EX-99.2 3 exh_992.htm EXHIBIT 99.2

Exhibit 99.2

 

 

 

 

 

 

 

 

 

 

 

PROFOUND MEDICAL CORP.

 

 

 

 

 

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

SEPTEMBER 30, 2021

 

PRESENTED IN US DOLLARS (000s)

 

 

 

 

 

 

 

 

 

 

 

Profound Medical Corp.

Interim Condensed Consolidated Balance Sheets

In USD (000s)

(Unaudited)

 

   September 30,
2021
$		  December 31,
2020
$
       
Assets      
       
Current assets      
Cash   72,218    83,913 
Trade and other receivables (note 3)   7,950    7,431 
Inventory (note 4)   6,991    5,331 
Prepaid expenses and deposits   106    1,067 
Total current assets   87,265    97,742 
           
Property and equipment (note 5)   862    859 
Intangible assets (note 6)   1,569    1,898 
Right-of-use assets (note 7)   1,193    1,424 
Goodwill   2,676    2,678 
           
Total assets   93,565    104,601 
           
Liabilities          
           
Current liabilities          
Accounts payable and accrued liabilities   2,166    3,382 
Deferred revenue   554    358 
Provisions   198    195 
Other liabilities (note 8)   -    99 
Derivative financial instrument   267    450 
Lease liabilities (note 9)   412    312 
Income taxes payable   -    13 
Total current liabilities   3,597    4,809 
           
Deferred revenue   912    1,078 
Lease liabilities (note 9)   1,042    1,364 
           
Total liabilities   5,551    7,251 
           
Shareholders’ Equity          
           
Share capital (note 10)   218,439    211,527 
Contributed surplus   14,524    11,250 
Accumulated other comprehensive loss   5,583    4,567 
Deficit   (150,532)   (129,994)
           
Total Shareholders’ Equity   88,014    97,350 
           
Total Liabilities and Shareholders’ Equity   93,565    104,601 

 

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

 

 

 

Profound Medical Corp.

Interim Condensed Consolidated Statements of Loss and Comprehensive Loss

In USD (000s)

(Unaudited)

 

    

Three

months

ended

September 30,

2021

$

    

Three

months

ended

September 30,

2020

$

    

Nine

months

ended

September 30,

2021

$

    

Nine

months

ended

September 30,

2020

$

 
                     
Revenue (note 12)                    
Capital equipment   1,457    1,135    3,150    2,301 
Non-capital - recurring   1,080    1,103    2,725    2,123 
    2,537    2,238    5,875    4,424 
Cost of sales (note 13)   1,550    765    3,420    2,093 
Gross profit   987    1,473    2,455    2,331 
                     
Operating expenses (note 13)                    
Research and development   4,054    3,566    10,578    7,398 
General and administrative   2,506    1,863    7,091    5,775 
Selling and distribution   2,034    1,186    5,349    3,112 
Total operating expenses   8,594    6,615    23,018    16,285 
                     
Operating Loss   7,607    5,142    20,563    13,954 
                     
Net finance costs/(income) (note 14)   (1,663)   784    (161)   (272)
                     
Loss before taxes   5,944    5,926    20,402    13,682 
                     
Income taxes    52    183    136    413 
                     
Net loss attributed to shareholders for the period   5,996    6,109    20,538    14,095 
                     
Other comprehensive (gain) loss                    
Item that may be reclassified to loss                    
Foreign currency translation adjustment   3,931    (2,160)   1,016    2,648 
Net loss and comprehensive loss for the period   2,065    8,269    19,522    11,447 
                     
Loss per share (note 15)                    
Basic and diluted loss per common share   0.29    0.33    1.01    0.85 

 

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

 

 

 

Profound Medical Corp.

Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity

In USD (000s)

(Unaudited)

 

    

Number

of shares

    

Share

capital

$

    

Contributed

surplus

$

    

Accumulated

other

comprehensive

income

$

    

Deficit

$

    

Total

$

 
                               
Balance – January 1, 2020   11,852,749    100,298    15,076    7,369    (108,372)   14,371 
                               
Net loss for the period   -    -    -    -    (14,095)   (14,095)
Cumulative translation adjustment   -    (1,340)   (432)   2,648    -    876 
Exercise of share options   152,384    1,729    (759)   -    -    970 
Exercise of warrants   1,055,094    13,637    (3,577)   -    -    10,060 
Share-based compensation (note 11)   -    -    2,070    -    -    2,070 
Issuance of units from offering (note 10)   6,564,914    79,094    -    -    -    79,094 
Balance – September 30, 2020   19,625,141    193,418    12,378    10,017    (122,467)   93,346 
                               
Balance – January 1, 2021   20,208,948    211,527    11,250    4,567    (129,994)   97,350 
                               
Net loss for the period   -    -    -    -    (20,538)   (20,538)
Cumulative translation adjustment   -    (916)   (111)   1,016    -    (11)
Exercise of share options   73,908    974    (392)   -    -    582 
Exercise of warrants   485,161    6,836    (997)   -    -    5,839 
Vesting of RSUs   1,234    18    (18)   -    -    - 
Share-based compensation (note 11)   -    -    4,792    -    -    4,792 
Balance – September 30, 2021   20,769,251    218,439    14,524    5,583    (150,532)   88,014 

 

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

 

 

 

 

 

Profound Medical Corp.

Interim Condensed Consolidated Statements of Cash Flows

In USD (000s)

(Unaudited)

 

    

Nine months

ended

September 30,

2021

$

    

Nine months

ended

September 30,

2020

$

 
           
Operating activities          
Net loss for the period   (20,538)   (14,095)
Adjustments to reconcile net loss to net cash flows from operating activities:          
Depreciation of property and equipment (note 5)   371    260 
Amortization of intangible assets (note 6)   763    666 
Depreciation of right-of-use assets (note 7)   249    226 
Share-based compensation (note 11)   4,792    2,070 
Interest and accretion expense (note 14)   67    542 
Deferred revenue   31    36 
Change in fair value of derivative financial instrument   (183)   176 
Change in fair value of contingent consideration   -    38 
Changes in non-cash working capital balances          
Trade and other receivables   (531)   (1,498)
Prepaid expenses and deposits   974    894 
Inventory   (2,025)   (1,663)
Accounts payable and accrued liabilities   (1,237)   (606)
Provisions   3    59 
Income taxes payable   (13)   167 
Foreign exchange on cash   (30)   (399)
Total cash used in operating activities   (17,307)   (13,127)
           
Investing activities          
Purchase of property and equipment   (32)   - 
Purchase of intangible assets   (434)   - 
Total cash used in investing activities   (466)   - 
           
Financing activities          
Issuance of common shares   -    85,523 
Transaction costs paid   -    (6,429)
Payment of other liabilities (note 8)   (99)   (173)
Payment of long-term debt and interest   -    (9,293)
Proceeds from share options exercised   582    970 
Proceeds from warrants exercised   5,839    10,060 
Payment of lease liabilities (note 9)   (286)   (194)
Total cash from financing activities   6,036    80,464 
           
Net change in cash during the period   (11,737)   67,337 
Foreign exchange on cash   42    630 
Cash – Beginning of period   83,913    14,800 
Cash – End of period   72,218    82,767 

 

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

 

 

 

Profound Medical Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2021

In USD (000s)

(Unaudited)

 

1Description of business

 

Profound Medical Corp. (Profound) and its subsidiaries (together, the Company) were incorporated under the Ontario Business Corporations Act on July 16, 2014. The Company is a medical technology Company developing treatments to ablate the prostate gland, uterine fibroids, osteoid osteoma and nerves for palliative pain relief for patients with metastatic bone disease.

 

The Company’s registered address is 2400 Skymark Avenue, Unit 6, Mississauga, Ontario, L4W 5K5.

 

2Summary of significant accounting policies and basis of preparation

 

Basis of preparation

 

The Company prepares its consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS), applicable to the preparation of interim condensed consolidated financial statements, including International Accounting Standards (IAS) 34, Interim Financial Reporting. These interim condensed consolidated financial statements are presented in US dollars and should be read in conjunction with the Company’s annual financial statements for the year ended December 31, 2020, which were prepared in accordance with IFRS.

 

The Board of Directors approved these consolidated financial statements on November 4, 2021. These consolidated financial statements comply with IFRS.

 

The interim condensed consolidated financial statements were prepared on a going concern basis under the historical cost convention, except for the derivative financial instrument and other liabilities which are measured at fair value. Certain current period amounts have been reclassified to conform with the current year presentation.

