistics | 5,114 | 2,975 | 6,997 | |||||||||
Professional fees | 565 | 2,920 | 1,578 | |||||||||
$ | 23,837 | $ | 19,717 | $ | 28,415 | |||||||
Expenses by nature |
Year ended December 31 | 2022 | 2021 | 2020 | |||||||||
Personnel expenses | ||||||||||||
Salaries, fees and short-term benefits | $ | 4,969 | $ | 4,513 | $ | 3,199 | ||||||
Share-based payments | 47 | 135 | 317 | |||||||||
5,016 | 4,648 | 3,516 | ||||||||||
Amortization | 2,057 | 3,132 | 2,772 | |||||||||
Research and development | 2,278 | 1,547 | 1,996 | |||||||||
Manufacturing | 163 | 249 | 943 | |||||||||
Inventory material costs | 6,211 | 5,790 | 3,355 | |||||||||
Write-down of inventory | 38 | 1,339 | 682 | |||||||||
Medical affairs | 117 | 58 | 161 | |||||||||
Administration | 1,375 | 1,395 | 398 | |||||||||
Selling and logistics | 3,931 | 5,114 | 2,975 | |||||||||
Professional fees | 686 | 565 | 2,920 | |||||||||
$ | 21,872 | $ | 23,837 | $ | 19,717 | |||||||
19. | Financial instruments |
(a) | Financial assets and liabilities |
As at December 31 | 2022 | 2021 | ||||||||||||||
Carrying amount | Fair value | Carrying amount | Fair value | |||||||||||||
Financial assets | ||||||||||||||||
Financial assets measured at amortized cost | ||||||||||||||||
Cash and cash equivalents | $ | 4,857 | $ | 4,857 | $ | 3,694 | $ | 3,694 | ||||||||
Restricted cash | — | — | 3 | 3 | ||||||||||||
Accounts receivable | 5,635 | 5,635 | 4,659 | 4,659 | ||||||||||||
Other assets | 63 | 63 | 57 | 57 | ||||||||||||
Financial liabilities | ||||||||||||||||
Financial liabilities measured at amortized cost: | ||||||||||||||||
Accounts payable and accrued liabilities | $ | 7,128 | $ | 7,128 | $ | 6,668 | $ | 6,668 | ||||||||
Current portion of royalty obligation | 179 | 179 | 423 | 423 | ||||||||||||
Current portion of acquisition payable | 677 | 677 | 634 | 634 | ||||||||||||
Current portion of lease obligation | 346 | 346 | 380 | 380 | ||||||||||||
Royalty obligation | — | — | 65 | 65 | ||||||||||||
Acquisition payable | 677 | 677 | 591 | 591 | ||||||||||||
Lease obligations | 503 | 503 | 789 | 789 | ||||||||||||
Financial liabilities measured at FVTPL | ||||||||||||||||
Current portion of contingent consideration | — | — | 293 | 293 | ||||||||||||
Contingent consideration | — | — | 40 | 40 | ||||||||||||
As at December 31 | 2021 | 2020 | ||||||||||||||
Carrying amount | Fair value | Carrying amount | Fair value | |||||||||||||
Financial assets | ||||||||||||||||
Financial assets measured at amortized cost | ||||||||||||||||
Cash and cash equivalents | $ | 3,694 | $ | 3,694 | $ | 2,716 | $ | 2,716 | ||||||||
Restricted cash | 3 | 3 | 1,394 | 1,394 | ||||||||||||
Accounts receivable | 4,659 | 4,659 | 5,253 | 5,253 | ||||||||||||
Other assets | 57 | 57 | 156 | 156 | ||||||||||||
Financial liabilities | ||||||||||||||||
Financial liabilities measured at amortized cost: | ||||||||||||||||
Accounts payable and accrued liabilities | $ | 6,668 | $ | 6,668 | $ | 6,979 | $ | 6,979 | ||||||||
Current portion of royalty obligation | 423 | 423 | 362 | 362 | ||||||||||||
Current portion of acquisition payable | 634 | 634 | 2,613 | 2,613 | ||||||||||||
Holdback payable | 0 | 0 | 1,523 | 1,523 | ||||||||||||
Current portion of lease obligation | 380 | 380 | 367 | 367 | ||||||||||||
Royalty obligation | 65 | 65 | 336 | 336 | ||||||||||||
Acquisition payable | 591 | 591 | 1,132 | 1,132 | ||||||||||||
Lease obligation | 789 | 789 | 1,080 | 1,080 | ||||||||||||
