Q4 2025 Avicanna Inc Earnings Call
Substantial synergistic benefits.
Each other business unit.
This has resulted in over 50 commercial products, mainly in the Canadian market and this is part of our plans for 2026 FERC could further expand these into international markets.
And we have established footprint and or proof of concept and what is not 24 international markets, resulting in about $25 $5 million of revenues during 2025 and S. ICD.
Adjusted EBITDA breakeven. This is all derived from a scientific platform Dr. Rubin, who will walk you through some of the developments of this year, but our scientific platform is really where we dedicated the first five years.
Canada into drug delivery preclinical and clinical development and this is something that we take pride in and I believe again that would be Canada is an established leader within that realm.
So just a quick overview of 2025. This is what we're going to be covering so I don't want to take the Thunder away from my colleague, Nick but from a financial perspective, we were able to.
Thirdly, consistent revenues from last year, a little bit above last year's results of $25 5 million, we did substantially improve our gross profits and gross margins by about 10%, resulting in 53% gross profits I believe these are industry, leading numbers and an indication of the companys entry barriers and operating it.
We're operating as a more of a Biopharma company, we are happy to be carrying zero debt integral contributor structured debt our debenture in our balance sheet and again, we were able to substantially improve our adjusted EBITDA to less than $300000 for all of 2025.
So strongest financial performance to date, while the revenue.
Growth was was modest we were able to substantially improve other.
Variables within our financial performance, Nick will dive into that we did improve our efficiency and margins will dive into how we accomplish that we were able to also make strategic investments through 2025. So for those of you that have been shareholders for.
We counted for a long period of time, you would notice that we were able to actually reinvest in physical capabilities in Colombia. For example that has now resulted in improvements of our export capabilities, but also in R&D in clinical development that is really the highest the largest value driver for the company in the long term we.
We did continue to expand.
Our commercialization efforts in Canada, and I'll expand into that and then based and then focus more on it.
Managements and commercialization across new markets, which we will also expand.
So overall, a successful year and we're very happy with the results of the year and we're very excited for what 2020 successful offered.
So just as a quick overview of <unk> for some of you that are not familiar <unk> is our main medical cannabis brands. This is treated as a medical formulary for insurance adjudication and for clinical practice for <unk>.
From a simple sense. This is a portfolio of <unk> medical cannabis products that are utilizing <unk> proprietary drug delivery systems to deliver standardized and evidence based products to patients <unk> and her team, including our pharmacists in my many.
Are helping patients site with clinical guidelines and treatment plans and working with the medical community to identify which one of these products is most suitable for various clinical indications or symptoms.
Very happy with what we've done with Royal Phyto, Canada has been a proof of concept market, where we have commercialized about 50 of these sku's learn from them test. It improves the formulations improved dosing and are consistently revamping. This portfolio, we will be now focusing on internationalization of further scale of real quite a 2026, which we will.
<unk>.
Something that in the next slide that we're quite excited about is the pipeline, that's coming and care leader will expand on.
The one after that yet so.
We're quite excited about again is the pipeline all expenses, but in the next slide we're talking about what we've accomplished with real quite or in our medical portfolio in Canada.
The number of listings, we have continued to increase which means more and more channels.
We can call them placements across Canada or listings these are <unk>.
<unk> getting listed within our medical or retail channel, meaning a province, or a medical platform other than <unk>.
So we're at 170 and this is a 26% increase from last year. We do now have 50 products in the Canadian market. We believe that number is going to go up by the end of this year with the introduction of our next generation three products, but in addition to that we are removing skus that are low performance.
The andas and just to bring more and more products into the market, but to bring our products or the market test and learn from them improve them and keep the winners and ideally start linking those product particular products to various against symptoms or clinical indications or patient groups, which is part of the medical affairs efforts, Kelly and I will expand on.
This is all done in an asset light model. So it'd be kind of is not a licensed producer we are outsourcing the manufacturing of our proprietary products meeting where tech transferring or formulations, we're ensuring that it is meeting any kind of quality standards and these products are being released what's interesting about this model is its scalability.
So as we continue to grow.
