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Carebook Announces Third Quarter Results

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Company Focuses on Opportunity to Provide Complete Digital Health Solutions for Employers

MONTREAL, Nov. 29, 2021 /CNW/ - Carebook Technologies Inc. ("Carebook" or the "Company") (TSXV: CRBK) (OTCPK: CRBKF) (XETR: PMM1), a leading Canadian provider of innovative digital health and virtual care solutions, today announced its financial results for the three-month period ended September 30, 2021 (the "third quarter").

Carebook Technologies (Groupe CNW/Carebook Technologies Inc.) (CNW Group/Carebook Technologies Inc.)
Carebook Technologies (Groupe CNW/Carebook Technologies Inc.) (CNW Group/Carebook Technologies Inc.)

"Carebook's third quarter was highlighted by the successful completion of our CoreHealth acquisition," stated Michael Peters, the Company's Chief Executive Officer. "The combination of CoreHealth and InfoTech, which we acquired in April, represents an end-to-end digital health platform that offers robust solutions for employers seeking to improve the wellbeing of their workforce. InfoTech's Wellness Checkpoint® software provides an assessment tool, generating descriptive reporting that identifies health and wellness challenges. CoreHealth's platform as a service then connects employees to an extensive network of providers and resellers capable of delivering appropriate, targeted solutions.

"This unified platform addresses a critical need for any company seeking to improve their employees' health, wellness, attendance, and productivity. Employers of all sizes thus offer us not only an ideal customer profile, but also an accelerated sales cycle that will facilitate improved cash flow. These employers are our clearest opportunity to strengthen our business. In pursuit of this opportunity, we are adjusting our strategy to focus primarily upon this vertical, which represents a global market of approximately $37 billion1. Over time, we intend to support our improved offering with a comprehensive network of providers and resellers, delivering revenue-generating curated content, targeted advertising, and other value-added partnerships. Ultimately, we believe this network will not only serve as a significant source of revenue, but also reduce the cost of our platform, increasing its accessibility and adoption.

"We are pleased to announce that our shift in strategic focus has already resulted in new contracts, confirming our belief that the employer vertical offers Carebook its greatest advantage," concluded Mr. Peters. "Over the balance of the year, we will complete the integration of our acquisitions. We currently host roughly 3.5 million members on our platform, and anticipate increasing this base over the course of 2022. We are confident that this strategic shift will build shareholder value over the long term, and I look forward to communicating our progress."

__________

1. Source: Grand View Research, Corporate Wellness and Market Size, 2021-2028; Research and Markets, Global Corporate Wellness Market Analysis 2018-2019 & Outlook to 2023

Third Quarter Highlights

  • Revenue of $1.8 million, an increase of $0.9 million, when compared to the third quarter of 2020. This change was primarily the result of the Company's acquisitions, which accounted for $0.9 million, or 108% of this increase.

  • Total comprehensive loss of $3.3 million, as compared to a loss of $1.6 million in the third quarter of 2020. This change was primarily due to costs associated with M&A and the related financing of the CoreHealth Technologies Inc. ("CoreHealth") acquisition, the non-routine expense related to the extension of the life of certain common share purchase warrants, and the addition of InfoTech Inc. ("InfoTech") and CoreHealth's operating costs, which were only partially offset by the addition of commensurate revenue.

  • In July 2021, the Company entered into three multi-year renewal contracts with multinational corporations. Two of these contracts are service expansions with existing clients, while the third is a multi-year software service agreement with a new client.

  • On August 5, 2021, the Company completed an offering of 11,280,000 units ("Units") of the Company at a price of $1.00, for aggregate gross proceeds of $11.3 million. These Units were comprised, in the aggregate, of 11,280,000 common shares of the Company and 5,640,000 warrants to purchase common shares of the Company at $1.47 per common share.

  • On August 6, 2021, the Company completed its acquisition of all the issued and outstanding securities of CoreHealth, the provider of a leading digital health and technology platform. CoreHealth contributed approximately $0.4 million of revenue during the third quarter, and generated approximately $3.2 million in revenue during the twelve months ended September 30, 2021.

  • On September 7, 2021, the Company announced the appointment of Michael Peters as Chief Executive Officer. Mr. Peters is a seasoned executive with over a decade of healthcare experience, and formerly served as Senior Vice President and Chief Business Officer at SE Health, one of Canada's largest diversified home health organizations.

Subsequent to the Quarter

  • In November 2021, the Company implemented significant measures to better align its cost structure to reflect the Company's strategic shift towards the employer vertical, the integration of its acquisitions of InfoTech and CoreHealth, and an improved approach to capital discipline. These initiatives resulted in a 34% reduction in the Company's headcount since the start of the third quarter, and are expected to reduce annualized expenses by approximately $5.0 million.

  • On November 26, 2021, the Company agreed to enter into secured loan agreements with investors including SAYKL Investment Ltd. ("SAYKL") for $1.0 million in aggregate gross proceeds.

  • In November 2021, the Company promoted Mathieu Lampron, its Chief Product Officer, to the additional position of Chief Operating Officer. Mr. Lampron possesses approximately 15 years of experience within the software industry.

  • On November 26, 2021, Alasdair Younie, a representative of UIL, which was the lead investor in the Company's recent $11.3 million equity offering, was appointed as a director of the Company.

