ANNUAL
REPORT
2021
OpSens focuses primarily on interventional cardiology and is in the process of expanding into the structural
cardiology market with a new product for the transcatheter treatment of aortic valve stenosis or TAVR.
Mission
To contribute to healthcare through a unique expertise in innovative medical products.
OpSens has subsequently improved its offer, as the evaluation criteria have
been extended and now permit the use of pressure measurements without
the injection of heart‑stimulating drugs. OpSens has developed a product
that meets the needs of cardiologists and has commercialized its diastolic
pressure algorithm called dPR to perform this needed measurement.
Expansion in the American Market
In 2021, OpSens signed two agreements with major group purchasing
organizations to accelerate its products’ penetration in the United States.
These new partnerships, which open the doors to more than half of the
catheterization labs in the U.S., are a testament to the OptoWire’s ability
to improve efficiency and reduce costs in diagnosing and treating arterial
blockages and align with our partners’ mission to better treat their patients.
OpSens intends to continue to consider such agreements to improve its market
penetration, particularly in the United States. The Company’s objective is to
sign new agreements in the near future.
The SavvyWire,™, OpSens’ Upcoming
Product for the TAVR Procedure
Rolling Stones’ front man, Mick Jagger, made medical news and put the
TAVR procedure into the spotlight. At 75, his highly calcified aortic valve
prevented a good flow of blood from the heart to the aorta and thus good
oxygenation of his organs.
He underwent the TAVR procedure, and a new aortic valve was inserted
into his heart through an artery from his groin. Avoiding general anesthesia
and open‑heart surgery with the minimally invasive procedure, the singer
was able to return quickly to his normal life.
OpSens’ Entry into the TAVR Market,
to be an $8 Billion Market1
To capitalize on the expertise acquired in the development of its first product
for cardiology, OpSens plans to launch a product for the TAVR procedure in
2022, a pressure guidewire to help in valve positioning. This is the fastest
growing segment in structural cardiology, driven by an aging population,
superior clinical outcomes, and openness to new evidence that people of all
health conditions benefit from this minimally invasive treatment.
OpSens is in the final stages leading to the launch of the SavvyWire,™. The
Company has completed the first in‑human clinical study and has filed with
Health Canada and the U.S. Food and Drug Administration (FDA).
Business Partnerships
OpSens’ second‑generation sensor technology can be adapted to a variety of
applications, enabling business partnerships in valuable medical markets.
Several companies, including Abiomed and Monteris, are integrating OpSens’
sensors into their products used in medical applications. These collaborations
highlight the quality of OpSens’ technology and position the Company for new
strategic agreements.
OpSens’ products are gaining increasing recognition in cardiology thanks to
a steady growth in the number of uses and the release of data demonstrating
the value and benefits of working with the OptoWire in clinical situations.
Cardiology – Cornerstone of OpSens’ Growth
» Strategic products in cardiology and in other medical fields
» Performance recognized by key opinion leaders around the world
» Company and markets positioned for strong growth supported by
clinical evidence and aging population
» Agreements with two major U.S. group purchasing organizations
» Improved financial position following $28.75 million financing in fiscal 2021
» Development, innovation, and continuous improvement
• Optimization of products and of production costs
• New generation of products for coronary artery disease
• Possibility of deployment in other systems to provide our products in
new markets – e.g., integration with the Picasso system in Spain
• New TAVR product compatible with OptoMonitor III installed in
catheterization laboratories worldwide
• Fidela,TM precise measurement technology that can be integrated into
new applications, opening the door to business partnerships
» Promising new avenues in the industrial field: e.g., ITER, and development
of an application for fuel monitoring in aeronautics.
OpSens Revenues*
Millions $
35
30
25
20
15
10
5
0
2017
2018
2019
2020
2021
Medical - Non-FFR
FFR
Medical total
Revenues (excluding licensing)
*Graph does not include licensing revenues
Coronary Artery Disease
Based on Fidela,TM its second‑generation fiber optic sensor, OpSens has
designed its first product for cardiology: the OptoWire, a pressure measurement
guidewire used in the diagnosis and treatment of coronary artery disease. The
OptoWire has been used in 150,000 patients worldwide in a procedure that is
becoming the model of excellence in treatment.
The FAME study showed that when a patient’s lesions are assessed by
FFR, major cardiac events were reduced. Today, the market continues to
be fueled by studies that demonstrate the clinical and economic benefits
of using coronary pressure guidewires. Cardiologists, medical cardiology
societies, insurance companies and hospitals are increasing the demand
for such products. OpSens is committed to developing innovative products
that address the limitations of aging, competing technologies.
Benefits of coronary pressure guidewires:
» Facilitate decision‑making before performing invasive procedures;
» Improve the health of patients in general; and,
» Avoid unnecessary medical procedures.
1. Global TAVR/Implantation, Kenneth Research
OpSens’ mission is to contribute to healthcare through unique expertise in innovative medical products.
OpSens is confident that it will advance its mission for heart disease patients, while generating revenue
growth in 2022, offer new medical applications and create shareholder value.
Letter to shareholders
In fiscal year 2021, we continued with our vision of becoming a
world leader in optical measurement in medical instrumentation,
focused on three key medical areas:
» coronary artery disease;
» the development of valuable medical partnerships, such as the
one with Abiomed for ventricular assistance; and
» on new opportunities such as the fast‑growing structural
cardiology market where we are specifically addressing the
treatment of aortic valve stenosis through transcatheter aortic
valve replacement (TAVR).
Revenue Growth Resumes
From a revenue standpoint, we are pleased with the operating
results in 2021, as we reported double‑digit top‑line growth across
the board. This was highlighted by record annual revenues of
$34.5 million, an increase of 17% over 2020. Our OptoWire product
for coronary artery disease led this growth in revenues, with
sales of $22.9 million, up 22% from last year. This was a record
year for OptoWire sales highlighted by growth in all our key
market geographies.
Significant Progress in the U.S. Market
– Agreements with Two Major U.S.
Group Purchasing Organizations
In particular, we made significant progress in the U.S. markets,
where our sales were up 42% for the year.
Contributing to the growth were the signing of agreements with
two major group purchasing organizations, or GPOs, to accelerate
product penetration in the U.S. In April 2021, we were awarded
an innovative technology contract from Vizient, the largest
member‑based healthcare performance improvement company
in the U.S. The contract was awarded to the OptoWire III, based
on the recommendation of experts who serve on one of Vizient’s
member‑led boards who identify technologies that have the
potential to enhance clinical care, patient safety, health care worker
safety or improve business operations of health care organizations.
Innovative technology contracts are recommended after review and
interaction with products submitted through Vizient’s Innovative
Technology Program.
The signing of the agreement with Vizient builds on the first GPO
agreement we signed in October 2020, when we announced a
three‑year contract with another large U.S. purchasing group.
This contract, which provides access to the OptoWire to all their
members across the U.S., is an additional recognition of the
OptoWire’s ability to improve the efficiency and reduce the costs
involved in diagnosing and treating artery blockages and aligns
with our partner’s mission to better treat their patients.
These new agreements are examples of our continued development
efforts in the U.S., with the goal to sign additional agreements in the
near future.
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Worldwide Initiatives to Expand Markets
In addition to the U.S. market, we are expanding our efforts to
increase our market share globally. For example, we signed an
agreement with Cathmedical Cardiovascular S.A. to integrate our
coronary physiology algorithms into Cathmedical’s next generation
hemodynamic system called Picasso. The systems will initially
focus on the Spanish cardiology market, where the Picasso system
has a dominant market share.
This type of partnership could be replicated for other systems, to
allow interventional cardiologists to benefit from full integration of
the OptoWire and the full power of OpSens’ coronary physiology
indices in catheterization laboratories to help improve clinical
results in patients with coronary artery disease.
The SavvyWire,™ Pressure Guidewire
for TAVR – To be Launched in 2022
In addition to our commercial progress, we made tremendous
progress on our TAVR development program during the year as we
move increasingly closer to commercialization.
The TAVR procedure is growing rapidly, driven by an aging population,
interest in less invasive procedures, and recent compelling clinical data
demonstrating the benefit of expanding this procedure to all patients.
It is one of the fastest growing segments in structural cardiology.
Our SavvyWire,™ a pressure measurement guidewire for TAVR, is
the first device intended to deliver the aortic valve prosthesis, while
allowing continuous hemodynamic pressure measurement before,
during and after the procedure. Industry experts are awaiting our
product which could become a game‑changer for the procedure
and could simplify TAVR by facilitating the work of cardiologists to
ultimately contribute to the health of patients.
1
The team at OpSens Solutions continues to do a great job and I
look forward to the continued leveraging of our proprietary optical
technology to a wide variety of commercial applications designed
for the most hostile and harsh environments.
Financing Strengthens the Company,
Positions it for the Future
This year, we completed a $28.75 million bought deal financing,
which will help accelerate our development, particularly in the TAVR
project. This was a straight common offering, with the overallotment
fully subscribed. We believe this is a testament to the confidence
shown in our prospects. At the end of August 2021, we had more
than $38 million in cash on the balance sheet as we are now in the
best financial position in the history of the Company from a balance
sheet perspective to strategically execute our growth strategy.
Perspectives
In 2022, our priority remains to increase the impact of our products
in cardiology from a commercial, clinical, and financial perspective,
as we set the stage for an even more successful future.
I thank the shareholders for their support in the deployment of
our strategy. I would also like to thank our customers, employees,
directors, suppliers, and partners for their support in the development
of OpSens.
In closing, we look forward to meeting with you at the annual virtual
shareholder meeting to be held in January 2022 to present the
Company’s progress and prospects.
Louis Laflamme
President and Chief Executive Officer
We are nearing commercialization of our guidewire that could position
OpSens as an innovation leader in this segment of cardiology. In
November 2021, we successfully concluded the in‑first human clinical
study which has enabled the filing for 510(k) regulatory clearance
with the U.S. Food and Drug Administration (FDA), one of the final
steps prior to commercialization which remains on target for 2022.
Fidela,™ a Technology that Opens Doors
for New Products and Partnerships
OpSens’ success is based notably on Fidela,TM the second‑generation
optical sensor that instruments the OptoWire, currently our flagship
product. This sensor, which is also at the heart of our product
for the TAVR procedure, is the key element that has enabled the
development high‑value partnerships in several medical markets,
such as the one with Abiomed for ventricular assistance in
cardiology and Monteris for laser ablation in neurology. Overall,
revenue to our OEMs was $8.1 million in fiscal 2021.
These partnerships highlight the superiority of our technology
which puts the Company in an excellent position for new
value‑bearing agreements.
Industrial Sector
The industrial sector is currently focusing on the aerospace, nuclear
and semiconductor sectors where our wholly‑owned subsidiary,
OpSens Solutions, reported a 36% increase in revenues in fiscal
year 2021 to $3.4 million. Importantly, there were also a number of
significant new product developments during the year.
This year, OpSens Solutions announced two contracts in prestigious
projects that could have an impact in the nuclear and aeronautical
markets. OpSens Solutions received advisory services and financial
support from the National Research Council of Canada (NRC) for
a research and development project on optical fuel monitoring
systems for aerospace applications, including civil aircraft. This
news was in addition to the announcement of OpSens Solutions’
participation in the International Thermonuclear Experimental
Reactor (ITER) project, the world’s largest nuclear fusion and
scientific experimentation project, with 35 nations committed to
building and demonstrating a potential source of safe, zero‑carbon,
virtually limitless energy based on nuclear fusion. For the ITER
project, currently under construction in the South of France,
OpSens Solutions was awarded a contract to provide fiber optic
absolute and differential pressure sensors, which will provide
critical information for the accurate monitoring in one of the largest
vacuum facilities ever built.
2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 2021
The following comments are intended to provide a review and analysis of the results of operations, financial condition,
and cash flows of OpSens Inc. for the year ended August 31, 2021, in comparison with the corresponding periods
ended August 31, 2020. In this Management’s Discussion and Analysis (“MD&A”), “OpSens,” “the Company,” “we,”
“us” and “our” mean OpSens Inc. and its subsidiaries. This MD&A should be read and interpreted in conjunction with
the information contained in our annual consolidated financial statements for the years ended August 31, 2021 and
2020, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued
by the International Accounting Standards Board. This document was prepared on November 22, 2021. All amounts
are in Canadian dollars unless otherwise indicated.
This MD&A contains forward-looking statements with respect to the Company. These forward-looking statements, by
their nature, require the Company to make certain assumptions and necessarily involve known and unknown risks and
uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-
looking statements. Forward-looking statements are not guarantees of performance. These forward-looking statements,
including financial outlooks, may involve, but are not limited to, comments with respect to the Company’s business or
financial objectives, its strategies or future actions, its targets, expectations for financial condition or outlook for
operations and future contingent payments. Words such as “may,” “will,” “would,” “could,” “expect,” “believe,”
“plan,” “anticipate,” “intend,” “estimate,” “continue,” or the negative or comparable terminology, as well as terms
usually used in the future and conditional, are intended to identify forward-looking statements.
Information contained in forward-looking statements is based upon certain material assumptions that were applied in
drawing a conclusion or making a forecast or projection, including management’s perceptions of historical trends,
current conditions and expected future developments, as well as other considerations that are believed to be appropriate
in the circumstances. The Company considers these assumptions to be reasonable based on all currently available
information, but cautions the reader that these assumptions regarding future events, many of which are beyond its
control, may ultimately prove to be incorrect since they are subject to risks and uncertainties that affect the Company
and its business. The forward-looking information set forth therein reflects the Company’s expectations as of
November 22, 2021, and is subject to change after this date. 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,
other than as required by law.
COVID-19
The global economy has significantly changed during the past year. The spread of COVID-19 virus, declared on March
11, 2020, as a pandemic by the World Health Organization (WHO), has led many governments to adopt exceptional
measures to slow the advancement of COVID-19. These events cause significant uncertainties that could damage the
Company’s activities. At the current time, it is not possible to reliably estimate the duration and impact that these
events may have on the Company’s future financial results because of the uncertainties about future developments.
Thus far, the Company has had minimal manufacturing, supply chain, or distribution disruptions and has continued to
fulfill orders to customers. However, the Company has had limited access to the cath labs and has adjusted its sales
force consequently.
3 OVERVIEW
The Company’s primary focus is the measurement of Fractional Flow Reserve (“FFR”) and the diastolic pressure
algorithm (“dPR”) in the coronary artery disease market. OpSens offers an optical guidewire (OptoWire) to measure
pressure to diagnose and to improve clinical outcomes in patients with coronary heart disease. OpSens also operates
in the Industrial segment through its wholly-owned subsidiary OpSens Solutions Inc. (“Solutions”). Solutions
develops, manufactures and installs innovative measurement solutions using fibre optic sensors for critical and
demanding industrial applications.
OpSens owns 21 patents and has four pending patents to protect its technologies in the Medical and Industrial sectors.
SECTORS OF ACTIVITY
In the Medical sector, OpSens markets OptoWire and OptoMonitor to diagnose coronary artery disease. OptoWire
provides cardiologists with an optimized pressure guidewire to navigate coronary arteries and cross blockages with
ease while measuring intracoronary blood pressure. This procedure is called FFR measurement, also referred to as
physiological measurement.
OpSens has obtained the required regulatory approvals for the OptoWire and OptoMonitor in the world’s largest
markets, namely the United States, Europe (including the Middle East), Japan and Canada. Furthermore, the need to
diagnose coronary disease without hyperemia induced by the injection of heart-stimulating drugs has emerged. OpSens
has developed its proprietary diastolic pressure ratio to meet this need. Non-Hyperemic Pressure Resting indices
(“NHPR”), such as OpSens’ dPR, are beneficial for some patients as they reduce procedure time, costs and discomfort.
This product is available through the OptoMonitor and works in combination with the OptoWire. OpSens’ dPR is
marketed in Japan, the United States, Canada and Europe.
OpSens has established a direct sales force in the United States and Canada and utilizes distributors in Europe
(including the Middle East) and Japan.
OpSens also provides a broad selection of miniature optical sensors to measure pressure and temperature that can be
used in a wide range of applications and can be integrated into other medical devices.
OpSens is currently developing the SavvyWire, a product aiming the market of structural cardiology, one of the fastest
growing segments of cardiology. The SavvyWire is developed specifically for transcatheter aortic valve replacement
(“TAVR”). It will become the first guidewire intended to both deliver a valvular prosthesis while allowing continuous
hemodynamic pressure measurement during the procedure.
OpSens has successfully completed the planned in-human clinical study on twenty patients required to complete
regulatory filing. Regulatory filing for Canada, the United States and other jurisdictions will be completed in early
2022. Product launch of the SavvyWire will be deployed as authorizations are received.
In the Industrial sector, OpSens’ expertise, technology and products meet the needs of multiple markets, including
aeronautic, geotechnical, infrastructures, nuclear, mining, military, and others. OpSens’ portfolio of products and
technologies can be adapted to measure various parameters under the most difficult conditions and bring significant
benefits in terms of optimizing production and reducing risks to the environment and health.
As an example, fibre optic sensors perform well in the presence of electromagnetic fields, radio frequencies, micro-
waves, high-intensity magnetic waves (MR) or high temperatures, elements that typically disrupt results with
conventional sensors. Customers’ needs are wide-ranging and require measuring various parameters like pressure,
temperature, strain, and others.
The Company focuses on business opportunities with the highest returns and has developed new products to fulfill
their specific needs. As an example, the new OPP-GD fibre optic differential pressure sensor and the new OEC fibre
optic extensometer sensors have grabbed the attention of many industries such as aeronautic and energy.
