We are well-positioned to grow via key market opportunities at the forefront of global healthcare, including the incoming U.S. administration's aim to "Make America Healthy Again" by tackling chronic disease.
Commercial and Community Care-Delivery: Continued expansion with market-leading employer, provider and payvider innovation partners
Growth of GLP-1s: Engagement expertise provides unique ability to facilitate sustainable health outcomes and demonstrable ROI to GLP-1 sponsors
Rise of Health AI: Unique data sets and capabilities will enrich and accelerate progress of next-gen clinical discovery platforms
TORONTO, Nov. 27, 2024 /PRNewswire/ - Newtopia Inc. ("Newtopia" or the "Company") (TSXV: NEWU) (OTCQB: NEWUF), a tech-enabled whole health platform creating sustainable habits that prevent, slow and reverse chronic disease, today announced its third quarter 2024 financial results, operational highlights and filing of its financial statements. These results pertain to the three months ended September 30, 2024. All amounts are expressed in Canadian dollars, unless otherwise noted.
Third Quarter 2024 Financial Highlights:
Revenue of $1.0 million
Opex reduction of 16%
New partnership with US supplemental payvider positions Newtopia for profitability in 2025
"As we have for eleven years, Newtopia continues to prove our unique ability to produce industry-leading patient engagement and to cultivate healthy habits that can prevent, slow and reverse chronic metabolic disease", said Jeff Ruby, Newtopia Founder and CEO. "Most recently, we reported nine-month outcomes from our ongoing trial with Arkansas-based Heartland Whole Health Institute, in which we delivered Newtopia's best-ever engagement rates and weight loss outcomes in both provider and employer environments."
"This quarter we also further strengthened our underlying operations, and evolved our offerings to respond to emerging industry opportunities and value-based needs, including the incoming US administration's desire to 'Make America Healthy Again' by tackling chronic disease – something we do better than anyone else in the market", continued Ruby.
"Building on the strength of this progress we continue to pursue three significant opportunities to accelerate Newtopia growth in the final quarter of the year and into 2025: (1) expanding our key innovation partnerships with providers, employers and provincial payers, including a new relationship with a US Supplemental Payvider covering millions of employee lives; (2) combining Newtopia's proven habit change platform with GLP-1 drugs for obesity and type 2 diabetes; and (3) partnering with health AI and clinical discovery innovators to improve our collective ability to deliver best in breed outcomes that prevent, reverse and slow chronic disease", Ruby concluded.
Third Quarter 2024 Financial Results
Revenue for the three months ended September 30, 2024 was $1.0 million compared to $2.4 million in the prior-year period. This decrease is driven by the loss of a client effective June 2024, in addition to a structural incentive change with an existing client which the Company is actively working to offset. Gross profit for the third quarter was $0.3 million, or 34% of revenue. Gross profit consists of revenue less direct expenses, including the cost of Welcome Kits and labor costs associated with the Company's frontline health coaching team.
Adjusted operating expenses for the three months ended September 30, 2024, totaled $1.3 million, compared to $1.6 million in the prior-year period. The Company posted an adjusted operating loss of $987 thousand, compared to a gain of $21 thousand in the prior-year period. Given the new partnership with a US payvider, Newtopia anticipates returning to profitable growth in the near future.
Conference Call
The Company will host a conference call November 27 at 5 p.m. eastern time to discuss the third quarter 2024 results in further detail. To access the conference call, please dial (800) 717-1738 (U.S.) or (646) 307-1865 (International) 10 minutes prior to the start time and reference Conference ID number 15026. The call will also be available via live webcast on the investor relations portion of the Company's website located at investor.newtopia.com.
A replay of the conference call will be available through December 18, 2024, which can be accessed by dialing (844) 512-2921 (U.S.) or (412) 317-6671 (International) and entering the passcode 11157569. The webcast will also be archived on the Company's website.
About Newtopia
Newtopia is a personalized whole health platform helping people create positive lifelong habits that prevent, slow, or reverse chronic disease while reducing healthcare costs. The platform leverages genetic, social and behavioral insights to create individualized prevention programs with a focus on metabolic disease, diabetes, mental health challenges, hypertension, weight management and musculoskeletal disorders. With a person-centered approach that combines virtual care, digital tools, connected devices and actionable data science, Newtopia delivers sustainable clinical and financial outcomes. Newtopia serves some of the largest nationwide employers and health plans and is currently listed in Canada on the Toronto Stock Exchange (TSXV: NEWU) and is quoted in the US on the OTCQB® Venture Market (OTCQB: NEWUF). To learn more, visit newtopia.com, LinkedInor X.
