CB2 Insights 2019 Year In Review – A Message from CEO and Co-Founder Pradyum Sekar
TORONTO, Jan. 08, 2020 (GLOBE NEWSWIRE) — CB2 Insights (CSE:CBII; OTCQB: CBIIF) (“CB2” or the “Company”), a leading data-driven company focused on bringing real-world evidence driven from the point-of-care to the medical cannabis community, today released its CEO’s 2019 Year In Review. The letter, which has also been sent to Investors, provides an update on the growth and development of the business last year as well as the foundation and opportunities that are ahead for 2020. The letter in its entirety can be found within this release.
Dear Shareholders,CB2 Insights has been pleased to deliver a year of outstanding performance for 2019, driven by a strong focus on establishing business fundamentals, execution of a well defined business strategy and growth in new business verticals to support a growing global demand for cannabinoid data and research. Our focus on execution has allowed us to achieve strong growth in revenues, improvements in cost efficiencies and an operating structure that will enable us to reach profitability in Q2 2020.We closed out the year having become a public company in March with a mission to increase our patient volume, improve our technology platform in order to better capture clinically-validated data within our clinics and begin to leverage those assets to bring a more traditional level of data and research to the medical cannabis space. We recognized that while revenue growth was important, more vital was bringing ourselves to profitability.While its not uncommon for a technology and data firm to grow solely based on external funding during its growth stage, we had uniquely positioned the company to be largely self-funded through our clinical operations which in turn allowed us to avoid having to do large raises resulting in shareholder dilution.After the final payout from the acquisition of Canna Care Docs, we operated with the cash flows that came from the clinical operations as well as less than $2M in external capital in our first year as a public company. Many people believed we would never be able to grow without doing a large financing. We believe this, in part, is why there has always been significant pressure on our stock – the assumption that a large raise was always around the corner.The facts: We were able to successfully complete 3 acquisitions, grow the company 24% year on year, decrease our expenses to near-profitability and now are proving new verticals of revenue with partnerships managing technology and research projects with licensed producers, research bodies and product manufacturers in North America, the UK and Colombia.We have always approached the industry with a traditional healthcare slant. In the last few months, oversight bodies, such as the US FDA, have begun cracking down on medical cannabis providers who claim benefits to their products but have yet to prove safety and efficacy through the traditional healthcare channels. Warnings and demands to remove marketing statements have reached 20+ companies already. Everyone in the medical cannabis industry recognizes that clinical trials, real-world evidence and other means of proving out efficacy are the only way that the industry will move to its forecasted value. But most don’t know where to begin. In just a few short months, we have over $300K in booked revenue related to our data and research efforts with a growing pipeline. And as we are currently able to handle those projects with the team that we already have in place, we expect strong profit margins of over 50% on that new revenue. Within these conversations, we are seeing movement that will lead to multi-million dollar agreements and we are working around the clock to secure them. The results for this year come after 5 years of establishing a strong foundation of technology, data analytical tools and clinical operations. This foundation sets us apart from our competitors as CB2 Insights is now in a position to truly support its customer end to end, maximize revenue and minimize time and cost in bringing drugs to market. Firstly, establishing large patient registries and cohorts, gives them access to a large network of patients to test and qualify their products safety and efficacy. Secondly, our proprietary Sail electronic data management platform, allows for big data analytical and insights generation , across multiple data sources to help customers in minimizing clinical trial costs, recruiting patients, identifying future drug formulations, and validating current products in market. Finally, full service Contract Research arm with experience in traditional clinical trials, aims to support customers in the validation and advancement of drugs to market including registration with regulatory bodies for future product registration and commercialization in current and new Global markets. The investments we have made will now generate a strong return for shareholders as we have started to monetize and build the pipeline for further deal flow across all three verticals of the business: Clinical Operations & Market Access, Technology and Data Analytics, and Contract Research and Development. They also help set our expectations for another year of strong double-digit sales growth, profitability and market expansion.Fiscal 2019 Operational and Financial Highlights:As of reviewed Q3 2019 financials, YTD revenue of $10.3M representing a significant YoY growth as well as improved adjusted EBIDTA from -25% in Q1 to -7% in Q3 with continued improvement into