HEALWELL AI INC. (“HEALWELL” or the “Company”) (TSX: AIDX), a data
science and AI company focused on preventative care, announces it
has filed its interim consolidated financial statements and
management's discussion and analysis for Q3 2023, representing the
three- and nine-months ended September 30, 2023. The reporting
period covered by these financial results pre-dates the significant
strategic transaction completed by the Company on October 1, 2023.
Dr. Alexander Dobranowski, HEALWELL’s CEO
commented, “Q3 was a transformational quarter for the Company in
which we announced the strategic transaction with WELL Health
Technologies Corp. (TSX: WELL) (“WELL”), which
ultimately resulted in the Company rebranding itself as HEALWELL AI
INC., and launching itself as a healthcare technology and data
science company focused on preventative care, with a vision to
improve healthcare and save lives through early identification and
detection of disease.”
Dr. Dobranowski further adds, “We are extremely
excited about the future growth opportunity for the Company.
HEALWELL leverages AI to empower patients and doctors to deliver
increased access, reduce healthcare costs, and improve patient
outcomes. In addition, HEALWELL has entered into a strategic
alliance agreement with WELL that positions the Company for
newfound growth and expansion opportunities as an emerging AI
enabled healthcare technology company. With our recent fundraising,
we are well capitalized with sufficient cash and reduced debt on
our balance sheet to execute on our organic growth objectives and
future acquisition opportunities.”
A summary of the Company’s financial and
operational results is set out below, and more detailed information
is contained in the condensed interim consolidated financial
statements and related management discussion and analysis, which
are available on the Company’s SEDAR+ page at www.sedarplus.ca.
Financial measures described as “Adjusted” in this news release are
non-IFRS financial measures and may not be comparable to other
similar measures disclosed by other companies. Please see Non-IFRS
Financial Measures below for more information.
Third Quarter 2023 Financial
Highlights
Significant financial highlights for the
Company’s continuing operations during the three months ended
September 30, 2023 included:
- HEALWELL achieved quarterly revenue
from continuing operations of $2,753,000 during Q3-2023, compared
to $3,086,000 generated in the same period of 2022 (Q3-2022).
- HEALWELL achieved Adjusted Gross
Profit(2) of $750,000 in Q3-2023 (Q3-2022: $1,085,000).
- HEALWELL achieved an Adjusted Gross
Margin(2) percentage of 27.3% during Q3-2023 (Q3-2022: 35.2%).
- During Q3-2023, HEALWELL reported
Adjusted EBITDA(1) loss of $2,571,000 (Q3-2022: negative
$2,647,000).
- As at September 30, 2023, HEALWELL
had $833,000 in cash (December 31, 2022: cash of $1,411,000).
Third Quarter 2023 Business and
Operational Highlights
Significant business and operational highlights
for the Company during the three months ended September 30, 2023
included:
- Strategic
Transaction with WELL: On July 19, 2023, the Company entered
into definitive agreements with WELL pursuant to which, among other
things, the Company would (a) complete a convertible debenture unit
financing to raise up to $10,000,000; (b) facilitate the sale of a
significant portion of the clinical assets held by the Company’s
wholly-owned subsidiary, MCI Medical Clinics Inc., to a
wholly-owned subsidiary of WELL; (c) execute on a debt resolution
and acknowledgement agreement providing for the resolution of its
outstanding secured credit facility with The First Canadian
Wellness Co. Inc. (“FCW”) in the aggregate principal amount of up
to $8,500,000; (d) enter into a call option agreement among WELL
and certain third parties which may result in a change in control
of the Company; (e) enter into an investor rights agreement
granting WELL board nomination rights, a pre-emptive right,
registration and qualification rights; and (f) enter into a number
of ancillary and related agreements with respect to the foregoing
(the “Strategic Transaction”). During the reporting period, the
Company dedicated significant time and resources to obtaining the
necessary approvals to complete the Strategic Transaction, as well
as negotiating and documenting the various ancillary and related
documents and agreements required to implement the Strategic
Transaction. The Strategic Transaction was completed on October 1,
2023, after the end of the reporting period. Additional details on
the final terms of the Strategic Transaction are set out in the
Company’s press release dated October 2, 2023.
