VANCOUVER, BC, June 5, 2023
/CNW/ - CareSpan Health, Inc. (TSXV: CSPN) (the "Company" or
"CareSpan"), a company addressing the shortage in primary care and
mental health through its provider networks, American-APN and
American-Med Psych, and its leading "Clinic-in-the-Cloud"
integrated digital care platform, is pleased to announce its
consolidated results for the quarter ended March 31, 2023. All amounts are expressed in U.S.
dollars.
Rembert de Villa, Chairman and
Chief Executive Officer of the Company stated, "Q1 2023 revenues
was $904,191, 50% higher than
revenues for the prior quarter ending December 31, 2022, of $605,090.
The number of patient encounters declined between Q1 2022 and Q1
2023 (14,085 vs. 8,268). The decline in patient encounters
and revenue between Q1 2022 and Q1 2023 (from $1,765,357 in Q1 2022) is due singularly to the
significant drop in COVID-19- related encounters and associated
reimbursements. The surge in COVID-19/Omicron-related cases
in Q4 2021 and Q1 2022, and its subsequent decline during the rest
of 2022 and beyond is consistent with COVID-19 case patterns
experienced across the United States.
While COVID 19-related encounters declined, patient visits
related to medical assessments for U.S. military veterans increased
by 82% for the same period, from 323 in Q1 2022 to 588 in Q2
2023.
Despite the decline in COVID-19 cases and reimbursements, we
continued to improve financial and operating results. Comprehensive
(loss) improved by 29%, from ($670,394)
million in Q1 2022 to ($520,002) in Q1 2023. Loss per share
improved to ($0.02) in Q1 2022 to
($0.01) in Q1 2023. Adjusted
EBITDA improved 18%, from ($663,415)
in Q 1 2022 to ($484,343) in Q1
2023.
Operating (loss) in Q1 2023 improved by 22% from Q1 2022. This
was achieved through continued cost containment and productivity
measures taken by the Company starting in 2022, reducing operating
expenses by $1,011,558, or 41.5%,
from Q1 2022 to Q1 2023.
"We continue to scale services that drive improved margins, such
as conducting medical assessments for U.S. military veterans. As we
reported in our 2022 annual results, we are focused on accelerating
our path to get to cash flow positive by executing on the current
backlog of higher-margin contracts, developing new contracts for
our members, and right-sizing operations and SG&A.
In Q1 2023, we continued to be very intentional in our in our
technology spend, enhancing our 'Clinic-in-the-Cloud' platform
through high-impact functions and features that improve revenue
capture and profitability.
Leslie Markow, Chief Financial
Officer, explains, "Highlights of our financial results are as
follows:
First Quarter 2023 Financial Highlights
- The number of billed patient encounters decreased to 8,268 in
Q1 2023 from 14,085 in Q1 2022 due to the decrease in COVID-19
visits.
- However, as COVD-19-related cases and reimbursements declined
across the country, average revenue per encounter increased to
$108.18 in Q1 2023 from $106.51 for Q4 2022.
- Operating expenses in Q1 2022 were $2,435,751 compared to $1,424,193 in Q1 2023, an improvement of
$1,011,558 or 41.5%.
-
- This was primarily the result of a reduction in practice fees,
as well as cost reduction measures to reduce salary costs,
contractor costs, information technology costs, while improving
productivity.
- The resulting operating loss for Q 1 2023 was ($520,002) compared to ($670,394) in Q1 2022, an improvement of
22%.
- Total Comprehensive (Loss) for the Company was ($520,002) in Q1 2023compared to ($671,094) in Q1 2022.
- (Loss) per share improved from ($0.02) in Q1 2022 to ($0.01) in Q1 2023. 2022. The weighted average
number of common shares outstanding was 26,933,211 at March 31, 2022, and 45,975,792 at March 31, 2023.
- Adjusted EBITDA, improved to $(484,434) in Q1 2023 compared to ($663,415) in Q1 2022.
- The Company's cash balance was $82,615 on March 31,
2023, compared to $393,746 as
of December 31, 2022.
- Trade and accounts receivable declined from $985,473 on December 31,
2022, compared to $327,224 due
to cash receipts in quarter one and lower encounters in Q1
2023.
- Accounts payable, accrued liabilities and amounts due to
related parties declined from $2,264,244 on December 31,
2022 to $2,027,283 at
March 31, 2023. The decrease is due
to payments to vendors offset by loans provided of $220,000 in quarter 1 2023.