Q4;With the acquisitions of Relaxed Clarity, MedEval and NJAM clinics, CB2 Insights now owns and operates one of the largest multi-state networks of specialty clinics in the US assessing nearly 100,000 patients seeking treatment which provides immediate market access to US-based product manufacturers for clinical trial and research programs;The Company has built both electronic data capture (EDC) and clinical data management software (CDMS) tools, which work to support its partners of any size to execute their data and clinical strategies. Most recent client announcements include Drug Science (Project T21), VIVO Cannabis, FCM Global, Premier Health, and My Access Clinics; andFull service contract research organization (CRO) services, including full-scale clinical trial management, trial design, monitoring, and other key research functions used by licensed producers, multi-state operators and traditional pharma companies entering the medical cannabis space. Most recent client announcements include Drug Science (Project T21), FCM Global, and Green Lotus.We have truly transformed our operation not only to reach profitability, but to pursue opportunities that will elevate the position of CB2 Insights as a valuable provider of data and research to stakeholders in both the medical cannabis and life science verticals. We are on pace to build and develop the industries largest data bank of anonymized clinical data on the safety, efficacy and usage of medical cannabis-based products and delivery forms. We believe this is going to a vital requirement by the industry in the years to come.The time is right. There are no other companies that are openly vying for this business at the moment. Which is also partially why it has taken a lot for us to convince partners that this is how they will secure their position in the medical cannabis space. But it is also why it is ours for the taking. When you look at similar companies in the traditional healthcare space such as IQVIA, Health Catalyst, Syneos and Medpace, you will see that their valuations are strong. They represent a stronghold in the traditional healthcare space – and we are now best positioned to realize the same value in the coming years.Our mission continues to be a global leader in medical cannabinoid therapy data and research. Our technology and research will continue to deepen insights and improve patient outcomes, while educating and supporting informed decisions that improve quality of life.We are also excited to announce that our most recent warrant repricing program that offers CB2 the most equitable form of non-dilutive capital, has had great support and uptake and we believe will provide adequate capital for CB2 to achieve its goal of reaching profitability by the end of Q1, 2020. We strongly believe that this enables CB2 to refrain from any significant future dilutive share issuances to finance operations and near-term organic growth.We look forward to another strong year ahead and continued demonstration of value to all our stakeholders.From all of us as CB2 Insights, Happy New Year!Sincerely,Pradyum Sekar
CEO & Co-FounderThe Year in Review letter to shareholders can also be found on CB2’s website at: https://www.cb2insights.com/news/article/1055About CB2 InsightsCB2 Insights has a mission to mainstream medical cannabis into traditional healthcare. We are a research and technology company, offering a suite of data and technology solutions as a full service clinical CRO, specializing in Phase II, III and IV, post-marketing, observational and experimental trials in a range of therapeutic areas for sponsors worldwide. For more information please visit www.cb2insights.com.Primary Contact:
Chief Corporate Officer
1.855.874.4999 ext. 120
Forward Looking StatementsStatements in this news release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed here and elsewhere in CB2’s filings with Canadian securities regulators. When used in this news release, words such as “will, could, plan, estimate, expect, intend, may, potential, believe, should,” and similar expressions, are forward-looking statements.Forward-looking statements may include, without limitation, statements regarding the opportunity to provide services and software to the U.S. cannabis industry.Although CB2 has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: dependence on obtaining regulatory approvals; investing in target companies or projects which have limited or no operating history and are subject to inconsistent legislation and regulation; change in laws; reliance on management; requirements for additional financing; competition; hindering market growth and state adoption due to inconsistent public opinion and perception of the medical-use and recreational-use marijuana industry and; regulatory or political change.There can be no assurance that such information will prove to be accurate or that management’s expectations or estimates of future developments, circumstances or results will materialize. As a result of these risks and uncertainties, the results or events predicted in these forward-looking statements may differ materially from actual results or events.Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release. CB2 disclaims any intention or obligation to update or revise such information, except as required by applicable law, and CB2 does not assume any liability for disclosure relating to any other company mentioned herein. No securities regulator or exchange has reviewed, approved, disapproved, or accepts responsibility for the content of this news release.