4 MARKET OVERVIEW
In the Medical sector, coronary artery disease represents a significant and growing opportunity for the Company. In
recent years, the prevalence of coronary heart disease has increased rapidly. In the AHA report, “Heart Disease and
Stroke Statistics – 2017”, which is based on health data compiled in more than 190 countries, coronary heart disease
is the leading cause of death worldwide with 17.3 million deaths per year. This number is expected to exceed
23.6 million deaths in 2030. Coronary heart disease is one of the leading causes of death in the developed world, and
the cost of managing and treating these diseases is a significant burden to society. The benefits of FFR were
demonstrated in various clinical studies such as FAME I and FAME II published in 2009 and 2012, respectively in the
New England Journal of Medicine. The FAME I study showed that the FFR-guided treatment rather than the standard
angiography alone led to a reduction in mortality, myocardial infarction, readmission for percutaneous coronary
intervention and coronary bypass by about 30% after a year. Several reports have also shown inaccurate diagnoses that
can lead to misuse or inappropriate use of “stents.”
The measurement of FFR has been shown to be more accurate and now holds the highest recommendation from the
European Society of Cardiology (Class IA).
In the United States, support for the increase in the use of physiologic measurement continues to grow. In March 2017,
the appropriate use criteria (“AUC”) for stable ischemic heart disease were updated to emphasize the use of FFR given
its importance. The goal of the AUC is to provide a framework for assessing general clinical practices and improving
the quality of care. The new AUCs reflect a recognition of the role and value of FFR, which should be beneficial for
an expansion in the use of FFR technologies. Payers, including Medicare, use the AUC to help formulate their
repayment criteria.
In April 2018, the Ministry of Health, Labour and Welfare (“MHLW”) in Japan introduced a new regulation requiring
the physiology evaluation of all coronary artery stenosis prior to its treatment, specifically mentioning FFR as an
evaluation method. The MHLW revised medical fees and established a requirement to assess functional ischemia
(blockage of arteries) prior to treatment.
These developments contribute to the steady growth of the coronary artery disease measurement market. According to
management and industry source estimates(1), this market exceeds US$600 million worldwide in 2021 and is expected
to exceed US$1 billion annually in the medium term (2025).
In the Industrial sector, under this reportable segment, the Corporation’s technology, expertise, and products can
serve several markets including aeronautic, geotechnical, infrastructures, nuclear, mining, military, and others. The
Company focuses mainly on the following markets:
-
-
-
Nuclear market: the opportunities in this market are related principally to new nuclear technologies to
produce energy. The new and recently patented fibre optic differential pressure sensor is the main solution
for that market;
Aeronautic market: the opportunities in this market are principally related to fuel monitoring systems for
aircraft. New industrial version of the absolute pressure sensor and the recent addition of a differential
pressure sensor are the main products for these applications; and
Traditional Niche Applications Market: they include niche applications in which the Company is currently
engaged, such as electro-pyrotechnic devices.
COMPETITION
In the Medical sector, coronary artery disease measurement market has five competitors and is currently dominated
by two major players who commercialize standard electrical technology. Competition is based on technological
advantages, brand recognition, customer service, marketing support and price.
In the Industrial sector, there is a significant number of competitors. Competition is based primarily on technological
advantages. Our direct competition is made up of both opened and closed-ended companies with a global presence.
(1) OpSens FFR Market Calculations based on GRAND VIEW RESEARCH (Feb. 2019).
5 CORPORATE GROWTH STRATEGY
OpSens’ growth strategy is to become a key player in the Medical sector focusing on the coronary artery disease
measurement, where its products and technologies offer major advantages over the competition. The Company also
aims to capitalize on its technologies and products in the industrial markets. To this end, the Company implements its
corporate strategy based on its various segments of operations.
In the Medical sector, the Company’s growth strategy in the field of interventional cardiology is carried out by:
-
Increase of its market shares in the fast-growing coronary artery disease market.
To achieve this, management has set up the following sales forces:
Direct Sales Force: OpSens has established a direct sales team, hiring a seasoned staff with solid
expertise in coronary artery disease. This sales force has been implemented to increase OpSens’ market
and commercialization penetration in the United States and Canada. In the context of COVID-19, the
Company adjusted its methods and the number of representatives using remote approaches rather than
in-person visits to catheterization laboratories. In the short term, this approach was better aligned to
customers wishing to limit the number of in-person visitors to hospitals. With COVID-19 pandemic
partially under control, OpSens has started to increase its sales force and will continue in 2022. OpSens
also targets agreements with group purchasing organizations to accelerate penetration, particularly in
the United States. OpSens has successfully signed agreements with group purchasing organizations,
with more expected to come; and
Distributor Sales Force: OpSens has signed distribution agreements in Europe, Asia, and the Middle
East. These agreements allow OpSens to focus on market penetration with leading business partners in
their respective markets.
Interventional cardiologists have started focusing on new measurements performed with the heart at rest.
These measurements require greater accuracy and constant and repeated guidewire performance over time. With
its second-generation optical sensor, the Company is convinced that there will be a growing interest in the
OptoWire’s recognized features which include:
A low-drift measurement technology for improved reliability, essential to cardiologists’ decision-
making in the diagnosis of coronary artery disease; and
Better connectivity as OptoWire is insensitive to blood contamination. It can be easily
reconnected without compromising measurement accuracy.
-
Clinical data
Major clinical studies previously suspended due to the COVID-19 pandemic have resumed and new ones are
planned in 2022.
-
Innovation
In this ever-evolving and state-of-the-art market, OpSens plans to leverage its expertise in fibre-optic sensing
medical devices to create new coronary artery disease measurement products and develop new fibre optic sensing
technologies for cardiology assessment that address other unmet medical needs. Commitment to innovation has
always been a driving force behind the Company’s success and desire to improve its intellectual property
portfolio and value proposition for customers.
As an example of innovation, the Company is developing a pressure guidewire designed to assist cardiologists
during TAVR. This innovation is a structural heart pressure guidewire that measures and displays critical
hemodynamics information in real time during valve replacement procedures.
Also, OpSens received regulatory approval for the commercialization of the newest version of its coronary
pressure guidewire, OptoWire III, for the United States, Japan, EMEA, and Canada thus far.
6 OpSens offers a broad selection of miniature optical sensors to measure pressure and temperature that can be
used in a wide range of applications and that can be integrated into other medical devices. The Company aims to
partner with key players in the industry. The partnership with Abiomed Inc. (“Abiomed”), for the use of its
miniature sensors and technology, is an example of the type of partnership the Company targets.
In the Industrial sector, the Company’s business strategy is achieved by:
•
•
Target Market: Solutions’ target markets are aeronautic, geotechnical, infrastructures, nuclear, mining,
military and others. These are markets where OpSens’ products offer unique advantages over its competitors;
and
Innovation: Solutions continually invest in innovations for its products, so they can offer unique advantages
over competitors. For example, the Company’s optical strain and pressure sensors have received the attention
of major players in the aeronautic industry because they require no shielding or grounding and because of
their ease of deployment.
NON-IFRS FINANCIAL MEASURES – EBITDAO
The Company quarterly reviews net income (loss) and Earnings Before Interest, Taxes, Depreciation, Amortization
and Stock-based compensation costs (“EBITDAO”). EBITDAO has no normalized sense prescribed by IFRS. It is not
very probable that this measure is comparable with measures of the same type presented by other issuers. EBITDAO
is defined by the Company as the addition of net income (loss), financial expenses, depreciation and amortization and
stock-based compensation costs. The Company uses EBITDAO for the purposes of evaluating its historical and
prospective financial performance. This measure also helps the Company to plan and forecast for future periods as
well as to make operational and strategic decisions. The Company believes that providing this information to investors,
in addition to IFRS measures, allows to see the Company’s results through the eyes of management, and to better
understand its historical and future financial performance.
RECONCILIATION OF EBITDAO TO NET LOSS
(In thousands of Canadian dollars)
Net loss
Financial expenses
Depreciation of property, plant and equipment and
right-of-use assets
Amortization of intangible assets
Stock-based compensation costs
EBITDAO
Year ended
August 31,
2021
$
Year ended
August 31,
2020
$
Year ended
August 31,
2019(2)
$
(1,150)
918
1,544
230
459
2,001
(2,644)
684
1,548
120
438
146
(1,952)
157
802
91
489
(413)
The positive variance of EBITDAO for the year ended August 31, 2021, is mainly explained by the fact that we
increased our sales in all segments. This was partially offset by a lower grant related to the Canada Emergency Wage
Subsidy (“CEWS”).
(2) Comparative figures have not been adjusted to reflect the adoption of IFRS 16, Leases, as set out in the accounting policy.
7 SELECTED CONSOLIDATED FINANCIAL DATA
(In thousands of Canadian dollars, except for
information per share)
Year ended
August 31,
2021
$
Year ended
August 31,
2020
$
Year ended
August 31,
2019(2)
$
Revenues
Sales
Medical
Industrial
Other
Cost of sales
Gross margin
Gross margin percentage
Operating expenses
Administrative
Sales and marketing
Research and development
Other income
Financial expenses
Loss before income taxes
Income taxes
Net loss
Basic and diluted loss per share
Revenues
30,985
3,363
34,348
116
34,464
15,783
18,681
54%
6,473
7,649
5,510
19,632
(740)
918
(1,129)
21
(1,150)
(0.01)
26,996
2,457
29,453
-
29,453
13,834
15,619
53%
5,041
8,780
5,441
19,262
(1,683)
684
(2,644)
-
(2,644)
(0.03)
27,032
2,418
29,450
3,302
32,752
14,037
18,715
57%
4,593
11,116
4,801
20,510
-
157
(1,952)
-
(1,952)
(0.02)
The Company reported revenues of $34,464,000 for the year ended August 31, 2021, compared to revenues of
$29,453,000 for the corresponding period in 2020, an increase of $5,011,000 or 17%.
Sales in the Medical segment totalled $30,985,000 for the year ended August 31, 2021, compared to sales of
$26,996,000 for the same period in 2020, an increase of $3,989,000 or 15%. The increase in Medical segment revenues
is explained by higher sales in coronary artery disease measurement line of business (FFR and dPR) of $4,212,000
compared with the same period in 2020. Original equipment manufacturer (“OEM”) medical sales decreased by
$223,000 compared to the same period last year.
The Company also reported other revenues of $116,000 related to a new development project with OEM partners.
Sales in the Industrial segment totalled $3,363,000 for the year ended August 31, 2021, compared to sales of
$2,457,000 for the same period in 2020. The increase is explained by a higher volume of orders in the nuclear field
compared to the same period last year.
(2) Comparative figures have not been adjusted to reflect the adoption of IFRS 16, Leases, as set out in the accounting policy.
8 For the year ended August 31, 2021 and 2020, pricing fluctuations did not have a significant impact on revenues.
The Company’s revenues are generated in U.S. dollars, Canadian dollars, euros, and British pounds; fluctuations in
the exchange rate affect revenues and net loss. For the year ended August 31, 2021, revenues were negatively affected
by $1,360,000 compared to the same period last year (sales were positively impacted by $348,000 for the year ended
August 31, 2020).
As at August 31, 2021, OpSens’ total backlog of orders amounted to $14,565,000 ($11,929,000 as at August 31, 2020).
Gross Margin
Information and analysis in this section do not take into consideration other revenues ($116,000 for the year ended
August 31, 2021, and nil for the year ended August 31, 2020, respectively).
Gross margin was $18,565,000 for the year ended August 31, 2021, compared to $15,619,000 for the same period last
year. The gross margin percentage slightly increased to 54% for the year ended August 31, 2021 compared to 53% for
the year ended August 31, 2020.
Administrative Expenses
Administrative expenses were at $6,473,000 and $5,041,000, respectively, for the year ended August 31, 2021, and
August 31, 2020. The increase is largely explained by higher headcount and professional fees.
Sales and Marketing Expenses
Sales and marketing expenses totalled $7,649,000 for the year ended August 31, 2021, a decrease of $1,131,000 over
the $8,780,000 reported during the same period in 2020. The decrease is largely explained by lower headcounts,
commissions, trade shows and travelling expenses as compared to last year.
Research and Development Expenses
Research and development expenses totalled $5,510,000 for the year ended August 31, 2021, an increase of $69,000
over the $5,441,000 reported during the same period in 2020. The increase is largely explained by higher headcount.
This was partly offset by higher grant from Industrial Research Assistance Program (IRAP) received for the
development of our new pressure guidewire for the structural heart and Scientific Research and Experimental
Development tax credit.
Other Income
Other income was $740,000 and 1,683,000, respectively, for the year ended August 31, 2021 and the year ended August
31, 2020. The decrease is explained by the lower non-refundable contribution under the CEWS program for an amount
of $943,000.
Financial Expenses
Financial expenses totalled $918,000 for the year ended August 31, 2021, compared to $684,000 for the same period
in 2020. The increase in financial expenses is mainly explained by a less favorable exchange rate of $281,000. This is
partly offset by lower interest expenses of $96,000.
Net Loss
As a result of the foregoing, net loss year ended August 31, 2021, was $1,150,000 compared to $2,644,000 for the
same period in 2020.
9 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION DATA
(In thousands of Canadian dollars)
Current assets
Total assets
Current liabilities
Long-term liabilities
Shareholders’ equity
As at
August 31,
2021
$
As at
August 31,
2020
$
As at
August 31,
2019
$
49,783
58,512
7,395
8,787
42,330
22,543
31,908
5,655
10,906
15,347
26,099
30,089
4,787
7,861
17,441
Total assets as at August 31, 2021, were $58,512,000 compared to $31,908,000 as at August 31, 2020. The increase is
mainly related to higher cash and cash equivalents of $27,679,000 following the completion of an equity financing on
February 25, 2021.
Current liabilities totalled $7,395,000 as at August 31, 2021, compared to $5,655,000 as at August 31, 2020.
The increase is mainly explained by a higher current portion of long-term debt of $1,342,000 and by higher accounts
payable and accrued liabilities of $228,000.
Long-term liabilities totalled $8,787,000 as at August 31, 2021, compared to $10,906,000 as at August 31, 2020, a
decrease of $2,119,000. The decrease is mainly explained by a lower long-term debt of $2,013,000.
SUBSEQUENT EVENTS
On September 9, 2021, the Company signed an amendment to its credit agreement dated February 26, 2019. Pursuant
to this amendment, the Company has a non-revolving credit facility of $10,000,000 that can be used for growth and
working capital purposes and that is secured by a first-rank movable hypothec on the universality of the Company’s
present and future property, plant and equipment and intangible assets. The credit facility shall be available to the
Company in two advances to be made by August 31, 2022. Any amount which remains unused shall be automatically
and permanently cancelled and terminated. Any amount drawn under this credit facility bears interest at the prime rate
plus 1.50%. The Company shall pay a 0.50% annual fee on the unused portion of the credit facility. The used portion
of the credit facility is repayable in equal monthly payments from September 2022 until the credit facility maturity in
August 2026.
Moreover, in September 2021, the Company prepaid the entire balance of the term loan bearing interest at prime rate
plus 2.00%, secured by a movable hypothec on the universality of the Company’s present and future property, plant
and equipment and intangible assets, maturing initially in February 2024. The repayment of $5,833,333 was made
from the cash equivalents portfolio. This loan had a carrying amount of $5,804,813 as at August 31, 2021 including
an amount of $2,315,791 included in the current portion of the long-term debt.
10 SUMMARY OF CONSOLIDATED QUARTERLY RESULTS
The summary below presents the periods in which OpSens published unaudited consolidated interim financial
statements.
(Unaudited, in thousands of Canadian dollars,
except for information per share)
Three-month
period ended
August 31,
2021
$
Three-month
period ended
May 31,
2021
$
Three-month
period ended
February 28,
2021
$
Three-month
period ended
November 30,
2020
$
Revenues
Net income (loss) for the period
8,066
(1,215)
Basic and diluted net income (loss) per share
(0.01)
9,233
(570)
(0.01)
8,829
41
0.00
8,336
594
0.01
(Unaudited, in thousands of Canadian dollars,
except for information per share)
Three-month
period ended
August 31,
2020
$
Three-month
period ended
May 31,
2020
$
Three-month
period ended
February 29,
2020
$
Three-month
period ended
November 30,
2019
$
Revenues
Net income (loss) for the period
7,576
557
Basic and diluted net income (loss) per share
0.01
6,630
52
0.00
8,258
(1,382)
6,989
(1,871)
(0.02)
(0.02)
For the Medical sector, activities are generally slower in the fourth quarter due to the summer vacations of physicians.
During the second semester of fiscal year 2020, activities were slower due to the COVID-19 global pandemic.
LIQUIDITY AND CAPITAL RESOURCES
As at August 31, 2021, the Company had cash and cash equivalents of $38,563,000 compared to $10,884,000 as at
August 31, 2020. Of this amount as at August 31, 2021, $35,863,000 were invested in highly-liquid, safe investments.
As at August 31, 2021, OpSens had a working capital of $42,388,000, compared to $16,888,000 as at August 31, 2020.
The increase in working capital is mainly related to higher cash and cash equivalents.
On February 25, 2021, the Company completed a bought deal public offering for aggregate gross proceeds of
$28,750,000. In connection with the offering, the Company issued a total of 15,972,222 shares at a price of $1.80 per
share. Transaction costs of the offering include underwriting fees of $1,725,000 and other professional fees and
miscellaneous fees of $401,000 for total transaction costs of $2,126,000.
