SALONA GLOBAL MEDICAL DEVICE CORP MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

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As used in this Quarterly Report on Form 10-Q, the terms "we," "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).

Caution Regarding Forward-Looking Statements

The following discussion and analysis should be read in conjunction with the
condensed consolidated financial statements and related notes. This quarterly
report, including, without limitation, statements under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," includes forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended ("Securities Act") and Section 21E
of the Securities Exchange Act of 1934, as amended ("Exchange Act"). These
forward-looking statements can be identified by the use of forward-looking
terminology, including the words "believes," "estimates," "anticipates,"
"expects," "intends," "plans," "may," "will," "potential," "projects,"
"predicts," "continue," or "should," or, in each case, their negative or other
variations or comparable terminology. There can be no assurance that actual
results will not materially differ from expectations. Such statements include,
but are not limited to, economic and competitive conditions, the effects of the
COVID 19 pandemic, regulatory changes and other uncertainties, the general
expansion of our business, and other statements which are not statements of
current or historical facts.

The forward-looking statements contained in this quarterly report are based on
our current expectations and beliefs concerning future developments and their
potential effects on us. Future developments affecting us may not be those that
we have anticipated. These forward-looking statements involve a number of risks,
uncertainties (some of which are beyond our control) and other assumptions that
may cause actual results or performance to be materially different from those
expressed or implied by these forward-looking statements. These risks and
uncertainties include, but are not limited to, those factors described under the
heading "Risk Factors" in this Report as well as our periodic reports, and our
Registration Statement on Form S-1 declared effective by the U.S. Securities and
Exchange Commission (SEC) on May 21, 2021 (the "Registration Statement"),
particularly in "Risk Factors" and "Cautionary Note Regarding Forward-Looking
Statements," all of which are difficult to predict. Should one or more of these
risks or uncertainties materialize, or should any of our assumptions prove
incorrect, actual results may vary in material respects from those projected in
these forward-looking statements. We undertake no obligation to update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise, except as may be required under applicable securities laws.
These risks and others described under "Risk Factors" may not be exhaustive.

By their nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may or may not
occur in the future. We caution you that forward-looking statements are not
guarantees of future performance and that our actual results of operations,
financial condition and liquidity, and developments in the industry in which we
operate may differ materially from those made in or suggested by the
forward-looking statements contained in this Report. In addition, even if our
results or operations, financial condition and liquidity, and developments in
the industry in which we operate are consistent with the forward-looking
statements contained in this Report, those results or developments may not be
indicative of results or developments in subsequent periods.

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             SALONA GLOBAL MEDICAL DEVICE CORPORATION

Notes to the unaudited condensed consolidated financial statements

For the three and nine months ended November 30, 2021 and 2020

                      (In Canadian Dollars)


Non-GAAP Measures

Throughout this management discussion and analysis, our management uses a number
of financial measures to assess its performance, and these are intended to
provide additional information to investors concerning the Company. This year
and 2022 mean the fiscal year ended February 28, 2022. Last year and 2021 mean
the fiscal year ended February 28, 2021. Some of these measures, including net
profit (loss) from operations and Adjusted EBITDA (i) are not calculated in
accordance with Generally Accepted Accounting Principles (GAAP), which are based
on the United States Generally Accepted Accounting Principles (U.S. GAAP), (ii)
are not defined by GAAP, and (iii) do not have standardized meanings that would
ensure consistency and comparability between companies using these measures.
Readers are cautioned that the disclosure of these items is meant to add to, and
not replace, the discussion of financial results as determined in accordance
with U.S. GAAP. Salona's presentation of this financial measure may not be
comparable to similarly titled measures used by other companies The primary
purpose of these non-GAAP measures is to provide supplemental information that
may prove useful to investors who wish to consider the impact of certain
non-cash or uncontrollable items on our operating performance and who wish to
separate revenues and related costs associated with client acquisition that may
not be ongoing.

Financial information presented in this Report is presented in Canadian dollars,
unless otherwise indicated. Unless otherwise indicated, all references to years
are to our fiscal year ended on the last calendar day of February.

Company overview

On March 11, 2021, we completed the Change of Business, as defined by the TSX
Venture Exchange, to become an acquisition-oriented medical device company with
plans to achieve scale through further acquisitions and organic growth. We
presently intend to operate in the recovery science market, including
post-operative pain, wound care and other markets serving the aging population
in the United States.