 

COVID-19

 

The COVID-19 outbreak has been declared a pandemic by the World Health Organization. COVID-19 is altering business and consumer activity in affected areas and beyond. The global response to the COVID-19 pandemic has resulted in, among other things, border closures, severe travel restrictions, the temporary shut-down of non-essential services and extreme fluctuations in financial and commodity markets. Additional measures may be implemented by one or more governments in jurisdictions where the Company operates. These measures have caused material disruption to businesses globally, resulting in an economic slowdown. The extent to which COVID-19 and any other pandemic or public health crisis impacts the Company’s business, affairs, operations, financial condition, liquidity, availability of credit and results of operations will depend on future developments that are highly uncertain and cannot be predicted with any meaningful precision, including new information which may emerge concerning the severity of the COVID-19 virus and the actions required to contain the COVID-19 virus or remedy its impact, among others.

 

 

(1)

 

 

Profound Medical Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2021

In USD (000s)

(Unaudited)

 

Further, from an operational perspective, the Company’s employees, direct sales and marketing teams and distribution partners, as well as the workforce of vendors, services providers and counterparties with which the Company does business, may also be adversely affected by the COVID-19 pandemic or efforts to mitigate the pandemic, including government-mandated shutdowns, requests or orders for employees to work remotely, and other physical distancing measures, which could result in an adverse impact on the Company’ ability to conduct its businesses, including its ability to cultivate adoption of the TULSA-PRO® technology, support clinical customers with the TULSA-PRO® procedures and increase the utilization of the systems and disposable components.

 

To date, the economic downturn and uncertainty caused by the COVID-19 pandemic and global measures undertaken to contain its spread have affected all of the Company’s operations to some extent and, in particular, have caused volatility in demand for the TULSA-PRO® and SONALLEVE® systems and the disposable components related thereto. This has resulted in a reduction in anticipated sales and led to delays in the Company’s expectations regarding the rate at which agreements for new system user sites will be entered into and when user sites will become operational for the initiation of patient treatments. Despite the COVID-19 pandemic, patient treatments are continuing and Profound continues to identify potential new system user sites. The Company continues to evaluate the current and potential impact of the COVID-19 pandemic on its business, affairs, operations, financial condition, liquidity, availability of credit and results of operations.

 

In addition, the actual and threatened spread of COVID-19 globally could also have a material adverse effect on the regional economies in which Profound operates, could continue to negatively impact stock markets, including the trading price of the Common Shares, could adversely impact the Company’s ability to raise capital, could cause continued interest rate volatility and movements that could make obtaining financing more challenging or more expensive.

 

Revenue

 

The company generates revenue from the lease and sale of medical devices and the sale of certain consumable goods. Capital equipment consists of one-time revenue for the sale of capital equipment including installation fees.  Non-capital – recurring revenue consists of the sale of consumables, lease of medical devices, procedures and services associated with extended warranties.

 

3Trade and other receivables

 

The trade and other receivables balance comprises the following:

 

    

September 30,

2021

$

    

December 31,

2020

$

 
           
Trade receivables   7,434    6,446 
Tax receivables   245    774 
Other receivables   271    211 
Total trade and other receivables   7,950    7,431 

 

 

(2)

 

 

Profound Medical Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2021

In USD (000s)

(Unaudited)

 

Amounts past due represent trade receivables past due based on the customer’s contractual terms. The Company applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all trade receivables. At September 30, 2021 there were nil (December 31, 2020 - $695) of trade receivables that were past due but still considered collectible.

 

4Inventory

 

    

September 30,

2021

$

    

December 31,

2020

$

 
           
Finished goods   2,994    3,573 
Raw materials   4,003    1,774 
Inventory provision   (6)   (16)
Total inventory   6,991    5,331 

 

During the three and nine month periods ended September 30, 2021, $1,209 and $3,213 (three and nine month periods ended September 30, 2020 - $284 and $1,586 respectively) of inventory was recognized in cost of sales. The Company decreased its inventory provision by $1 and $10 during the three and nine month periods ended September 30, 2021 (decreased for the three and nine month periods ended September 30, 2020 - $180 and $11). There were no other inventory writedowns charged to cost of sales during the three and nine month periods ended September 30, 2021.