Financial liabilities measured at FVTPL | ||||||||||||||||
Current portion of contingent consideration | 293 | 293 | 1,925 | 1,925 | ||||||||||||
Contingent consideration | 40 | 40 | 51 | 51 |
19. | Financial instruments (continued) |
(a) | Financial assets and liabilities (continued) |
Level 1 | Level 2 | Level 3 | ||||||||||
Financial liabilities | ||||||||||||
Current portion of royalty obligation | $ | — | $ | — | $ | 179 | ||||||
Current portion of acquisition payable | — | — | 677 | |||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Financial liabilities | ||||||||||||
Current portion of royalty obligation | $ | — | $ | — | $ | 423 | ||||||
Current portion of acquisition payable | — | — | 634 | |||||||||
Current portion of contingent consideration | — | — | 293 | |||||||||
Royalty obligation | — | — | 65 | |||||||||
Acquisition payable | — | — | 591 | |||||||||
Contingent consideration | — | — | 40 | |||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Financial liabilities | ||||||||||||
Current portion of royalty obligation | $ | — | $ | — | $ | 362 | ||||||
Current portion of acquisition payable | — | — | 637 | |||||||||
Current portion of contingent consideration | — | — | 1,925 | |||||||||
Royalty obligation | — | — | 335 | |||||||||
Acquisition payable | — | — | 1,132 | |||||||||
Contingent consideration | — | — | 51 |
19. | Financial instruments (continued) |
(a) | Financial assets and liabilities (continued) |
(b) | Risks arising from financial instruments and risk management |
(i) | Market risk |
As at December 31 (Expressed in U.S. Dollars) | 2021 | 2020 | ||||||
Cash and cash equivalents | $ | 2,854 | $ | 1,758 | ||||
Restricted cash | 2 | 1,095 | ||||||
Accounts receivable | 3,657 | 4,032 | ||||||
Other assets | 45 | 123 | ||||||
Accounts payable and accrued liabilities | (3,669 | ) | (4,698 | ) | ||||
Current portion of royalty obligation | (334 | ) | (284 | ) | ||||
Current portion of acquisition payable | (500 | ) | (500 | ) | ||||
Holdback payable | 0 | (1,473 | ) | |||||
Current portion of contingent consideration | (231 | ) | (1,512 | ) | ||||
Income taxes payable | (114 | ) | (129 | ) | ||||
Current portion of lease obligation | (80 | ) | (77 | ) | ||||
Royalty obligation | (51 | ) | (263 | ) | ||||
Acquisition payable | (466 | ) | (889 | ) | ||||
Contingent consideration | (32 | ) | (40 | ) | ||||
Lease obligation | (291 | ) | (354 | ) | ||||
$ | 790 | $ | (3,211 | ) | ||||
As at December 31 (Expressed in U.S. Dollars) | 2022 | 2021 | ||||||
Cash and cash equivalents | $ | 3,592 | $ | 2,854 | ||||
Restricted cash | — | 2 | ||||||
Accounts receivable | 4,079 | 3,657 | ||||||
Other assets | 47 | 45 | ||||||
Accounts payable and accrued liabilities | (4,307 | ) | (3,669 | ) | ||||
Current portion of royalty obligation | (132 | ) | (334 | ) | ||||
Current portion of acquisition payable | (500 | ) | (500 | ) | ||||
Holdback payable | — | — | ||||||
Current portion of contingent consideration | — | (231 | ) | |||||
Income taxes payable | (44 | ) | (114 | ) | ||||
Current portion of lease obligation | (92 | ) | (80 | ) | ||||
Royalty obligation | — | (51 | ) | |||||
Acquisition payable | — | (466 | ) | |||||
Contingent consideration | — | (32 | ) | |||||
Lease obligation | (246 | ) | (291 | ) | ||||
$ | 2,395 | $ | 790 | |||||
Financial instruments (continued) |
(b) | Risks arising from financial instruments and risk management (continued) |