11 The company intend the use of proceeds from the equity financing as follow:
Use of
funds as
planned
Over-
Allotment
Funds
available to
Opsens
from
equity
financing
Actual use
of funds as
at August
31, 2021
Funds
remaining
to be used
$
$
$
$
$
22,874,000
3,750,000 26,624,000
7,383,883 19,240,117
(In Canadian dollars)
Net proceeds from the issue, including
the over-allotment option
Use of proceeds
Sales and Marketing
Research and Development
7,000,000
8,000,000
-
-
-
7,000,000
4,421,753
2,578,247
8,000,000
2,532,270
5,467,730
3,000,000
429,860
2,570,140
Capital expenditures and production ramp-up
3,000,000
Working capital
Total use of proceeds
4,874,000
3,750,000
8,625,000
-
8,624,000
22,874,000
3,750,000 26,624,000
7,383,883 19,240,117
Under a new loan agreement with a Canadian financial institution, the Company may receive a maximum amount of
$600,000. The loan bears interest at the prime rate plus 1.00% and is repayable in monthly instalments of $16,667 and
will mature in October 2024. The loan has a nine months moratorium period without payment of principal following
the date of the signature of the agreement. It is secured by a movable hypothec on the universality of the property,
plant and equipment and intangible assets, present and future of the Company. On November 27, 2020, the Company
received $600,000 of this loan. Under this loan agreement, the Company is subject to certain covenants, which were
met as of the date of this MD&A.
On February 27, 2019, OpSens announced that it has entered into a $8,000,000 credit agreement (the “Agreement”)
with a Canadian financial institution. The Agreement consists of a $7,000,000 term loan, set to mature in 60 months
with no principal payment for a 24-month period following the signature of the Agreement, bearing interest at prime
rate plus 2.00% per annum and of a $1,000,000 revolving operating credit margin bearing interest at prime rate plus
1.00%, set to mature in one year and that may be renewed on an annual basis. The disbursement of the $7,000,000
term loan occurred on March 1, 2019, and the revolving operating credit was also available at that time. Deferred
financing fees related to the Agreement include professional fees and miscellaneous fees of $87,468. Under this
Agreement, the Company is subject to certain covenants, which were met as of the date of this MD&A. In September
2021, the Company prepaid the entire balance of the term loan.
Based on its cash and cash equivalents position, OpSens has the financial resources necessary to maintain short-term
operations, honour its commitments and support its anticipated growth and development activities. From a medium-
term perspective, OpSens may need to raise additional financing by issuing equity securities or debt. From a long-term
perspective, there is uncertainty about obtaining additional financing, given the risks and uncertainties identified in the
“Risks and Uncertainties” section of the Annual Information Form. Changes in cash and cash equivalents will largely
depend on the rate of revenue growth in upcoming quarters.
12 SUMMARY OF CASH FLOWS
(In thousands of Canadian dollars)
Operating activities
Investing activities
Financing activities
Effect of foreign exchange rate changes on cash
and cash equivalents
Net change in cash and cash equivalents
Operating Activities
As at
August 31,
2021
$
As at
August 31,
2020
$
2,839
(937)
25,875
(98)
27,679
(985)
(1,765)
(1,211)
(11)
(3,972)
For the year ended August 31, 2021, cash flows generated by our operating activities were $2,839,000 compared to
cash flows used of $985,000 for the same period last year. The increase in cash flows generated by our operating
activities is mainly explained by a positive variance of EBITDAO, as explained previously and by a positive variance
of changes in non-cash operating working capital items related to inventory of $1,762,000, government assistance
receivable of $856,000 and by accounts payable and accrued liabilities of $1,129,000. This is partly offset by a negative
variance of changes in non-cash operating working capital items related to trade and other receivables of $1,139,000.
Investing Activities
For the year ended August 31, 2021, cash flows used by our investing activities reached $937,000 compared to
$1,765,000 for the same period in 2020. The decrease in cash flows used is mainly explained by lower acquisition of
property, plant, and equipment and intangible assets for the Medical sector.
Financing Activities
For the year ended August 31, 2021, cash flows generated by financing activities reached $25,875,000 compared to
cash flows used of $1,211,000 for the same period in 2020. The variation is mainly explained by completion of a
bought deal public offering in February 2021.
13 INFORMATION BY REPORTABLE SEGMENTS
Segmented Information
The Company is organized into two segments: Medical and Industrial.
Medical segment: in this segment, OpSens focuses mainly on physiological measurement such as FFR and dPR in the
coronary artery disease market but also supplies a wide range of miniature optical sensors to measure pressure and
temperature to be used in a wide range of applications that can be integrated in other medical devices. This also includes
other revenues related to its optical sensor technology.
Industrial segment: in this segment, OpSens develops, manufactures and installs innovative fibre optic sensing
solutions for critical and demanding industrial applications.
The principal factors employed in the identification of the two segments include the Company’s organizational
structure, the nature of the reporting lines to the President and Chief Executive Officer and the structure of internal
reporting documentation such as management accounts and budgets.
The same accounting policies are used for both reportable segments. Operations are carried out in the normal course
of business and are measured at the exchange amount, which approximates prevailing prices in the markets.
Years ended August 31,
Medical
$
Industrial
$
2021
Total
$
Medical
Industrial
$
$
2020
Total
$
31,101,209
111,695
16,457,466
3,362,611
381,797
2,222,896
34,463,820
493,492
18,680,362
26,996,184
-
14,179,616
2,457,166
96,090
1,439,876
29,453,350
96,090
15,619,492
1,362,247
181,951
1,544,198
1,298,636
249,077
1,547,713
218,255
445,506
540,010
11,644
294,656
377,738
229,899
740,162
917,748
108,845
1,383,939
340,946
10,935
298,669
343,121
119,780
1,682,608
684,067
21,186
(1,969,256 )
-
818,828
21,186
(1,150,428 )
-
(2,647,823 )
-
4,019
-
(2,643,804 )
651,109
44,650
695,759
1,224,453
28,748
1,253,201
264,398
19,788
284,186
676,967
37,928
714,895
56,212,182
15,246,157
2,300,223
936,253
58,512,405
16,182,410
29,777,672
16,070,310
2,130,767
491,267
31,908,439
16,561,577
External sales
Internal sales
Gross margin
Depreciation of property,
plant and equipment and
right-of-use assets
Amortisation of intangible
assets
Other income
Financial expenses
Current income taxes
expense
Net income (loss)
Acquisition of property,
plant and equipment
Additions to intangible
assets
Segment assets
Segment liabilities
14 Information by geographic segment
Years ended August 31,
Revenue by geographic segment
United States
Japan
Canada
Other*
2021
$
12,862,452
7,277,326
3,270,982
11,053,060
34,463,820
2020
$
11,408,452
6,313,784
2,644,881
9,086,233
29,453,350
* Comprised of revenues generated in countries for which amounts are individually not significant.
Revenues are attributed to the geographic segment based on the clients’ location. Non-current assets, which include
property, plant and equipment, intangible assets and right-of-use assets, are mainly located in Canada. Non-current
assets located in other countries are not significant.
During the year ended August 31, 2021, revenues from two clients from the Medical’s reportable segment represented
individually more than 10% of the total revenues of the Company, i.e. 21% and 19% (24% and 21% for the year ended
August 31, 2020).
Medical Segment
Information and analysis in this section for revenue and gross margin do not take into consideration other revenues
($116,000 for the year ended August 31, 2021, and nil for the year ended August 31, 2020).
For the year ended August 31, 2021, sales from the Medical segment were $30,985,000 compared to $26,996,000 for
the year ended August 31, 2020, an increase of $3,989,000. The increase is explained by higher coronary artery disease
product sales of $4,212,000. This is partly offset by lower OEM medical sales of $223,000.
Gross margin was $16,342,000 for the year ended August 31, 2021, compared to $14,179,000 for the year ended
August 31, 2020, an increase of $2,162,000. The gross margin percentage is stable at 53% for the year ended August
31, 2021, and 2020.
Net loss for the medical segment was $1,969,000 for the year ended August 31, 2021, compared to $2,648,000 for the
same period last year. The decrease in net loss is mainly explained by higher sales has explained previously.
Working capital for the Medical segment as at August 31, 2021, was $41,372,000 compared to $15,495,000 as at
August 31, 2020. The increase of $25,877,000 is mainly explained by higher cash and cash equivalents of $27,888,000
and by lower accounts payable and accrued liabilities of $519,000. This is partly offset by lower inventory of $452,000
and by higher current portion of long-term debt of $1,342,000.
Industrial Segment
For the year ended August 31, 2021, external sales from the Industrial segment were $3,363,000 compared to
$2,457,000 for the year ended August 31, 2020, an increase of $906,000 mostly explained by a higher volume of orders
in the nuclear field compared to the same period last year.
Gross margin was $2,223,000 for the year ended August 31, 2021, compared to $1,440,000 for the same period in
2020, an increase of $923,000. The gross margin percentage increased from 56% for the year ended August 31, 2020,
15 to 59% for the year ended August 31, 2021. The increased in gross margin percentage is mainly explained by the higher
volume of sales.
Net income for the Industrial segment was $819,000 for the year ended August 31, 2021, compared to $4,000 for the
year ended August 31, 2020. The increase in net income is mainly explained by the higher volume of sales and increase
in gross margin as explained before.
Working capital for the Industrial segment as at August 31, 2021, was $1,016,000 compared to $1,393,000 as at August
31, 2020. The decrease is mainly explained by lower cash and cash equivalents of $210,000 and by lower trade and
other receivables of $220,000. This is partly offset by higher tax credits receivable of $62,000.
FOURTH QUARTER 2021
Revenues
Revenues totalled $8,066,000 for the year ended August 31, 2021 compared to revenues of $7,576,000 for the
corresponding period in 2020, an increase of $490,000 or 6%. The increase is mainly explained by higher sales in the
coronary artery disease line of business (FFR and dPR) of $450,000 and the industrial segment of $155,000. This is
partly offset by lower OEM medical sales of $178,000 compared to the same period last year
Gross Margin
Information and analysis in this section do not take into consideration other revenues ($60,000 for the three-month
period ended August 31, 2021, and nil for the three-month period ended August 31, 2020, respectively).
Gross margin was $3,956,000 for the three-month period ended August 31, 2021, compared to $3,816,000 for the same
period last year. The gross margin percentage slightly decreased to 49% for the three-month period ended August 31,
2021 compared to 50% for the same period last year.
Administrative Expenses
Administrative expenses were at $1,794,000 and $1,015,000, respectively, for the three-month period ended August
31, 2021 and the August-month period ended August 31, 2020. The increase is largely explained by higher headcount,
professional fees, and recruiting expenses.
Sales and Marketing Expenses
Sales and marketing expenses totalled $2,191,000 for the three-month period ended August 31, 2021, an increase of
$733,000 over the $1,458,000 reported during the same period in 2020. The increase is largely explained by the
accelerating in spending related to headcount, commissions, trade shows and travelling expenses when compared to
last year related to the size adjustment of our direct sales force in the United States due to COVID-19 in the second
semester of 2020.
Research and Development Expenses
Research and development expenses totalled $1,340,000 for the three-month period ended August 31, 2021, an increase
of $28,000 over the $1,312,000 reported during the same period in 2020. The increase is largely explained by higher
headcount. This is partly offset by higher Scientific Research and Experimental Development tax credit.
Other Income
Other income was $19,000 and 882,000, respectively, for the three-month period ended August 31, 2021 and August
31, 2020. The decrease is explained by a lower non-refundable contribution under the CEWS program for an amount
of $863,000.
16 Financial Expenses
Financial revenues totalled 62,000 for the three-month period ended August 31, 2021, compared to financial expenses
of $356,000 for the same period in 2020. The decrease in financial expenses is mainly explained by foreign exchange
gain of $194,000 and by higher interest revenues of $35,000.
Net income (loss)
As a result of the foregoing, net loss for the three-month period ended August 31, 2021, was $1,215,000 compared to
net income of $557,000 for the same period in 2020.
INFORMATION ON SHARE CAPITAL
For the year ended August 31, 2021, the Company granted to some employees and directors a total of 2,342,500 stock
options with an average exercise price of $1.71, cancelled 566,625 stock options with an exercise price of $1.10,
whereas 904,500 stock options with an average exercise price of $1.15 were exercised, and 327,500 stock options with
an exercise price of $1.21 expired.
For the year ended August 31, 2020, the Company granted to some employees and directors a total of 1,400,000 stock
options with an average exercise price of $0.75, cancelled 1,239,750 stock options with an exercise price of $0.94,
whereas 100,000 stock options with an average exercise price of $0.72 were exercised, and 467,875 stock options with
an exercise price of $0.95 expired.
As at November 22, 2021, the following components of shareholders’ equity are outstanding:
Common shares
Stock options
Securities on a fully diluted basis
107,912,789
6,749,750
114,662,539
No dividend was declared per share for each share class.
RELATED PARTY TRANSACTIONS
Key management personnel, having authority and responsibility for planning, directing and controlling the activities
of the Company, comprise the Executive Chairman, the Chief Executive Officer, the Chief Financial Officer and the
President of OpSens Solutions Inc. Compensation of key management personnel and directors for the years ended
August 31, 2021 and 2020 were as follows:
Short-term salaries and other benefits
Option-based awards
Years ended August 31,
2021
$
1,219,527
119,303
1,338,830
2020
$
1,109,901
153,867
1,263,768
The compensation of key executives is determined by the Human Resources and Compensation Committee, taking
into consideration individual performance and market trends.
17 FINANCIAL INSTRUMENTS
Fair Value
The fair value of cash and cash equivalents, trade and other receivables and accounts payable and accrued liabilities
approximates their carrying value due to their short-term maturities.
The fair value of long-term debt is based on the discounted value of future cash flows under the current financial
arrangements at the interest rate the Company expects to currently negotiate for loans with similar terms and conditions
and maturity dates. The fair value of long-term debt approximates its carrying value due to the current market rates.
Valuation Techniques and Assumptions Applied for the Purposes of Measuring Fair Value
The Company must maximize the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value. The Company primarily applies the market approach for recurring fair value measurements. The
three input levels used by the Company to measure fair value are the following:
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. An active market for the asset
or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to
provide pricing information on an ongoing basis.
Level 2 – Quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that
are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value
of the assets or liabilities.
Risk Management
The main risks arising from the Company’s financial instruments are credit risk, liquidity risk, interest rate risk,
concentration risk and foreign exchange risk. These risks arise from exposures that occur in the normal course of
business and are managed on a consolidated basis.
Credit Risk
Credit risk is the risk of an unexpected loss if a customer or counterparty to a financial instrument fails to meet its
contractual obligations. The Company regularly monitors credit risk exposure and takes steps to mitigate the likelihood
of this exposure resulting in losses. The Company's exposure to credit risk currently relates to cash and cash equivalents
and to trade and other receivables. The Company’s credit risk management policies include the authorization to carry
out investment transactions with recognized financial institutions with credit ratings of at least A and higher, in either
bonds, money market funds or guaranteed investment certificates. Consequently, the Company manages credit risk by
complying with established investment policies.
The credit risk associated with trade and other receivables is generally considered normal as trade receivables consist
of a large number of customers spread across diverse geographical areas. In general, the Company does not require
collateral or other security from customers for trade accounts receivable; however, credit is extended following an
evaluation of creditworthiness. In addition, the Company performs ongoing credit checks of its customers and
establishes an allowance for doubtful accounts when accounts are determined to be uncollectible. Two major customers
represented 34.67% of the Company’s total accounts receivable as at August 31, 2021 (31.72% as at August 31, 2020).
As at August 31, 2021, 10.36% (0.38% as at August 31, 2020) of the accounts receivable were of more than 90 days
whereas 64.51% (34.51% as at August 31, 2020) of those were less than 30 days. The maximum exposure to the risk
of credit for accounts receivable corresponded to their book value. As at August 31, 2021, the allowance for doubtful
accounts was at $213,353 (nil as at August 31, 2020).
18 Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial
liabilities that are settled in cash and/or another financial asset. The Company’s approach is to ensure it will have
sufficient liquidity to meet operational, capital and regulatory requirements and obligations, under both normal and
stressed circumstances. Cash flow projections are prepared and reviewed quarterly by the Board of Directors to ensure
a sufficient continuity of funding. The funding strategies used to manage this risk include the Company’s access to
capital markets and debt securities issues.
The following are the contractual maturities of the financial liabilities (principal and interest, assuming current interest
rates) as at August 31, 2021 and 2020:
As at August 31, 2021
Carrying
amount
Cash flows
$
$
0 to 12
months
$
Accounts payable and accrued
liabilities
Long-term debt
Total
3,842,871
3,842,871
3,842,871
7,396,817
7,370,774
2,822,089
2,801,422
11,239,688
11,213,645
6,664,960
2,801,422
1,747,263
1,747,263
As at August 31, 2020
Carrying
amount
Cash flows
$
$
0 to 12
months
$
12 to 24
After
months
24 months
$
-
$
-
12 to 24
After
months
24 months
$
-
$
-
Accounts payable and accrued
liabilities
Long-term debt
Total
Interest Rate Risk
3,545,323
3,545,323
3,545,323
8,068,565
8,079,330
1,497,590
2,586,536
11,613,888
11,624,653
5,042,913
2,586,536
3,995,204
3,995,204
The Company’s exposure to interest rate risk is summarized as follows:
Cash and cash equivalents
Trade and other receivables
Accounts payable and accrued liabilities
Long-term debt
Interest Rate Sensitivity Analysis
Fixed and variable interest rates
Non-interest-bearing
Non-interest-bearing
Non-interest-bearing and fixed and variable interest rates
Interest rate risk exists when interest rate fluctuations modify the cash flows or the fair value of the Company’s
investments. The Company owns investments with fixed and variable interest rates. As at August 31, 2021, the
Company was holding more than 93% (70% as at August 31, 2020) of its cash and cash equivalents in all-time
redeemable term deposits.
All else being equal, a hypothetical 1% interest rate increase or decrease would have an impact of $75,939 on net loss
and comprehensive loss for the year ended August 31, 2021 ($74,220 for the year ended August 31, 2020).