On May 21, 2021, we consummated the acquisition of South Dakota Partners Inc.
("SDP") through a subsidiary. SDP operates a large state-of-the-art production
facility located in the State of South Dakota currently producing proprietary
and white label medical devices for pain management, cold and hot therapy, NMES,
PEMF and ultrasound. Since its acquisition, SDP has generated $8,080,154 of
revenue and has generated net earnings of $359,289. We anticipate SDP will
continue to be profitable in future quarters. Information relating to SDP
contained in this Report covers the period from May 22, 2021, through November
30, 2021.

On September 30, 2021, the Company consummated the acquisition of Simbex, LLC
("Simbex"), an IP-based business that has a portfolio of several revenue and
royalty generating products ranging from wearable technology to products for
physical stability as well as expertise in development and design of many
medical devices on the market it has innovated over the past several years.
Simbex generated over $8,000,000 in audited revenues in 2020 with reported gross
margins of 50% and was cash flow positive. Information relating to Simbex
contained in this Report covers the period  from September 30, 2021, through
November 30, 2021. Since acquisition, Simbex has generated $1,670,797 of revenue
and has generated net earnings of $206,145.

On November 29, 2021, the Company consummated the acquisition of the customer
lists, sales orders and supply agreements, and related sales channel and
intellectual property assets of ALG-Health, LLC ("ALG"), a business engaged in
the selling medical devices and supplies to small, independent hospitals, group
purchasing organizations, medical offices and clinics, in exchange for nonvoting
securities of ALG Health Plus which are exchangeable for up to a maximum of
21,000,000 nonvoting Class A shares of the Company subject to the achievement of
certain revenue and EBITDA targets. In connection with the transaction, our
subsidiary ALG Health Plus entered into an exclusive supply agreement with ALG.

January 12, 2022 Melissa Polesky-Meyrowitz, CPA, was appointed the Chief
Financial Officer for the Company. Mrs. Polesky-Meyrowitz is a CPA with a BBA in
accounting from Hofstra University. She has over ten years experience in the
accounting and taxation. She was previously an International Tax Services
Supervisor at RSM, LLP and an US Tax Compliance and Advisory Manager at Richter
LLP located in Toronto. Melissa has previously worked with the Company in the
role of senior controller.

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             SALONA GLOBAL MEDICAL DEVICE CORPORATION

Notes to the unaudited condensed consolidated financial statements

For the three and nine months ended November 30, 2021 and 2020

                      (In Canadian Dollars)


RESULTS OF OPERATIONS

Results of operations for the three and nine months ended November 30, 2021 and
November 30, 2020 (In Canadian dollars)

Selected financial information

The Company uses Adjusted EBITDA, as calculated below, to assess the financial
health of its acquisitions and determine the overall potential of its business
not including transaction costs and other activities associated with the ongoing
growth strategy of the Company. Adjusted EBITDA is calculated as net income less
interest, taxes, depreciation, amortization, stock-based comp, foreign exchange
gain (loss) and transaction costs.

                 Three Months Ended                 2021 vs 2020                  Nine Months Ended                  2021 vs 2020
           November 30,      November 30,                                   November 30,      November 30,
               2021              2020          $ Change       % Change          2021              2020          $ Change       % Change
Revenue  $    5,286,702    $      223,587    $ 5,063,115        2,264%    $    9,850,915    $      293,411    $ 9,557,504        3,257%
Gross
Margin        1,662,636           223,587      1,439,049          644%         3,073,782           293,411      2,780,371          948%
Adjusted
EBITDA   $      302,536    $       14,886    $   287,650        1,932%    $      557,357    $     (394,339 )  $   951,696        (246%)

Adjusted EBITDA is calculated as follows:

                            Three Months Ended                              

Nine month period ended

                     November 30, 2021     November 30, 2020           November 30, 2021     November 30, 2020
Adjusted
EBITDA       $                 302,536   $            14,886   $                 557,357   $          (394,339 )
Less: Stock
Based
Compensation                  (292,492 )             (69,200 )                  (757,792 )            (136,004 )
Amortization
of
intangible
asset                         (165,552 )                   -                    (244,340 )                   -
Depreciation
of property
and
equipment                      (65,458 )                   -                    (131,414 )                   -
Depreciation
of
right-of-use
asset                          (67,817 )                   -                    (106,700 )                   -
Interest
Expense                       (121,518 )                   -                    (265,602 )                   -
Foreign
exchange
loss                           (48,934 )                   -                     (38,397 )                   -
Transaction
costs
including
legal, audit
and US
Regulatory                  (1,044,455 )            (306,909 )                (2,269,923 )            (306,909 )
Gain on debt
settlement                           -                     -                      15,538                     -
Income tax
expense                             (7 )                   -                      (1,995 )                   -
Net Loss     $              (1,503,697 ) $          (361,223 ) $              (3,223,268 ) $          (837,252 )


