CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF,
Frankfurt: 6PH) (the “
Company” or
“
CloudMD”), a telehealth company revolutionizing
the delivery of healthcare to patients, is pleased to announce that
it has closed the previously announced acquisition of Re:Function
Health Group Inc.
(“
Re:Function”),
a leading rehabilitation clinic network, with 8 clinics and 37
specialists and allied health professionals.
Dr. Essam Hamza, CEO of
CloudMD commented, “We are excited to close the
acquisition of Re:Function and have already started working with
the entire team. Through strategic M&A, we have acquired a
number of already successful standalone healthcare solutions that
combined, will create one transformative platform that emphasizes
whole-person care. The integration of these solutions is already
very much underway and already showing early beneficial results. I
am extremely proud of our team for their diligence and focus in
building the solid foundation which has enabled CloudMD to be a
leader in the space.”
Re:Function is a state-of-the-art rehabilitation
company built by like-minded health professionals offering superior
patient focused care, with a longitudinal approach to healthcare
delivery. Re:Function provides assessments for enterprise clients,
insurers and corporations for long-term disability claims and
return to work outcomes. CloudMD will integrate its telemedicine
solutions throughout the clinics, layering on additional allied
health and specialist functions to the platform. The practice is
made up of four key rehabilitation pillars,
Re:Build (physiotherapy),
Re:Think (counselling), Re:View
(medlegal consulting) and Re:Tool (vocational
rehabilitation), and a team of specialists including: Occupational
Therapists, Physiotherapists, Kinesiologists, Psychologists,
Psychiatrists and Counsellors.
The acquisition will be immediately accretive to
CloudMD as the Re:Function group of clinics generated approximately
$5.8 million in revenues with earnings before interest, taxes,
depreciation and amortization (EBITDA) margins exceeding 19% over
the last fiscal year ending January, 2020.
Re:Function’s principle Directors, Ralph
Cheesman and Mike Smith, both Occupational Therapists, will be
joining CloudMD to lead the continued expansion of allied health
services across North America, and together will provide a
multidisciplinary, team-based approach to treatment.
Terms of
Agreement
In consideration for the purchase of 100% of the
outstanding securities of Re:Function, CloudMD has agreed to pay
shareholders aggregate consideration of C$8,000,000 payable as
follows: (i) C$3,000,000 in cash, subject to a working capital
adjustment; (ii) C$3,500,000 in shares of the Company; and (iii) a
performance-based earnout of C$1,500,000, which is payable in
shares of the Company in annual issuances over a period of three
years. All shares issued pursuant to the acquisition are issued at
a deemed price of C$0.88 per share and are priced by calculating
the ten-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 executed on August 21, 2020. The shares will be
subject to certain contractual restrictions on trading for a period
of thirty months from the date of issuance.
About Re:Function Health
Group
Re:Function is a state-of-the-art rehabilitation
company built by like-minded health professionals offering superior
patient focused care, with a longitudinal approach to healthcare
delivery. The practice is made up of four key rehabilitation
pillars, Re:Build (physiotherapy), Re:Think (counselling), Re:View
(medlegal consulting) and Re:Tool (vocational rehabilitation), and
a team of specialists including: Occupational Therapists,
Physiotherapists, Kinesiologists, Psychologists, Psychiatrists and
Counsellors. For more information visit www.refunction.ca
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.
ON BEHALF OF THE BOARD OF DIRECTORS
“Dr. Essam Hamza, MD" Chief Executive Officer
FOR ADDITIONAL INFORMATION CONTACT:
Julia Becker VP, Investor Relations
julia@cloudmd.ca
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. 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 Re:Function’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
Re:Function, 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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