19 Financial Expenses (Revenues)
Interest and bank charges
Interest on long-term debt
Interest on lease liabilities
Loss on foreign currency translation
Interest income
Concentration Risk
Years ended August 31,
2021
$
80,498
398,605
267,557
280,624
(109,536 )
917,748
2020
$
71,262
472,298
289,510
90
(149,093 )
684,067
Concentration risk exists when investments are made with multiple entities that share similar characteristics or when
a large investment is made with a single entity. As at August 31, 2021 and 2020, the Company was holding 100% of
its cash equivalents portfolio in all-time redeemable term deposits with financial institutions with high
creditworthiness.
Foreign Exchange Risk
The Company realizes certain sales and purchases mainly of raw materials, supplies and professional services in
U.S. dollars, Euros and British pounds. Therefore, it is exposed to foreign currency fluctuations. The Company does
not actively manage this risk
Foreign Currency Sensitivity Analysis
Based on the Corporation’s foreign currency exposures noted above, varying the above foreign exchange rate to reflect
a 10% strengthening would have increased (decreased) the net loss and comprehensive loss as follows, assuming that
all other variables remained constant. An assumed 10% weakening of the foreign currency would have had an equal
but opposite effect on the basis that all other variables remained constant:
Year ended August 31, 2021
Decrease (increase) of the
net loss
Decrease (increase) of the
net loss
10% appreciation in the
Canadian dollar
10% depreciation in the
Canadian dollar
CA$/US$
CA$/EUR€
CA$/GBP£
$
$
$
(1,000,000 )
(621,000 )
25,000
1,000,000
621,000
(25,000 )
20 Year ended August 31, 2020
Decrease (increase) of the
net loss
Decrease (increase) of the
net loss
10% appreciation in the
Canadian dollar
10% depreciation in the
Canadian dollar
CA$/US$
CA$/EUR€
CA$/GBP£
$
$
$
(205,000 )
(530,000 )
(36,000 )
205,000
530,000
36,000
As at August 31, 2021 and 2020, the risk to which the Company was exposed is established as follows:
Cash and cash equivalents (US$1,350,764;
US$1,516,591 as at August 31, 2020)
Cash and cash equivalents (€ 233,721;
€ 228,611 as at August 31, 2020)
Cash and cash equivalents (£ 3,039;
£ 36,258 as at August 31, 2020)
Trade and other receivables (US$1,828,513;
US$1,913,967 as at August 31, 2020)
Trade and other receivables (€ 815,415;
€ 613,597 as at August 31, 2020)
Trade and other receivables (£ 52,500;
£ 69,040 as at August 31, 2020)
Accounts payable and accrued liabilities (US$376,989;
US$692,710 as at August 31, 2020)
Accounts payable and accrued liabilities (€ 9,273;
€ 41,569 as at August 31, 2020)
Accounts payable and accrued liabilities (£ 6,753;
£ 9,520 as at August 31, 2020)
Total
CAPITAL MANAGEMENT
As at
August 31,
2021
$
As at
August 31,
2020
$
1,704,259
1,977,938
348,385
356,016
5,277
63,169
2,307,035
2,496,196
1,215,458
955,554
91,166
120,282
(475,647 )
(903,432 )
(13,822 )
(64,736 )
(11,726 )
5,170,385
(16,585 )
4,984,402
The Company's objective in managing capital, primarily composed of shareholders' equity, long-term debt and lease
liabilities, is to ensure sufficient liquidity to fund production and R&D activities, general and administrative expenses,
sales and marketing expenses, working capital and capital expenditures.
In the past, the Company has had access to liquidity through non-dilutive sources, including the sale of non-core assets,
long-term debts, government assistance, R&D tax credits, interest income and to liquidity through dilutive sources as
public equity offerings.
As at August 31, 2021, the Company's working capital amounted to $42,387,696 ($16,888,129 as at August 31, 2020),
including cash and cash equivalents of $38,563,271 ($10,884,019 as at August 31, 2020). The accumulated deficit at
the same date was $44,395,449 ($43,245,021 as at August 31, 2020). Based on the Company's assessment, which takes
into account current cash and cash equivalents, as well as its strategic plan and corresponding budgets and forecasts,
the Company believes that it has sufficient liquidity and financial resources to fund planned expenditures and other
working capital needs for at least, but not limited to, the 12-month period after the reporting date of August 31, 2021.
21 The Company believes that its current liquid assets are sufficient to finance its activities in the short-term The Company
manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk
characteristics of the underlying assets. Capital management objectives, policies and procedures have broadly
remained unchanged since the last fiscal year.
For the years ended August 31, 2021 and 2020, the Company has not been in default on any of its obligations regarding
long-term debt and lease liabilities.
CAPACITY TO PRODUCE RESULTS
As discussed in the section “LIQUIDITY AND CAPITAL RESOURCES”, the Company has the required financial
resources for its short-term operations, to fulfill its commitments, to support its growth plan and for the development
of its activities. On a mid-term perspective, it is possible that additional financing, through the issuance of shares or
debt financing or any other means of financing, might be required.
From the human resources’ perspective, there are no vacancies in the major executive positions within the Company.
However, additional technical and production personnel as well as sales and marketing personnel will be required to
support the expected growth. Considering the employment market in Canada, the United States and Europe, the
Company is confident in its capacity to recruit qualified human resources in a timely fashion.
Regarding the strategy on corporate executive compensation, it is oriented toward creating long-term value for the
shareholders. Several corporate executives hold an important share and share-purchase option position, with rights to
be acquired over a four-year period to align shareholders’ interest with corporate executives’ interest. This long-term
vision stimulates innovation and the development of recurring revenues.
NEW ACCOUNTING STANDARD
New Standards Adopted By the Company During the previous year
IFRS 16, Leases
On September 1, 2019, the Company adopted the standard IFRS 16, Leases. This new standard specifies how to
recognize, measure, present and disclose leases. The Company has chosen the retrospective application of IFRS 16
with the cumulative effect of initially applying the standard recognized at the date of initial application. The approach
allows for two transition options to measure the right-of-use assets at transition. The Company has chosen that the
right-of-use assets will be equal to the lease liabilities at the date of initial application. Moreover, as a practical
expedient, the deferred lease inducements related to free rents have been derecognized as an adjustment to the deficit
and the deferred lease inducement related to financing activity, which does not represent a locative component, have
been reclassified as a long-term debt for the Company as at September 1, 2019. The following table summarizes the
impacts of adopting IFRS 16:
Right-of-use assets
Lease liabilities
Adjustment recognized in deficit
September 1, 2019
$
5,272,723
5,272,723
76,838
22
DISCLOSURE CONTROLS AND PROCEDURES
In accordance with the requirements of National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual
and Interim Filings (NI 52-109), the Company’s management, including the Chief Executive Officer (“CEO”) and the
Chief Financial Officer (“CFO”), have evaluated the effectiveness of the Company’s disclosure controls and
procedures (DC&P). Based upon the results of the evaluation, the Company’s CEO and CFO have concluded that as
at August 31, 2021, the Company’s disclosure controls and procedures to provide reasonable assurance that the
information required to be disclosed by the Company in reports it files is recorded, processed, summarized and reported
within the appropriate time periods and forms were effective.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Internal control over financial reporting (ICFR) is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of consolidated financial statements for external purposes in
accordance with applicable IFRS. Internal control over financial reporting should include those policies and procedures
that establish the following:
• Maintenance of records in reasonable detail, that accurately and fairly reflect the transactions and disposals
•
•
•
of assets;
Reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated
financial statements in accordance with applicable IFRS;
Receipts and expenditures are only being made in accordance with authorizations of management or the
Board of Directors; and
Reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposal
of the Company’s assets that could have a material effect on the financial instruments.
An evaluation was carried out, under the supervision of the CEO and the CFO, of the design and effectiveness of our
internal controls over financial reporting. Based on this evaluation, the CEO and the CFO concluded that the internal
controls over financial reporting are effective as at August 31, 2021.
RISK FACTORS
The Company operates in an industry that contains various risks and uncertainties. Additional risks and uncertainties
not presently known by the Company, or which the Company deems to be currently insignificant, may impede the
Company’s performance. The materialization of one of the risks could harm the Company’s activities and have
significant negative impacts on its financial situation and its operating results. In that case, the Company’s stock price
could be affected.
An outbreak of infectious disease, a pandemic or a similar public health threat, such as the recent outbreak of the novel
coronavirus known as COVID-19, or a fear of any of the foregoing, could adversely impact the Company by decreasing
short-term market for its products by delaying the execution of elective interventional cardiology procedures and by
causing operating, supply chain and project development delays and disruptions, labour shortages, reduced product
demand, travel disruption and shutdowns (including as a result of government regulation and prevention measures),
and increased costs to the Company.
There are other important risks which management believes could impact the Company’s business. For information
on risks and uncertainties, please also refer to the “Risk Factors” section of our most recent Annual Information Form.
OFF-BALANCE SHEET ARRANGEMENTS
As of August 31, 2021, the Company was not the primary beneficiary in Special Purpose Entities and there were no
off-balance sheet arrangements.
23 OTHER INFORMATION
Updated information on the Company can be found on the SEDAR Web site at http://www.sedar.com.
On behalf of management,
Chief Financial Officer and Corporate Secretary
(s) Robin Villeneuve, CPA, CA
_______________
November 22, 2021
24 69 Consolidated Financial Statements
OpSens Inc.
Years ended August 31, 2021 and 2020
OpSens Inc.
Years ended August 31, 2021 and 2020
Table of contents
Independent Auditor’s Report ............................................................................................................................ 1-3
Consolidated Statements of Loss and Comprehensive Loss ................................................................................ 4
Consolidated Statements of Changes in Equity ................................................................................................. 5-6
Consolidated Statements of Financial Position ..................................................................................................... 7
Consolidated Statements of Cash Flows .............................................................................................................. 8
Notes to the Consolidated Financial Statements ............................................................................................. 9-43
Independent Auditor’s Report
To the shareholders and the Board of Directors of OpSens Inc.
Opinion
We have audited the consolidated financial statements of OpSens Inc. (the “Company”), which comprise the
consolidated statements of financial position as at August 31, 2021 and 2020, and the consolidated statements
of loss and comprehensive loss, changes in equity and cash flows for the years then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies (collectively referred to
as the “financial statements”).
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position
of the Company as at August 31, 2021 and 2020, and its financial performance and its cash flows for the years
then ended in accordance with International Financial Reporting Standards (“IFRS”).
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian GAAS”).
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Financial Statements section of our report. We are independent of the Company in accordance with the
ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the consolidated financial statements for the year ended August 31, 2021. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
We have determined that there are no key audit matters to communicate in our auditor’s report.
Other Information
Management is responsible for the other information. The other information comprises:
• Management’s Discussion and Analysis
•
The information, other than the financial statements and our auditor’s report thereon, in the Annual Report.
Our opinion on the financial statements does not cover the other information and we do not and will not express
any form of assurance conclusion thereon. In connection with our audit of the financial statements, our
responsibility is to read the other information identified above and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the
work we have performed on this other information, we conclude that there is a material misstatement of this other
information, we are required to report that fact in this auditor’s report. We have nothing to report in this regard.
The Annual Report is expected to be made available to us after the date of the auditor’s report. If, based on the
work we will perform on this other information, we conclude that there is a material misstatement of this other
information, we are required to report that fact to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance
with IFRS, and for such internal control as management determines is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the consolidated financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Sophie Fortin.
/s/ Deloitte LLP1
Quebec City, Canada
November 22, 2021
_________________
1CPA auditor, CA, public accountancy permit No. A124208
OpSens Inc.
Consolidated Statements of Loss and Comprehensive Loss
Years ended August 31, 2021 and 2020
(in Canadian dollars)
Revenues
Sales
Other
Cost of sales
Gross margin
Operating expenses (Note 22)
Administrative
Sales and marketing
Research and development
Other income (Note 17)
Financial expenses (Note 23)
2021
$
2020
$
34,347,899
29,453,350
115,921
-
34,463,820
29,453,350
15,783,458
13,833,858
18,680,362
15,619,492
6,472,857
5,040,700
7,649,336
8,780,110
5,509,825
5,441,027
19,632,018
19,261,837
(740,162 )
(1,682,608 )
917,748
684,067
Loss before income taxes
(1,129,242 )
(2,643,804 )
Current income taxes expense
21,186
-
Net loss
(1,150,428 )
(2,643,804 )
Other comprehensive income
Items that may be reclassified subsequently to net loss
Net changes in unrealized gain on translation of foreign operations
8,662
-
Comprehensive loss
(1,141,766 )
(2,643,804 )
Basic and diluted net loss per share (Note 14)
(0.01 )
(0.03 )
The accompanying notes are an integral part of the consolidated financial statements.
4
OpSens Inc.
Consolidated Statement of Changes in Equity
Year ended August 31, 2021
(in Canadian dollars)
Common shares
Share capital
Reserve – Stock
option plan
Accumulated
other
comprehensive
income – Foreign
operations
translation
(number)
$
$
$
Deficit
$
Total
$
Balance as at August 31, 2020
90,280,317
54,768,369
3,823,514
-
(43,245,021 )
15,346,862
Common shares issued in connection with a
public bought deal offering (Note 13a)
Common shares issued pursuant to the stock
15,972,222
26,624,000
-
option plan (Note 13a)
904,500
1,502,433
(460,077 )
Stock-based compensation costs (Note 13b)
Other comprehensive income – Net changes in
unrealized gain on translation of foreign
operations
Net loss
-
-
-
-
458,543
-
-
-
-
-
-
-
8,662
-
-
-
-
26,624,000
1,042,356
458,543
8,662
-
(1,150,428 )
(1,150,428 )
Balance as at August 31, 2021
107,157,039
82,894,802
3,821,980
8,662
(44,395,449 )
42,329,995
The accompanying notes are an integral part of the consolidated financial statements.
5
OpSens Inc.
Consolidated Statement of Changes in Equity
Year ended August 31, 2020
(in Canadian dollars)
Common shares
Issued
Subscribed
Total Share capital
Reserve –
Stock option
plan
(number)
(number)
(number)
$
$
Deficit
$
Total
$
Balance as at August 31, 2019
90,180,317
51,149
90,231,466
54,709,401
3,409,390
(40,678,055 )
17,440,736
Impact of adopting IFRS 16 (Note 4)
-
-
-
-
-
76,838
76,838
Shares issued pursuant to the stock option plan
(Note 13a)
Stock-based compensation costs (Note 13b)
Net loss and comprehensive loss
Balance as at August 31, 2020
90,280,317
The accompanying notes are an integral part of the consolidated financial statements.
100,000
(51,149 )
48,851
58,968
(24,171 )
-
-
-
-
438,295
-
(2,643,804 )
(2,643,804 )
-
-
34,797
438,295
-
-
-
-
-
90,280,317
54,768,369
3,823,514
(43,245,021 )
15,346,862
6
OpSens Inc.
Consolidated Statements of Financial Position
(in Canadian dollars)
Assets
Current
Cash and cash equivalents (Note 15)
Trade and other receivables (Note 5)
Government assistance receivable (Note 17)
Tax credits receivable (Note 19)
Inventories (Note 6)
Prepaid expenses
Property, plant and equipment (Note 7)
Intangible assets (Note 8)
Right-of-use assets (Note 12)
Liabilities
Current
Accounts payable and accrued liabilities (Note 10)
Warranty provision (Note 16)
Deferred revenues
Current income taxes payable
Current portion of long-term debt (Note 11)
Current portion of lease liabilities (Note 12)
Long-term debt (Note 11)
Lease liabilities (Note 12)
Shareholders’ equity
Share capital (Note 13a)
Reserve – Stock option plan (Note 13b)
Accumulated other comprehensive income
Deficit
As at
August 31,
2021
$
As at
August 31,
2020
$
38,563,271
4,135,446
-
320,000
6,115,091
648,884
49,782,692
2,731,508
1,676,597
4,321,608
58,512,405
3,842,871
83,803
120,710
19,895
2,802,223
525,494
7,394,996
4,594,594
4,192,820
16,182,410
10,884,019
4,041,080
428,601
105,677
6,505,094
578,893
22,543,364
3,229,787
1,622,310
4,512,978
31,908,439
3,545,323
153,138
48,951
-
1,460,654
447,169
5,655,235
6,607,911
4,298,431
16,561,577
82,894,802
3,821,980
8,662
(44,395,449 )
42,329,995
58,512,405
54,768,369
3,823,514
-
(43,245,021 )
15,346,862
31,908,439
Subsequent events (Note 25)
The accompanying notes are an integral part of the consolidated financial statements.
Approved by the Board
Signed [Jean Lavigueur] , director
Signed [Louis Laflamme] , director
7
OpSens Inc.
Consolidated Statements of Cash Flows
Years ended August 31, 2021 and 2020
(in Canadian dollars)
Operating activities
Net loss
Adjustments for:
Depreciation of property, plant and equipment and right-of-use assets
(Notes 7 and 12)
Amortisation of intangible assets (Note 8)
Loss on disposal of property, plant and equipment
Stock-based compensation costs (Note 13b)
Interest expense
Unrealized foreign exchange loss
Changes in non-cash operating working capital items (Note 15)
Investing activities
Acquisition of property, plant and equipment (Notes 7 and 15)
Additions to intangible assets (Notes 8 and 15)
Interest received
Financing activities
Increase in long-term debt, net of transaction costs
Reimbursement of long-term debt
Payment of lease liabilities
Proceeds from issuance of shares (Note 13a)
Transaction costs attributable to the issuance of common shares
(Note 13a)
Interest paid
2021
$
2020
$
(1,150,428 )
(2,643,804 )
1,544,198
229,899
267,562
458,543
568,130
106,757
814,833
2,839,494
(746,837 )
(288,150 )
97,529
(937,458 )
842,180
(1,550,736 )
(453,686 )
29,792,356
(2,126,000 )
(628,851 )
1,547,713
119,780
80,381
438,295
616,472
10,565
(1,154,458 )
(985,056 )
(1,220,582 )
(689,896 )
145,228
(1,765,250 )
244,206
(372,391 )
(409,788 )
34,797
-
(707,916 )
25,875,263
(1,211,092 )
Effect of foreign exchange rate changes on cash and cash equivalents
(98,047 )
(10,565 )
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents – Beginning of year
Cash and cash equivalents – End of year
27,679,252
10,884,019
38,563,271
(3,971,963 )
14,855,982
10,884,019
Additional information on the consolidated statements of cash flows is presented in Note 15.