 

5Property and equipment

 

Property and equipment consist of the following:

 

    

Furniture

and

fittings

$

    

Research

and

manufacturing

equipment

$

    

Leasehold

improvements

$

    

Equipment under lease

$

    

Total

$

 
                          
At January 1, 2021                         
Cost   127    1,068    553    633    2,381 
Accumulated depreciation   (115)   (1,068)   (240)   (99)   (1,522)
Net book value   12    -    313    534    859 
                          
Nine months ended
September 30, 2021		                         
Opening net book value   12    -    313    534    859 
Additions   -    -    32    338    370 
Foreign exchange   (2)   -    -    6    4 
Depreciation   (10)   -    (45)   (316)   (371)
Closing net book value   -    -    300    562    862 
                          
At September 30, 2021                         
Cost   40    1,068    575    1,004    2,686 
Accumulated depreciation   (40)   (1,068)   (275)   (442)   (1,824)
Net book value   -    -    300    562    862 

 

(3)

 

 

Profound Medical Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2021

In USD (000s)

(Unaudited)

 

6Intangible assets

 

Intangible assets consist of the following:

 

    

Exclusive

licence

agreement

$

    

Software

$

    

Proprietary

technology

$

    

Brand

$

    

Total

$

 
                          
As at January 1, 2021                         
Cost   231    421    3,456    681    4,789 
Accumulated amortization   (45)   (59)   (2,328)   (459)   (2,891)
Net book value   186    362    1,128    222    1,898 
                          
Nine months ended
September 30, 2021		                         
Opening net book value   186    362    1,128    222    1,898 
Additions   -    434    -    -    434 
Foreign exchange   1    (11)   7    3    - 
Amortization   (17)   (102)   (538)   (106)   (763)
Closing net book value   170    683    597    119    1,569 
                          
As at September 30, 2021                         
Cost   231    849    3,456    681    5,217 
Accumulated amortization   (61)   (166)   (2,859)   (562)   (3,648)
Net book value   170    683    597    119    1,569 

 

7Right-of-use assets

 

    

Leased

premises

$

 
      
As at January 1, 2021     
Cost   1,918 
Accumulated depreciation   (494)
Net book value   1,424 
      
Nine months ended September 30, 2021     
Opening net book value   1,424 
Addition   18 
Foreign exchange   - 
Depreciation   (249)
Closing net book value   1,193 
      
As at September 30, 2021     
Cost   1,918 
Accumulated depreciation   (725)
Net book value   1,193 

 

The Company leases office premises in Mississauga, Canada, Beijing, China and Vantaa, Finland. These lease agreements are typically entered into for three to ten-year periods.

 

(4)

 

 

Profound Medical Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2021

In USD (000s)

(Unaudited)

 

8Other liabilities

 

    

Contingent

consideration

$

 
      
As at January 1, 2021   99 
Amounts paid   (99)
As at September 30, 2021   - 

 

Contingent consideration

 

The final payment in relation to the contingent consideration was made during the period and no further amounts are owing.

 

On July 31, 2017, the Company entered into an Asset and Share Purchase Agreement (the agreement) to acquire all of the issued and outstanding shares and certain assets of Royal Philips’ (Philips) Sonalleve MR-HIFU business (Sonalleve). The agreement includes certain contingent consideration payments payable monthly in euro tied to revenue levels of the Sonalleve business summarized as follows:

 

·5% of revenue between the date of acquisition and December 31, 2017;

 

·6% of revenue during the year ending December 31, 2018;

 

·7% of revenue during the years ending December 31, 2019 and 2020; and

 

·if total revenues are in excess of a defined amount from the date of acquisition to December 31, 2020, then the Company will be required to pay 7% of revenue from the date of acquisition to December 31, 2019.

 

9Lease liabilities

 

    

September 30,

2021

$

    

December 31,

2020

$

 
           
Balance – Beginning of period   1,676    1,836 
Additions   15    - 
Repayments   (286)   (289)
Foreign exchange   (18)   58 
Interest and accretion expense   67    71 
Balance – End of period   1,454    1,676 
Less: Current portion   412    312 
Long-term portion   1,042    1,364 

 

(5)

 

 

Profound Medical Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2021

In USD (000s)

(Unaudited)

 

10Share capital

 

Common shares

 

The Company is authorized to issue an unlimited number of common shares.