In the domestic market of Canada, but also internationalize, we will be using an asset light model that allows us to scale without major capex.
We are in <unk>.
National medical platforms, including <unk>. So <unk> is one of the medical cannabis platforms in Canada. We believe is unique and Kelly and I will expand on that but we're very excited to see that we are entering more and more channels, where these proprietary products are having significant benefit for patients.
Jeremy will expand on in fluid and powder equities are two of our technologies that we have finalized during 2025 and its derivative products.
Leave that for Carolina, but what I'll touch on is the products from this from these developments that were going to be translating into the Canadian market during 2026 and into international markets from 2026 and on.
So this includes in fluid, which is the liquid version of a self emulsifying drug delivery system that is being utilized as a precursor.
As essentially a nano emulsion going into gummies, resulting in flat same technology.
He is being utilized in our new capsules that are going to be fast acting capsules, sashays and small beverages. The idea here is to be able to reduce combustible and inhaled products within the patient population by delivering fast acting benefits of cannabinoids within more consumer friendly patient friendly dose.
These are all and get IV cash proprietary products lots of patent protection around these and very excited we've seen so early results from these products within preclinical and clinical development and now bringing them to the market.
Powder acts on the right is powder version of a similar technology, but different that allows us to then solidify these products into hard forums, such as tablets and all options.
Carolina.
Good morning, everyone over the past year, our medical and scientific affairs efforts in Canada have remained focused on advancing kind of annoying based medicine through three integrated pillars.
<unk> medical platform standardize and evidence based proprietary products and rigorous clinical evidence generation I'll walk through these briefly.
2025 was a turning point for my many medical cannabis care platform, which provides access to cannabinoid based medicine to patients across Canada.
With care practitioner Arthur antigen.
Originally launched following the acquisition of medical cannabis space shoppers, a subsidiary of shoppers drug Mart.
Platform demonstrated grit supported by ongoing improvements in patient engagement communication workflows and clinical documentation process.
These operational enhancements alongside the continued expansion and increased utilization of our pharmacist led support services are driving driving greater efficiencies across our platform, while improving patient retention continuing to a cure and overall sales performance.
You may ask what differentiates <unk> from other medical cannabis services and Thats, the combination of infrastructure clinical support and access.
We have a diverse multi brand platform with over 200.
30, Skus from 65, leading medical cannabis brands.
We have a strong medical affairs platform, including clinically clinician training and accredited education programs through we haven't seen that Academy.
We are integrated in insurance and reimbursement capabilities across private insurers.
Institutions and multiple provincial workers compensation board such as WSI.
And we have bilingual pharmacist led support programs that are important in treatment planning and specialized services such as the ones we have developed for veterans.
Fortunately this platform not only supports patient care, but also enables real world evidence generation, which I'll touch on later.
It also generates completion engagement and payer integration at scale positioning it as a core driver of both clinical and commercial growth.
We continue to believe that my money, especially when combined with real fighter as the most complete services cannabinoid based medicine and perfectly suited for international expansion into markets, they're planning to regulate medical cannabis.
Lee.
During 2025, we set out to engage and collaborate with the medical community in Canada in an effort to help facilitate the incorporation of cannabinoid based medicine into standard of care, while we faced early challenges we are.
Pleased with the progress we made in 2025 and the reception we have received from the medical community.
Over the year, we have continued to expand our reach within the medical community through targeted education scientific exchange and collaboration with key stakeholders. This is included health care professional training and education.
It has been focused on clinical guidelines treatment planning and integration of medical cannabis into products.
Key opinion leader engagement, including four national Webinars, reaching over 700, registrants and over nearly 409 attendees.
Strategic collaborations with professional organizations, including the nurse practitioner Shinners Association of Ontario, and the Canadian in Society.
Conference participation in scientific presence, including our annual symposium, which had over 400 health care practitioner registrations as well as participation in eight other conferences across pain mental health palliative care and veterans' health.
Giving us presence across the country.
Finally, we enhanced all of our educational infrastructure, including App updates to <unk> Academy and the development of training modules.
We also conducted an advisory board engagements, including chronic pain and PTSD focus sessions with multi disciplinary experts to inform clinical frameworks and identify gaps in care.