The accompanying notes are an integral part of the consolidated financial statements.
8
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
1.
Incorporation and Description of Business
OpSens Inc. (“OpSens” or the “Company”) is incorporated under the Business Corporations Act (Quebec).
OpSens focuses mainly on physiological measurement such as Fractional Flow Reserve (FFR) and Diastolic
Pressure Ratio (dPR) in the coronary artery disease market and also supplies a wide range of miniature optical
sensors to measure pressure and temperature to be used in a wide range of applications that can be integrated
in other medical devices. OpSens offers an advanced optical-based pressure guidewire (OptoWire) that aims at
improving the clinical outcome of patients with coronary artery disease. OpSens is also involved in industrial
activities through its wholly-owned subsidiary OpSens Solutions Inc. (“Solutions”). Solutions develops,
manufactures and installs innovative fibre optic sensing solutions for critical and demanding industrial
applications. The Company’s head office is located at 750, du Parc-Technologique Blvd., Quebec City, Quebec,
Canada, G1P 4S3.
2. Summary of Significant Accounting Policies
The significant accounting policies used in the preparation of the consolidated financial statements are as follows:
Basis of Measurement
The consolidated financial statements have been prepared on the historical cost basis.
Basis of Preparation
The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). The Company has
consistently applied the accounting policies throughout all years presented.
The preparation of consolidated financial statements in accordance with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgment in applying the Company's accounting
policies. The areas with a higher degree of judgment or complexity, or areas where assumptions and estimates
are significant to the consolidated financial statements are disclosed in note 3.
Basis of Consolidation
The consolidated financial statements include the accounts of the Company and those of its wholly-owned
subsidiaries. All intra-group transactions, balances, revenues and expenses are fully eliminated upon
consolidation until they are realized with a third party.
Subsidiary
A subsidiary is an entity over which the Company has control. The Company controls an entity when it is exposed
to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. A subsidiary is fully consolidated from the date control is obtained and they are
no longer consolidated at the date control ceases.
Changes in the parent company’s ownership interest in a subsidiary that do not result in a loss of control are
accounted for as equity transactions.
9
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
2. Summary of Significant Accounting Policies (continued)
Revenue Recognition
The Company sells products through a direct sales force and to distributors. The Company recognizes sales
revenues for both medical and industrial segments upon shipment of products to customers, when the control
has been transferred to the buyer, there is no continuing management involvement with the products, the recovery
of the consideration is probable and the amount of revenue can be measured reliably. Sales are measured at the
fair value of the consideration to which the Company is entitled to receive in exchange for transferring the
promised products, net of any trade and volume discounts.
Milestone revenues are recognized over the agreement residual terms at the point in time when it is highly
probable that the respective milestone event criteria are met, and the risk of reversal of revenue recognition is
remote. These revenues are classified as Other in the consolidated statements of loss and comprehensive loss.
Reporting Currency and Foreign Currency
The consolidated financial statements are presented in Canadian dollars, which is the functional currency of the
Company, as this is the principal currency of the economic environment in which it operates.
Foreign Currency Transactions
Foreign currency transactions are translated into functional currency as follows: monetary assets and liabilities
that are denominated in foreign currencies are translated at the exchange rate in effect at the date of the
consolidated statements of financial position, non-monetary assets and liabilities that are denominated in foreign
currencies are translated at historical rates, revenues and expenses are translated at the exchange rates in effect
at the time of the transaction and exchange differences are recognized as Financial expenses in consolidated
statements of loss and comprehensive loss in the period in which they arise.
Foreign Operations Translation
Each subsidiary determines its own functional currency. The items included in its financial statements are
therefore measured in this functional currency. For entities that have a functional currency that differs from the
Company, their financial statements are translated in Canadian dollars as follows: assets and liabilities are
translated at the end-of-period exchange rate and revenues and expenses are translated at the monthly average
exchange rates in effect during the period. If exchange rates fluctuate significantly, revenues and expenses are
instead translated using the exchange rates at the dates of the transactions. All resulting exchange differences
are recognised in other comprehensive income as Net changes in unrealized gain on translation of foreign
operations.
Research and Development Costs
Research costs are expensed as incurred. Development costs are expensed as incurred except for those which
meet generally accepted criteria for deferral, in which case, the costs are capitalized and amortised to operations
over the estimated period of benefit. No development costs have been capitalized during any of the years
presented.
10
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
2. Summary of Significant Accounting Policies (continued)
Refundable Research and Development Tax Credits and Government Assistance
Refundable research and development (R&D) tax credits and government assistance, except for the Canada
Emergence Wage Subsidy (CEWS), are accounted for using the cost reduction method. Accordingly, refundable
R&D tax credits and government assistance are recorded as a reduction of the related expenses or capital
expenditures in the period in which the expenses are incurred.
The Company received a non-refundable contribution for admissible salaries related to its workforce according to
the CEWS program. This contribution is classified as Other income in the consolidated statements of loss and
comprehensive loss. The contribution receivable regarding the CEWS is classified as Government assistance
receivable in the consolidated statements of financial position
Refundable R&D tax credits and government assistance are accounted when the Company has reasonable
assurance that it will comply with the conditions attaching to them and that the grants will be received.
Shareholders’ Equity
Share capital represents the value of shares that have been issued. Any transaction costs attributable to the
issuance of shares are deducted from share capital.
Share-based Compensation
The Company offers a stock option plan described in note 13b), which is determined as an equity-settled plan.
The Company uses the fair value-based method to measure the fair value of stock options as at their grant date.
The fair value is determined using the Black-Scholes option pricing model and is recognized in the consolidated
statements of loss and comprehensive loss as a compensation expense and credited to the stock option plan
reserve, using a graded vesting schedule over the vesting period, based on the Company’s estimate of the
number of shares that will eventually vest. At the end of each reporting period, the Company revises its estimate
of the number of equity instruments expected to vest. The impact of the revision of original estimates, if any, is
recognized in the consolidated statements of loss and comprehensive loss such that the cumulative
compensation expense reflects the revised estimate, with a corresponding adjustment to the stock option plan
reserve.
Any consideration received by the Company upon the exercise of stock options is credited to share capital, and
the stock option plan reserve component resulting from stock-based compensation is transferred to share capital
upon the issuance of the shares.
Cash and Cash Equivalents
Cash and cash equivalents include cash and short-term investments redeemable anytime or with a maturity of
three months or less beginning on the acquisition date.
11
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
2. Summary of Significant Accounting Policies (continued)
Inventories
Inventories are valued at the lower of cost and net realizable value. Cost is essentially determined using the
weighted average cost. The cost of work in progress and finished goods comprises the cost of raw materials,
direct labour costs, an allocation of fixed production overheads based on the normal capacity of the production,
including applicable depreciation of property, plant and equipment and right-of-use assets, and an allocation of
variable production overheads based on the actual use of the production facilities.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and selling expenses. Inventories are written down to net realizable value when the cost of inventories
is determined not to be recoverable. When the circumstances that previously caused the inventories to be written
down below cost no longer exist or when there is clear evidence of an increase in net realizable value because
of a change in economic circumstances, the amount of the write-down is reversed. The reversal is limited to the
amount of the original write-down.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost, less accumulated depreciation and accumulated impairment
losses, if any. The cost of property, plant and equipment includes the purchase price and the directly attributable
costs of acquisition.
Depreciation is recorded using the straight-line method over the estimated useful life, considering any residual
value, as follows:
Office furniture and equipment
Production equipment
Research and development equipment
Diagnostic and demonstration equipment
Research and development computer equipment
Computer equipment
Leasehold improvements
10 years
7 years
7 years
3 to 5 years
3 years
3 years
Remaining lease terms
of five and three years
Depreciation methods, residual values and useful life of property, plant and equipment are reviewed annually.
Any change is accounted for prospectively as a change in accounting estimates.
Gains and losses on disposal of property, plant and equipment are determined by comparing the proceeds from
disposal with the carrying amount and are recognized in the consolidated statements of loss and comprehensive
loss.
12
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
2. Summary of Significant Accounting Policies (continued)
Intangible Assets
Intangible assets with finite useful life consist of patents and software, including internally software development
costs. Intangible assets acquired separately are recorded at cost. The amount initially recognized for internally
generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first
meets the recognition criteria, and comprises all directly attributable costs necessary to create, produce, and
prepare the asset to be capable of operating in the manner intended by management. After initial recognition,
intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recorded using the straight-line method over the estimated useful life considering any residual
value, as follows:
Patents
Software
Internally generated software
Term of underlying patent - 20 years
3 to 15 years
5 years
The Company’s indefinite-life intangible assets consist of trademarks and are not amortised.
Impairment of Non-Financial Assets
Indefinite-Life Intangible Assets
The carrying values of identifiable intangible assets with indefinite life are tested annually for impairment.
Indefinite-life intangible assets are allocated to cash generating units (CGUs) for the purpose of impairment testing
based on the level at which management monitors it, which is not higher than an operating segment. The
Company has elected to carry its annual impairment test during the last quarter of each year or at any time if an
indicator of impairment exists.
Non-Financial Assets with Finite Useful Life
The carrying values of non-financial assets with finite useful life, such as property, plant and equipment, intangible
assets with finite useful life and right-of-use assets, are assessed for impairment whenever events or changes in
circumstances indicate that their carrying amounts may not be recoverable. If such an indicator exists, the
recoverable amount of the asset must be determined. Such assets are impaired if their recoverable amount is
lower than their carrying amount. If it is not possible to estimate the recoverable amount of an individual asset,
the recoverable amount of the CGU to which the asset belongs is tested for impairment.
Recognition of Impairment Charge
The recoverable amount is the higher of an asset’s fair value less costs of disposal or its value in use. If the
recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of
the asset or CGU is reduced to its recoverable amount. The resulting impairment charge is recognized in the
consolidated statements of loss and comprehensive loss. Impairment charges recognized in prior periods are
determined at each reporting date for any indications that the impairment charge has decreased or no longer
exists. When an impairment charge is subsequently reversed, the carrying amount of the asset or CGU is
increased to the revised estimate of its recoverable amount so that the increased carrying amount does not
exceed the carrying amount that would have been recorded had no impairment charges been recognized for the
asset or CGU in prior years. An impairment charge recognized for goodwill cannot be reversed.
13
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
2. Summary of Significant Accounting Policies (continued)
Leases
At inception of a contract, the Company assesses whether the contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. All leases are recognized on the statements of financial position with right-of-use
assets and lease liabilities, except for short-term leases and leases for which the underlying asset is of low value.
For these, the Company decided to recognize lease payments as expenses on a straight-line basis over the
period of the lease.
Right-of-Use Assets
The Company recognizes right-of-use assets and lease liabilities at the start date of the contract. Right-of-use
assets are measured at cost less any accumulated depreciation and any accumulated impairment losses and
adjusted for any remeasurement of the lease liabilities. The cost of the right-of-use asset comprises the amount
of the initial measurement of the lease liability, any initial direct costs, any lease payments made at or before the
commencement date, less any lease incentives received and the costs to be incurred to dismantle and remove
the underlying asset. Right-of-use assets are depreciated using the straight-line method over the period from the
commencement date to the earlier of the end of the useful life of the right-of-use assets or the end of the leases
term. The leases term includes the non-cancellable period and the renewal options reasonably certain to be
exercised. The leases term is one year for hosting servers and ranges from three to ten years for buildings.
Depreciation methods and useful lives are reviewed annually.
Lease Liabilities
At the commencement date of the lease, the lease liabilities are measured at the present value of the lease
payments to be made over the period of the lease. The present value is determined using the incremental
borrowing rate of the Company at the start date of the contract if the implicit interest rate cannot be readily
determined. The lease payments include fixed payments and variable lease payments that depend on an index
or a rate. Variable lease payments that do not depend on an index or a rate are not included in the measurement
of lease liabilities but instead are recognized as expenses when the payment occurs. After the commencement
date, the carrying amount of lease liabilities is then increased to reflect interest on the lease liabilities and reduced
to reflect the lease payments made. The carrying amount of lease liabilities is remeasured when there is a change
in future lease payments, in renewal options or in the periods of the lease. The remeasurement amount of the
lease liabilities is recognized as an adjustment to the right-of-use assets, or in the consolidated statements of
loss and comprehensive loss when the carrying amount of the right-of-use assets is reduced to zero.
Classification and Presentation
Depreciation charge for right-of-use assets, expenses related to variable lease payments not included in the
measurement of lease liabilities and loss (gain) related to lease modifications are, if applicable, allocated between
the functions presented in the consolidated statements of loss and comprehensive loss. Interests related to the
lease liabilities are rather classified as Financial expenses. Lease payments related to the principal portion of the
lease liabilities are classified as Payment of lease liabilities within cash flows from financing activities. Lease
payments related to the interest portion of the lease liabilities are classified as Interest paid within cash flows from
financing activities.
Warranty Provision
The Company offers a standard 12-month warranty excluding consumables and accessories. Provision for the
expected cost of warranty obligations are recognized at the date of sale of the relevant products, at the
management’s best estimate of the expenditure required to settle the warranty obligation.
14
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
2. Summary of Significant Accounting Policies (continued)
Income Taxes
Income tax expenses comprise current and deferred income taxes. Income taxes are recognized in the
consolidated statements of loss and comprehensive loss except to the extent that it relates to items recognized
directly in equity, in which case the income taxes are also recognized directly in equity.
Current Income Taxes
The current income tax assets and liabilities for the current and prior periods are measured at the amount
expected to be paid to or received by the taxation authorities. The income tax rates used to calculate the amount
are those that are enacted or substantively enacted at the date of the consolidated statements of financial position
in the tax jurisdiction where the Company generates taxable income/loss.
Deferred Income Taxes
The Company follows the liability method of accounting for deferred income taxes. Under this method, deferred
income tax assets and liabilities are determined based on deductible or taxable temporary differences between
carrying values and tax values of assets and liabilities as well as the carry forward of unused tax losses and
deductions, using enacted or substantively enacted income tax rates expected to apply to taxable income in the
years in which the assets are expected to be realized or the liabilities settled.
Deferred income tax assets are recognized only to the extent that it is probable that taxable profits will be available
against which the deductible temporary differences can be utilized. The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the assets to be recovered.
Deferred tax liabilities are generally recognized for all taxable temporary differences and for taxable temporary
differences arising on investments in subsidiaries, except where the reversal of the temporary differences can be
controlled and it is probable that the differences will not reverse in the foreseeable future. However, deferred tax
is not recognized if it arises from the initial recognition of goodwill or the initial recognition of an asset or liability
in a transaction other than a business combination that, at the time of the transaction, affects neither accounting
nor taxable profit or loss.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or to different taxable entities that intend to settle the
balances on a net basis.
Loss per Share
Basic net loss per share is calculated by dividing the net loss for the year attributable to shareholders of the
Company by the weighted-average number of common shares outstanding during the year.
Diluted net loss per share is calculated by dividing the net loss for the year attributable to shareholders of the
Company by the weighted average number of common shares outstanding during the year, plus the effects of
dilutive common share equivalents. This method requires that diluted net loss per share be calculated using the
treasury stock method, as if all dilutive potential common share equivalents had been exercised at the beginning
of the reporting period, or period of issuance, as the case may be, and that the funds obtained thereby be used
to purchase common shares of the Company at the fair value of the common shares during the period.
15
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
2. Summary of Significant Accounting Policies (continued)
Financial Instruments
Financial assets at fair value through profit and loss (FVTPL): Financial assets carried at FVTPL are initially
recorded at fair value and transaction costs are expensed in the consolidated statements of loss and
comprehensive loss. Realized and unrealized gains and losses arising from changes in the fair value of the
financial assets held at FVTPL are included in the consolidated statements of loss and comprehensive loss in the
period in which they arise.
Financial liabilities at FVTPL: These financial liabilities are initially recognized at fair value, and transaction costs
directly attributable to issuing the financial liabilities are expensed in the consolidated statements of loss and
comprehensive loss. Financial liabilities that are required to be measured at FVTPL have all fair value movements,
including those related to changes in the credit risk of the liability, recognized in the consolidated statements of
loss and comprehensive loss.
Financial assets at fair value through other comprehensive income (FVTOCI): Investments in equity and debt
instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are
measured at fair value, with gains and losses arising from changes in fair value recognized in other
comprehensive income in the period in which they arise without subsequent reclassification to net loss in the case
of equity instruments.
Financial assets at amortised cost: A financial asset is measured at amortised cost if the objective of the business
model is to hold the financial asset for the collection of contractual cash flows, and the asset's contractual cash
flows are comprised solely of payments of principal and interest. They are classified as current assets or
non-current assets based on their maturity date and are initially recognized at fair value and subsequently carried
at amortised cost less any impairment.
Financial liabilities at amortised cost: These financial liabilities are initially recognized at fair value and are
subsequently measured at amortized cost using the effective interest method.
The Company’s financial instruments are classified as follows:
Financial instruments
Cash and cash equivalents
Trade and other receivables
Accounts payable and accrued liabilities
Long-term debt
IFRS 9 – Measurement category
Amortised cost
Amortised cost
Amortised cost
Amortised cost
Impairment of financial assets at amortised cost: The Company recognizes a loss allowance for expected credit
losses on financial assets that are measured at amortised cost. The Company has chosen the simplified approach
which requires to measure the loss allowance at an amount equal to lifetime expected credit losses that is the
maximum contractual period over which the entity is exposed to credit risk. The net change in expected credit
losses is recognized to the net loss.
