UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from to
Commission File Number
(Exact name of registrant as specified in its charter)
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Not Applicable |
(I.R.S. Employer Identification Number) | (State or other jurisdiction of incorporation or organization) |
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(Address of principal executive offices) | Zip Code |
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☐ | Accelerated filer ☐ |
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Smaller reporting company |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
As of August 10, 2023 (latest practicable date),
As used in this Quarterly Report on Form 10-Q, the terms "the Company," "us," "our," the "Company" and "Salona" mean Salona Global Medical Device Corporation (a corporation incorporated under the laws of the Province of British Columbia formerly known as Brattle Street Investment Corp.) and its subsidiaries (unless the context indicates a different meaning).
SALONA GLOBAL MEDICAL DEVICE CORPORATION
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
For the Three and Six Months Ended June 30, 2023, and June 30, 2022
(Expressed in Canadian Dollars, unless specified otherwise)
2
SALONA GLOBAL MEDICAL DEVICE CORPORATION |
Note | June 30, 2023 | December 31, 2022 | |||||||
Assets | |||||||||
Cash and cash equivalents | 16 | $ | $ | ||||||
Accounts receivable, net | 5 | ||||||||
Inventories, net | 7 | ||||||||
Prepaid expenses and other receivables | 18 | ||||||||
Total current assets | |||||||||
Security deposit | 12 | ||||||||
Long-term accounts receivable | 5 | ||||||||
Long-term prepaid expenses and other receivables | |||||||||
Property and equipment, net | 8 | ||||||||
Right-of-use assets, net | 12 | ||||||||
Intangible assets, net | 9 | ||||||||
Goodwill | 4 | ||||||||
Total assets | $ | $ | |||||||
Liabilities and Stockholders' Equity | |||||||||
Liabilities | |||||||||
Line of credit | 11 | ||||||||
Accounts payable and accrued liabilities | 10 | ||||||||
Current portion of debt | 11 | ||||||||
Current portion of lease liability | 12 | ||||||||
Other liabilities | 10 | ||||||||
Obligation for payment of earn-out consideration | 4 | ||||||||
Total current liabilities | |||||||||
Debt, net of current portion | 11 | ||||||||
Lease liability, net of current portion | 12 | ||||||||
Total liabilities | $ | $ | |||||||
Stockholders' equity | |||||||||
Common stock; |
|||||||||
13 |
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|
|||||||
Class A shares; |
13 | ||||||||
Common stock to be issued: |
13 |
||||||||
Class A shares to be issued: |
13 | ||||||||
Additional paid-in-capital | 13 | ||||||||
Accumulated other comprehensive income | |||||||||
Deficit | ( |
) | ( |
) | |||||
Total stockholders' equity | $ | $ | |||||||
Total liabilities and stockholders' equity | $ | $ | |||||||
Basis of presentation and going concern (Note 2) | |||||||||
Contingencies (Note 19) | |||||||||
Subsequent events (Note 20) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
SALONA GLOBAL MEDICAL DEVICE CORPORATION |
For the 3 months ended | For the 6 months ended | ||||||||||||||
Note | June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||
Revenue | 6 | $ | $ | $ | $ | ||||||||||
Cost of revenue | |||||||||||||||
Direct service personnel | |||||||||||||||
Direct material costs | |||||||||||||||
Other direct costs | |||||||||||||||
Total cost of revenue | |||||||||||||||
Gross margin | |||||||||||||||
Operating expenses | |||||||||||||||
Selling, general, and administrative | |||||||||||||||
Depreciation of property and equipment | 8 | ||||||||||||||
Amortization of right-of-use assets | 12 | ||||||||||||||
Amortization of intangible assets | 9 | ||||||||||||||
Total operating expenses | |||||||||||||||
Net operating (loss) gain | ( |
) | ( |
) | ( |
) | |||||||||
Interest expense | ( |
) | ( |
) | ( |
) | ( |
) | |||||||
Foreign exchange gain (loss) | ( |
) | |||||||||||||
Other income | 18 | ||||||||||||||
Provision for impairment | 4 | ( |
) | ( |
) | ||||||||||
Change in fair value of earnout consideration | 4 | ( |
) | ( |
) | ||||||||||
Change in fair value of contingent consideration | 4 | ( |
) | ( |
) | ( |
) | ||||||||
Transaction costs | 15 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||
Net loss before taxes | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Provision for income taxes | 17 | ( |
) | ( |
) | ||||||||||
Net loss |
|
( |
) |
|
( |
) |
|
( |
) |
|
( |
) | |||
Other comprehensive loss | |||||||||||||||
Foreign currency translation gain (loss) | ( |
) | |||||||||||||
