Aequus Provides General Update and First Quarter 2024 Financial Highlights, Grant Stock Options and Financing
VANCOUVER, May 09, 2024 – Aequus Pharmaceuticals Inc. (TSX-V: AQS, OTCQB: AQSZF) (“Aequus” or the “Company”), a specialty pharmaceutical company focused on bringing healthcare solutions to Canadians through licensing and partnerships, today reported financial results for the quarter ended March 31, 2024 (“First Quarter 2024”) and associated Company developments. Unless otherwise noted, all figures are in Canadian currency.
Mr. Janzen, CEO. “I continue to believe in the value that ZIMED® PF will bring to Canadian ophthalmologists and their patients. Adoption since launch has been in line with expectations and our team is excited by a potential surge in product demand, as we announced earlier week.”
Financial Highlights
The Company reported an operating loss before other income and expenses of $662,877 for the three months ended March 31, 2024, a decrease of 11% from the loss before other income of $744,394 in the three months ended March 31, 2023. The decrease in net loss was mainly due to a decrease of $99,813, or 13%, in expenses offset by the reduction of $18,296 in gross income due to pause the sale of Evolve products in July 2023.
Aequus launched ZIMED® PF in August 2023 and recognized $52,555 of revenue from its sales during the three months ended March 31, 2024. The Company experienced a decrease in revenue related to Evolve sales of 100% during the three months ended March 31, 2024. Overall revenue decreased $39,696 or 43%, in the first quarter 2024 compared to same period in 2023, which was driven by the pause in Evolve sale in summer 2023.
Sales and marketing costs in the first quarter 2024 were $442,719 when compared to $351,051 in the first quarter 2023, a change of 26% or $91,668. The majority of the increase was related to new marketing initiatives promoting ZIMED® PF.
Research and development included product development expenses, it decreased to $nil during the three months ended March 31, 2024, compared to $201,361 during the three months ended March 31, 2023. The decrease was attributable to no expenses related to the approval process of ZIMED® PF during the three months ended March 31, 2024.
General and administration expenses in the first quarter 2024 were $255,122 compared to $245,242 in the first quarter of 2023, an increase of 4% or $9,880. The change in expenses was mainly driven by general cost-cutting measures offset by higher loan-related expenses.
Aequus Grants Stock Options
The Company announces that it has granted incentive stock options (the “Options”) to certain directors, officers, employees, and consultants of the Company to purchase up to an aggregate of 2,175,000 common shares of the Company. These stock options are exercisable at a price of $0.05 per share, for a term of eight years, and vest in tranches over a 3-year period. The options are subject to the terms and conditions of the Company’s stock option plan and the policies of the TSX Venture Exchange.
Financing
The “Company”, announces today it will increase its debt up to $600,000 to be used for general working capital and inventory purchases. Mr. Doug Janzen, Chairman and Chief Executive Officer of the Company, has agreed to provide an on demand loan with an interest rate of six percent (6%), which are terms consistent with previous loans.
The Loan involves a related party (as such term is defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”)), specifically a director and senior officer of the Company, and constitutes a related party transaction under MI 61-101. This transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(b) and 5.7(1)(f) of MI 61-101, as the Company is not listed or quoted on any of the stock exchanges or markets listed in subsection 5.5(b) of MI 61-101, and the Loan represents a loan from a related party on reasonable commercial terms that are not less advantageous to the Company than if the Loan were obtained from a person dealing at arm’s length and the Loan is not convertible or repayable in securities.
ABOUT AEQUUS PHARMACEUTICALS INC.
Aequus Pharmaceuticals Inc. (TSX-V: AQS, OTCQB: AQSZF) is specialty pharmaceutical company focused on developing and commercializing high quality, differentiated products in ophthalmology. Aequus plans to build on its Canadian commercial platform through the launch of additional products that are either created internally or brought in through an acquisition or license; remaining focused on highly specialized therapeutic areas. For further information, please visit www.aequuspharma.ca.
FORWARD-LOOKING STATEMENT DISCLAIMER
This release may contain forward-looking statements or forward-looking information under applicable Canadian securities legislation that may not be based on historical fact, including, without limitation, statements containing the words “believe”, “may”, “plan”, “will”, “estimate”, “continue”, “anticipate”, “intend”, “expect”, “potential” and similar expressions. Forward- looking statements are necessarily based on estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as the factors we believe are appropriate. Forward-looking statements include but are not limited to statements relating to: our ability to continue to grow revenues and add new products; the current loans allowing us to bridge us to higher revenue ; the expectation that 2024 is a transition period as we look to add to our product offerings; the implementation of our business model and strategic plans; revenue growth trends into the future; expected timing for product launches; the Company’s expected revenues; and the regulatory approval of its products. Such statements reflect our current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Aequus, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements. In making the forward looking statements included in this release, the Company has made various material assumptions, including, but not limited to: obtaining regulatory approvals; general business and economic conditions; the Company’s ability to successfully out license or sell its current products and in-license and develop new products; the assumption that the Company’s current good relationships with third parties will be maintained; the availability of financing on reasonable terms; the Company’s ability to attract and retain skilled staff; market competition; the products and technology offered by the Company’s competitors; and the Company’s ability to protect patents and proprietary rights. In evaluating forward looking statements, current and prospective shareholders should specifically consider various factors set out herein and under the heading “Risk Factors” in the Company’s Management Discussion and Analysis, a copy of which is available on Aequus’ profile on the SEDAR website at www.sedarplus.com, and as otherwise disclosed from time to time on Aequus’ SEDAR profile. Should one or more of these risks or uncertainties, or a risk that is not currently known to us materialize, or should assumptions underlying those forward-looking statements prove incorrect, actual results may vary materially from those described herein. These forward-looking statements are made as of the date of this release and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by applicable securities laws. Investors are cautioned that forward-looking statements are not guarantees of future performance and are inherently uncertain. Accordingly, investors are cautioned not to put undue reliance on forward looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of theTSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
CONTACT INFORMATION
Aequus Investor Relations
Email: investors@aequuspharma.ca
Phone: 604-336-7906