All of these efforts are designed to support clinicians and adopting cannabinoid based therapies.
Chuck shared and evidence informed manner.
As a result, we are seeing continued growth in new prescribers engaging with my money either through direct patient onboarding or furnished to clinic networks strengthening our position within the medical channel and supporting sustained patient growth.
Okay.
In terms of our pipeline development and translational science over the last nine years of preclinical and clinical work.
On cannabinoid, Andy Canada has established a scientific platform and continues to evolve intellectual property.
R&D team continues to innovate and leverage.
A robust understanding of medical cannabis and patent outcomes to deliver proprietary.
Cannabinoid based products.
Yeah.
Okay.
Our development efforts are underpinned by robust R&D platform complemented by observational real world evidence studies that help inform clinical decision, making and validate our therapeutic approach.
During 2025, we also finalized to suffer more supplying drug delivery system platforms in fluid and powder. Our racks that are designed and optimized yourself challenges associated with hydrophobic nature of cannabinoids.
Both of these unique drug delivery system is utilizing nano emulsion technology to deliver cannibalize and a consistent and rapid manner, while enhancing absorption and speed of onset.
Both of these technologies will also further developed into final product formats that are isolated to as part of our 2026 pipeline.
Really an incredible example of our scientific platform translation capabilities intent commercial efforts.
We continue to advance our proprietary oral delivery platforms first powder, Iraq, which is designed to address key challenges associated with cannabinoid, including parcel liability favorable barrels ability and delayed onset.
In a recent in vitro study this platform demonstrated a 74% increase in bioavailability at 63% increase in peak plasma concentration and 134% higher peak concentration compared to standard MCT oil farm formulations we.
We have filed a provisional patent covering this technology.
Which is adapted across multiple formats, including capsules tablets sashays and touches.
Additionally in fluid another cell phone more fine drug delivery system will be utilized in various product formats. This technology was designed for product formats, such as beverages in guns.
Finally, we are granted a new U S. PTO patents covering topical cannabinoid composition for dermatology call applications further strengthening our intellectual property portfolio.
We continue to advance the structured clinical development strategy that spans real world evidence randomized control trials and early phase mechanistic studies at the foundation of this work is our national real World evidence study conducted through <unk>, which is led by Dr. Hans clock.
This prospective observational study has enrolled approximately 450 patients to date and evaluate the patient reported outcomes across pain sleep, <unk>, Zaidi depression, and medication use and routine clinical practice.
<unk> has now been published in the Canadian Journal pain, demonstrating significant improvements across multiple clinical endpoints over a 24 week period.
We continue to drive this data collection forward as we speak.
Building on the real World evidence findings, we have initiated a pilot phase two randomized placebo controlled clinical trial in osteoarthritis pain, which is also led by Dr. Hans Clark at the University Health network.
This study is a multicenter three arm parallel study that is about relating our proprietary oral cannabinoid capsules utilizing our solid sense delivery platform.
We are currently in recruitment patient recruitment phase and this trial represents an important step towards generating high quality controlled evidence to support clinical and regulatory regulatory advancement.
Looking ahead, we have also received health, Canada approval for our phase one randomized placebo controlled dose finding study that we announced in 2026 in collaboration with the University of Calgary led by Dr. Lee of Mail and Dr. Matthew Hill.
The study is designed to characterize the dose dependent effects of oral THC earnings Zaidi.
Incorporating validated psychometric assessments, along side pharmacokinetic profiling and biomarker analysis.
Together.
These programs reflect the deliberate and staged approach to evidence generation leveraging real world data 10 form controlled trials and advancing toward more precise dose defined therapeutic strategies now I will turn it back over to Ross.
Okay.
Thanks Carolina.
Just we'll get into a little bit of the international progress we made during 2025 and at the end of the presentation, we'll talk about our 2026 plans, but as most of you are familiar with the company in.
The success <unk> had in Canada, Canada does remain our in our main market our priority market, but Canada is also our sandbox, Canada again, where we're optimizing our real fight our portfolio optimizing the services provided in my many combining into in through into what is a real complete medical cannabis service and we are then.