Comprehensive loss |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
Net loss per share | |||||||||||||||
Basic and diluted | ( |
) | ( |
) | ( |
) | ( |
) | |||||||
Weighted average number of common stock and Class A shares outstanding |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
SALONA GLOBAL MEDICAL DEVICE CORPORATION Unaudited Interim Condensed Consolidated Statements of Stockholders' Equity (In Canadian Dollars, unless specified otherwise) |
Common stock | Common stock to be issued |
Class A Shares | Class A shares to be issued |
Accumulated | ||||||||||||||||||||||||||||||||
Additional | other | |||||||||||||||||||||||||||||||||||
paid-in- | comprehensive | |||||||||||||||||||||||||||||||||||
Number | Amount $ | Number | Amount $ | Number | Amount $ | Number | Amount $ | capital $ | income $ | Deficit $ | Total $ | |||||||||||||||||||||||||
Balance - March 31, 2022 | ( |
) | ||||||||||||||||||||||||||||||||||
Stock based compensation | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||
Shares issued on exercise of options | - | - | - | - | - | - | ( |
) | - | - | ||||||||||||||||||||||||||
Shares issued on exercise of warrants | - | - | - | - | - | - | ( |
) | - | - | ||||||||||||||||||||||||||
Shares to be issued related to acquisition of SDP | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Shares issued related to acquisition of SDP | - | - | - | - | ( |
) | ( |
) | - | - | - | - | ||||||||||||||||||||||||
Class A shares exchanged for common shares | - | - | ( |
) | ( |
) | - | - | - | - | - | - | ||||||||||||||||||||||||
Foreign currency translation loss | - | - | - | - | - | - | - | - | - | ( |
) | - | ( |
) | ||||||||||||||||||||||
Net loss from the period | - | - | - | - | - | - | - | - | - | - | ( |
) | ( |
) | ||||||||||||||||||||||
Balance - June 30, 2022 | ( |
) | ||||||||||||||||||||||||||||||||||
Balance December 31, 2021 | ( |
) | ||||||||||||||||||||||||||||||||||
Stock based compensation | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||
Shares issued on exercise of options | - | - | - | - | - | - | ( |
) | - | - | ||||||||||||||||||||||||||
Shares issued on exercise of warrants | - | - | - | - | - | - | ( |
) | - | - | ||||||||||||||||||||||||||
Shares issued on financing, net | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Share issuance costs | - | ( |
) | - | - | - | - | - | - | - | - | ( |
) | |||||||||||||||||||||||
Shares to be issued related to acquisition of SDP | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Shares issued related to acquisition of SDP | - | - | - | - | ( |
) | ( |
) | - | - | - | - | ||||||||||||||||||||||||
Class A shares exchanged for common shares | - | - | ( |
) | ( |
) | - | - | - | - | - | - | ||||||||||||||||||||||||
Foreign currency translation gain | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||
Net loss from the period | - | - | - | - | - | - | - | - | - | - | ( |
) | ( |
) | ||||||||||||||||||||||
Balance - June 30, 2022 | ( |
) | ||||||||||||||||||||||||||||||||||
Balance - March 31, 2023 | ( |
) | ||||||||||||||||||||||||||||||||||
Share based compensation | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||
Shares issued on exercise of options | ( |
) | ( |
) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Shares issued for settlement of liabilities | - | - | - | - | - | - |
|
- | - | |||||||||||||||||||||||||||
Shares issued related to Simbex agreement | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Shares issued related to ALG agreement | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Shares issued related to Arrowhead agreement | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Class A shares exchanged for common shares | ( |
) | ( |
) | - | - | - | |||||||||||||||||||||||||||||
Foreign currency translation gain | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||
Net loss for the period | - | - | - | - | - | - | - | - | - | - | ( |
) | ( |
) | ||||||||||||||||||||||
Balance - June 30, 2023 | ( |
) | ||||||||||||||||||||||||||||||||||
Balance - December 31, 2022 | ( |
) | ||||||||||||||||||||||||||||||||||
Share based compensation | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||
Shares issued on exercise of options | - | - | - | - | - | - | ( |
) | - | - | ||||||||||||||||||||||||||
Shares issued related to acquisition of SDP | - | - | - | - | ( |
) | ( |
) | - | - | - | - | ||||||||||||||||||||||||
Shares issued for settlement of liabilities | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Shares issued related to Simbex agreement | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Shares issued related to ALG agreement | - | - | - | - | - | - | - | - | - |