Skylight Health Announces Strategic Investment from U.S. Institutional Healthcare Firm
October 21 2022 - 7:00AM
Skylight Health Group Inc. (TSXV:SLHG; OTCQX: SLHGF) (“Skylight
Health” or the “Company”), a healthcare platform combining
technology and analytics, focused on transitioning patients into
value-based care to drive better health outcomes and experiences in
the United States, today announced a strategic commitment of USD 5
million in the form of a convertible debenture from a multi-billion
dollar growth-oriented healthcare institutional investment firm in
the United States. The investment is set to close in two tranches.
The first tranche of USD 3.37 million has been completed as of the
date of this release and the second tranche for the remaining USD
1.63 million is expected to close within 30 days.
The investment is structured in the form of a 0% interest,
asset-backed convertible debenture. Each debenture shall be in the
principal amount of C$1,000. Each debenture shall be convertible
into 1,111 common shares of the Company at C$0.90 (“Common
Shares”). Upon issuance of the debenture, the holder shall also
receive 1,111 share purchase warrants (the “Warrants”) of the
Company. Each Warrant entitles the holder to purchase one Common
Share (a “Warrant Share”) at a price of C$0.90 for a period of 5
years from the date of issuance of the Debentures. Skylight has the
option to repay the debt at any time at their election, without
penalty, regardless of the share price.
The funds will be used to support Skylight on its pathway to
profitability. Over the last 2 quarters, the Company has seen and
reported an improved EBITDA performance while growing its top line
revenue. Additionally, it has made several announcements where it
has both expanded and added new Medicare Advantage Plans which will
lead to new membership expected for 2023. Skylight’s Joint Venture
with Centene Corp/Collaborative Health Systems will also allow its
traditional Medicare patients to benefit from increased funding in
the upcoming ACO Reach program in 2023.
“Skylight structured this investment to reduce dilution to
shareholders while giving the Company a significant buffer to
execute on its vision,” said Prad Sekar, CEO and Co-Founder of
Skylight Health. “We’ve continued to show increased revenue and
decreased burn and expect to reach cash-flow-positivity in the
upcoming quarters. We are excited to have a strong institutional
investor who understands the long-term impact of our opportunity in
the value-based care sector within US healthcare.”
Northland Capital Markets acted as the sole placement agent for
the financing. In connection with the financing, the Company paid a
7% cash finder’s fee to Northland.
The convertible debenture and warrants are subject to final
approval from the TSX Venture Exchange and all securities are
subject to a standard four month plus one day hold period.
In addition, the Board of Directors of the
Company has authorized, and the Company has declared, a dividend on
its 9.25% Series A Cumulative Redeemable Perpetual Preferred Shares
(the “Series A Preferred Shares”) for the month of November 2022.
The Series A Preferred Shares trade under the “SLHGP” stock ticker
symbol.
In accordance with the terms of the Series A
Preferred Shares, the Series A dividend will be payable in cash in
the amount of $0.1927 per share on November 21, 2022 to the
shareholders of record of the Series A Preferred Stock as of the
dividend record date of October 28, 2022.
About Skylight Health Group
Skylight Health Group (TSXV:SLHG; OTCQX: SLHGF) is a healthcare
services and technology company, working to positively impact
patient health outcomes. The Company operates a US multi-state
primary care health network comprised of physical practices
providing a range of services from primary care, sub-specialty,
allied health, and laboratory/diagnostic testing. The Company is
focused on helping small and independent practices shift from a
traditional fee-for-service (“FFS”) model to value-based care
(“VBC”) through tools including proprietary technology, data
analytics and infrastructure. In an FFS model, payors (commercial
and government insurers) reimburse on an encounter-based approach.
This puts a focus on the volume of patients per day. In a VBC
model, the providers offer care that is aimed at keeping patients
healthy and minimizing unnecessary health expenditures that are not
proven to maintain the patient’s well-being. This places emphasis
on quality over volume. VBC will lead to improved patient outcomes,
reduced cost of delivery and drive stronger financial performance
from existing practices.
Forward Looking Statements
This press release may include predictions, estimates or other
information that might be considered forward-looking within the
meaning of applicable securities laws. While these forward-looking
statements represent our current judgments, they are subject to
risks and uncertainties that could cause actual results to differ
materially. You are cautioned not to place undue reliance on these
forward-looking statements, which reflect our opinions only as of
the date of this release. Please keep in mind that we are not
obligating ourselves to revise or publicly release the results of
any revision to these forward-looking statements in light of new
information or future events. When used herein, words such as "look
forward," "believe," "continue," "building," or variations of such
words and similar expressions are intended to identify
forward-looking statements. Factors that could cause actual results
to differ materially from those contemplated in any forward-looking
statements made by us herein are often discussed in filings we make
with the Canadian securities regulators, and Canadian Securities
Administrators, available at www.sedar.com, and on our
website, at skylighthealthgroup.com.
For more information, please visit our website or contact:
Investor Relations:Jackie
Kellyinvestors@skylighthealthgroup.com416-301-2949
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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