 

Issued and outstanding (with no par value)

 

    

September 30,

2021

$

    

December 31,

2020

$

 
           
20,769,251 (December 31, 2020 – 20,208,948) common shares   218,439    211,527 

 

Warrants

 

A summary of warrants outstanding is shown below:

 

    

Number of

warrants

    

Weighted

average

exercise

price

C$

    

Weighted

average

remaining

contractual

life

(years)

 
                
Balance - January 1, 2021   1,223,744    14.45    1.68 
Expired   (13,600)   15.50    - 
Exercised   (485,161)   15.33    0.32 
Balance - September 30, 2021   724,983    13.81    1.48 

 

11Share-based payments

 

Share options

 

Compensation expense related to share options for the three and nine month periods ended September 30, 2021 was $1,765 and $4,397, respectively (three and nine month periods ended September 30, 2020 - $978 and $2,066, respectively).

 

 

(6)

 

 

Profound Medical Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2021

In USD (000s)

(Unaudited)

 

A summary of the share option changes during the period presented and the total number of share options outstanding as at September 30, 2021 are set forth below:

 

    

Number

of options

    

Weighted

average

exercise

price

C$

 
           
Balance - January 1, 2021   1,522,362    13.97 
Granted   568,464    22.21 
Exercised   (73,908)   9.72 
Forfeited/expired   (46,843)   15.46 
Balance - September 30, 2021   1,970,075    16.47 

 

The Company estimated the fair value of the share options granted during the period using the Black-Scholes option pricing model with the weighted average assumptions below. Due to the absence of Company-specific volatility rates for the expected life of the share options, the Company chose comparable companies in the medical device industry.

 

    

March 11,

2021

    

May 21,

2021

    

June 17,

2021

 
                
Exercise price   C$28.16    C$22.08    C$23.14 
Expected volatility   75%   75%   75%
Expected life of options (years)   6     6    6  
Risk-free interest rate   1.40%   1.21%   1.14%
Dividend yield   -    -    - 
Number of share options issued   12,000    555,464    1,000 

 

The following table summarizes information about the share options outstanding as at September 30, 2021:

 

Exercise price
C$		   

Number of

options

outstanding

    

Weighted

average

remaining

contractual life

(years)

    

Number of

options

exercisable

 
                
2.01 – 4.00   11,300    1.13    11,300 
8.01 – 10.00   452,610    6.73    240,770 
10.01 – 12.00   137,890    6.67    100,349 
12.01 – 14.00   8,300    4.87    8,300 
14.01 – 16.00   160,256    5.75    151,473 
16.01 – 18.00   533,155    8.67    176,028 
20.01 – 22.00   1,400    8.88    379 
22.01 – 24.00   562,764    9.53    - 
24.01 – 26.00   91,400    9.18    - 
28.01 – 30.00   11,000    9.45    - 
    1,970,075    8.06    688,599 

 

 

(7)

 

 

Profound Medical Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2021

In USD (000s)

(Unaudited)

 

Long-term incentive plan

 

Share-based compensation expense related to long-term incentive plan (LTIP) for the three and nine month periods ended September 30, 2021 was $229 and $395 (three and nine month periods ended September 30, 2020 - $2 and $4, respectively).

 

A summary of the RSUs changes during the period are set forth below:

 

    Number of RSUs 
      
Balance - January 1, 2021    8,717 
Granted   211,500 
Forfeited   (10,000)
Vested   (1,234)
Balance - September 30, 2021   208,983 

 

12Revenue

 

   Three months ended September 30,
    

2021

$

    

2020

$

 
    Contracts with customers    Leasing    Contracts with customers    Leasing 
                     
Capital equipment   1,457    -    1,135    - 
Non-capital - recurring   922    158    1,019    84 
    2,379    158    2,154    84 

 

   Nine months ended September 30,
    

2021

$

    

2020

$

 
    Contracts with customers    Leasing    Contracts with customers    Leasing 
                     
Capital equipment   3,150    -    2,301    - 
Non-capital - recurring   2,410    315    1,944    179 
    5,560    315    4,245    179 

 

 

(8)

 

 

Profound Medical Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2021

In USD (000s)

(Unaudited)

 

13Nature of expenses

 

    

Three

months

ended

September 30,

2021

$

    

Three

months

ended

September 30,

2020

$

    

Nine

months

ended

September 30,

2021

$

    

Nine

months

ended

September 30,

2020

$

 
                     