- Bridge
Financing: On July 20, 2023, in connection with executing the
definitive agreements for the Strategic Transaction, $3,000,000 of
bridge financing was made available to the Company by WELL through
a secured promissory note, to provide the Company with working
capital to stabilize its business, continue to operate in the
ordinary course and to accelerate the pursuit of its strategic plan
during the interim period between signing the definitive agreements
for and closing the Strategic Transaction. The note bore interest
at a rate of prime plus 9%, which accrued and was subsequently
repaid, along with all outstanding principal, on closing of the
Strategic Transaction.
- Shareholder
Meeting: On September 21, 2023, the Company held an annual general
and special meeting of its shareholders for the purpose of (a)
completing the standard business of the Company’s annual general
meeting for the financial year ended December 31, 2022, and (b)
obtaining various approvals relating to the Strategic Transaction.
The Company had previously obtained an order under the Canada
Business Corporations Act extending the time for the Company to
hold its annual general meeting for the financial year ended
December 31, 2022 until September 30, 2023.
- Change of Name: On
September 26, 2023 the Company amended its articles to change its
name to “HEALWELL AI INC.”.
- Information and
Data Analytics: The Company continued to provide data insights as a
service to customers in nine categories: rare disease; complex
major medical/chronic; patient cohort building; clinical trial
recruitment; synthetic health data and bespoke insights. Such
services are targeted primarily at pharmaceutical companies, life
science companies, precision medicine companies and top-tier
university centers.
- Personnel: The
Company continued to reduce staff in its head office to streamline
the business and reduce costs in advance of narrowing its focus on
data-driven healthcare technology and clinical research.
- Revenue Decline:
Revenue from continuing operations decreased 11%, or $333,000, in
the three months ended September 30, 2023 as compared to the same
period last year. The decrease was due to the consolidation of five
of the Company’s medical clinics in Ontario in late 2022 and early
2023, the sale of its operations in Alberta to WELL on June 1,
2023, and classifying the clinics to be sold to WELL in the
Strategic Transaction as discontinued operations.
Events Subsequent to
September 30, 2023
Significant business and operational highlights
for the Company subsequent to the three months ended September 30,
2023 included:
- Completion of Strategic
Transaction: On October 2, 2023, the Company announced the closing
of the Strategic Transaction with WELL, and re-launched as an AI
and data science focused healthcare technology business. HEALWELL
has significantly strengthened its balance sheet by: (1) completing
a convertible debenture unit financing for gross proceeds of $10
million led by WELL and a syndicate of investors, and (2)
discharging and fully satisfying its secured debt obligations of
more than $11 million. HEALWELL and WELL also established a
strategic alliance that positions HEALWELL to become a significant
player in the multi-billion-dollar data sciences and preventative
care industry. HEALWELL expanded its board and management team with
several new additions including the appointment of Hamed Shahbazi,
Chairman and CEO of WELL, to the board of HEALWELL.
- Bought Deal Financing: On
October 17, 2023, the Company closed a bought deal private
placement financing of 13,333,400 Class A subordinate voting shares
of the Company (the “Subordinate Voting Shares”)
at a price of $0.60 per Subordinate Voting Share, for aggregate
gross proceeds of $8,000,040.
- WELL AI Decision Support: On
October 18, 2023, HEALWELL announced the launch of WELL AI Decision
Support, in conjunction with WELL, to assist healthcare providers
in improving early disease diagnosis and preventative health.
WELL's goal is to make AI Enabled Decision Support a core offering
to all physicians supported by its fully managed and SaaS platforms
which collectively power more than 31,000 physicians and other care
providers across Canada and the US.
- Doctorly Investment: On November 8,
2023, HEALWELL announced a strategic investment in doctorly GmbH
(“doctorly”), an innovative provider of
comprehensive practice management software based in Germany as
part of doctorly’s recently completed new round of funding.
Concurrently, HEALWELL has also entered into a Strategic Alliance
Agreement with doctorly which provides HEALWELL with access to
doctorly’s rapidly growing healthcare provider base and support for
provider onboarding onto the HEALWELL clinical decision support
platform. This partnership marks HEALWELL’s inaugural foray into
the European healthcare technology landscape.
Transfer of Non-Core Assets
The Company has successfully completed the
transfer of its debt and equity interests in four healthcare and
technology companies to FCW in satisfaction of the principal and
accrued fees due to FCW under a loan facility it made available to
the Company on May 18, 2023 in the principal amount of $1,500,000.
Further to the Company's press release dated July 27, 2023, the
transfer of the non-core assets was being completed in stages, with
the last transfer having been completed on November 14, 2023.
