Cipher Pharmaceuticals : Financial Document

Cipher Pharmaceuticals Inc.

Condensed interim consolidated financial statements Unaudited

For the three months ended March 31, 2023

NOTICE OF NO AUDITOR REVIEW OF

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditor has not performed a review of the condensed interim consolidated financial statements, they must be accompanied by a notice indicating that the condensed interim consolidated financial statements have not been reviewed by an auditor. The accompanying unaudited condensed interim consolidated financial statements of Cipher Pharmaceuticals Inc. (the "Company") have been prepared by and are the responsibility of the Company's management. The Company's independent auditor has not performed a review of these condensed interim consolidated financial statements in accordance with standards established by the Chartered Professional Accountants of Canada (CPA Canada) for a review of interim financial statements by an entity's auditor.

Cipher Pharmaceuticals Inc.

Condensed interim consolidated statements of financial position

(in thousands of United States dollars - unaudited)

	As at March 31,	As at December 31,
	2023	2022
	$	$
Assets
Current assets
Cash and cash equivalents	33,427	28,836
Accounts receivable	5,487	6,802
Inventory	2,383	2,152
Prepaid expenses and other assets	332	371
Total current assets	41,629	38,161
Property and equipment, net	471	481
Intangible assets, net	2,451	2,754
Goodwill	15,706	15,706
Deferred tax assets (Note 9)	16,703	16,674
Total assets	76,960	73,776
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued liabilities	4,127	4,107
Income taxes payable (Note 9)	5,004	4,904
Contract liability	285	257
Current portion of lease obligation (Note 10)	101	101
Total current liabilities	9,517	9,369
Lease obligation (Note 10)	302	327
Total liabilities	9,819	9,696
Shareholders' equity
Share capital (Note 4)	18,294	17,719
Contributed surplus	5,273	5,358
Accumulated other comprehensive loss	(9,514)	(9,514)
Retained earnings	53,088	50,517
Total shareholders' equity	67,141	64,080
Total liabilities and shareholders' equity	76,960	73,776

Commitments and contingencies (Note 10)

The accompanying notes are an integral part of these condensed interim consolidated financial statements

Approved on behalf of the Board:
(Signed) "Craig Mull"	(Signed) "Harold Wolkin"
Craig Mull	Harold Wolkin
Chair of the Board	Director

Cipher Pharmaceuticals Inc.

Condensed interim consolidated statements of income and

comprehensive income

(in thousands of United States dollars - unaudited)

	Three months
ended March 31,
2023	2022
$	$
Revenue
Licensing revenue (Note 5)	1,676	2,099
Product revenue	3,210	3,317
Net revenue	4,886	5,416
Operating expenses
Cost of products sold	977	1,124
Research and development	3	65
Depreciation and amortization	343	155
Selling, general and administrative (Notes 6 & 7)	1,217	1,173
Total operating expenses	2,540	2,517
Other (income) expenses
Interest income	(355)	(7)
Unrealized foreign exchange gain	(7)	(17)
Total other (income) expenses	(362)	(24)
Income before income taxes	2,708	2,923
Current income tax (recovery) expense (Note 9)	97	724
Deferred income tax (recovery) expense (Note 9)	(15)	50
Total income tax (recovery) expense	82	774
Net income and comprehensive income for the period	2,626	2,149
Income per share (Note 8)
Basic	0.10	0.08
Diluted	0.10	0.08

The accompanying notes are an integral part of these condensed interim consolidated financial statements

Cipher Pharmaceuticals Inc.

Condensed interim consolidated statements of changes in shareholders' equity

	(in thousands of United States dollars - unaudited)
				Accumulated other		Total
			Contributed	comprehensive	Retained	shareholders'
	Share Capital	Surplus	loss	earnings	equity
	(000s)	$	$	$	$	$
Balance, January 1, 2023	25,063	17,719	5,358	(9,514)	50,517	64,080
Net income for the period	-	-	-	-	2,626	2,626
Shares issued under the share purchase plan (Note 4)	4	10	-	-	-	10
Shares issued under the Restricted Share Unit plan	261	497	(497)	-	-	-
Exercise of stock options (Note 4)	36	85	(32)	-	-	53
Share-based compensation expense (Note 4)	-	-	444	-	-	444
Purchase of common shares under common share
repurchase plan (Note 4)	(29)	(17)	-	-	(55)	(72)
Balance, March 31, 2023	25,335	18,294	5,273	(9,514)	53,088	67,141
Balance, January 1, 2022	25,937	18,121	5,092	(9,514)	25,198	38,897
Net income for the period	-	-	-	-	2,149	2,149
Shares issued under the share purchase plan (Note 4)	9	13	-	-	-	13
Shares issued under the Restricted Share Unit plan	78	59	(59)	-	-	-
Exercise of stock options (Note 4)	-	-	-	-	-	-
Share-based compensation expense (Note 4)	-	-	38	-	-	38
Purchase of common shares under common share
repurchase plan (Note 4)	(463)	(288)	-	-	(461)	(749)
Balance, March 31, 2022	25,561	17,905	5,071	(9,514)	26,886	40,348

The accompanying notes are an integral part of these condensed interim consolidated financial statements