(i) | Market risk (continued) |
(ii) | Credit risk |
(iii) | Liquidity risk |
(c) | Capital management |
19. | Financial instruments (continued) |
(c) | Capital management (continued) |
Determination of fair values |
(a) | Share-based payment transactions |
(b) | Royalty obligation |
(c) | Acquisition payable |
Contingent consideration |
Segmented information |
As at December 31 | 2021 | 2020 | ||||||
Canada | $ | 706 | $ | 986 | ||||
United States | 9,879 | 10,131 | ||||||
Barbados | 5,211 | 7,105 | ||||||
$ | 15,796 | $ | 18,222 | |||||
As at December 31 | 2022 | 2021 | ||||||
Canada | $ | 392 | $ | 706 | ||||
United States | 9,642 | 9,879 | ||||||
Barbados | 4,954 | 5,211 | ||||||
$ | 14,988 | $ | 15,796 | |||||
For the year ended December 31, 2022 | Marketing and Distribution of Commercial Products | Retail and Mail Order Pharmacy | Total | |||||||||
Revenue | $ | 15,282 | $ | 7,783 | $ | 23,065 | ||||||
Operating expenses | (15,209 | ) | (6,663 | ) | (21,872 | ) | ||||||
Other income | 346 | — | 346 | |||||||||
Finance income (expense), net | (219 | ) | 13 | (206 | ) | |||||||
Foreign exchange gain, net | 52 | — | 52 | |||||||||
Profit before income taxes | $ | 252 | $ | 1,133 | $ | 1,385 | ||||||
Marketing and Distribution of Commercial Products | Retail and Mail Order Pharmacy | Total | ||||||||||
Revenue | $ | 14,317 | $ | 7,427 | $ | 21,744 | ||||||
Operating expenses | (16,177 | ) | (7,660 | ) | (23,837 | ) | ||||||
Other Income | 1,803 | 25 | 1,828 | |||||||||
Finance income (expense), net | (600 | ) | 75 | (525 | ) | |||||||
Foreign exchange gain, net | 31 | 0 | 31 | |||||||||
Net loss before income taxes | $ | (626 | ) | $ | (133 | ) | $ | (759 | ) | |||
21. | Segmented information (continued) |
For the year ended December 31, 2021 | Marketing and Distribution of Commercial Products | Retail and Mail Order Pharmacy | Total | |||||||||
Revenue | $ | 14,317 | $ | 7,427 | $ | 21,744 | ||||||
Operating expenses | (16,177 | ) | (7,660 | ) | (23,837 | ) | ||||||
Other income | 1,803 | 25 | 1,828 | |||||||||
Finance income (expense), net | (600 | ) | 75 | (525 | ) | |||||||
Foreign exchange gain, net | 31 | — | 31 | |||||||||
Loss before income taxes | $ | (626 | ) | $ | (133 | ) | $ | (759 | ) | |||
22. | Subsequent Events |
ITEM 19. | EXHIBITS |
Number | Exhibit | |
1. | Articles of Incorporation and Bylaws: | |
1.1 | Medicure’s Articles of Incorporation dated September 15, 1997 [1] | |
1.2 | Lariat’s Articles of Incorporation dated June 3, 1997 [1] | |
1.3 | Medicure’s Certificate of Continuance from Manitoba to Alberta dated December 3, 1999 [1] | |
1.4 | Certificate of Amalgamation for Medicure and Lariat dated December 22, 1999 [1] | |
1.5 | Medicure’s Certificate of Continuance from Alberta to Canada dated February 23, 2000 [1] | |
1.6 | ||
1.7 | ||
1.8 | ||
1.9 | ||
4. | Material Contracts and Agreements: | |
4.1 | Transfer Agency Agreement between Montreal Trust Company of Canada and the Company dated as of January 26, 2000, whereby Montreal Trust Company of Canada agreed to act as transfer agent and registrar with respect to the Shares [1] | |
4.2 | Medicure International Licensing Agreement between the Company and Medicure International Inc. dated June 1, 2000, wherein the Company granted Medicure International, Inc. a license with regard to certain intellectual property [1] | |