Forward Looking Statements
This news release contains forward-looking information and forward-looking statements, within the meaning of applicable Canadian securities legislation, and forward looking statements, within the meaning of applicable United States securities legislation (collectively, "forward-looking statements"), which reflects management's expectations regarding Newtopia's future growth, results from operations (including, without limitation, future production and capital expenditures), performance (both operational and financial) and business prospects and opportunities. Wherever possible, words such as "predicts", "projects", "targets", "plans", "expects", "does not expect", "budget", "scheduled", "estimates", "forecasts", "anticipate" or "does not anticipate", "believe", "intend" and similar expressions or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. All statements other than statements of historical fact may be forward- looking information. Such statements reflect Newtopia's current views and intentions with respect to future events, based on information available to Newtopia, and are subject to certain risks, uncertainties, and assumptions. Material factors or assumptions were applied in providing forward-looking information. While forward-looking statements are based on data, assumptions and analyses that Newtopia believes are reasonable under the circumstances, whether actual results, performance or developments will meet Newtopia's expectations and predictions depends on a number of risks and uncertainties that could cause the actual results, performance and financial condition of Newtopia to differ materially from its expectations. Forward-looking statements are not a guarantee and are based on a number of estimates and assumptions management believes to be relevant and reasonable, whether actual results, performance or developments will meet Newtopia's expectations and predictions depends on a number of risks and uncertainties that could cause the actual results, performance and financial condition of Newtopia to differ materially from its expectations. Certain of the "risk factors" that could cause actual results to differ materially from Newtopia's forward-looking statements in this press release include, without limitation: the termination of contracts by clients, risks related to COVID-19 including various recommendations, orders and measures of governmental authorities to try to limit the pandemic, including travel restrictions, border closures, non-essential business closures, quarantines, self-isolations, shelters- in-place and social distancing, disruptions to markets, economic activity, financing, supply chains and sales channels, and a deterioration of general economic conditions including a possible national or global recession; and other general economic, market and business conditions and factors, including the risk factors discussed or referred to in Newtopia's disclosure documents, filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedarplus.caincluding Newtopia's final long form prospectus dated March 30, 2020.
For more information on these risks please see the "Risk Factors" in Newtopia's final long-form prospectus dated March 30, 2020. Should any factor affect Newtopia in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, Newtopia does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this news release is made as of the date of this news release, and Newtopia undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Key Financial Measures and Schedule of Non-GAAP Reconciliations Unaudited Gross Profit Information- including amortization
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
$
$
$
$
Revenue
986,116
2,434,606
4,369,086
7,440,297
Cost of revenue
(651,969)
(1,040,988)
(2,359,758)
(3,501,663)
Gross profit
334,147
1,393,618
2,009,328
3,938,634
Gross profit margin
34 %
57 %
46 %
53 %
Reconciliation of Total Operating Expenses to Adjusted Operating Expenses
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
$
$
$
$
Total expenses
1,978,493
2,164,039
6,038,822
7,313,195
Add (Subtract)
Share-based compensation
(54,851)
(158,584)
(195,941)
(466,887)
Depreciation of property and equipment
(483)
(1,386)
(1,953)
(4,965)
Debenture interest and accretion expense
(300,997)
(246,556)
(844,321)
(593,979)
Interest on promissory note
(2,000)
-
(2,000)