Revenue

Business Overview

               Three Months Ended                2021 vs 2020                Nine Months Ended                2021 vs 2020
          November 30,     November 30,                               

November 30, November 30,

              2021             2020         $ Change      % Change         2021             2020         $ Change      % Change
Revenue $    5,286,702   $      223,587   $ 5,063,115       2,264%   $    9,850,915   $      293,411   $ 9,557,504       3,257%




Since the acquisition of SDP on May 21, 2021, Simbex on September 30, 2021, and
the sales channel assets of ALG on November 29, 2021, we have continued
generating sales revenue in line with each of their pre-COVID revenue figures
and each continue to grow. From June 1, 2021, through November 30, 2021, we have
generated sales of $9,750,915.

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             SALONA GLOBAL MEDICAL DEVICE CORPORATION

Notes to the unaudited condensed consolidated financial statements

For the three and nine months ended November 30, 2021 and 2020

                      (In Canadian Dollars)


                  Three Months Ended                 2021 vs 2020                  Nine Months Ended                  2021 vs 2020
            November 30,      November 30,                                 

November 30, November 30,

                2021              2020          $ Change       % Change          2021              2020          $ Change       % Change
Cost of
Revenue
Direct
service
personnel $      953,260    $            -    $   953,260          100%    $    1,230,443    $            -    $ 1,230,443          100%
Direct
material
costs     $    2,431,065    $            -    $ 2,431,065          100%    $    5,306,949    $            -    $ 5,306,949          100%
Other
direct
costs     $      239,741    $            -    $   239,741          100%    $      239,741    $            -    $   239,741          100%




Cost of revenue includes our labor costs expended in the production of medical
devices, and related expenses allocated directly to the production of medical
devices, and our cost of actual materials used in the production process from
June 1, 2021, through November 30, 2021. The ongoing issues with the global
supply chain process caused by COVID-19 and other economic factors has impacted
the Company's ability to source affordable components. While there can be no
assurances, management believes that the negative impacts on the Company's
sourcing of components will diminish as the global supply chain stabilizes.

Amortization, depreciation, interest, transaction costs and foreign exchange gain (loss)

                     Three Months Ended                 2021 vs 2020                 Nine Months Ended                   2021 vs 2020
               November 30,      November 30,                                  November 30,      November 30,
                   2021              2020          $ Change      % Change          2021              2020           $ Change       % Change
Amortization
of
intangible
assets       $     (165,552 )  $            -    $ (165,552 )        100%    $     (244,340 )  $            -    $   (244,340 )        100%
Depreciation
of property
and
equipment           (65,458 )               -       (65,458 )        100%          (131,414 )               -        (131,414 )        100%
Amortization
of
right-of-use
assets              (67,817 )               -       (67,817 )        100%          (106,700 )               -        (106,700 )        100%
Interest
expense            (121,518 )               -      (121,518 )        100%          (265,602 )               -        (265,602 )        100%
Foreign
exchange
gain                (48,934 )               -       (48,934 )        100%           (38,397 )               -         (38,397 )        100%
Gain on debt
settlement                -                 -             -            0%            15,538                 -          15,538          100%
Transaction
costs
including
legal,
financial,
audit, US &
Canadian
Regulatory   $   (1,044,455 )  $     (306,909 )  $ (737,546 )        240%    $   (2,269,923 )  $     (306,909 )  $ (1,963,014 )        640%




Amortization of intangible assets reflects the amortization of intangible assets
such as trademarks, non-compete agreement, intellectual property and customer
base. We depreciate property and equipment across their useful lives. While
there can be no assurances, we expect depreciation of property and equipment and
of right of use asset and interest expense to increase as the Company continues
to grow its balance sheet through acquisitions.

Transaction costs include legal, financial, audit, US and Canadian regulatory
expenses and other fees incurred in connection with the Change of Business
transaction, the SDP, Simbex and ALG acquisitions, due diligence of acquisition
targets, financing costs, US regulatory costs, and associated accounting and
other costs. While these costs are necessary to the change of our line of
business, they are not operational expenses of the business.