Please refer to the Company's press release dated July 27, 2023 and
its amended and material change report dated August 31, 2023 for
more information on the transfer of the non-core assets.
Mark Findlay appointed Senior Vice President of
Sales and Marketing (Canada):
HEALWELL is also pleased to announce the
strategic hiring of Mark Findlay, an experienced pharmaceutical
executive, as the new Senior Vice President of Sales and Marketing
for Canada. Mr. Findlay's appointment at the Khure Health division
of HEALWELL underscores the Company’s commitment to preventative
medicine, AI-driven healthcare solutions and supporting healthcare
providers in early disease diagnosis.
Mr. Findlay has 30 years of pharmaceutical
leadership roles in sales, marketing, market access, and government
affairs, managing franchises and national teams in multiple
therapeutic areas, along with launching blockbuster medicines in
Canada and the US. Most recently Mr. Findlay served at Astra Zeneca
Canada as Vice President, CVRM (Cardiovascular, Renal and
Metabolism) Portfolio, Established Brands and Primary Care. His
career is marked by the consistent delivery of exceptional
performance and the cultivation of excellence at AstraZeneca, GSK,
Pharmacia and Searle.
Don Watts, President of Khure Health commented,
“We are incredibly fortunate to welcome Mark Findlay, to the
HEALWELL family. Mark's extensive experience and proven leadership
in the pharmaceutical industry make him an invaluable addition to
our executive team at Khure. We are confident that Mark will play a
pivotal role in our journey to transform healthcare in
Canada.”
Webcast and Conference Call
Details:
As previously announced, HEALWELL will be
holding a conference call and simultaneous webcast to discuss its
financial results on Wednesday, November 15, 2023 at 1:00
pm EST (10:00 am PST). The call will be hosted by Dr.
Alexander Dobranowski, Chief Executive Officer, and Scott
Nirenberski, Chief Financial Officer. Please dial-in 10 minutes
prior to the start of the call.
Date: Wednesday, November 15, 2023Time: 1:00 PM ET / 10 AM PTFor
attendees who wish to join by webcast, the event can be accessed
at: https://edge.media-server.com/mmc/p/w8xdq2mi
Attendees who wish to join by phone must visit the following
link and pre-register:
https://register.vevent.com/register/BIc0c1a6aaab034c1db8f1cd38a2a77869
Selected Financial
Information(in thousands of dollars, except percentages
and per share amounts)
|
Three months ended |
Period over |
Nine months ended |
Period over |
|
September 30 |
period Change |
September 30 |
period Change |
|
|
2023 |
|
|
2022 |
$ |
% |
|
|
2023 |
|
|
2022 |
$ |
% |
|
|
($ in thousands except percentages) |
Continuing operation |
|
Revenues |
$ |
2,753 |
|
$ |
3,086 |
$ |
(333 |
) |
(11 |
) |
$ |
8,960 |
|
$ |
10,341 |
|
$ |
(1,381 |
) |
(13 |
) |
Cost of revenue |
|
2,161 |
|
|
2,159 |
|
2 |
|
NM |
|
|
6,638 |
|
|
