Cosmos Holdings Achieves Positive Adjusted Net Income and Positive Adjusted EBITDA for the Third Quarter of 2021

 

 

CHICAGO, Nov. 16, 2021 (GLOBE NEWSWIRE) -- Cosmos Holdings, Inc. (“the Company") (OTCQX: COSM), an international pharmaceutical company with a proprietary line of nutraceuticals and distributor of branded and generic pharmaceuticals, nutraceuticals, OTC medications and medical devices, today provided a business update and reported financial results for the third quarter ended September 30, 2021.

Greg Siokas, Chief Executive Officer of Cosmos Holdings, stated, "I am pleased to report we achieved positive adjusted net income and positive adjusted EBITDA (as defined below) for the third quarter of 2021, which reflects our strong organic growth, including both full-line wholesale products and our proprietary nutraceutical brand, Sky Premium Life®. Importantly, over the past nine months we have been focusing on reducing the Company’s debt and have converted a total of $10.2 million of debt to equity, further strengthening our balance sheet and facilitating our goal of uplisting to the Nasdaq Capital Market. Towards that end, we are also pleased to have secured a commitment of approximately $5.5 million of investment from Ault Global Holdings. We believe this investment is further validation of our business model and confidence in Cosmos’ upside potential.”

“We continue to rapidly expand our distribution network worldwide and open new markets for our proprietary line of branded pharmaceuticals, nutraceuticals, and food supplements. During the quarter, we entered into an exclusive distribution agreement with Mediprovita GbR for the distribution of our full line of proprietary nutraceuticals, Sky Premium Life®, in Germany and Austria. We also achieved a major milestone by partnering with China-based REMAI e-Commerce Co., Ltd. to open a flagship store and launch our Sky Premium Life® products on Alibaba’s Tmall Global, the world’s largest cross-border e-commerce marketplace with approximately 500 million monthly active users. This partnership vastly expands our e-commerce distribution network into China and offers significant opportunities for geographic expansion of our proprietary supplement and nutraceutical products. We also upgraded our pharmaceutical logistic center in Athens, Greece. By installing an automated robotic system at CosmoFarm, a wholly owned subsidiary of Cosmos, we have reached a high level of automation in our entire supply chain. Upgrading our pharmaceutical logistic center, substantially expands our current productivity and throughput, supporting our organic growth.”

“Notably, we continue to strengthen our balance sheet and have increased our working capital to $6.9 million as of September 30, 2021 compared to $6.0 million as of December 31, 2020. We also increased our shareholder equity to $4.7 million from a deficit of $4.2 million as of December 31, 2020. Overall, we have maintained a solid balance sheet and are well positioned to execute on a number of key milestones that we believe will drive significant value for shareholders.”

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

  Three Months Ended September 30, Nine Months Ended September 30,
(in $)   2021       2020       2021       2020
GAAP - Figures        
REVENUE $ 13,595,418     $ 14,352,098     $ 40,061,419     $ 39,105,318
GROSS PROFIT   2,345,570       2,397,310       5,383,748       5,938,612
INCOME (LOSS) FROM OPERATIONS $ (914,551 )   $ 1,080,003     $ (4,022,120 )   $ 2,291,880
NET INCOME (LOSS)   (1,936,543 )     757,866       (6,489,502 )     1,651,867
         
Non-GAAP Figures (*)        
ADJUSTED EBITDA $ 1,224,570     $ 1,196,101     $ 1,627,935     $ 2,668,180
ADJUSTED NET INCOME (LOSS) $ 1,056,009     $ 1,191,666     $ 1,558,783     $ 2,654,253
         

(*) See “Definitions of Non-GAAP Measures” and “Reconciliation of Non-GAAP Measures” sections herein for an explanation and reconciliations of non-GAAP measures used throughout this release.

Definitions of Non-GAAP Measures

We collect and analyze operating and financial data to evaluate the health of our business and assess our performance. In addition to Revenue, Income (Loss) from Operations and Net Income (Loss) under GAAP, we use: EBITDA, Adjusted EBITDA, and Adjusted Net Income (Loss). We have included these non-GAAP financial measures because they are key measures used by our management to evaluate our operating performance. Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors. Our calculation of these non-GAAP financial measures may differ from similarly titled non-GAAP measures, if any, reported by our peer companies. These non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP

Adjusted EBITDA

We define Adjusted EBITDA as Income (Loss) before Income Taxes, excluding (i) depreciation and amortization expense, (ii) interest expense, net, (iii) non-cash interest expense, (iv) stock-based compensation expense, (v) non-recurring and extraordinary items (vi) other income (expense), net, (vii) gain (loss) on equity investments, net, (viii) gain on extinguishment of debt, (ix) change in fair value of derivative liability and (x) foreign currency transaction, net.