Loan Agreements

The Company has agreed to enter into a secured loan agreement (each, a "Loan Agreement", and collectively the "Loan Agreements") with investors including SAYKL (each, a "Lender", and together, the "Lenders") for $1.0 million in aggregate gross proceeds. Interest on the principal amount outstanding under the Loan Agreements is payable monthly at a rate of CDOR + 10%, and the Loan Agreements have a five-year maturity. The obligations of the Company under the Loan Agreements will be subordinated to the Company's obligations under its existing senior credit facilities. To secure the Company's obligations under the Loan Agreements, the Company has agreed to grant to each of the Lenders a security interest and hypothec in all of the property and undertaking of the Company, subordinated to the security interests granted by the Company to its senior lenders.

SAYKL is a "related party" of the Company within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). As a result, the Loan Agreements are considered to be a "related party transaction" as such term is defined by MI 61-101, requiring the Company, in the absence of exemptions, to obtain minority shareholder approval of the "related party transaction". The Company intends to rely on an exemption from the minority shareholder approval requirement set out in MI 61-101 as the fair market value of the transaction does not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101. The Company did not file a material change report at least 21 days prior to closing, which the Company deems reasonable in the circumstances so as to be able to avail itself of the proceeds of the transaction in an expeditious manner. The Company intends to file a material change report within the required timeframe, which will contain all prescribed disclosure relating to this related party transaction.

Appointment of Alasdair Younie to the Board of Directors

Carebook announced today that Mr. Alasdair Younie has been appointed to the Company's Board of Directors, effective November 26, 2021.

Mr. Younie is a Director of ICM Limited, a joint manager of UIL. He currently serves as a Director for Allectus Capital Limited, West Hamilton Holdings Limited, and Somers Limited, where he also oversees operations. He previously worked within the corporate finance division at Arbuthnot Securities Limited in London. Mr. Younie is a graduate of Bristol University, and a Member of the Institute of Chartered Accountants in England and Wales.

Advisory Services

Carebook has retained Deloitte LLP ("Deloitte"), alongside Endeavour Investor Relations ("Endeavour"), to provide capital markets and stakeholder communications advisory services. These service providers have been engaged for an initial period expiring on August 31, 2022 and will be compensated through a combined monthly fee of approximately $15,000, and certain pre-approved out-of-pocket expenses. Deloitte and Endeavour are not related nor affiliated to Carebook, and have agreed to comply with all applicable securities laws and the policies of the TSXV in providing the above services. Neither Deloitte nor Endeavour has any interest, directly or indirectly, in Carebook or its securities, or any right or intent to acquire such an interest. Deloitte is a multinational professional services network with offices in over 150 countries and territories around the world. Endeavour is based in Vancouver, and regarded as one of Canada's leading boutique investor relations firms.

Conference Call Details

A conference call will be held at 8:30 AM Eastern on November 29, 2021 to discuss Carebook's financial results for the third quarter. Participants may join the Company's conference call by using an appropriate dial-in number or via webcast (ID: 8893485). For those unable to participate, playback will be made available an hour after the event at 647-436-0148, or 1-888-203-1112, utilizing passcode 8893485.

Carebook's unaudited consolidated financial statements and accompanying notes, and Management's Discussion and Analysis for the three-month period ended September 30, 2021 are available on the Company's website at www.carebook.com and on SEDAR at www.sedar.com.

About Carebook Technologies
Carebook's digital health platform empowers its clients and more than 3.5 million members to take control of their health journey. During 2021, the Company completed the acquisitions of InfoTech Inc., a global leader in health and productivity risk management, and CoreHealth Technologies Inc., owner of an industry-leading wellness platform. In combination, these companies create an end-to-end digital health platform that includes both assessment tools and the technology to deliver complementary solutions. Carebook's shares trade on the TSXV under the symbol "CRBK," on the OTC Markets under the symbol "CRBKF," and on the Frankfurt Stock Exchange under the symbol "PMM1."
www.carebook.com

Notice regarding forward-looking statements:

This release includes forward-looking information within the meaning of Canadian securities laws regarding Carebook, its subsidiaries and their business, including regarding the potential synergies from, and the integration of the acquisitions of InfoTech and CoreHealth, the potential growth prospects of Carebook (including the increase in the Company's member base), its subsidiaries and their products and technologies, the creation of shareholder value and the reduction in annualized expenses. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such statements are based on the current expectations of the management of Carebook and are based on assumptions and subject to risks and uncertainties. Although the management of Carebook believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the Company, including economic factors, management's ability to manage and to operate the business of Carebook, management's ability to successfully integrate the Company's completed acquisitions and to realize the synergies of such acquisitions, management's ability to successfully complete product studies, the equity markets generally and risks associated with growth and competition, as well as the risk factors identified in the Company's management's discussion and analysis for the year ended December 31, 2020 and described under the heading "Item 21 – Risk Factors" in the Listing Application of the Company dated September 28, 2020, each of which can be found on SEDAR under the Company's profile at www.sedar.com. Although Carebook has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on any forward-looking statements or information. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Carebook does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. In addition, the current situation and future developments with respect to the COVID-19 pandemic could cause certain of the assumptions and information set forth herein or the fact that on which such assumptions are based to differ materially from previous expectations including in respect of demand for our products, supply chain and availability of materials, mobility and shipping of materials and or products, access to debt and equity capital and other factors.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Carebook Technologies Inc.

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