Utilizing that to build our pharmaceutical pipeline and intellectual property portfolio.
However, during 2025, we were able to accomplish some early signals elsewhere initially with <unk> for those of you that are not familiar <unk> is our first approved pharmaceutical. This is an epilepsy drugs for pediatric epilepsy catastrophic indications include Atlantic Gusto and drove a syndrome and the product was approved for.
At FDA marketing authorization by BMO, which is a Colombian authorities and the product was launched early Q Q1 2026.
This is a very soft launch so we're learning from it we're learning from our first pharmaceutical launch and hoping that we can scale up in Colombia and internationalize. It in other markets, where the <unk> approval at our Lima does qualify.
In addition to that we were able to commence exports into the United States, We've never breached U S. Federal law, we've never conducted sort of state level.
Activities, and therefore are actually quite clear in terms of our U S. Pathway. However, we were able to conduct CBD direct CBD product sales through our partnership with replay a replay for those of you not familiar with is out here within our former NBA veterans CVD recovery breath, which is utilizing our proprietary CBD CBD topical.
We launched the brand late last year and are now working on the scale of that in the United States with all of his team.
Very excited about the opportunity there because we are utilizing our own organic CBD in CPG that we're producing in Colombia, we're producing the finished product also in Colombia exporting relative to the United States going through obviously, the full import export process.
In addition to that we were able to scale, our is and more importantly, improve the quality of <unk>, which is our Colombian subsidiary also in Colombia, We have a majority owned subsidiary that has been historically focused on the production of active pharmaceutical ingredients CBD CBD THC using organic materials over the last two years.
With concentrated on improving the capabilities within this operation to be able to produce organic premium flower. So that we can export that around the world. The reason why that's important is in many of the emerging.
For national markets, such as the European Union U K, Australia.
Flower does still represent the highest proportion of sales and it is easiest products to be able to export and we've been able to prove that our infrastructure in Colombia, which has clear cost advantages and environmental advantages in organic certification can meet the regulatory and quality requirements of these markets and we announced that recently.
Exports of Australia, and as of last year, we were able to enter into Europe as well. So we believe this can be something that's going to be scaled during 2026 that we're quite excited about the opportunity. This can have as a revenue driver and also asked us, but actually a very large cash cow to that help fund some of the other innovations and international expansions of the car.
Great.
We were able to answer our 24th market.
This is now but is there in 2026, we enter Australia, which is our six continents.
For those of you that are not familiar with the regulatory landscape.
Related cannabinoid, such a controlled substance so theres a lot of quota applications in import and export process that needs to go they're going to go through and no country has the same regulations. So we are navigating a very complex regulatory scheme internationally and we were able to successfully work with international law to be able to get these products into various market.
It's something that we're quite excited about and I'll touch on in terms of what we expect to do in 2026 as a forward looking statement also.
So overall I think we're very well positioned to now scale. We did further improve our processes. During 2025, we did land in new markets with Avalanche <unk> programs and partnerships and again, we're operating in a very asset light model, where we believe that the formulations products can enter more and more international markets while not.
While not requiring a significant investment from a capex perspective for Ravi, Canada, and while maintaining high entry barriers with whether it's a formulations or it's a low cost of the materials that we're able to deliver.
I think we're going to go into finance now.
Thank you Ross and good morning.
B to provide an update on the financial results for 2025.
In 2025 topline revenue was consistent year over year at $25 5 billion.
Avocado earned gross profit of $13 5 million, representing a gross profit margin of 53%.
This is a 10% increase from the 2020 core gross margin of 48%.
The improved gross margin as a result of increased service and licensing revenue as well as a higher sell through of advocate a branded product.
As a percentage of <unk> sales of <unk> branded products sold online grew from 17, 5% in Q4 2024 to 19, 7% in Q4 2025.
A 12% increase year over year.
The company also continued its relentless efforts on cost control decreasing operating expenses by $1 5 million year over year, representing a 9% decrease compared to 2024.
As a result, we achieved adjusted EBITDA positivity in the fourth quarter of 2025, earning $310000.