7,061 |
|
|
(423 |
) |
(6 |
) |
Gross profit |
|
592 |
|
|
927 |
|
(335 |
) |
(36 |
) |
|
2,322 |
|
|
3,280 |
|
|
(958 |
) |
(29 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
911 |
|
|
1,836 |
|
(925 |
) |
(50 |
) |
|
3,461 |
|
|
5,881 |
|
|
(2,420 |
) |
(41 |
) |
Sales and marketing |
|
320 |
|
|
157 |
|
163 |
|
104 |
|
|
961 |
|
|
966 |
|
|
(5 |
) |
(1 |
) |
General and administrative |
|
4,811 |
|
|
3,660 |
|
1,151 |
|
31 |
|
|
11,278 |
|
|
9,721 |
|
|
1,557 |
|
16 |
|
Impairment of goodwill and intangibles |
|
- |
|
|
200 |
|
(200 |
) |
NM |
|
|
7,629 |
|
|
200 |
|
|
7,429 |
|
NM |
|
|
|
6,042 |
|
|
5,853 |
|
189 |
|
3 |
|
|
23,329 |
|
|
16,768 |
|
|
6,561 |
|
39 |
|
|
|
|
|
|
|
|
|
|
Net finance costs |
|
591 |
|
|
257 |
|
334 |
|
130 |
|
|
1,301 |
|
|
417 |
|
|
884 |
|
212 |
|
Share of comprehensive loss (income) from associate |
|
- |
|
|
50 |
|
(50 |
) |
NM |
|
|
- |
|
|
237 |
|
|
(237 |
) |
NM |
|
Loss on settlement of shares-contingent consideration |
|
- |
|
|
- |
|
- |
|
NM |
|
|
677 |
|
|
- |
|
|
677 |
|
NM |
|
Impairment of investment in associate |
|
- |
|
|
- |
|
- |
|
NM |
|
|
2,180 |
|
|
- |
|
|
2,180 |
|
NM |
|
Changes in fair value of contingent consideration |
|
1,730 |
|
|
75 |
|
1,655 |
|
NM |
|
|
1,693 |
|
|
233 |
|
|
1,460 |
|
NM |
|
Changes in fair value of investments |
|
- |
|
|
- |
|
- |
|
NM |
|
|
134 |
|
|
- |
|
|
134 |
|
NM |
|
|
|
2,321 |
|
|
382 |
|
1,939 |
|
NM |
|
|
5,985 |
|
|
887 |
|
|
5,098 |
|
NM |
|
|
|
|
|
|
|
|
|
|
Loss before taxes |
|
(7,771 |
) |
|
(5,308 |
) |
(2,463 |
) |
46 |
|
|
(26,992 |
) |
|
(14,375 |
) |
|
(12,617 |
) |
88 |
|
Income taxes |
|
(218 |
) |
|
3,512 |
|
(3,730 |
) |
(106 |
) |
|
(1,118 |
) |
|
1,481 |
|
|
(2,599 |
) |
(175 |
) |
|
|
|
|
|
|
|
|
|
Net loss-continuing operation |
|
(7,553 |
) |
|
(8,820 |
) |
1,267 |
|
(14 |
) |
|
(25,874 |
) |
|
(15,856 |
) |
|
(10,018 |
) |
63 |
|
|
|
|
|
|
|
|
|
|
Net (income)/loss on discontinued operations, net of tax |
|
190 |
|
|
280 |
|
(90 |
) |
(32 |
) |
|
(828 |
) |
|
1,689 |
|
|
(2,517 |
) |
(149 |
) |
|
|
|
|
|
|
|
|
|
Net loss |
|
(7,743 |
) |
|
(9,100 |
) |
1,357 |
|
(15 |
) |
|
(25,046 |
) |
|
(17,545 |
) |
|
(7,501 |
) |
43 |
|
|
|
|
|
|
|
|
|
|
Continuing operation |
|
|
|
|
|
|
|
|
Adjusted
gross profit (1) |
|
750 |
|
|
1,085 |
|
(335 |
) |
(31 |
) |
|
2,797 |
|
|
3,755 |
|
|
(958 |
) |
(26 |
) |
Adjusted
gross margin (1) |
|
27.3 |
% |
|
35.2 |
% |
|
|
|
31.2 |
% |
|
36.3 |
% |
|
|
Adjusted
EBITDA (1) |
|
(2,571 |
) |
|
(2,647 |
) |
76 |
|
(3 |
) |
|
(6,966 |
) |
|
(7,587 |
) |
|
621 |
|
(8 |
) |
Adjusted
EBITDA margin (1) |
|
(93.4 |
%) |
|
(85.8 |
%) |
|
|
|
(77.7 |
%) |
|
(73.4 |
%) |
|
|
|
|
|
|
|
|
|
|
|
Discontinued operation |
|
|
|
|
|
|
|
|
Adjusted
gross profit (1) |
|
1,457 |
|
|
2,743 |
|
(1,286 |
) |
(47 |
) |
|
6,063 |
|
|
8,569 |
|
|
(2,506 |
) |
(29 |
) |
Adjusted
gross margin (1) |
|
27.8 |
% |
|
28.9 |
% |
|
|
|
28.9 |
% |
|
29.5 |