We have included Adjusted EBITDA because it is a key measure used by our management team to evaluate our operating performance, generate future operating plans, and make strategic decisions. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors. In addition, it provides a useful measure for period-to-period comparisons of our business, as it removes the effect of certain non-cash expenses and non-recurring and extraordinary
Items.

Adjusted EBITDA has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP.

Adjusted Net Income (Loss)

We define Adjusted Net Income (Loss) as Adjusted EBITDA (see above), excluding (i) benefit from (provision for) income taxes.

Adjusted Net Income has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP.

Reconciliation of Non-GAAP Measures

Adjusted EBITDA & Adjusted Net Income (Loss)

The following table presents reconciliations of Adjusted EBITDA & Adjusted Net Income (Loss) to the most directly comparable GAAP financial measure for each of the periods indicated.

  Three Months Ended September 30, Nine Months Ended September 30,
(in $)   2021       2020       2021       2020  
INCOME (LOSS) BEFORE INCOME TAXES $ (1,767,982 )   $ 762,301     $ (6,420,350 )   $ 1,665,794  
Adjustments (add back):        
Depreciation and amortization expense   108,192       87,747       323,678       298,543  
Interest expense, net   670,282       789,426       2,182,715       1,853,414  
Non-cash interest expense   353,303       -       492,391       29,509  
Stock-based compensation   1,989,626       -       5,147,077       -  
Non-recurring and extraordinary items   41,302       28,351       179,300       77,757  
Other income (expense), net   122,477       (75,124 )     340,103       (103,073 )
Gain (loss) on equity investments, net   (38 )     46,883       (317 )     36,637  
Gain on extinguishment of debt   (350,008 )     (16,194 )     (795,644 )     (795,418 )
Change in fair value of derivative liability   (125,621 )     -       (213,490 )     -  
Foreign currency transaction, net   183,036       (427,289 )     392,472       (394,983 )
ADJUSTED EBITDA $ 1,224,570     $ 1,196,101     $ 1,627,935     $ 2,668,180  
Benefit from (provision for) income tax   (168,561 )     (4,435 )     (69,152 )     (13,927 )
ADJUSTED NET INCOME (LOSS) $ 1,056,009     $ 1,191,666     $ 1,558,783     $ 2,654,253  
                               

About Cosmos Holdings, Inc.

Cosmos Holdings Inc. is an international pharmaceutical company, with a proprietary line of nutraceuticals and distributor of branded and generic pharmaceuticals, nutraceuticals, OTC medications and medical devices through an extensive, established EU distribution network. The Company identifies, acquires, develops and commercializes products that improve patients' lives and outcomes and has developed a global distribution platform and is currently expanding throughout Europe, Asia and North America. Cosmos Holdings has offices and distribution centers in Thessaloniki, Greece, Athens, Greece and Harlow, UK. More information is available at www.cosmosholdingsinc.com and www.skypremiumlife.com.

Forward-Looking Statements

With the exception of the historical information contained in this news release, the matters described herein, may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements preceded by, followed by, or that otherwise, include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could”, are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. These statements, involve unknown risks and uncertainties that may individually or materially impact the matters discussed, herein for a variety of reasons that are outside the control of the Company, including, but not limited to, the Company’s ability to raise sufficient financing to implement its business plan, the impact of the COVID-19 pandemic on the Company’s business, operations and the economy in general, and the Company’s ability to successfully develop and commercialize its proprietary products and technologies. Readers are cautioned not to place undue reliance on these forward- looking statements, as actual results could differ materially from those described in the forward-looking statements contained herein. Readers are urged to read the risk factors set forth in the Company’s filings with the SEC, which are available at the SEC’s website (www.sec.gov). The Company disclaims any intention or obligation to update, or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Relations Contact:
Crescendo Communications, LLC
Tel: 212-671-1020
Email: COSM@crescendo-ir.com">COSM@crescendo-ir.com

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David E. Gutierrez
Head of PR, IR
and Corporate Development

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