- Shareholders' (deficiency) increased to $(1,617,944) on March 31,
2023 compared to $(885,025) on
December 31, 2023, mainly resulting
from capital transactions in 2022.
Events Subsequent to March 31,
2022
- Between March and May 2023, the
Company received loans from the Chairman and CEO, a shareholder, an
employee, and the Medical Advisor to the Company of $340,000, of which $220,000 was received before March 31, 2023. These loans are due in one year,
bearing an interest rate of 12%. The loan holders have the option
to be converted into a future qualified equity financing in excess
of CAD $1 million.
- The Company's loan from a former director of $165,000 plus interest, previously due
March 31, 2023, was extended until
such time the Company raises significant funds. This loan was
registered in first priority of other loans under the British Columbia, Canada company
legislation.
- In April 2023, the Company
converted CAD $101,765 of accounts
payable to a vendor by the issuance of 1,017,650 common shares and
issued 508,825 warrants at CAD $0.15
for 5 years.
- In May 2023 the Company signed a
Memorandum of Understanding with ChopraX LLC to develop and bring
to market a network of integrative medicine providers that will
provide virtual consultations globally using the CareSpan platform.
This was covered in a separate press release by the Company on
May 31, 2023.
Outlook
CareSpan is focused on executing its growth strategy in 2023 and
beyond and achieving positive cash flow position, mainly through
the following:
- Fulfilling the backlog of current, higher-margin signed
contracts for U.S. military veterans assessments, as well as
medical supervision of remote patient monitoring for patients of
weight loss programs
- Continued focus on identifying and signing contracts (similar
to the disability assessment contract for U.S. military veterans
and RPM-related care) to match existing patient backlogs to
CareSpan network providers. This will drive higher margins
for both CareSpan and its network providers while leveraging
CareSpan's digital care platform to bring better health outcomes to
a wider population.
- Narrowed focus on recruiting clinicians (mainly Nurse
Practitioners) specifically in geographies matching these contracts
to accelerate growth post onboarding and improve margins for both
CareSpan and its clinician members.
- Maintain productivity and continued reduced cost structure to
improve cash flow. The Company intends to continue strict
control of expenses by focusing mainly on expense items that are
directly tied to revenue capture.
- Execution of the agreement with ChopraX LLC to bring the
integrative medicine offering to market in the U.S. and globally,
leveraging the Chopra brand, clinical methodology and protocols,
and provider relationships, as well as CareSpan's
Clinic-in-the-Cloud platform and operations.
About CareSpan Health, Inc.
CareSpan is a healthcare
technology and services company incorporated in British Columbia. CareSpan's proprietary
"Clinic-in-the Cloud" is a clinical workflow driven platform
designed by doctors that integrates remote patient monitoring,
diagnostic tools, the patient's electronic health record, care
collaboration capabilities, patient engagement and e-prescribing
and lab ordering. CareSpan's platform seamlessly supports
both in-person and virtual/telehealth care. CareSpan is using this
platform combined with essential business services to build
provider networks across the U.S. that deliver primary and chronic
care, and urgent care as well as behavioral health care.
About American-APN and American-MedPsych
American-APN
is one of the first professional "group practices without walls"
that brings highly qualified Nurse Practitioners to those in need
of health care under a collaborative care system that uses digital
technologies. American-APN was created for and by advanced practice
nurses and NPs (Nurse Practitioners). It is operated exclusively by
its nurse practitioner membership with its own executive leadership
and board of directors.
American-MedPsych brings together behavioral health specialists
in their own "practice without walls," allowing them to collaborate
with American-APN and other primary care providers to address the
growing behavioral health shortage in the
United States.
American-MedPsych is a growing national group practice of
behavioral specialists delivering care using the CareSpan Clinic
and supported by CareSpan Integrated Network's management services
organization. American-MedPsych specialists uses sophisticated
digital care tools in collaboration with primary care counterparts
to manage reinforcing conditions such as depression and diabetes,
substance abuse and pain, stress, and job performance, to alleviate
suffering and improve outcomes.
Members of both networks benefit from the suite of technology
and business services and solutions offered by CareSpan Integrated
Networks.