                   Three Months Ended               2021 vs 2020                Nine Months Ended               2021 vs 2020
              November 30,     November 30,                               November 30,     November 30,
                  2021             2020         $ Change     % Change         2021             2020         $ Change     % Change
Foreign
currency
translation
gain (loss) $      112,505   $      (45,406 ) $  157,911       (348%)   $      128,506   $     (300,397 ) $  428,903       (143%)




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             SALONA GLOBAL MEDICAL DEVICE CORPORATION

Notes to the unaudited condensed consolidated financial statements

  For the three and nine months ended November 30, 2021 and 2020
                      (In Canadian Dollars)




Since we operate in the United States, we are exposed to foreign currency risk.
We are unable to effectively predict swings in the foreign exchange value of the
U.S. Dollar against the Canadian Dollar. When currency is moved between
denominations, a gain or loss may be realized which management is unable to
accurately predict.

Cash and capital resources

We fund our operations through cash from operations and asset-based loans
secured by subsidiary inventory and accounts receivable from third parties. As
of November 30, 2021, we had $6,127,736 of cash and cash equivalents, total
restricted cash and marketable securities, which was a decrease of $6,867,090
from the balance as of February 28, 2021. During the quarter ended May 31, 2021,
we generated $5,550,258 from the sale of 9,990,237 of our common shares. On
August 20, 2021, we generated $21,392 from the exercise of 112,617 of stock
options.

long-term debt

On June 9, 2021, our subsidiary SDP entered into a $6,813,180 (US$5,400,000)
revolving loan facility with a third-party financial institution, which
refinanced their existing revolving loan facility and other notes. All amounts
outstanding under the $ 6,813,180 revolving loan facility bear interest at the
greater of 4% or prime plus 0.75% per annum, and any accrued unpaid interest is
payable monthly, with a maturity of August 1, 2023. The repayment obligations
under the $6,813,180 facility are secured by a first priority lien on
substantially all of the assets of SDP and are not guaranteed by the Company or
any other subsidiary. In addition, on June 9, 2021, SDP issued a secured
promissory note in the principal amount of $936,895 (US$750,000) which evidenced
the refinancing of two outstanding loans. The note bears interest at the greater
of 6% or prime rate plus 2.75% per annum. Principal and accrued but unpaid
interest due on the note are payable monthly in equal installments over a
36-month period, and the repayment obligations under the note are secured by a
lien on substantially all of the assets of SDP. As of November 30, 2021, we had
long term debt of $730,527 related to the above note, as compared to $0 on
February 28, 2021, and $0 as of August 31, 2020.

Cash flow

The following table is a summary of our cash flows for the nine-month periods ended November 30, 2021, and November 30, 2020.

                                                             Nine months Ended
                                                       November 30,     November 30,
                                                               2021             2020
Net cash used in operating activities                $   (1,336,020 ) $     (400,142 )
Net cash (used in) provided by for investing
activities                                               (4,142,266 )       

81,451

Net cash (used in) provided by in financing
activities                                               (1,092,067 )          5,348
Net decrease in cash                                     (6,570,353 )       (313,343 )

Net cash used in operating activities

During the nine-month period ended November 30, 2021, $1,336,020 was used in
operating activities, compared to $400,142 for the period ended November 30,
2020. This cash flow was mostly used in the continued acquisition activity of
the Company as well as to ensure continued operation of the Company and capital
raising expenses. Cash losses were substantially lower than the book loss of the
Company due to an increase in accounts payable of $827,727 from February 28,
2021, reflecting expenses incurred but not yet paid.

Net cash provided by investing activities

During the nine-month period ended November 30, 2021, $4,142,266 was provided by
investing activities, compared to $81,451 that was provided for the period ended
November 30, 2020. This decrease in cash flow reflects the funds used to acquire
Simbex on September 30, 2021. Net cash used for investing activities was offset
by cash received upon the acquisition of SDP and Simbex.

                                       29

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             SALONA GLOBAL MEDICAL DEVICE CORPORATION

Notes to the unaudited condensed consolidated financial statements

For the three and nine months ended November 30, 2021 and 2020

                      (In Canadian Dollars)


Net cash used in fundraising activities

During the nine-month period ended November 30, 2021, $1,092,067 was used in
financing activities, compared to $5,348 during the period ended November 30,
2020. The cash was primarily used to pay off loans held by SDP. Net cash used in
financing activities was offset by cash generated from the exercise of stock
options.

The Company currently intends to meet its short-term and long-term liquidity needs with its existing cash, current assets and cash flow from operating activities.

We have never paid a cash dividend on our capital stock. Any future
determination to pay cash dividends will be at the discretion of our Board of
Directors (the "Board") and will depend upon our financial condition, operating
results, capital requirements and such other factors as our Board deems
relevant.

Off-balance sheet arrangements

We had no off-balance sheet arrangements during the periods covered by this report.

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