The Company has been awarded a contract with the Commonwealth of Kentucky - Once executed, ARR will be at $6 million
VANCOUVER, BC, Sept. 7, 2022 /CNW/ - HS GovTech Solutions Inc. (the "Company" or "HS GovTech") (CSE: HS) (OTC: HDSLF) (Frankfurt: 38H) is pleased to announce that it has been selected for and agreed to a contract with the Commonwealth of Kentucky Cabinet for Health and Family Services (the "State", or "Kentucky"). The resulting contract will allow Kentucky to deploy HSCloud SuiteTM for data management across numerous regulatory areas and use cases for their environmental health, along with usage of HSPayTM and GovCallTM. All financial figures contained herein are expressed in U.S. dollars ("USD") unless otherwise noted.
Awarded Contract Highlights
Total Contract Value ("TCV") is $9,393,587 over eight years.
Annual Recurring Revenue (ARR) will be $1,074,073 per year, not inclusive of HSPay revenue.
Professional Services and implementation fees are $801,000.
HSPay will be the processor of all online electronic payments.
State will initially use 100 concurrent seats for GovCall with the option to add additional seats as needed.
This contract is the result of a lengthy procurement process, including a Request for Proposal ("RFP") issued by the State to which the Company submitted a formal proposal for in February of this year. The State reviewed multiple products from various companies who participated in the RFP process and deemed HSCloud SuiteTM to be the most robust solution available for data management. The State began negotiations with, and awarded to, HS GovTech in June. The contract is expected to be countersigned by the State this month, and the implementation is set to begin no later than October 1st.
As at June 30, 2022, the Company's ARR stood at $4.82 million. Once this contract is countersigned, combined with additional contract executions since June 30th, the Company's ARR will stand at $6.00 million. This represents an increase in ARR of $1.18 million since the start of Q3 2022 - a 24% increase this quarter alone. Based on the status of several late stage deals in the pipeline, the Company anticipates continued momentum in Q4 and a strong close to the year.
Silas Garrison, CEO of HS GovTech commented, "I am very excited to be able to announce this new contract and to welcome Kentucky to the HS GovTech family. It is humbling to be chosen by Kentucky as they sought a partner to help modernize their technology. We are passionate about serving the environmental health market. We continue to prove we are the leader in the space, and that HSCloud Suite is hands down the preeminent solution for data management for state and local regulatory agencies.
This confident position in the market allows us to continue filling our sales pipeline with new deals despite the increased rate of contract signings. I am also encouraged about the size of some of the deals in our pipeline. Our business development and management team continues to build enduring relationships with agencies of all sizes across North America. These relationships are strengthened as a result of the hard work by our team to implement our solution. I am immensely proud of our team who has worked tirelessly to continually innovate our platform and deliver excellence to our customers. I am honored to work alongside so many great team members while serving such a rewarding market."
HS GovTech will provide an update on its activities in a webinar, September 14, 2022 at 2:00 pm EST hosted by Adelaide Capital. Registration link: Here
The Company also announces that it will issue 185,000 incentive stock options and 1,387,500 RSU's to Employees, Officers, and Directors of the Company. The options will have a strike price of CA$0.50 and expire five years from the date of grant.
ARR is a non-IFRS measure that provides an indication of the subscription revenue from customers that is expected from continued usage per the term of contract signed, and as such management believes ARR to be a meaningful measure for assessment of Company performance. Key assumptions related to ARR figures are from continued usage of the services over the life of the agreement, with the calculation based on the annual average of subscription revenues over the life of the agreement.
HS GovTech Solutions Inc.
HS GovTechTM is an industry leading software as a service company serving the state, provincial and local government market across the United States and Canada. HS GovTech'sTM cutting edge platforms currently provide inspection, information, communication and data management systems that enable government agencies to operate more efficiently. HS GovTech'sTM cloud and mobile based platforms are currently deployed in over 800 state and local government organizations across North America. HS GovTechTM currently offers the only fully integrated inspection, administration and analytics product suite across all platforms in North America. HS GovTechTM also delivers its government grade technologies to private businesses through its My Health DepartmentTM platform, enabling citizens and private businesses to gain visibility and predictability into their own organizations and move from a reactive to a proactive operational status. As HS GovTechTM continues to deliver focused service and innovative solutions to government organizations, the Company entered the FinTech space through its HSPayTM offering which serves as a payment platform that streamlines the intake of government revenue. Further, HS GovTech's GovCallTM platform offers one of the only teleconferencing and video collaboration platforms tailored exclusively for government agencies.
This release may contain forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although HS GovTechTM believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. HS GovTechTM 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.
SOURCE HS GovTech Solutions Inc.
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