ON BEHALF OF THE BOARD OF DIRECTORS:
Rembert de Villa
Chairman and Chief Executive Officer
For further information please visit:
http://www.carespanhealth.com, http://www.americanapn.com and
http://www.americanmedpsych.com
Use of Non-IFRS Measures
This press release refers to certain non-IFRS (International
Financial Reporting Standards) measures including, but not limited
to Adjusted EBITDA (as defined herein). These measures do not have
a standardized meaning prescribed by IFRS and therefore they may
not be comparable to similarly titled measures presented by other
companies and should not be construed as an alternative to other
financial measures determined in accordance with IFRS. Rather,
these non-IFRS measures are provided as additional information to
complement IFRS measures by providing a further understanding of
operations from management's perspective. Accordingly, non-IFRS
measures should not be considered in isolation nor as a substitute
for analysis of financial information reported under IFRS.
Management believes that these non-IFRS measures provide useful
information to investors in measuring the financial performance of
Company for the reasons outlined below.
Management uses Adjusted earnings before interest, income taxes,
depreciation, and amortization ( "Adjusted EBITDA" ) as a key
financial metric to evaluate Company's operating performance as a
complement to results provided in accordance with IFRS. The term
"Adjusted EBITDA", as defined by management, refers to net income
(loss) before adjusting earnings for finance costs, income taxes,
stock-based compensation, amortization, non-recurring items, and
severance costs.
We believe that the items excluded from Adjusted EBITDA are not
connected to and do not represent the operating performance of
Company. We believe that Adjusted EBITDA is useful supplemental
information as it provides an indication of the results generated
by Company's main business activities prior to taking into
consideration how those activities are financed and taxed as well
as expenses related to stock-based compensation, depreciation,
amortization, restructuring costs, other expense (income), and
foreign exchange (gain) loss. Accordingly, we believe that this
measure may also be useful to investors in enhancing their
understanding of Company's operating performance. It is a key
measure used by Company's management and board of directors to
understand and evaluate Company's operating performance, to prepare
annual budgets and to help develop operating plans.
Forward-Looking Statements
This news contains "forward-looking statements" within the
meaning of applicable Canadian securities laws (collectively,
"forward-looking statements") which reflect the current
expectations of management of the company's future growth, results
of operations, performance, and business prospects and
opportunities, including the statements made above with respect to:
(i) the Company's anticipation of scaling the business going
forward; (ii) the Company continuing to recruit Nurse
Practitioners; (iii) enrolling patients in RPM; (iv) the Company
enrolling 2,000 patients in 2022 in their RPM services which will
be an important revenue and profitability factor; and (v) ramping
the implementation of the disability assessment contract for U.S.
military veterans; and (vi) improving individual practice revenue
through improved billing and collections, patient acquisition and
engagement and new payor contracts. Forward-looking statements are
frequently, but not always, identified by words such as "may",
"would", "could", "will", "should", "expect", "plan", "anticipate",
"believe", "estimate", "predict", "potential for", "intend" and
similar expressions or the negative of these terms or other
comparable terminology, although these words may not be present in
all forward-looking statements.
Forward-looking statements are based on management's assumptions
as at the date of the forward-looking statements are provided,
including but not limited to the following: the ability of the
Company to execute its growth plans and business strategies; the
ability of the Company to secure new contracts and assignments; the
growth of the NPs within CareSpan's network and acquiring patients
for its RPM services; and the ability of the Company to generate
meaningful revenue from such assignments and future engagements.
Though management believes that its assumptions are reasonable in
the circumstances, forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the
Company's actual results, performance or achievements to differ
materially from all or any of the future results, performance or
achievements expressed or implied by forward-looking statements.
Risk factors that could cause the Company's actual results,
performance, or achievements to differ from the forward-looking
statements in this news release include, but may not be limited to:
general market and economic risk; any necessary regulatory
approvals required (if applicable) for the Company to deliver the
services under its previous engagements; the ability of the
Company's management to execute its strategy; unexpected or adverse
regulatory changes in the healthcare space; and the ability of the
Company to attract and retain new NPs; the Company's ability to
attract new patients for its RPM services. These factors should be
considered carefully, and prospective investors should not place
undue reliance on the forward-looking statements.
Although the forward-looking statements contained in the news
release are based upon what management currently believes to be
reasonable assumptions, the Company cannot assure prospective
investors that actual results, performance or achievements will be
consistent with these forward-looking statements. Except as
required by law, the Company expressly disclaims any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.
Neither the TSX Venture Exchange nor its Regulation Service
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE CareSpan Health, Inc.