<unk> also significantly improved adjusted EBITDA for the full year by 71% excuse me a loss of $300000 in 2025.
Appeared to have lots of $1 billion in 2024.
This improvement is a direct result of the boost in gross margin and efficiencies within operating expenses.
Net loss was also upgraded significantly cut by 41% from $4 6 million in 2024 to $2 7 million in 2025.
<unk> continues to operate with no debt on its balance sheet and manage to improve its working capital position by 23% in 2025 as compared to the prior year.
The company is on the path to fund its own operation through operating cash flow and only raised $1 billion through non brokered private placement during the year as compared to $4 $8 million raised in 2024.
Okay.
I will move to the next slide and we'll go through a brief revenue breakdown.
So we operate in many different channels and markets.
Dossier in Canada continues to be the major driver gravitas and after a soft first quarter, we were about to deliver three sequential quarters of revenue growth, resulting in $24 million for the year.
As noted on a previous slide as a percent of minority Dr. <unk> sale, our medical affairs efforts resulted in a 12% increase of our avocado branded product sell through.
Substantially improving our consolidated Canadian gross margins.
Other Canadian revenue is comprised of license and service revenue. In addition to business to business product sales into other channels such as medical cannabis.
High margin license revenue increased by 39% year over year from $1 6 million to $1 6 million, while b to B product sales were relatively in line with the prior year.
International revenue, most notably from our Santa Marta Goldman have joint venture achieved revenue of $1 9 million.
Although topline revenue was relatively consistent year over year in our international segment, we were able to realize significant margin improvement with the shift away from product sales towards service revenue.
Now I'll pass back to Ross for a look forward into 2026 as well as closing remarks.
Thanks Vic.
Again, I'm very happy with the financial results more so from the fact that we have reduced or almost.
I almost would have eliminated the use for external capital to sustain our business looking forward into 2026, as we look to further scale and invest and I think that gives us a solid ground to build on and we're quite happy with that Unfortunately, we're seeing the inverse impact of our financial and corporate and clinical and R&D progress in terms of the stock price.
I think thats.
For anyone that can access public files. It is clear to see that there is oversupply of its not coming from one of the major shareholders. So this is public information.
Relatively illiquid stock and are in the PSX in the segment that were already.
Unfortunately associated to the terms of cannabinoids that that is having an impact and we're hoping the progress we continue to make in terms of 2026 and our plans our efforts Wifi six will help rectify this and really unlock value for shareholders. When we look at Canada.
And Canada is our primary focus but it is also our more mature market, representing almost 90% of our international revenue. We do expect to continue to grow in a more stable fashion than we do as expected further invest within the R&D clinical and medical affairs.
Quite excited about the launch of the three products. We believe that this is in line with the needs of the market both on the medical and even on the retail side, where there is opportunity for licensing of these technologies.
We're quite it's quite important for us to be able to resolve some of the harm concerns related to cannabinoid, specifically no harm reduction campaign and fast acting oral formulations, we believe can offset or reduce the amount of combustible inhaled products under the Canadian market and Thats something that we will be dedicating resources superior 2026.
The United States. This is becoming much more for us as we proceed we do have a multi pronged strategy, which does include a pre rescheduling and of course scheduling that is expected for those of you that are not aware of the United States or Donald Trump has indicated that he expects to reschedule campus our cannabinoid.
Based products federally and that would allow for significant opportunities from a medical R&D clinical but also from a commercial perspective for companies that.
That a dedicated 10 years now into a complete medical candidates focus.
Within that we expect to dedicate resources into partnerships strategic partnerships in terms of licensing and sort of the CVD pathway prior to rescheduling and post rescheduling hope that we can when they bring the <unk> and <unk> platform into the United States and offer what has worked as a complete medical cannabis.
Their platform in Canada, the United States. In addition to that we are looking at the U S capital markets something that we.
We always knew we need to we need to we aim to go towards we've done a lot of analysis that we have now engaged in discussions to be able to build our U S listing pathway in terms of a senior exchange, we believe as a biopharma company that does operate only in federal regulations, we have the capabilities and the other regulatory sort of.