4.3 | Development Agreement between Medicure International, Inc. and CanAm Bioresearch Inc. dated June 1, 2000, wherein CanAm Bioresearch Inc. agreed to conduct research and development activities for Medicure International, Inc. [1] | |
4.4 | Amendment to the Consulting Services Agreement dated February 1, 2002 between A.D. Friesen Enterprises Ltd. and the Company whereby consulting services will be provided to the Company by Dr. Albert D. Friesen [2] | |
4.5 | ||
4.5 | Amendment dated March 1, 2002 to the Development Agreement between Medicure International, Inc. and CanAm Bioresearch Inc. [5] | |
4.7 | ||
4.8 | ||
4.9 |
158
4.10 | ||
4.11 | ||
4.12 | ||
4.13 | ||
4.14 | ||
4.15 | ||
4.16 | ||
4.17 | ||
4.18 | ||
4.19 | ||
4.20 | ||
4.21 | ||
4.22 | ||
4.23 | ||
4.24 | ||
4.25 | ||
8.1 | ||
11.1 | ||
12.1 |
159
12.2 | ||
13.1 | ||
23.1 | ||
Notes:
[1] | Herein incorporated by reference as previously included in the Company’s Form 20-F registration statement filed on January 30, 2001. |
[2] | Herein incorporated by reference as previously included in the Company’s Form 20-F annual report filed on December 31, 2002. |
[3] | Herein incorporated by reference as previously included in the Company’s Form 20-F annual report filed on October 20, 2003. |
[4] | Herein incorporated by reference as previously included in the Company’s Form 20-F annual report filed on September 15, 2004. |
[5] | Herein incorporated by reference as previously included in the Company’s Form 20-F annual report filed on August 24, 2005. |
[6] | Herein incorporated by reference as previously included in the Company’s Form 20-F annual report filed on August 16, 2006. |
[7] | Herein incorporated by reference as previously included in the Company’s Form 20-F annual report filed on August 27, 2007. |
[8] | Herein incorporated by reference as previously included in the Company’s Form 20-F annual report filed on August 29, 2008. |
[9] | Herein incorporated by reference as previously included in the Company’s Registration Statement on Form S-8, filed on October 9, 2007 (SEC FileNo. 333-146574). |
[10] | Herein incorporated by reference as previously included in the Company’s Form 20-F annual report filed on September 11, 2014. |
[11] | Herein incorporated by reference as previously included in the Company’s Form 20-F annual report filed on April 14, 2015. |
[12] | Herein incorporated by reference as previously included in the Company’s Form 20-F annual report filed on March 31, 2016. |
[13] | Herein incorporated by reference as previously included in the Company’s Form 20-F annual report filed on April 27, 2017. |
160
[14] | Herein incorporated by reference as previously included in the Company’s Form 20-F annual report filed on May 1, 2018. |
[15] | Herein incorporated by reference as previously included in the Company’s Form 20-F annual report filed on April 29, 2019. |
[16] | Herein incorporated by reference as previously included in the Company’s Form 20-F annual report filed on April 15, 2020. |
[17] | Herein incorporated by reference as previously included in the Company’s Form 20-F annual report filed on April 20, 2021. |
* | Filed herewith |
** | Furnished herewith |
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SIGNATURE PAGE
Pursuant to the requirements of Section 12 of the
Dated: April 27, 2022
ON BEHALF OF THE CORPORATION,
MEDICURE INC.
per:
/s/ Albert D. Friesen |
Albert D. Friesen, Ph.D. |
Chairman, & CEO |
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