Mr. Payton Nyquvest reports

NUMINUS WELLNESS INC. ANNOUNCES FOURTH QUARTER AND FULL YEAR FISCAL 2023 RESULTS

Numinus Wellness Inc. has released its financial results for the three months and fiscal year ended Aug. 31, 2023 (Q4 2023).

Q4 fiscal 2023 highlights:

• Q4 2023 revenues grew 46.8 per cent year over year to $6.1-million;
• Q4 2023 revenues grew 1.7 per cent from the previous quarter;
• Gross profit of $1.8-million increased 37.4 per cent year over year;
• Cash position of $8.6-million as at Aug. 31, 2023;
• Achieved reduced cash burn rate of under $1.0-million per month in October, 2023;
• Announced a partnership with the Multidisciplinary Association for Psychedelic Studies (MAPS), which grants Numinus permission to use its protocol to offer MDMA-assisted (3,4-methylenedioxymethamphetamine) therapy experiential opportunities for practitioners;
• Numinus Practitioner Training doubled the cohort in its fundamentals of psychedelic-assisted therapy (PAT) course.

Fiscal 2023 highlights:

• Fiscal 2023 revenue of $23.2-million, a 256.9-per-cent increase over fiscal 2022;
• Gross profit of $8.4-million, a 371.2-per-cent increase over the previous year;
• Provided 82,373 client appointments in Numinus Wellness Clinics;
• Launched the Numinus Certification Pathway to train and certify psychedelic therapy practitioners, with over 400 unique learners participating since inception;
• Facilitated 36 clinical research trials, inclusive of many leading psychedelic drug development companies.

All financial results are reported in Canadian dollars unless otherwise stated.

"In fiscal 2023, we built on the foundational work carried out in the previous year and continued to optimize synergies between our clinical, training and contract research management operations to provide the most comprehensive platform in the mental wellness space with a particular expertise in psychedelics," said Payton Nyquvest, founder and chief executive officer. "We continue to focus on being a leading integrated mental health care company, offering top-tier psychedelic practitioner training programs and clinical research management services. Since Numinus was founded, there have been significant advancements in psychedelic therapy and we take pride in our substantial contributions to this sector that positively impact people's lives. The results of our efforts can be seen in the increasing number of client visits, our research collaborations with leading drug developers and the growth of our training platform for practitioners. The anticipated approval of MDMA-assisted therapy by the FDA, if approved, will provide us with increased opportunities to deploy our unique service model using another treatment modality.

"Our expanded training program in PAT is proving to be an important strategic growth initiative as evidenced by the growing source of high-margin revenue. As of Aug. 1, we doubled the seats in our fundamentals of PAT course. We are migrating our courses to a new learning management system, enhancing our training program by significantly improving learner engagement, satisfaction, ease of navigation and overall community experience. Additionally, our new free introduction to psychedelics course will be launched in the next two weeks to help broaden the awareness of the benefits of PAT while also providing greater brand awareness and lead generation for the full program. With the anticipation of MDMA-AT approval next year, this training is crucial to ensure positive client outcomes and rapid adoption of this treatment option.

"A key focus in fiscal 2023 that will continue into 2024 is increasing revenue and gross margin while reducing corporate overhead," added Mr. Nyquvest. "Our efforts to date have successfully reduced cash burn to under $1-million per month beginning with October, 2023. We are now focused on generating positive EBITDA on a consolidated basis." (EBITDA is earnings before interest, taxes, depreciation and amortization.)

Revenue

Revenues grew 1.7 per cent from the prior quarter to $6.1-million in Q4 2023, driven by the ramp-up of services in the United States and Canada, in addition to an increased number of higher revenue-generating third party clinical trials. Compared with the same quarter last year, revenues grew 46.8 per cent.

For the fiscal year ending Aug. 31, 2023, revenue increased by 256.9 per cent over the previous fiscal year. This revenue increase resulted from the consolidated revenues from the acquisitions of the Montreal, Toronto and U.S. clinics.

Gross margin

Sequentially, gross margin declined 500 basis points in Q4 2023 to 29.5 per cent from 34.5 per cent in Q3 2023, due to an increased number of full-time practitioners (rather than part-time contractors) and the performance of certain clinic locations. Gross margin also declined 200 basis points, compared with 31.5 per cent reported in Q4 2022.

On an annual basis, the gross margin was 36.1 per cent in fiscal year 2023, compared with 27.4 per cent in fiscal year 2022. The increase in annual gross margin reflects an increase in client appointments and improved clinic utilization.

The company continues to identify opportunities to improve operational results. To best position for future growth, the company has decided to wind down the clinical and research services at the Phoenix location. Unlike the rest of the U.S. clinic network, efforts to turn around the Phoenix clinic have been unsuccessful despite investing significant financial and management resources. Numinus will continue to optimize its clinic base and ensure its resources are focused on the areas of the highest potential return while ensuring exceptional service to its clients.

Operating expenditures

Operating expenditures were $7.9-million in Q4 2023, compared with $9.2-million in the previous quarter. In the quarter, the company continued its cost containment initiative to refocus operations on revenue producing activities and extend its cash runway. In Q4 2022, operating expenses were $13.4-million, excluding a $13.3-million impairment charge taken in that quarter.