-
Interest on lease obligations
-
(5,221)
-
(26,784)
Finance charges
(256,482)
(145,024)
(496,171)
(376,990)
Amortization of deferred finance charges
(44,984)
(39,710)
(130,884)
(107,500)
Foreign exchange gain (loss)
2,094
17,302
32,843
(36,791)
(Loss) Gain on settlement of related party payable
-
3,111
(9,797)
10,314
Adjusted operating expenses
1,320,790
1,579,015
4,390,598
5,700,657
Unaudited Adjusted Operating Loss
Three Months Ended Sep 30,
Nine Months Ended Sep 30,
2024
2023
2024
2023
$
$
$
$
Gross profit
334,147
1,393,618
2,009,328
3,938,634
Add back amortization of intangible asset
-
206,509
-
619,537
Adjusted gross profit
334,147
1,600,127
2,009,328
4,558,171
Adjusted operating expenses
(1,320,790)
(1,579,015)
(4,390,598)
(5,700,657)
Adjusted operating loss
(986,643)
21,112
(2,381,270)
(1,142,486)
Newtopia Inc. Condensed Interim Consolidated Statements of Financial Position (Unaudited) As at September 30, 2024 and December 31, 2023 (Expressed in Canadian Dollars)
September 30,
December 31,
2024
2023
$
$
Assets
Current assets
Cash
10,200
387,339
Trade and other receivables
381,061
1,400,959
Contract assets
-
259,072
Prepaid expenses and deposits
137,226
101,043
Inventories
91,654
115,232
Deferred costs
41,979
64,583
662,120
2,328,228
Property and equipment
2,712
4,665
664,832
2,332,893
Liabilities
Current liabilities
Trade and other payables
2,415,716
1,825,356
Credit facility
4,865,674
4,767,006
Promissory note
200,000
-
Contract Liability
48,746
-
Deferred revenue
-
48,185
Debentures
5,735,672
3,723,530
13,265,808
10,364,077
Debentures
-
1,387,476
13,265,808
11,751,553
Shareholders' Equity (Deficit)
Common shares
49,754,858
49,404,596
Contributed surplus
14,648,104
14,151,188
Deficit
(77,003,938)
(72,974,444)
(12,600,976)
(9,418,660)
664,832
2,332,893
Newtopia Inc. Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Unaudited) Three Months Ended September 30, 2024 (Expressed in Canadian Dollars)
2024
2023
$
$
Revenue
986,116
2,434,606
Cost revenue
651,969
1,040,988
Gross profit
334,147
1,393,618
Operating expenses
Technology and development
366,732
446,504
Sales and marketing
163,261
317,544
General and administrative
790,797
814,967
Share-based compensation
54,851
158,584
Depreciation of property and equipment
483
1,386
1,376,124
1,738,985
Other expenses (income)
Interest on lease obligations
-
5,221
Debenture interest and accretion expense
300,997
246,556
Interest on promissory note
2,000
-
Finance charges
256,482
145,024
Foreign exchange (gain) loss
(2,094)
(17,302)
(Gain) Loss on settlement of related party payable
-
(3,111)
Amortization of deferred finance charges
44,984
39,710
602,369
425,054
Net loss and comprehensive loss
(1,644,346)
(770,421)
Loss per share
Basic and diluted loss per share
(0.01)
(0.01)
Weighted average number of shares outstanding
Basic and diluted
173,265,303
153,829,313
Newtopia Inc. Condensed Interim Statements of Cash Flows (Unaudited) Nine Months Ended September 30, 2024 (Expressed in Canadian Dollars)
2024
2023
$
$
Cash flows used in operating activities
Net loss and comprehensive loss
(4,029,494)
(3,374,561)
Items not involving cash
Depreciation of property and equipment
1,953
4,965
Amortization of intangible asset
-
619,537
Amortization of deferred finance charge
130,884
107,500
Debenture interest and accretion expense
624,661
353,530
Interest on promissory note
2,000
-
Interest on lease obligations
-
26,784
Debt modification
-
8,956
Credit facility interest
130,466
-
Share-based compensation
195,941
466,887
(Gain) Loss on settlement of related party payable
9,797
(10,314)
(2,933,792)
(1,796,716)
Change in non-cash working capital
Trade and other receivables
1,019,898
(216,987)
Prepaid expenses and deposits
(36,183)
(33,712)
Inventories
23,578
208,151
Trade and other payables
442,895
(502,016)
Deferred revenue
(48,185)
-
Contract asset/liability
307,818
174,670
(1,223,971)
(2,166,610)
Cash flows used in investing activities
Purchase of property and equipment
-
(2,548)
-
(2,548)
Cash flows from financing activities
Credit facility withdrawals
(3,726,407)
4,706,984
Credit facility repayments
3,825,080
(5,167,679)
Credit facility financing costs
(93,280)
(117,260)
Promissory note
200,000
-
Repayment of lease obligation
-
(464,998)
Proceeds from private placement issuance of Units, net of costs
641,440
1,467,295
Proceeds from issuance of debenture units, net of costs