16
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
3. Critical Accounting Estimates, Assumptions and Judgments
The preparation of the Company’s consolidated financial statements requires management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the
disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in a material
adjustment to the carrying value of the related asset or related liability.
For all these items, relevant accounting policies are discussed in note 2 of these consolidated financial
statements.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognized in the period in which the estimates are revised if the revision affects only that period or in the
period of the revision and future periods if the revision affects both the current and future periods.
Assessment of COVID-19 Impact
Because of the economic and business uncertainties caused by the spread of COVID-19 virus, the Company
reviewed all the critical accounting estimates, assumptions and judgments that are made by management during
the preparation of the consolidated financial statements. No significant change is necessary following this review
for these consolidated financial. However, because of the uncertain and evolving situation associated with the
spread of COVID-19, new information could emerge after the approval date of the consolidated financial
statements. This could lead to the necessity for the Company to review the critical accounting estimates,
assumptions and judgments prospectively over the next periods. Management continues to monitor and evaluate
the situation and its impact on the Company’s activities.
Thus far, the Company has had no manufacturing, supply chain, or distribution disruptions caused by the spread
of COVID-19 virus and has continued to fulfill orders to customers. However, it is not possible to reliably estimate
the length, severity and long-term impact the global pandemic may have on the Company's financial results,
business conditions and cash flows because of the uncertainties about future developments.
The following critical estimates, judgments and assumptions have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year.
Inventories
The Company measures its inventories at the lower of cost, determined with the weighted average cost basis
method, and net realizable value, and provides reserves for excess and obsolete inventories. The Company
determines its reserves for excess and obsolete inventories based on the quantities on hand at the reporting
dates, compared to foreseeable needs over the next twelve months, considering changes in demand, technology
and market.
Useful Life of Depreciable Assets
Management reviews the useful life of depreciable assets at each reporting date. As at August 31, 2021,
management stated that the useful life represents the expected utility of the assets to the Company. The carrying
amounts are presented in notes 7 and 8. Actual results, however, may vary due to technical obsolescence or
changes in the market, particularly for computer equipment and software.
Impairment of Non-Financial Assets
When the Company performs an impairment test for its non-financial assets, the recoverable amount of the asset
or the CGU must be determined. For that purpose, the Company evaluates the higher of assets fair value less
costs of disposal and its value in use. This evaluation requires a high degree of judgment and several estimates
including future cash flows, discount rates and other variables.
17
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
3. Critical Accounting Estimates, Assumptions and Judgments (continued)
Leases
Upon the occurrence of either a significant event or a significant change in circumstances, the Company reviews
if it has the reasonable certainty to exercise an extension option of the lease, or not to exercise a termination
option. Future lease payments are also reviewed by management, resulting in a remeasurement of the carrying
amount of right-of-use assets and lease liabilities. To measure lease liabilities at the present value of the
remaining lease payments, the Company must also determine its incremental borrowing rate when the implicit
interest rate of the contract cannot be readily determined.
Government Assistance and Refundable R&D Tax Credits
Government assistance, including the CEWS, and refundable R&D tax credits are recorded in the consolidated
financial statements when there is reasonable assurance that the Company has complied with, and will continue
to comply with, all of the conditions necessary to obtain the government assistance and refundable R&D tax
credits.
Warranty Provision
The Company estimated warranty provision based on the history of defective products and the probability that
these defects will arise, as well as the related costs.
Loss Allowance for Expected Credit Losses
The Company evaluates the expected credit losses on financial assets that are measured at amortised cost using
a provision matrix based on the historical credit losses, the time value of money and past events, current
conditions and forecasts of future economic conditions. The particularities of each debtor are taken into account
in this analysis.
Stock-based Compensation
The Company uses judgment in assessing expected life, volatility, risk-free interest rates, as well as the estimated
number of options that will ultimately vest.
Revenue Recognition
Delivery generally occurs when the product is handed over to a transporter for shipment. At the time of the
transaction, the Company assesses whether the price associated with its revenue transaction is fixed or
determinable and whether collection is reasonably assured. The Company assesses collection based on several
factors, including past transaction history and the creditworthiness of the customer. For the milestone revenues,
the Company estimates to probability that the respective milestone event criteria are met.
Functional Currency
The functional currency for the Company and its subsidiaries is the currency of the primary economic environment
in which each operates. The determination of functional currency may require certain judgments to determine the
primary economic environment. The Company reconsiders the functional currency used when there is a change
in events and conditions which determined the primary economic environment.
18
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
3. Critical Accounting Estimates, Assumptions and Judgments (continued)
Income Taxes
Management estimates income taxes based on the tax laws applicable in the jurisdictions where the Company
operates.
A deferred income tax asset will be recognized in the consolidated financial statements only when the Company
concludes that these tax assets will probably be materialized by shielding profits from taxes or otherwise. The tax
asset amount will be recorded based on the enacted and substantively enacted income tax rates for the year in
which the differences are expected to reverse.
4. Changes in Accounting Policies
New standard adopted by the Company during the previous year
IFRS 16, Leases
On September 1, 2019, the Company adopted the standard IFRS 16, Leases. This new standard specifies how
to recognize, measure, present and disclose leases. The Company has chosen the retrospective application of
IFRS 16 with the cumulative effect of initially applying the standard recognized at the date of initial application.
The approach allows for two transition options to measure the right-of-use assets at transition. The Company has
chosen that the right-of-use assets will be equal to the lease liabilities at the date of initial application. Moreover,
as a practical expedient, the deferred lease inducements related to free rents have been derecognized as an
adjustment to the deficit and the deferred lease inducement related to financing activity, which does not represent
a locative component, have been reclassified as a long-term debt for the Company as at September 1, 2019. The
following table summarizes the impacts of adopting IFRS 16:
Right-of-use assets
Lease liabilities
Adjustment recognized in deficit
September 1, 2019
$
5,272,723
5,272,723
76,838
19
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
5. Trade and Other Receivables
Trade
Allowance for expected credit losses
Sales taxes receivable
Other receivables
Total
Allowance for Expected Credit Losses
Balance – Beginning of year
Additional provision recognized
Amount recovered during the year
Balance – End of year
6.
Inventories
Raw materials
Work in progress
Finished goods
Total
As at
August 31,
2021
$
4,204,946
(213,353 )
102,919
40,934
As at
August 31,
2020
$
3,922,452
-
99,902
18,726
4,135,446
4,041,080
Years ended August 31,
2021
2020
$
-
(213,353 )
-
(213,353 )
As at
August 31,
2021
$
3,107,546
1,580,270
1,427,275
6,115,091
$
-
-
-
-
As at
August 31,
2020
$
2,695,700
1,153,315
2,656,079
6,505,094
For the year ended August 31, 2021, $12,393,833 of inventories were expensed in the consolidated statements
of loss and comprehensive loss as Cost of sales ($8,493,824 for the year ended August 31, 2020).
Write-downs of inventories amounting to $114,680 ($122,945 for the year ended August 31, 2020) were included
under cost of sales.
20
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
7. Property, Plant and Equipment
Office
furniture
and
equipment,
net of
income tax
credits of
$3,420
Production
equipment,
net of income
tax credits of
$103,160
Diagnostic and
demonstration
equipment
Research and
development
equipment, net
of income tax
credits and
government
assistance of
$55,303
Research and
development
computer
equipment
Leasehold
improvements,
net of income tax
credits of
$44,823
Computer
equipment
$
$
$
$
$
$
$
Total
$
Cost
Balance as at August 31, 2020
Additions
Disposals
Transfers
Effect of foreign exchange
differences
562,164
16,724
(76,248 )
-
3,855,483
147,252
(203,983 )
70,713
-
-
650,257
275,414
(524,801 )
-
-
Balance as at August 31, 2021
502,640
3,869,465
400,870
Accumulated depreciation
Balance as at August 31, 2020
Disposals
Depreciation
Transfers
Effect of foreign exchange
differences
282,514
(76,248 )
49,358
-
2,216,244
(203,983 )
472,292
65,896
258,464
(257,239 )
123,701
-
-
-
-
Balance as at August 31, 2021
255,624
2,550,449
124,926
1,568,067
30,460
(976,238 )
(70,713 )
-
551,576
1,285,821
(976,238 )
69,422
(65,896 )
-
313,109
125,467
25,347
(60,063 )
-
597,685
133,694
(394,571 )
-
1,300,504
66,868
(338,820 )
-
8,659,627
695,759
(2,574,724 )
-
-
(6 )
-
(6 )
90,751
336,802
1,028,552
6,780,656
90,094
(60,063 )
25,331
-
522,241
(394,571 )
64,492
-
774,462
(338,820 )
121,832
-
5,429,840
(2,307,162 )
926,428
-
-
42
-
42
55,362
192,204
557,474
4,049,148
Net book value
as at August 31, 2021
247,016
1,319,016
275,944
238,467
35,389
144,598
471,078
2,731,508
21
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
7. Property, Plant and Equipment (continued)
Office
furniture and
equipment,
net of
income tax
credits of
$3,420
Production
equipment,
net of income
tax credits of
$103,160
Diagnostic and
demonstration
equipment
Research and
development
equipment, net of
income tax credits
and government
assistance of
$55,303
Research and
development
computer
equipment, net of
income tax credits
of $3,078
$
$
$
$
$
Leasehold
improvements, net
of income tax
credits of $44,823
$
Computer
equipment
$
Total
$
Cost
Balance as at August 31, 2019
Additions
Disposals
Balance as at August 31, 2020
Accumulated depreciation
Balance as at August 31, 2019
Disposals
Depreciation
545,066
17,098
-
562,164
235,028
-
47,486
Balance as at August 31, 2020
282,514
3,157,367
698,116
-
3,855,483
1,766,112
-
450,132
2,216,244
543,313
280,173
(173,229 )
650,257
216,748
(92,848 )
134,564
258,464
1,485,462
82,605
-
1,568,067
1,199,856
-
85,965
1,285,821
98,963
26,504
-
125,467
73,648
-
16,446
90,094
536,013
61,672
-
597,685
470,829
-
51,412
522,241
1,213,471
87,033
-
7,579,655
1,253,201
(173,229 )
1,300,504
8,659,627
655,164
-
119,298
4,617,385
(92,848 )
905,303
774,462
5,429,840
Net book value
as at August 31, 2020
279,650
1,639,239
391,793
282,246
35,373
75,444
526,042
3,229,787
22
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
8.
Intangible Assets
Indefinite life –
Trademarks
$
Finite life –
Internally
generated
software
$
Finite life –
Software
$
Finite life –
Internally
developed
patents
$
Total
$
45,673
12,606
-
-
58,279
584,264
49,633
349,791
117,746
1,398,335
150,477
2,378,063
330,462
(46,276 )
-
587,621
-
(156,480 )
311,057
-
-
1,548,812
(46,276 )
(156,480 )
2,505,769
-
-
-
-
-
109,534
-
109,534
221,184
34,000
(156,480 )
98,704
534,569
86,365
-
620,934
755,753
229,899
(156,480 )
829,172
Cost
Balance as at August 31, 2020
Additions
Grant recorded against
intangible
assets (Note 17)
Disposals
Balance as at August 31, 2021
Accumulated amortisation
Balance as at August 31, 2020
Amortisation
Disposals
Balance as at August 31, 2021
Net book value
as at August 31, 2021
58,279
478,087
212,353
927,878
1,676,597
Finite life –
Internally
generated
software
$
Finite life –
Software,
net of income
tax credits of
$1,518
$
Finite life –
Internally
developed
patents
$
Total
$
Indefinite life –
Trademarks
$
25,982
19,691
-
-
45,673
-
-
-
-
188,965
521,827
322,702
27,089
1,125,519
272,816
1,663,168
841,423
(126,528 )
-
584,264
-
-
-
-
-
-
349,791
204,099
17,085
-
221,184
-
-
1,398,335
(126,528 )
-
2,378,063
431,874
102,695
-
534,569
635,973
119,780
-
755,753
Cost
Balance as at August 31, 2019
Additions
Grant recorded against
intangible
assets (Note 17)
Disposals
Balance as at August 31, 2020
Accumulated amortisation
Balance as at August 31, 2019
Amortisation
Disposals
Balance as at August 31, 2020
Net book value
as at August 31, 2020
45,673
584,264
128,607
863,766
1,622,310
The Company has considered indicators of impairment as at August 31, 2021, to determinate if an impairment
loss was necessary in particular because of patent requests that have not been pursued. No impairment loss
was recognized for the years ended August 31, 2021 and 2020.
23
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
9. Authorized Line of Credit
The Company has a revolving operating credit facility for a maximum of $1,000,000 (the credit limit). The available
revolving operating credit is limited to the lesser of the credit limit and 75% of eligible accounts receivable, plus
50% of eligible inventories, minus priority claims. The aggregate outstanding amount under the revolver may not
at any time exceed the credit limit. This revolving operating credit bears interest at the prime rate plus 1.00% and
is repayable on the first anniversary of the date of the agreement. The Company is also allowed to prepay this
facility in whole or in part at any time without penalty. It is secured by a first-rank movable hypothec on the
universality of receivables and inventories. The credit line was not used as at August 31, 2021 and 2020.
The Company also has credit cards for a maximum of $100,000 to finance its current operations. The balance
used on these credit cards bears interest at a rate of 19.99%.
10. Accounts Payable and Accrued Liabilities
Suppliers
Salaries, employee benefits and other
Other liabilities
Total
As at
August 31,
2021
$
877,729
1,877,880
1,087,262
3,842,871
As at
August 31,
2020
$
1,421,986
1,284,450
838,887
3,545,323
24
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
11. Long-term Debt
Contributions repayable to Canada Economic Development (CED), without
interest (effective rate of 13.50%), repayable in 20 equal and consecutive
quarterly instalments of $15,000, maturing in April 2021 without payment
from April to December 2020 inclusive due to a nine-month moratorium.
Debt balance
Imputed interest
Contributions repayable to Canada Economic Development (CED), without
interest (effective rate of 12.00%), repayable in 59 equal and consecutive
monthly instalments of $3,333 and a final payment of $3,353, maturing in
July 2024 without payment from April to December 2020 inclusive due to
a nine-month moratorium.
Debt balance
Imputed interest
Term loan, bearing interest at prime rate plus 0.25%, secured by a movable
hypothec on the universality of the Company’s present and future
property, plant and equipment and intangible assets, payable in 48
monthly instalments of $18,750, maturing in November 2020 without
principal payment from March to August 2020 inclusive due to a six-month
moratorium. Amounts received are net of transaction costs of $9,000.
Term loan, bearing interest at prime rate plus 0.25%, secured by a movable
hypothec on the universality of the Company’s present and future
property, plant and equipment and intangible assets, payable in 48
monthly instalments of $4,500, maturing in August 2022 without principal
payment from March to August 2020 inclusive due to a six-month
moratorium. Amounts received are net of transaction costs of $2,160.
Term loan, bearing interest at prime rate plus 2.00%, secured by a movable
hypothec on the universality of the Company’s present and future
property, plant and equipment and intangible assets, maturing in
February 2024 without principal payment for a 24-month period following
the signature of an agreement in March 2019. The principal is payable in
36 monthly instalments of $194,444. Amounts received are net of
transaction costs of $87,468.
Amounts to be carried forward
As at
August 31,
2021
$
As at
August 31,
2020
$
-
-
-
30,000
(400 )
29,600
116,675
(11,622 )
105,053
143,339
(20,513 )
122,826
-
56,236
53,900
107,624
5,804,813
6,947,412
5,963,766
7,263,698
25
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
11. Long-term Debt (continued)
Amounts carried over
Term loan, bearing interest at prime rate plus 0.25%, secured by a movable
hypothec on the universality of the Company’s present and future
property, plant and equipment and intangible assets, maturing in
June 2024 without principal payment for a 12-month period following the
receipt of the first tranche of the loan in October 2019. The second and
last tranche of the loan for $242,180 has been received in January 2021.
The principal is payable in 44 monthly instalments of $10,938 and a final
payment of $10,386. Amounts received are net of transaction costs of
$5,250.
As at
August 31,
2021
$
As at
August 31,
2020
$
5,963,766
7,263,698
369,507
245,704
Term loan bearing interest at 6.66% payable in 111 monthly instalments of
$8,070, maturing in September 2025.
463,544
559,163
Term loan, bearing interest at prime rate plus 1.00%, secured by a movable
hypothec on the universality of the Company’s present and future
property, plant and equipment and intangible assets, maturing in
October 2024 without principal payment for a 9-month period following
the receipt of the loan in February 2021. The principal is payable in 36
monthly instalments of $16,667.
Current portion
600,000
7,396,817
-
8,068,565
2,802,223
4,594,594
1,460,654
6,607,911
The following table presents changes in long-term debt for the Company for the years ended August 31, 2021
and 2020:
Balance – Beginning of year
Impact of adopting IFRS 16 – Reclassification of the deferred lease
inducement related to financing activity
Increase in long-term debt
Transaction costs
Reimbursement of long-term debt
Amortization of transaction costs
Balance – End of year
Years ended August 31,
2021
$
2020
$
8,068,565
7,494,325
-
648,641
842,180
249,456
-
(5,250 )
(1,550,736 )
(372,391 )
36,808
53,784
7,396,817
8,068,565
26
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
11. Long-term Debt (continued)
The annual principal instalments due on the long-term debt are:
Less than 1 year
1 to 2 years
2 to 3 years
3 to 4 years
4 to 5 years
More than 5 years
As at
August 31,
2021
$
2,802,223
2,800,058
1,625,731
158,035
10,770
-
7,396,817
As at
August 31,
2020
$
1,460,654
2,566,429
2,531,305
1,369,586
129,821
10,770
8,068,565
Under the terms and conditions of the agreements on long-term debt with its lenders, the Company is subject to
certain covenants with respect to maintaining minimum financial ratios. As at August 31, 2021 and 2020, these
financial ratios were met by the Company.