Numinus took two one-time charges during the year ended Aug. 31, 2023: $600,000 for staffing reductions in non-revenue producing roles and $600,000 in aged accounts receivable. On an annual basis, total operating expenses including impairment of goodwill and intangible assets and other items in fiscal 2023 were $37.9-million, compared with $46.5-million in fiscal 2022.

Operational highlights

Numinus wellness clinic network

Wellness clinics generated revenue of $5.0-million during Q4 2023, a 34.6-per-cent year-over-year increase from $3.7-million during Q4 2022 and consistent with revenues of $5.0-million during Q3 2023, despite typical Q4 seasonality effects during the summer months. The increase in clinic network revenues year over year is primarily due to the expansion of clinic services:

• 21,068 clinical appointments in Q4 2023, compared with 21,520 in Q3 2023:
  • Average of 345.4 appointments per operating day in Q4 2023, compared with 331.1 in Q3 2023;
  • 8.9 per cent of appointments during Q4 2023 were made by new clients;
  • 18.9 per cent of appointments during Q4 2023 were KAT or ketamine/Spravato medicine related;
  • 6.2 per cent of appointments during Q4 2023 were for TMS services;
• In fiscal 2023, the company administered psychedelic-assisted therapy using its PAT protocol and model of care with psilocybin or MDMA to nine clients in total, with six more scheduled or awaiting approval.

In the quarter, Numinus entered into a partnership with MAPS to use their protocols to provide psychedelic experiential opportunities for practitioners as part of a clinical study. If the clinical trial application submitted to Health Canada is approved, the MDMA-assisted therapy experiential opportunity would be available only through Numinus. The clinical trial would enable practitioners interested in MDMA-assisted therapy to experience and observe MDMA sessions to further their understanding of PAT using this modality.

Numinus clinical research

Revenues from CCR during Q4 2023 were $1.2-million, a sequential increase of 14.2 per cent from $1.0-million during Q3 2023 and a 138.1-per-cent increase compared with Q4 2022.

On Oct. 3, 2023, the company introduced a comprehensive psychedelic program for individuals suffering from mental distress associated with serious and chronic illness delivered through its Numinus Utah and Cedar Clinical Research facilities.

About Numinus Bioscience Inc.

On Sept. 18, 2023, the company announced that, in line with efforts to reduce cash expenses, it would cease operations at Numinus Bioscience, its non-revenue-producing research lab and not renew the leases on its research clinic locations in Montreal and Vancouver. Numinus Bioscience will remain a legal entity under Numinus Wellness, ensuring the company will retain all intellectual property, patents and regulatory licences.

Balance sheet and liquidity

Numinus ended the quarter with a total cash balance of $8.6-million and working capital of $7.4-million.

As a result of cost containment initiatives that began in Q3 2023, after fiscal 2023, the company has reduced annualized cash expenses significantly, resulting in a reduced cash burn to under $1-million per month starting October, 2023. Numinus intends to continue its focus on profitability and ensuring the company is sustainable with its current operations.

Numinus's condensed consolidated financial statements for the years ended Aug. 31, 2023, and Aug. 31, 2022, and related management's discussion and analysis are available on Numinus's investor relations website and under the company's profile on SEDAR+. These documents were prepared in accordance with IFRS (international financial reporting standards).

Capital structure

As at Aug. 31, 2023, the company had 263,632,130 issued and outstanding common shares, 14,553,682 stock options, and 11.34 million warrants outstanding.

Conference call and webcast details

Interested parties are invited to participate in the company's Q4 and full-year 2023 results conference call and webcast occurring on the same day, at 5:30 p.m. Eastern Time (2:30 p.m. Pacific Time). During the call, Numinus executives will review the company's performance and recent initiatives and answer questions from analysts.

To listen to the live webcast, please register on-line.

The webcast will also be archived on the events and presentations page of Numinus's investor relations website.

To participate in the live conference call, please use the following dial-in information:

• 1-888-330-3632 (toll-free in North America);
• 1-646-960-0837 (international);
• Please ask to participate in Numinus's Q4 2023 and annual results call.

To avoid any delays in joining the call, please dial in at least five minutes prior to the call start time. If prompted, please provide conference passcode 3547386.

A conference call replay can also be accessed after 8:30 p.m. Eastern Time (5:30 p.m. Pacific Time) on Nov. 29, 2023, at 1-800-770-2030 or 1-647-362-9199 (using passcode 3547386). The replay will be available until Dec. 13, 2023.

About Numinus Wellness Inc.

Numinus Wellness helps people to heal and be well through the development and delivery of innovative mental health care and access to safe, evidence-based psychedelic-assisted therapies. The Numinus model -- including psychedelic research and clinic care -- is at the forefront of a transformation aimed at healing rather than managing symptoms for depression, anxiety, trauma, pain and substance use. Numinus is leading the integration of psychedelic-assisted therapies into mainstream clinical practice and building the foundation for a healthier society.

We seek Safe Harbor.