VANCOUVER, BC, May 29, 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
audited consolidated annual results for the year ended December 31, 2022. All amounts are expressed in
U.S. dollars.
Rembert de Villa, Chairman and
Chief Executive Officer of the Company stated, "CareSpan's
fundamental business remained strong, with an 11.5% annual increase
in patient encounters, from 40,100 in 2021 to 44,700 in 2022.'
Revenues declined 21%, from $5.75
million in 2021 to $4.54
million in 2022. This was due singularly to the significant
drop in COVID-19- related encounters and associated reimbursements,
consistent with the overall decline in COVID-19 cases throughout
the U.S. during that period. Despite this revenue headwind, we
improved financial and operating performance. Comprehensive (loss)
after one-time/non-recurring transactions improved by 51.4%, from
($6.89) million in 2021 to
($3.35) million in 2022. Loss per
share improved 88.0%, from ($0.83) in
2021 to ($0.10) in 2022. Adjusted
EBITDA improved 18%, from ($3.38)
million in 2021 to ($2.75)
million in 2022.
Operating (loss) in 2022 improved by 32.0% from 2021. This was
achieved through aggressive cost containment and productivity
measures taken by the Company, reducing operating expenses by
$2,853,963, or 26.2%, from 2021 to
2022.
"We have also begun to prove our ability to scale services that
drive improved margins, such as conducting medical assessments for
U.S. military veterans. We continue to accelerate 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 administration.
We have also been very strategic in our technology spend,
enhancing our 'Clinic-in-the-Cloud' platform through higher-impact
functions and features that improve clinical workflows as well as
billing and collections.
Leslie Markow, Chief Financial
Officer, explains, "Highlights of our financial results are as
follows:
Year-End 2022 Annual Financial Highlights
- The number of billed patient encounters increased by 11.5%,
from 40,100 in 2021 to 44,700 in 2022.
-
- However, as COVD-19-related cases and reimbursements declined
across the country, average revenue per encounter decreased by
29.2% from $143.56 in 2021 to
$101.59 in 2022.
- Availability of at-home testing and lower infection rates
significantly reduced demand for in-office COVID-19-related
encounters by nearly 40%.
- Reimbursements per COVID-19-related encounter declined by over
8% for paid claims.
- These two factors account for a reduction in revenue, from
$5,756,681 in 2021 to $4,542,885 in 2022.
- Operating expenses in 2022 were $8,035,167 compared to $10,889,130 in 2021, an improvement of
$2,853,963 or 26.2%.
-
- This was primary the result of a reduction in practice fees and
finance costs, as well as cost reduction measures to reduce
contractor costs, information technology costs, share-based
payments, and general and administrative cost, while improving
productivity.
- Operating expenses for 2022 also include bad debts expense
related to write-offs of loans to member providers and insurance
claims receivables. Recovery actions have been initiated on these
insurance claims.
- The resulting operating loss for 2022 was ($3,492,282) compared to ($5,132,449) in 2021, an improvement of 32%. The
reduction in operating expenses more than offset the decline in
COVID-19-related revenues.
- The Company reduced its equity share in CareSpan Asia from
50.1% through June 30, 2022, to 15%
from that date onwards, resulting in a net gain of $351,377.
- Total Comprehensive (Loss) for the Company was ($3,350,182) in 2022, compared to ($6,889,086) in 2021, an improvement of
$3,538,804 or 51.4%.
- (Loss) per share improved from ($0.83) in 2021 to ($0.10) in 2022. In 2021, the weighted average
number of common shares outstanding was 8,234,851 and 30,725,686 in
2022.
- Adjusted EBITDA, after non-recurring costs and non-cash items
(mainly foreign exchange translation), improved 18.6%, from
($3.38) million in 2021 to
($2.75) million in 2022.
- The Company's cash balance was $393,746 as of December
31, 2022, compared to $948,662
as of the end of 2021.
- Trade and accounts receivable declined from $1,618,588 in 2021 to $985,473 in 2022mainly due to the reduction in
revenue as explained above, and provisions made for bad debt.
- Accounts payable and accrued liabilities declined from
$2,655,108 in 2021 to $2,030,731 in 2022 due to payments and the
conversion of some accounts payable into common shares. Due to
related parties declined from $741,862 in 2021 to $233,513 in 2022, resulting from no longer
consolidating CareSpan Asia's debt.
- Shareholders' (deficiency) increased from ($699,525) in 2021 to ($885,025) in 2022, or a difference of
($185,500), mainly resulting from the
capital transactions in 2022.
Events Subsequent to December 31,
2022
- On January 9, 2023, the Company
announced a partnership with CoachCare to deliver medically
assisted remote patient monitoring services. The combined goal of
the partnership is to deliver RPM to over 2,000 patients this year.
Typical reimbursement from Medicare and private insurance for RPM
is over $120 per patient per
month.
- On January 20, 2023, the Company
issued 260,000 options at CAD $0.13
to employees, consultants, and directors. The options vest equally
on grant date, 6 months, 18 months, and 24 months from the date of
issue and expire on January 20,
2028.
- On February 14, 2023, CareSpan
announced the reduction in exercise price of common share purchase
warrants issued on September 14,
2022, as per the closing of a private placement of units of
the Company.
- Subsequent to December 31, 2022,
1,311,288 common shares were issued to employees for backpay not
paid in 2022. Any remaining backpay was paid to employees by
January 15, 2023, except $7,814 owed to the Chairman and CEO, included as
accounts payable and accrued liabilities on December 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. 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.
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.
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.