12. Leases
Right-of-Use Assets
The following tables present changes in right-of-use assets for the Company for the years ended August 31,
2021 and 2020:
Balance as at August 31, 2020
New leases / leases modifications
Depreciation of right-of-use assets
Balance as at August 31, 2021
Opening balance as at September 1, 2019
New leases / leases modifications
Depreciation of right-of-use assets
Balance as at August 31, 2020
Year ended August 31, 2021
Buildings
$
4,462,365
430,537
(585,682 )
4,307,220
Hosting
servers
$
50,613
(4,137 )
(32,088 )
14,388
Year ended August 31, 2020
Buildings
$
5,190,001
(118,424 )
(609,212 )
4,462,365
Hosting
servers
$
82,722
1,089
(33,198 )
50,613
Total
$
4,512,978
426,400
(617,770 )
4,321,608
Total
$
5,272,723
(117,335 )
(642,410 )
4,512,978
27
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
12. Leases (continued)
Lease Liabilities
The following tables present changes in lease liabilities for the Company for the years ended August 31, 2021
and 2020:
Balance as at August 31, 2020
New leases / leases modifications
Payment of lease liabilities
Sublease income from right-of-use assets
Interest expense on lease liabilities
Balance as at August 31, 2021
Current portion
Long-term lease liabilities as at August 31, 2021
Opening balance as at September 1, 2019
New leases / leases modifications
Payment of lease liabilities
Sublease income from right-of-use assets
Interest expense on lease liabilities
Balance as at August 31, 2020
Current portion
Long-term lease liabilities as at August 31, 2020
Year ended August 31, 2021
Buildings
$
4,692,531
430,537
(709,871 )
23,942
265,450
4,702,589
509,769
4,192,820
Hosting
servers
$
53,069
(4,137 )
(35,314 )
-
2,107
15,725
15,725
Total
$
4,745,600
426,400
(745,185 )
23,942
267,557
4,718,314
525,494
-
4,192,820
Year ended August 31, 2020
Buildings
$
5,190,001
(118,424 )
(688,874 )
24,301
285,527
4,692,531
411,290
4,281,241
Hosting
servers
$
82,722
1,089
(34,725 )
-
3,983
53,069
35,879
17,190
Total
$
5,272,723
(117,335 )
(723,599 )
24,301
289,510
4,745,600
447,169
4,298,431
28
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
12. Leases (continued)
The lease payments, based on the expected undiscounted contractual cash flows, are as follows over the period
of the leases:
Less than 1 year
1 to 2 years
2 to 3 years
3 to 4 years
4 to 5 years
More than 5 years
As at
August 31,
2021
$
765,549
769,175
726,938
576,257
587,782
2,524,166
5,949,867
As at
August 31,
2020
$
703,578
568,676
564,999
579,124
593,602
3,254,251
6,264,230
For the years ended August 31, 2021 and 2020, expenses relating to short-term leases and leases for which the
underlying asset is of low value were not significant.
The Company is not exposed to a significant liquidity risk regarding its lease liabilities. The Company’s treasury
function oversees lease liabilities.
13. Shareholders’ Equity
a) Share Capital
On February 25, 2021, the Company completed a public bought deal offering for aggregate gross proceeds
of $28,750,000. In connection with the offering, the Company issued a total of 15,972,222 common shares at
a price of $1.80 per common share.
Transaction costs of the offering include underwriting fees of $1,725,000 and other professional fees and
miscellaneous fees of $401,000 for total transactions costs of $2,126,000.
During the year ended August 31, 2021, following the exercise of stock options, the Company issued 904,500
common shares (48,851 common shares for the year ended August 31, 2020) for a cash consideration of
$1,042,356 ($34,797 for the year ended August 31, 2020). As a result, an amount of $460,077 was reallocated
from Reserve – Stock option plan to Share capital in shareholders’ equity ($24,171 for the year ended
August 31, 2020). Also, 51,149 common shares subscribed during the year ended August 31, 2019 have
been issued during the year ended August 31, 2020. This situation did not occur during the year ended
August 31, 2021.
b) Stock Options
According to the policies of the TSX Exchange, the stock option plan must be approved by the Company’s
shareholders every three years. So, the shareholders approved the stock option plan on January 21, 2020.
The number of common shares reserved by the Board of Directors for options granted under the plan shall
not exceed 10% of the issued and outstanding common shares of the Company. The plan is available to the
Company’s directors, consultants, officers and employees.
29
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
13. Shareholders’ Equity (continued)
b) Stock Options (continued)
The stock option plan stipulates that the terms of the options and the option price shall be fixed by the directors
subjected to the price restrictions and other requirements imposed by the TSX Exchange. The exercise period
cannot exceed five years, beginning on the grant date. These options generally vest over a four-year period,
except for 1,020,000 stock options (1,070,000 stock options granted as at August 31, 2020), which were
completely vested at grant date. The exercise price of the options is the closing price of the shares of the
Company on the TSX Exchange on the trading day immediately preceding the date of grant.
The compensation expense in regard to the stock option plan for the year ended August 31, 2021 is $458,543
($438,295 for the year ended August 31, 2020).
The fair value of options granted issued was estimated using the Black-Scholes option pricing model using
the following assumptions:
Risk-free interest rate
Volatility
Dividend yield on shares
Expected life
Weighted share price
Weighted fair value per option at the
grant date
Years ended August 31,
2021
2020
Between 0.17% and 0.84%
Between 0.24% and 1.67%
Between 55.81% and 73.20% Between 46.43% and 66.51%
Nil
0 to 5 years
$1.71
$0.75
Nil
0 to 5 years
$0.75
$0.27
Option valuation models require the input of highly subjective assumptions, including the expected stock price
volatility. Any changes in the subjective input assumptions can affect the fair value estimate.
The expected volatility is based on the historical volatility of the underlying share price for a period equivalent
to the expected life of the options.
The changes in the number of stock options granted by the Company and their weighted-average exercise
prices between August 31, 2019 and August 31, 2021 are as follows:
Outstanding as at August 31, 2019
Options granted
Options exercised
Options expired
Options cancelled
Outstanding as at August 31, 2020
Options granted
Options exercised
Options expired
Options cancelled
Outstanding as at August 31, 2021
Options exercisable as at August 31, 2021
Number of
options
7,004,000
1,400,000
(100,000 )
(467,875 )
(1,239,750 )
6,596,375
2,342,500
(904,500 )
(327,500 )
(566,625 )
7,140,250
3,551,844
Weighted-
average
exercise price
$
1.04
0.75
0.72
0.95
0.94
1.01
1.71
1.15
1.21
1.10
1.20
1.09
30
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
13. Shareholders’ Equity (continued)
b) Stock Options (continued)
The table below provides information on the outstanding stock options as at August 31, 2021:
Exercise price
$
0.51 – 0.75
0.76 – 1.00
1.01 – 1.25
1.26 – 1.50
1.51 – 1.75
1.76 – 2.00
2.01 – 2.25
2.26 – 2.50
2.51 – 2.75
1.20
Number of outstanding
stock options
Number of exercisable
stock options
Weighted average
remaining contractual life
(years)
397,125
3,308,375
557,250
898,750
1,268,750
-
467,500
-
242,500
7,140,250
136,781
1,935,906
189,156
595,000
695,000
-
-
-
-
3,551,844
3.64
2.56
3.02
1.98
2.62
-
4.86
-
4.99
2.83
14. Net Loss per Share
The table below presents a reconciliation between the basic net loss and the diluted net loss per share:
Net loss attributable to shareholders
Basic and diluted
Number of shares
Years ended August 31,
2021
$
2020
$
(1,150,428 )
(2,643,804 )
Basic and diluted weighted average number of shares outstanding
98,806,987
90,276,765
Amount per share
Basic and diluted net loss per share
(0.01 )
(0.03 )
Stock options are excluded from the calculation of the diluted weighted average number of shares outstanding
when their exercise price is greater than the average market price of common shares or when their effect is
antidilutive. The number of stock options excluded from the calculation because their exercise price is greater
than the average market price of common shares is presented below:
Stock options
Years ended August 31,
2021
2020
1,733,750
6,023,936
For the years ended August 31, 2021 and 2020, the diluted amount per share was the same amount as the basic
amount per share, since the dilutive effect of stock options was not included in the calculation; otherwise, the
effect would have been antidilutive. Accordingly, the diluted amount per share for these periods was calculated
using the basic weighted average number of shares outstanding.
31
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
15. Additional Information on the Consolidated Statements of Cash Flows
Changes in non-cash operating working capital items
Trade and other receivables
Government assistance receivable
Tax credits receivable
Inventories
Prepaid expenses
Accounts payable and accrued liabilities
Warranty provision
Deferred revenues
Current income taxes payable
Supplementary information
Years ended August 31,
2021
$
2020
$
(94,366 )
428,601
(214,323 )
390,003
(69,991 )
352,590
(69,335 )
71,759
19,895
814,833
1,045,169
(428,601 )
191,714
(1,372,043 )
118,452
(776,778 )
18,678
48,951
-
(1,154,458 )
Unpaid acquisition of property, plant and equipment
Unpaid additions to intangible assets
32,427
25,503
83,505
29,467
Cash and cash equivalents
Cash
Short-term investments
As at
August 31,
2021
$
As at
August 31,
2020
$
2,700,529
35,862,742
38,563,271
3,251,374
7,632,645
10,884,019
32
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
16. Warranty provision
During the normal course of business, the Company replaces defective parts under warranty provision offered at
the sale of the products. The term of the warranty is generally 12 months. The following table summarizes
changes in warranty provision:
Balance – Beginning of year
Additional provision recognized
Unused amount reversed during the year
Amount used during the year
Effect of foreign exchange differences
Balance – End of year
Years ended August 31,
2021
$
153,138
73,982
(46,515 )
(96,573 )
(229 )
83,803
2020
$
134,460
80,500
-
(61,822 )
-
153,138
This provision estimate is based on past experience. The actual costs that the Company may incur, as well as
the moment when the parts should be replaced, can differ from the estimated amount.
17. Government assistance
Because of the spread of COVID-19 virus, the Government of Canada implemented the Canada Emergency
Wage Subsidy (CEWS). For the year ended August 31, 2021, the Company recorded, as Other income, a
non-refundable contribution under the CEWS program for an amount of $740,162 for admissible salaries related
to its workforce ($1,682,608 for the year ended August 31, 2020).
Under agreements reached with the National Research Council Canada with respect to the Industrial Research
Assistance Program (IRAP), the Company may receive a non-refundable contribution for a maximum amount of
$500,000 to cover some of its incurred costs to develop a new product for the structural heart market and a
non-refundable contribution for a maximum amount of $500,000 to cover some of its incurred costs to develop
an optical-based fuel monitoring system for aerospace applications. For the year ended August 31, 2021, the
Company recorded contributions totalling $323,084 ($187,590 for the year ended August 31, 2020) which were
accounted for against research and development expenses.
Under agreements reached with the Ministère de l’Économie et de l’Innovation, through the Centre de
Collaboration MiQro Innovation (C2MI) with respect to the Projet stratégique mobilisateur (PSM), the Company
may receive a non-refundable contribution for a maximum amount of $405,934 to cover some of its incurred
costs to develop a new product for the structural heart market. For the year ended August 31, 2021, the Company
recorded contributions totalling $211,990 ($94,007 for the year ended August 31, 2020) which were accounted
for against research and development expenses.
Under an agreement reached with the Ville de Québec, the Company may receive a non-refundable contribution
for a maximum amount of $350,000 to cover some of its incurred costs related to the development of a software
and sales and marketing expenses. For the year ended August 31, 2021, the Company didn’t receive any
contribution under this agreement ($180,000 for the year ended August 31, 2020 which were accounted for
against internally generated software and sales and marketing expenses).
Under an agreement reached with the Ministère de l’Économie et de l’Innovation, the Company may receive a
non-refundable contribution for a maximum amount of $92,804 to cover some of its incurred costs related to the
development of a software. For the year ended August 31, 2021, the Company recorded contributions totalling
$46,276 ($46,528 for the year ended August 31, 2020) which were accounted for against internally generated
software.
33
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
18.
Income Taxes
The reconciliation of the income tax provision calculated using the combined Canadian federal and provincial
statutory income tax rate with the income tax provision in the consolidated financial statements is as follows:
Income tax payable using the combined federal and provincial statutory
tax rate (26.5%; 26.5% in 2020)
Effect of different tax rates of subsidiaries in other jurisdictions
Non-deductible expenses and other
Deductible financing fees
Non-taxable income tax credits
Losses carried forward
Income tax using effective income tax rate
Years ended August 31,
2021
$
2020
$
(299,249 )
(2,573 )
823,431
(180,924 )
(84,800 )
(234,699 )
21,186
(701,489 )
-
739,747
(106,145 )
(28,040 )
95,927
-
As at August 31, 2021, the Company has tax losses of approximately $26,035,000 for federal purposes and
$26,954,000 for provincial purposes that can be used to reduce future taxable income. These losses expire as
follows:
2024
2025
2027
2028
2029
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
Federal
Provincial
$
$
347,000
42,000
343,000
40,000
1,552,000
1,509,000
641,000
463,000
2,024,000
1,286,000
237,000
1,091,000
2,513,000
5,759,000
5,447,000
2,912,000
271,000
1,282,000
168,000
617,000
273,000
2,068,000
1,280,000
239,000
1,125,000
2,510,000
5,493,000
5,427,000
4,308,000
325,000
1,278,000
119,000
26,035,000
26,954,000
34
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
18.
Income Taxes (continued)
The Company also has undeducted research and development expenses of $12,489,000 ($11,719,000 as at
August 31, 2020) for federal purposes and $15,642,000 ($14,814,000 as at August 31, 2020) for provincial
purposes that are deferred over an undetermined period.
Deferred income tax assets related to unclaimed tax losses, financing costs, research and development
expenses and others, as well as non-refundable R&D tax credits totalling approximately $16,080,000
($15,043,000 as at August 31, 2020) were not recognized due to the uncertainty about the Company’s ability to
generate taxable income. In addition, deferred tax liabilities of approximately $940,000 ($878,000 as at
August 31, 2020) related to federal investment tax credits on research and development expenses were
recognized and offset by a deferred income tax asset.
19. R&D Tax Credits
For tax purposes, research and development expenses are detailed as follows:
Federal
Provincial
Years ended August 31,
2021
$
1,116,000
1,173,000
2020
$
598,000
633,000
These expenses have enabled the Company to become eligible for R&D tax credits reimbursable for the following
amounts:
Federal
Provincial
Years ended August 31,
2021
2020
$
-
$
-
320,000
320,000
105,677
105,677
These credits were accounted for against research and development expenses in the consolidated statements
of loss and comprehensive loss.
Reimbursable scientific research and experimental development income tax credits earned for the years ended
August 31, 2021 and 2020, have not yet been reviewed by the taxation authorities, and the amounts granted
could differ from those that have been recorded.
Over the years, the Company qualified for federal R&D tax credits, which were non-refundable and could be used
against Part I Company tax. The accumulated credits as at August 31, 2021, are about $3,549,000 ($3,314,000
for the year ended August 31, 2020) and expire over a period of 2 to 20 years beginning in 2021.
35
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
20. Segmented Information
Segmented Information
The Company is organized into two segments: Medical and Industrial.
Medical segment: in this segment, OpSens focuses mainly on physiological measurement such as FFR and dPR
in the coronary artery disease market and also supplies a wide range of miniature optical sensors to measure
pressure and temperature to be used in a wide range of applications that can be integrated in other medical
devices. This also includes other revenues related to its optical sensor technology.
Industrial segment: in this segment, OpSens develops, manufactures and installs innovative fibre optic sensing
solutions for critical and demanding industrial applications.
The principal factors employed in the identification of the two segments reflected in this note include the
Company’s organizational structure, the nature of the reporting lines to the President and Chief Executive Officer
and the structure of internal reporting documentation such as management accounts and budgets.
The same accounting policies are used for both reportable segments. Operations are carried out in the normal
course of business and are measured at the exchange amount, which approximates prevailing prices in the
markets.
Medical
Industrial
$
$
Years ended August 31,
2021
Total
$
Medical
Industrial
$
$
2020
Total
$
External sales
Internal sales
Gross margin
31,101,209
111,695
16,457,466
3,362,611 34,463,820 26,996,184
-
493,492
2,222,896 18,680,362 14,179,616
381,797
2,457,166 29,453,350
96,090
96,090
1,439,876 15,619,492
Depreciation of property,
plant and equipment
and right-of-use assets
Amortisation of intangible
assets
Other income
1,362,247
181,951
1,544,198
1,298,636
249,077
1,547,713
218,255
445,506
11,644
229,899
108,845
10,935
119,780
294,656
740,162
1,383,939
298,669
1,682,608
Financial expenses
540,010
377,738
917,748
340,946
343,121
684,067
Current income taxes
expense
21,186
-
21,186
-
-
-
Net income (loss)
(1,969,256 )
818,828
(1,150,428 )
(2,647,823 )
4,019
(2,643,804 )
Acquisition of property,
plant and equipment
Additions to intangible
assets
Segment assets
Segment liabilities
651,109
44,650
695,759
1,224,453
28,748
1,253,201
264,398
56,212,182
15,246,157
19,788
676,967
284,186
2,300,223 58,512,405 29,777,672
936,253 16,182,410 16,070,310
37,928
714,895
2,130,767 31,908,439
491,267 16,561,577
36
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
20. Segmented Information (continued)
Information by geographic segment
Revenue by geographic segment
United States
Japan
Canada
Other*
Years ended August 31,
2021
$
2020
$
12,862,452
7,277,326
3,270,982
11,053,060
34,463,820
11,408,452
6,313,784
2,644,881
9,086,233
29,453,350
* Comprised of revenues generated in countries for which amounts are individually not significant.
