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VANCOUVER, British Columbia, Jan. 15, 2021 (GLOBE NEWSWIRE) -- CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF, Frankfurt: 6PH) (the “Company” or “CloudMD”), a telehealth company seeking to revolutionize the delivery of healthcare to patients, is pleased to announce that it has closed the previously announced acquisition of Medical Confidence Inc. (“Medical Confidence”), a revolutionary healthcare navigation platform with proven results in wait time reduction and patient satisfaction.
Medical Confidence provides access to a proprietary, real time digital database of publicly available specialists and their wait times, allowing patient referrals to the right specialist in the shortest available time. The platform provides medical consultations, wellness plans and referrals to Canadian healthcare providers in support of patients’ mental and physical health issues. The company’s clinical healthcare navigators use a collaborative, team-based, approach that leaves individuals motivated and supported throughout their care journey, as well as eliminates frustrations and mental health issues surrounding lack of access to care and long wait times to see appropriate care.
Medical Confidence’s solutions are utilized by a wide range of customers including employers, individuals, disability case managers, life and health insurers and property and casualty insurers. Proven results include a 20% reduction in benefit and disability costs, 6-month reduction in disability duration (on average), access to treatment 220 days sooner (on average), and improved employee satisfaction (reported by 75% of clients). Currently, Medical Confidence has long standing contracts with Canada’s largest group benefit and disability insurers.
The integration of Medical Confidence into CloudMD’s platform of Enterprise Solutions will enable employers and insurers to realize lower absenteeism and improved return to work outcomes with personalized health and wellness care plans and improved access to healthcare resources. The combined forces of CloudMD, Snapclarity, HumanaCare, iMD and Medical Confidence changes the landscape where employers can offer one solution that addresses the health needs of their workforce and eliminates the need of multiple vendors. Employers will be able to offer their employees a group benefit plan that will not only provide access to care for mental and physical health issues but improve the financial costs associated with the current $7.5 billion dollars spent on long term disability.
The acquisition is immediately accretive to CloudMD as Medical Confidence generated approximately $2 million in revenues with earnings before interest, taxes, depreciation and amortization (EBITDA) margins exceeding 26% over the last fiscal year ending March 2020. Medical Confidence drives revenue through retainer-based, multi-year contracts with enterprise clients, and has experienced year over year revenue growth exceeding 35% in last fiscal year. CloudMD intends to integrate Medical Confidence into its suite of products to realize and optimize revenue synergies and cross selling opportunities.
Terms of Acquisition
In consideration for the purchase of 100% of the outstanding securities of Medical Confidence, CloudMD has agreed to pay shareholders aggregate consideration of $6 million payable as follows: (i) $2.25 million in cash, subject to a working capital adjustment; (ii) $2.25 million in shares of the company; and (iii) a performance-based earnout of $1.5 million, which is payable 50% in shares of the company and 50% in cash in equal annual issuances over a period of two years. All shares issued pursuant to the acquisition are issued at a deemed price of $2.625 per share by calculating the 10-day volume-weighted average trading price of the company's shares for the 10 trading days prior to the execution of the binding term sheet (press release dated Oct 22, 2020). The shares will be subject to certain contractual restrictions on trading for a period of 20 months from the date of issuance.
About CloudMD Software & Services
CloudMD is digitizing the delivery of healthcare by providing a patient centric approach, with an emphasis on continuity of care. The Company offers SAAS based health technology solutions to healthcare providers across North America and has developed proprietary technology that delivers quality healthcare through a holistic offering including hybrid primary care clinics, specialist care, telemedicine, mental health support, educational resources and artificial intelligence (AI). CloudMD currently services a combined ecosystem of over 500 clinics, almost 4000 licensed practitioners and 8 million patient charts across North America.
About Medical Confidence
Medical Confidence is a pioneer healthcare navigation platform that reduces healthcare costs through achieving better health outcomes. Its health outcomes are measurable and demonstrate reductions in costs associated with absenteeism and presenteeism. Medical Confidence clients report that its services have reduced their absence costs by 20%. Leveraging its innovative use of technology and unmatched national network of over 50,000 physician specialists. The healthcare consumer (employee) has efficient and faster access to the ideal healthcare providers for their medical condition. For more information on Medical Confidence, visit www.medicalconfidence.com.
ON BEHALF OF THE BOARD OF DIRECTORS
“Dr. Essam Hamza, MD"
Chief Executive Officer
FOR ADDITIONAL INFORMATION CONTACT:
VP, Investor Relations
Forward Looking Statements
This news release contains forward-looking statements that are based on CloudMD’s expectations, estimates and projections regarding its business and the economic environment in which it operates, including with respect to its business plans and its intended use of the proceeds of the Offering. Although CloudMD believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements and readers should not place undue reliance on such statements. These forward-looking statements speak only as of the date on which they are made, and CloudMD undertakes no obligation to update them publicly to reflect new information or the occurrence of future events or circumstances, unless otherwise required to do so by law.
Non-GAAP and Non-IFRS Measures
This press release refers to “EBITDA” and “EBITDA margins” which are non-GAAP and non-IFRS financial measures that do not have a standardized meaning prescribed by GAAP or IFRS. The Company’s presentation of these financial measures may not be comparable to similarly titled measures used by other companies. These financial measures are intended to provide additional information to investors concerning the Company’s and Medical Confidence’s performance. EBITDA is defined as earnings before interest, taxes, depreciation and amortization and EBITDA margins is defined as EBITDA as a percent of total revenue. EBITDA and EBITDA margins are Non-IFRS measures the Company uses as an indicator of financial health and excludes several items which may be useful in the consideration of the financial condition of the Company and Medical Confidence, as applicable, including interest expense, income taxes, depreciation, and amortization.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
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