Production and manufacturing costs   1,234    692    2,543    1,629 
Salaries and benefits   3,236    2,550    8,995    6,841 
Consulting fees   848    368    2,862    2,240 
Research and development expense, excluding salaries and benefits   779    1,769    2,171    2,091 
Sales and marketing expenses   483    127    817    400 
Amortization and depreciation   487    400    1,383    1,152 
Share-based compensation   1,994    978    4,792    2,070 
Rent   42    42    175    161 
Software/Hardware   152    188    427    454 
Insurance   447    338    1,088    970 
Other expenses   442    (72)   1,185    370 
    10,144    7,380    26,438    18,378 

 

14Net finance costs

 

    

Three

months

ended

September 30,

2021

$

    

Three

months

ended

September 30,

2020

$

    

Nine

months

ended

September 30,

2021

$

    

Nine

months

ended

September 30,

2020

$

 
                     
Change in fair value of derivative financial instrument   (34)   6    (183)   176 
Lease liability interest expense (note 9)   22    25    67    71 
Interest income   (22)   (232)   (116)   (465)
Change in fair value of contingent consideration (note 8)   -    30    -    38 
CIBC loan   -    -    -    471 
Foreign exchange (gain) loss   (1,629)   955    71    (563)
    (1,663)   784    (161)   (272)

 

 

(9)

 

 

Profound Medical Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2021

In USD (000s)

(Unaudited)

 

15Loss per share

 

The following table shows the calculation of basic and diluted loss per share:

 

    

Three

months

ended

September 30,

2021

    

Three

months

ended

September 30,

2020

    

Nine

months

ended

September 30,

2021

    

Nine

months

ended

September 30,

2020

 
                     
Net loss for the period  $5,996   $6,109   $20,538   $14,095 
Weighted average number of common shares   20,406,538    18,708,547    20,360,518    16,485,795 
Basic and diluted loss per share  $0.29   $0.33   $1.01   $0.85 

 

Of the 1,970,075 (September 30, 2020 – 1,524,801) share options, 208,983 (September 30, 2020 – 3,717) RSUs and 724,983 (September 30, 2020 – 1,724,804) warrants not included in the calculation of diluted loss per share for the period ended September 30, 2021, 1,413,582 (September 30, 2020 – 2,193,999) were exercisable.

 

16Related party transactions

 

Key management includes the Company’s directors and senior management team. The remuneration of directors and the senior management team was as follows:

 

    

Three

months

ended

September 30,

2021

$

    

Three

months

ended

September 30,

2020

$

    

Nine

months

ended

September 30,

2021

$

    

Nine

months

ended

September 30,

2020

$

 
                     
Salaries and employee benefits   299    214    1,435    1,124 
Directors’ fees   63    26    171    70 
Share-based compensation   586    478    2,020    1,187 
    948    718    3,626    2,381 

 

Executive employment agreements allow for additional payments in the event of a liquidity event, or if the executive is terminated without cause.

 

 

(10)

 

 

17Segment reporting

 

The Company’s operations are categorized into one segment, which is medical technology focused on magnetic resonance guided ablation procedures for the treatment of prostate disease, uterine fibroids and palliative pain treatment for patients with metastatic bone disease. The Company sells its products in various countries around the world, the below table shows the entity wide geographic disclosure for revenue based on the location of the legal entity that sold the product.

 

For the three-months ended September 30, 2021:

 

    

Canada

$

    

USA

$

    

Germany

$

    

Total

$

 
                     
Revenue                    
Capital equipment   469    -    988    1,457 
Non-capital - recurring   42    570    468    1,080 
    511    570    1,456    2,537 

 

For the nine-months ended September 30, 2021:

 

    

Canada

$

    

USA

$

    

Germany

$

    

Total

$

 
                     
Revenue                    
Capital equipment   1,724    -    1,426    3,150 
Non-capital - recurring   247    1,398    1,080    2,725 
    1,971    1,398    2,506    5,875 

 

For the three-months ended September 30, 2020:

 

    

Canada

$

    

Germany

$

    

Total

$

 
                
Revenue               
Capital equipment   1,135    -    1,135 
Non-capital - recurring   435    668    1,103 
    1,570    668    2,238 

 

For the nine-months ended September 30, 2020:

 

    

Canada

$

    

Germany

$

    

Total

$

 
                
Revenue               
Capital equipment   1,758    543    2,301 
Non-capital - recurring   840    1,283    2,123 
    2,598    1,826    4,424 

 

 

(11)

 

 

Profound Medical Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2021

In USD (000s)

(Unaudited)