Clearance to be able to list on a senior U S exchange, where we can really unlock value for our shareholders. So this is something that we're going to be dedicating again time and resources to this year and we believe is something that will substantially help to unlock value.
From an international market perspective, again, what we did is added at work.
Now.
Our learnings our products our formulations are technology, whether it's through direct exports of raw materials.
Martha which we've already proven 82 for our finished products, whether that's a licensee or finished exports of our products like royal vital into various emerging markets to strategic partnerships with fortune 100 Fortune 500 companies that are looking to enter the cannabinoid adjacent really cannot deny direct model using.
<unk>, either our intellectual property of our raw materials to various other opportunities.
The more and more countries legalize and regulate cannabinoid based products. The trend. We're seeing is that this is under our medical platform and this is where we believe that <unk> is very well positioned again to take the learnings accompany from Canada intellectual property and scale that internationally.
From an R&D clinical perspective, we're quite excited that we're able to reinvest in these these opportunities and during 2025 care leader. The team have made significant advancements from new product development to preclinical and clinical development much of which has been done through grants and support from the clinical community.
But we have been able to invest into these platforms that we believe that this will ultimately drive the real value of the company in the future, especially as we go towards the United States and a senior exchange listing as a pharmaceutical issuer.
We're quite excited to see the learnings again from our real world evidence that we've been able to conduct in Canada or so of our phase III studies that are now going into Canada into later stage pharmaceutical development into markets like the United States and where there is a substantial opportunity to co develop our licensed technology as well. So overall very excited for what we've accomplished.
I'm personally very comfortable this is the most comfortable the company has been in terms of financial performance being able to stand on its own two feet and now look forward and invest in many of the things that we've already proven have work in different markets, but more specifically in Canada, and we believe that we have the team to do so and we're excited to do so so we will open it up.
Now Ken.
I mean, it is going to help me with some of the questions and happy to answer that for the group.
Hi, everyone.
In order to ask a question. If you can just put your hand up you press the three dots sending you throw up your hand, and then I will on mute your line.
<unk> can you please introduce yourself and what organization you're from so we'll give it a few minutes for people to figure out how to put their hand up.
Everyone's sharp.
Okay.
Okay.
We'll give it one more minute if we have no questions are euro always welcome to E mail that team at Mccanna, We're always open to discussing anything and look forward to your feedback so we'll give it one more minute.
There should be a three little dots at the bottom of your screen you compress the menu or.
Hansen be able to kind of pop up.
Okay.
I do see one has come up.
Alright, Barbara hexane.
Should be able to mute yourself now.
I think you're right.
Thank you Carolina.
I just had a quick question.
Okay.
A retired investor.
Are you finding any interests from other major.
Tom physical companies in terms of acquiring a company.
Hi, Barbara I'll answer that question.
Question <unk>.
So far the the early interest has come from cannabis companies.
And we believe there is there is one the value hasn't been ready to they will likely shelf the company in terms of the intellectual property and the value that it generates for our medical and pharma with perspective, so our target ultimately when we consider an exit it wouldn't be a pharmaceutical one.
We have collaborations and engagements partnerships, some strategic sort of alliances with mid sized pharma companies and we continue to scale those but we haven't had any direct acquisition opportunities yes.
<unk>, However, I believe that once we view eventually listen to the U S. In terms of a senior exchange and the rescheduling of the United States takes place that's going to open up the opportunity for more health care biotech <unk>.
Investment, but also health care biotech companies getting more comfortable with economic Deutsche space today, we're still fly being a significant amount of stigma and hesitation because of the lack of sort of federal authorization in the United States and that's where a lot of these companies are as you know so we see that as a as a significant opportunity to unlock value in a lipid.
Actually print exit we're not quite there yet and this is why we are further formatting the ERP tool to be more U S friendly for such opportunities.
Okay. Thanks.
Is it one more minute.
I think we'll wrap up here.
Everyone. Thank you for attending thank you for your interest in the company, who were happy to keep you updated especially as we make further progress in 2026, we will be conducting a more and more calls updates webinars et cetera, and excited to deliver the results of this airport T. Thank you thanks, Gary and thanks, Mike.
Yes.
