About Innocan Pharma

Innocan Pharma (CSE: INNO), (FSE: IP4), (OTC: INNPF) is an Israeli pharmaceutical technology company that has emerged as an industry leader in the market of Cannabidiol (CBD) infused treatments and products. A look at the company’s 2021 financial reports shows that Innocan is successfully achieving strategic milestones while accessing a substantial $52 billion market. Innocan Pharma has built up $12 million capital, shown improved losses over 2021, improved its IP portfolio, and displayed significant expense cuts.

Founded in 2018, the company specializes in the research and development of several different cutting-edge platforms combining CBD with other medicines and addressing the low bioavailability of CBD. The company is pursuing licensing discussions regarding its data set for an injectable Liposome technology aimed at the burgeoning Veterinary Services Industry. 

Liquidity

On December 31, 2021, Innocan Pharma had a working capital balance of $12,035,000 CAD, which was a significant increase from the $3,330,000 reported on December 31, 2020. The capital is made up of current assets of cash and cash equivalents, other accounts receivable and inventory, trade accounts payable, and other accounts payable and accrued liabilities. The balance of working capital reported at year-end 2021 did not include the balance of warrants under current liabilities and therefore is a non-GAAP measure. The warrants balance was excluded because it has no impact on future cash flow.

The balance of working capital provides a runway of 2 years for the company at a $600,000 burn rate. Innocan has the capability to finance itself into the foreseeable future through issuing equity. Warrants exercised in 2021 and the completion of a Private Placement in October 2021 contributed to the capital reserve of $12 million. The company’s cash flow is not affected by the $25 million deficit accumulated since its inception. Innocan ensures sufficient liquidity to meet liabilities and fund future research and development with its current working capital balance and ability to raise additional funds.

Profit and Loss

Innocan has shown improved losses on financial reports for the year ending December 31, 2021. The total comprehensive losses were reported at year-end, 2021, at $10,091,000, up from $9,953,000 comprehensive loss reported on December 31, 2020. The final quarter of 2021 showed a comprehensive loss of $605,000, which was a major improvement from the fourth quarter of 2020 when the loss was $6,291,000.

The improvement of losses on the December 31, 2021 financial statements was in part due to increases in revenues and gross profit. In 2021, revenue grew to $196,000, which was a significant increase over 2020 where revenues reported were only $8,000. Gross profits for the year ending December 31, 2021 were reported at $121,000. Profits indicated that the company’s strategic growth plans were effective, as they were up from only $3,000 at year-end in 2020.

Intellectual Property (IP)

The 2021 year-end results for Innocan Pharma included an improved IP portfolio. Throughout 2021, the company completed patent applications for potentially industry-leading CBD infused treatments. In March 2021, Innocan filed for a novel cannabis-based anti-itch treatment for insect bites, rash, cuts, burns or exposure to various allergens. On June 14, 2021 the company followed up with another patent application for a new cannabis-infused vaginal moisturizer and lubricant treatment. Additional applications for patents were completed by Innocan Pharma in 2021 for novel cannabis-infused products, including a topical solution for diabetic symptoms, a treatment for hair loss, and cutting-edge CBD delivery systems.

Innocan has also extended into the emerging field of CBD Veterinary Solutions by developing several new products including an injectable Liposome technology.

Expenses

Innocan Pharma significantly cut expenses throughout the fiscal year ending December 31, 2021. Despite the pharmaceutical technological advances made by Innocan Pharma during the year, the company managed to decrease research and development (R&D) expenses. The R&D expenses reported at year-end in 2021 were $1,399,000 , a significant decrease from $1,744,000 in 2020. The decrease was in part a result of an expired Research and License Agreement with Yissum.  A new agreement for the next phase of research is being negotiated between Innocan Pharma and Yissum. The net financial expenses in 2021 were $2,611,000, which was almost a 50% decrease from $5,228,000 in 2020.

Conclusion

Innocan Pharma is being labeled an emerging leader in Cannabidiol (CBD) products. Market experts, investors, and analysts look to Innocan’s Liposome Platform Technology (LPT) as commercially feasible applications for both humans and animals to treat issues like anxiety, inflammation, and pain management. This leads us to conclude that Innocan is building a unique brand for itself by targeting the intersection of CBD and Veterinary Services.

Innocan continues to show financial growth by building capital, increasing liquidity, decreasing expenses, and building a strong IP portfolio. As the company begins the licensing and monetization of new pharmaceutical technologies, it is likely that Innocan will become a viable acquisition target for well-recognized competitors..

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