 

Other entity wide financial information by geography as at September 30, 2021:

 

    

Canada

$

    

USA

$

    

China

$

    

Germany

$

    

Finland

$

    

Total

$

 
                               
Total assets   88,699    1,168    53    2,015    1,630    93,565 
Goodwill and intangible assets   4,245    -    -    -    -    4,245 
Property and equipment   586    276    -    -         862 
Right-of-use assets   1,158    -    13    -    22    1,193 

 

Other entity wide financial information by geography as at December 31, 2020:

 

    

Canada

$

    

USA

$

    

Germany

$

    

Finland

$

    

Total

$

 
                          
Total assets   98,890    456    1,682    3,573    104,601 
Goodwill and intangible assets   4,576    -    -    -    4,576 
Property and equipment   859    -    -    -    859 
Right-of-use assets   1,325    -    -    99    1,424 

 

18Change in presentation currency

 

At December 31, 2020, the Company changed its presentation currency from Canadian dollars to United States dollars. The change in presentation currency was made to better reflect the Company's business activities and to improve investor's ability to compare the Company's financial results with other publicly traded businesses in the industry. In making the change to a US dollar presentation currency, the Company followed the guidance in IAS 21, The Effects of Changes in Foreign Exchange Rates (IAS 21) and has applied the change retrospectively as if the new presentation currency had always been the Company's presentation currency. In accordance with IAS 21, the financial statements for all the periods presented have been translated to the new US dollar presentation currency. For comparative balances, assets and liabilities have been translated into the presentation currency at the rate of exchange prevailing at the reporting date, or at the exchange rate prevailing at the date of the transactions. Exchange rate differences arising on translation are taken to other comprehensive loss (income). The Company has presented the effects of the change in the presentation currency below.

 

 

(12)

 

 

Profound Medical Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2021

In USD (000s)

(Unaudited)

 

    

September 30,

2020

USD$

    

September 30,

2020

CAD$

 
           
Assets          
Current assets          
Cash   82,767    110,402 
Trade and other receivables   4,742    6,326 
Inventory   4,941    6,591 
Prepaid expenses and deposits   93    124 
Total current assets   92,543    123,443 
           
Property and equipment   599    799 
Intangible assets   1,669    2,227 
Right-of-use assets   1,437    1,917 
Goodwill   2,556    3,409 
Total assets   98,804    131,795 
           
Liabilities          
Current liabilities          
Accounts payable and accrued liabilities   1,800    2,401 
Deferred revenue   424    566 
Provisions   154    205 
Other liabilities   79    105 
Derivative financial instrument   372    497 
Lease liabilities   291    389 
Income taxes payable   181    242 
Total current liabilities   3,301    4,405 
           
Deferred revenue   755    1,006 
Provisions   21    28 
Lease liabilities   1,381    1,842 
Total liabilities   5,458    7,281 
           
Shareholders’ Equity          
           
Share capital   193,418    258,000 
Contributed surplus   12,378    16,511 
Accumulated other comprehensive loss   10,017    160 
Deficit   (122,467)   (150,157)
Total Shareholders’ Equity   93,346    124,514 
           
Total Liabilities and Shareholders’ Equity   98,804    131,795 

 

(13)

 

 

Profound Medical Corp.

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2021

In USD (000s)

(Unaudited)

 

    

Three

months

ended

September 30,

2020

USD$

    

Three

months

ended

September 30,

2020

CAD$

 
           
Revenue          
Capital equipment   1,135    1,512 
Non-capital - recurring   1,103    1,469 
    2,238    2,981 
Cost of sales   765    1,019 
Gross profit   1,473    1,962 
           
Operating expenses          
Research and development   3,566    4,750 
General and administrative   1,863    2,481 
Selling and distribution   1,186    1,580 
Total operating expenses   6,615    8,811 
           
Operating Loss   5,142    6,849 
           
Net finance costs   784    1,044 
           
Loss before taxes   5,926    7,893 
           
Income taxes   183    243 
           
Net loss attributed to shareholders for the year   6,109    8,136 
           
Other comprehensive loss (income)          
Item that may be reclassified to profit or loss          
Foreign currency translation adjustment - net of tax   (2,160)   (118)
           
Net loss and comprehensive loss for the year   8,269    8,254 
           
Loss per share          
Basic and diluted loss per common share   0.33    0.43 

 

 

 

(14)