Revenues are attributed to the geographic segment based on the clients’ location. Non-current assets, which
include property, plant and equipment, intangible assets and right-of-use assets, are mainly located in Canada.
Non-current assets located in other countries are not significant.
For the year ended August 31, 2021, revenues from two clients from the Medical’s reportable segment
represented individually more than 10% of the total revenues of the Company, i.e. 21% and 19% (24% and 21%
for the year ended August 31, 2020).
21. Related Party Transactions
Key management personnel, having authority and responsibility for planning, directing and controlling the
activities of the Company, comprise the Executive Chairman, the Chief Executive Officer, the Chief Financial
Officer and the President of OpSens Solutions Inc. Compensation of key management personnel and directors
for the years ended August 31, 2021 and 2020 were as follows:
Short-term salaries and other benefits
Option-based awards
Years ended August 31,
2021
$
1,219,527
119,303
1,338,830
2020
$
1,109,901
153,867
1,263,768
The compensation of key executives is determined by the Human Resources and Compensation Committee,
taking into consideration individual performance and market trends.
37
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
22. Additional Information to the Consolidated Statements of Loss and Comprehensive Loss
Expenses (revenues) by function
Years ended August 31,
2021
$
2020
$
Salaries and Other Benefits
14,652,074
13,254,678
Cost of sales
Administrative
Sales and marketing
Research and development
Depreciation of Property, Plant and Equipment and Righ-of-Use
1,544,198
1,547,713
Assets
Cost of sales
Administrative
Sales and marketing
Research and development
Amortisation of Intangible Assets
229,899
119,780
Administrative
Research and development
Government Assistance
Research and development
(535,074 )
(391,797 )
Refundable Research and Development Tax Credits
(347,185 )
(89,943 )
Research and development
38
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
23. Financial Instruments
Fair Value
The fair value of cash and cash equivalents, trade and other receivables and accounts payable and accrued
liabilities approximates their carrying value due to their short-term maturities.
The fair value of long-term debt is based on the discounted value of future cash flows under the current financial
arrangements at the interest rate the Company expects to currently negotiate for loans with similar terms and
conditions and maturity dates. The fair value of long-term debt approximates its carrying value due to the current
market rates.
Risk Management
The main risks arising from the Company’s financial instruments are credit risk, liquidity risk, interest rate risk,
concentration risk and foreign exchange risk. These risks arise from exposures that occur in the normal course
of business and are managed on a consolidated basis.
Credit Risk
Credit risk is the risk of an unexpected loss if a customer or counterparty to a financial instrument fails to meet
its contractual obligations. The Company regularly monitors credit risk exposure and takes steps to mitigate the
likelihood of this exposure resulting in losses. The Company's exposure to credit risk currently relates to cash
and cash equivalents and to trade and other receivables. The Company’s credit risk management policies include
the authorization to carry out investment transactions with recognized financial institutions with credit ratings of
at least A and higher, in either bonds, money market funds or guaranteed investment certificates. Consequently,
the Company manages credit risk by complying with established investment policies.
The credit risk associated with trade and other receivables is generally considered normal as trade receivables
consist of a large number of customers spread across diverse geographical areas. In general, the Company does
not require collateral or other security from customers for trade accounts receivable; however, credit is extended
following an evaluation of creditworthiness. In addition, the Company performs ongoing credit checks of its
customers and establishes an allowance for doubtful accounts when accounts are determined to be uncollectible.
Two major customers represented 34.67% of the Company’s total accounts receivable as at August 31, 2021
(31.72% as at August 31, 2020).
As at August 31, 2021, 10.36% (0.38% as at August 31, 2020) of the accounts receivable were of more than 90
days whereas 64.51% (34.51% as at August 31, 2020) of those were less than 30 days. The maximum exposure
to the risk of credit for accounts receivable corresponded to their book value. As at August 31, 2021, the
allowance for doubtful accounts was at $213,353 (nil as at August 31, 2020).
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial
liabilities that are settled in cash and/or another financial asset. The Company’s approach is to ensure it will have
sufficient liquidity to meet operational, capital and regulatory requirements and obligations, under both normal
and stressed circumstances. Cash flow projections are prepared and reviewed quarterly by the Board of Directors
to ensure a sufficient continuity of funding. The funding strategies used to manage this risk include the Company’s
access to capital markets and debt securities issues.
39
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
23. Financial Instruments (continued)
Risk Management (continued)
Liquidity Risk (continued)
The following are the contractual maturities of the financial liabilities (principal and interest, assuming current
interest rates) as at August 31, 2021 and 2020:
As at August 31, 2021
Carrying
0 to 12
12 to 24
After
amount Cash flows
months
months
24 months
Accounts payable and accrued
liabilities
Long-term debt
Total
$
$
$
3,842,871
3,842,871
3,842,871
$
-
$
-
7,396,817
7,370,774
2,822,089
2,801,422
1,747,263
11,239,688
11,213,645
6,664,960
2,801,422
1,747,263
As at August 31, 2020
Carrying
amount
Cash flows
$
$
0 to 12
months
$
12 to 24
After
months
24 months
$
-
$
-
Accounts payable and accrued
liabilities
Long-term debt
Total
Interest Rate Risk
3,545,323
3,545,323
3,545,323
8,068,565
8,079,330
1,497,590
2,586,536
3,995,204
11,613,888
11,624,653
5,042,913
2,586,536
3,995,204
The Company’s exposure to interest rate risk is summarized as follows:
Cash and cash equivalents
Trade and other receivables
Accounts payable and accrued liabilities
Long-term debt
Fixed and variable interest rates
Non-interest-bearing
Non-interest-bearing
Non-interest-bearing and fixed and variable interest rates
Interest Rate Sensitivity Analysis
Interest rate risk exists when interest rate fluctuations modify the cash flows or the fair value of the Company’s
investments. The Company owns investments with fixed and variable interest rates. As at August 31, 2021, the
Company was holding more than 93% (70% as at August 31, 2020) of its cash and cash equivalents in all-time
redeemable term deposits.
All else being equal, a hypothetical 1% interest rate increase or decrease would have an impact of $75,939 on
net loss and comprehensive loss for the year ended August 31, 2021 ($74,220 for the year ended
August 31, 2020).
40
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
23. Financial Instruments (continued)
Risk Management (continued)
Interest Rate Risk (continued)
Financial Expenses (Revenues)
Interest and bank charges
Interest on long-term debt
Interest on lease liabilities
Loss on foreign currency translation
Interest income
Concentration Risk
Years ended August 31,
2021
$
80,498
398,605
267,557
280,624
(109,536 )
917,748
2020
$
71,262
472,298
289,510
90
(149,093 )
684,067
Concentration risk exists when investments are made with multiple entities that share similar characteristics or
when a large investment is made with a single entity. As at August 31, 2021 and 2020, the Company was holding
100% of its cash equivalents portfolio in all-time redeemable term deposits with financial institutions with high
creditworthiness.
Foreign Exchange Risk
The Company realizes certain sales and purchases mainly of raw materials, supplies and professional services
in U.S. dollars, Euros and British pounds. Therefore, it is exposed to foreign currency fluctuations. The Company
does not actively manage this risk
Foreign Currency Sensitivity Analysis
Based on the Company’s foreign exchange risk noted above, varying the foreign exchange rate to reflect a 10%
strengthening in the Canadian dollar would have decreased (increased) the net loss as follows, assuming that
all other variables remained constant. An assumed 10% weakening of the foreign currency would have had an
equal but opposite effect on the basis that all other variables remained constant.
Year ended August 31, 2021
Decrease (increase) of the
net loss
10% appreciation in the
Canadian dollar
Decrease (increase) of the
10% depreciation in the
CA$/US$
CA$/EUR€
CA$/GBP£
$
$
$
(1,000,000 )
(621,000 )
25,000
net loss
Canadian dollar
1,000,000
621,000
(25,000 )
41
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
23. Financial Instruments (continued)
Risk Management (continued)
Foreign Exchange Risk (continued)
Foreign Currency Sensitivity Analysis (continued)
Year ended August 31, 2020
CA$/US$
CA$/EUR€
CA$/GBP£
$
$
$
Decrease (increase) of the
10% appreciation in the
net loss
Canadian dollar
(205,000 )
(530,000 )
(36,000 )
Decrease (increase) of the
10% depreciation in the
net loss
Canadian dollar
205,000
530,000
36,000
As at August 31, 2021 and 2020, the risk to which the Company was exposed is established as follows:
Cash and cash equivalents (US$1,350,764;
US$1,516,591 as at August 31, 2020)
Cash and cash equivalents (€ 233,721;
€ 228,611 as at August 31, 2020)
Cash and cash equivalents (£ 3,039;
£ 36,258 as at August 31, 2020)
Trade and other receivables (US$1,828,513;
US$1,913,967 as at August 31, 2020)
Trade and other receivables (€ 815,415;
€ 613,597 as at August 31, 2020)
Trade and other receivables (£ 52,500;
£ 69,040 as at August 31, 2020)
Accounts payable and accrued liabilities (US$376,989;
US$692,710 as at August 31, 2020)
Accounts payable and accrued liabilities (€ 9,273;
€ 41,569 as at August 31, 2020)
Accounts payable and accrued liabilities (£ 6,753;
£ 9,520 as at August 31, 2020)
Total
As at
August 31,
2021
$
As at
August 31,
2020
$
1,704,259
1,977,938
348,385
356,016
5,277
63,169
2,307,035
2,496,196
1,215,458
955,554
91,166
120,282
(475,647 )
(903,432 )
(13,822 )
(64,736 )
(11,726 )
5,170,385
(16,585 )
4,984,402
42
OpSens Inc.
Notes to the Consolidated Financial Statements
Years ended August 31, 2021 and 2020
(in Canadian dollars)
24. Capital Management
The Company's objective in managing capital, primarily composed of shareholders' equity, long-term debt and
lease liabilities, is to ensure sufficient liquidity to fund production and R&D activities, general and administrative
expenses, sales and marketing expenses, working capital and capital expenditures.
In the past, the Company has had access to liquidity through non-dilutive sources, including the sale of non-core
assets, long-term debts, government assistance, R&D tax credits, interest income and to liquidity through dilutive
sources as public equity offerings.
As at August 31, 2021, the Company's working capital amounted to $42,387,696 ($16,888,129 as at
August 31, 2020), including cash and cash equivalents of $38,563,271 ($10,884,019 as at August 31, 2020). The
accumulated deficit at the same date was $44,395,449 ($43,245,021 as at August 31, 2020). Based on the
Company's assessment, which takes into account current cash and cash equivalents, as well as its strategic plan
and corresponding budgets and forecasts, the Company believes that it has sufficient liquidity and financial
resources to fund planned expenditures and other working capital needs for at least, but not limited to, the
12-month period after the reporting date of August 31, 2021.
The Company believes that its current liquid assets are sufficient to finance its activities in the short-term.
The Company manages the capital structure and makes adjustments to it in light of changes in economic
conditions and the risk characteristics of the underlying assets. Capital management objectives, policies and
procedures have broadly remained unchanged since the last fiscal year.
For the years ended August 31, 2021 and 2020, the Company has not been in default on any of its obligations
regarding long-term debt and lease liabilities.
25. Subsequent Events
On September 9, 2021, the Company signed an amendment to its credit agreement dated February 26, 2019.
Pursuant to this amendment, the Company has a non-revolving credit facility of $10,000,000 that can be used
for growth and working capital purposes and that is secured by a first-rank movable hypothec on the universality
of the Company’s present and future property, plant and equipment and intangible assets. The credit facility shall
be available to the Company in two advances to be made by August 31, 2022. Any amount which remains unused
shall be automatically and permanently cancelled and terminated. Any amount drawn under this credit facility
bears interest at the prime rate plus 1.50%. The Company shall pay a 0.50% annual fee on the unused portion
of the credit facility. The used portion of the credit facility is repayable in equal monthly payments from September
2022 until the credit facility maturity in August 2026.
Moreover, in September 2021, the Company prepaid the entire balance of the term loan bearing interest at prime
rate plus 2.00%, secured by a movable hypothec on the universality of the Company’s present and future
property, plant and equipment and intangible assets, maturing initially in February 2024. The repayment of
$5,833,333 was made from the cash equivalents. This loan had a carrying amount of $5,804,813 as at August
31, 2021, including an amount of $2,315,791 included in the current portion of the long-term debt.
26. Approval of Consolidated Financial Statements
The consolidated financial statements were approved by the Board of Directors and authorized for issue on
November 22, 2021.
43
Governance
Directors
Alan Milinazzo
Executive Chairman of the Board of Directors
Louis Laflamme, CPA, CA
President and Chief Executive Officer
Lori Chmura
Director
Gaétan Duplain
President, OpSens Solutions
Denis Harrington
Director
Jean Lavigueur, CPA, CA
Director
Pat Mackin
Director
Denis M. Sirois
Director
Officers
Louis Laflamme, CPA, CA
President and Chief Executive Officer
Gaétan Duplain
President, OpSens Solutions
Robin Villeneuve, CPA, CA
Chief Financial Officer and Corporate Secretary
Corporate Information
Head Office
750 Boulevard du Parc‑Technologique
Quebec, QC G1P 4S3
Phone: 418.781.0333
Fax: 418.781.0024
For additional information or to receive quarterly reports and
press releases, contact Marie‑Claude Poitras at the head office or
at marie‑claude.poitras@OpSens.com.
Shares in Circulation
107,157,039 (as of August 31, 2021)
Transfer Agent and Registrar
TSX Trust Company (TSX Trust)
2001 Robert‑Bourassa Blvd., suite 1600
Montreal, QC H3A 2A6
T: 1‑800‑387‑0825 F: 514.285.8846
Registration
Toronto Stock Exchange – Symbol: OPS
OTCQX – Symbol: OPSSF
Auditors
Deloitte S.E.N.C.R.L./s.r.l, Quebec, QC
Annual General and Special
Meeting of Shareholders
The annual general and special meeting of shareholders of
OpSens Inc. will be held virtually via live webcast available at
https://bit.ly/3BcCTbi on January 18, 2022 at 10:00 a.m. (ET).
The Company encourages its shareholders to exercise their right
to vote with TSX Trust during the advance voting period that ends
on Friday, January 14, or 48 business hours prior to the event
scheduled for Tuesday, January 18, 2022, at 10:00 a.m.
Information and documents are available at www.OpSens.com.
70 Aortic Stenosis
an abnormal narrowing of the aortic valve opening
Aorta
Left Atrium
Aortic Valve
Closed
Open
Normal Aortic Valve
Right Ventricle
Left Ventricle
Open
Closed
Aortic Valve Stenosis
OpSens’ Markets
OpSens Preparing to Launch Product for TAVR Market
Measuring, a Key Step towards Better Heart Health
OpSens’ SavvyWire,™, scheduled for release in 2022, will become the first
pressure guidewire developed specifically for percutaneous aortic valve
replacement (TAVR). The SavvyWire,™ is the first guidewire intended
to both deliver the aortic valve prosthesis, while allowing continuous
hemodynamic pressure measurement during the procedure.
Aortic stenosis is a narrowing of the aortic valve, which creates an obstacle
to the ejection of blood, often leading to heart failure.
To solve this problem, cardiologists traditionally performed open‑heart
surgery to replace the narrowed valve.
In recent years, the percutaneous replacement of this valve has gained in
popularity. Very minimally invasive, the method was initially reserved for
the most physically compromised patients, those who could not realistically
consider open‑heart surgery. Progress has made this intervention simpler
and more efficient. Studies presented in 2019 showed that patients of all
conditions could benefit from the percutaneous treatment, which is less
stressful for the patient and more economical. The results of these studies
and other factors could double the number of replacements by 2023.2
OpSens’ innovation aims to optimize the implantation of replacement
aortic valves. This new guidewire will continuously provide hemodynamic
pressure measurements before, during and after the procedure. It will also
simplify the cardiologists’ workflow by minimizing the number of steps and
equipment exchanges to promote safety and speed in the intervention.
OpSens’ product addresses a market that represents an extraordinary
opportunity for the Company and its shareholders. It answers an unmet
need of cardiologists and will create a synergy in the sales network that will
benefit both the OptoWire and this new sector of activities. Its integration
will be facilitated by the fact that it works with the OptoMonitor III, which is
already installed in catheterization laboratories around the world.
OpSens possesses the rare skills needed to develop this advanced
technology. OpSens plans to capitalize on this opportunity through
aggressive development. The recent pioneering experience gained in the
development and marketing of the OptoWire will allow the Company to
quickly reach an efficient marketing of the product.
Industrial
OpSens’ versatile technologies can meet a variety of needs in valuable
markets. There is a positive sentiment around OpSens’ single‑point
measurement technology in leading areas. This growing interest stems
from the fact that traditional technologies do not perform as expected
under certain conditions, opening avenues for OpSens’ fiber optic
technology. OpSens capitalizes on its easily adaptable technology and
invests in innovation to create applications for growing markets, such as
semiconductors, aeronautics, and other diverse applications.
OpSens Solutions’ engagements in projects and markets with global reach,
such as the International Thermonuclear Experimental Reactor (ITER)
project, is a testament to the impact our products can have in the most
challenging and ambitious environments.
2. TAVR/TMVR Market Likely to Double by 2023, Daniel Allar May 10, 2019 Structural ‑ Congenital Heart Disease
P
hoto: Stevens Leblanc
Cardiology ‑
physiological measurements
Measuring, a key step towards better heart health
Industrial applications
Innovative fiber optic solutions for various industries
P
hoto: Stevens Leblanc