Braxia Scientific's Q2 2024: Cash Burn Over But Income Low, What's Next For Psychedelics Company?

Ontario-based Canadian psychedelics company Braxia Scientific Corp. BRAXF filed its interim financial statements and management discussion for the three and six months ended Sept. 30, 2023. 

Numbers show:

• Cash of $524,454 (CA$709,681) by Sept. 30, vs. $636,483 by June 30, and $1.08 million by March 31, 2023.

See full Q1 results.

• Three and six-month revenue of $439,026 and $882,577 vs. $336,439 and $644,971 during the same comparable periods in 2022. Meaning YoY revenue increase of 30.5% and 36.8%, respectively. 

• Three and six-month operating expenses of $294,455 and $949,315 compared to $1.57 million and $2.35 million in the same periods in 2022. This means a major YoY operating expenses decrease of 81.2% and 59.7%, respectively.

• Six-month net loss of $794,488 as compared to $2.45 million in the same period in 2022, an almost 68% YoY decrease. 

See Also: Canada-based psychedelics company Red Light Holland’s TRUFF Q2 2024 numbers.

CEO McIntyre’s Comments On Potential ‘Strategic Alternatives’

Braxia is defined as “a medical research and telemedicine company with clinics that provide innovative ketamine treatments for persons with depression and related disorders.” 

It primarily focuses on the operation of its multidisciplinary clinics with in-person and virtual mental health treatments through its wholly-owned subsidiary Braxia Health and research on novel drugs and delivery methods.

On the quarter’s performance, CEO Dr. Roger McIntyre said Braxia’s clinics experienced higher treatment volumes in the first half of fiscal 2024, “resulting in strong revenue growth” while the team kept focused on reducing expenses and improving efficiencies, as well as “looking to add novel therapies and other support services” to its clinical platform for further revenue improvement.

Meanwhile, the “going concern” section of the filed statements reports that current funds on hand, combined with operational cash flow, “would not be sufficient” to fund operations. 

In this sense, McIntyre said the board has formally initiated a process to explore strategic alternatives and alternative sources of capital or partnerships. 

“While I remain confident in the continued growth of our clinics, if we are unable to raise additional funding in the short term, we will look at alternate courses of actions including, but not limited to, further cost reductions, restructuring and the potential scaling back of clinic locations," he further noted.

The “strategic alternatives” comprehensive process is set to begin “immediately.” Options evaluated will include a potential sale of the company, merger or other business combination, sale of all or a portion of the company's assets, strategic investment or other significant transaction. With the warning that “there is no assurance that these efforts will result in any guaranteed improvements to cash flow, strategic or financial transactions,” the timing for the expected updates has not yet been disclosed.

On the management front, Olga Cwiek has resigned as a board director and CFO Stephen Brooks has also departed, with CLO Peter Rizakos now appointed to the board and serving as CFO.

Photo: Benzinga edit with photo by Serrgey75 and fizkes on Shutterstock.