% |
|
|
Adjusted
EBITDA (1) |
|
(164 |
) |
|
87 |
|
(251 |
) |
(290 |
) |
|
(284 |
) |
|
20 |
|
|
(304 |
) |
(1,497 |
) |
Adjusted
EBITDA margin (1) |
|
(3.1 |
%) |
|
0.9 |
% |
|
|
|
1.4 |
% |
|
0.07 |
% |
|
|
|
|
|
|
|
|
|
|
|
Net
income/(loss) attributable to Company shareholders |
|
|
|
|
|
|
|
|
-
Continuing operation |
$ |
(7,553 |
) |
$ |
(8,820 |
) |
|
|
$ |
(25,874 |
) |
$ |
(15,856 |
) |
|
|
-
Discontinued operation |
|
(190 |
) |
|
(280 |
) |
|
|
|
828 |
|
|
(1,689 |
) |
|
|
|
$ |
(7,743 |
) |
$ |
(9,100 |
) |
|
|
$ |
(25,046 |
) |
$ |
(17,545 |
) |
|
|
Weighted
average number of |
|
|
|
|
|
|
|
|
Of Share outstanding: Basic and diluted |
|
53,869,773 |
|
|
50,075,202 |
|
|
|
|
50,090,760 |
|
|
50,075,202 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share -Basic and diluted |
|
|
|
|
|
|
|
|
-
Continuing operation |
$ |
(0.14 |
) |
$ |
(0.18 |
) |
|
|
$ |
(0.52 |
) |
$ |
(0.32 |
) |
|
|
-
Discontinued operation |
|
(0.004 |
) |
|
(0.01 |
) |
|
|
|
0.02 |
|
|
(0.03 |
) |
|
|
|
$ |
(0.14 |
) |
$ |
(0.18 |
) |
|
|
$ |
(0.50 |
) |
$ |
(0.35 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
Period over |
Nine months ended |
Period over |
|
September 30 |
period Change |
September 30 |
period Change |
|
|
2023 |
|
|
2022 |
$ |
% |
|
|
2023 |
|
|
2022 |
$ |
% |
|
|
($ in thousands except percentages) |
Continuing operation |
|
Revenues |
$ |
2,753 |
|
$ |
3,086 |
$ |
(333 |
) |
(11 |
) |
$ |
8,960 |
|
$ |
10,341 |
|
$ |
(1,381 |
) |
(13 |
) |
Cost of revenue |
|
2,161 |
|
|
2,159 |
|
2 |
|
NM |
|
|
6,638 |
|
|
7,061 |
|
|
(423 |
) |
(6 |
) |
Gross profit |
|
592 |
|
|
927 |
|
(335 |
) |
(36 |
) |
|
2,322 |
|
|
3,280 |
|
|
(958 |
) |
(29 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
911 |
|
|
1,836 |
|
(925 |
) |
(50 |
) |
|
3,461 |
|
|
5,881 |
|
|
(2,420 |
) |
(41 |
) |
Sales and marketing |
|
320 |
|
|
157 |
|
163 |
|
104 |
|
|
961 |
|
|
966 |
|
|
(5 |
) |
(1 |
) |
General and administrative |
|
4,811 |
|
|
3,660 |
|
1,151 |
|
31 |
|
|
11,278 |
|
|
9,721 |
|
|
1,557 |
|
16 |
|
Impairment of goodwill and intangibles |
|
- |
|
|
200 |
|
(200 |
) |
NM |
|
|
7,629 |
|
|
200 |
|
|
7,429 |
|
NM |
|
|
|
6,042 |
|
|
5,853 |
|
189 |
|
3 |
|
|
23,329 |
|
|
16,768 |
|
|
6,561 |
|
39 |
|
|
|
|
|
|
|
|
|
|
Net finance costs |
|
591 |
|
|
257 |
|
334 |
|
130 |
|
|
1,301 |
|
|
417 |
|
|
884 |
|
212 |
|
Share of comprehensive loss (income) from associate |
|
-- |
|
|
50 |
|
(50 |
) |
NM |
|
|
- |
|
|
237 |
|
|
(237 |
) |
NM |
|
Loss on settlement of shares-contingent consideration |
|
- |
|
|
- |
|
- |
|
NM |
|
|
677 |
|
|
- |
|
|
677 |
|
NM |
|
Impairment of investment in associate |
|
- |
|
|
- |
|
- |
|
NM |
|
|
2,180 |
|
|
- |
|
|
2,180 |
|
NM |
|
Changes in fair value of contingent consideration |
|
1,730 |
|
|
75 |
|
1,655 |
|
NM |
|
|
1,693 |
|
|
233 |
|
|
1,460 |
|
NM |
|
Changes in fair value of investments |
|
- |
|
|
- |
|
- |
|
NM |
|
|
134 |
|
|
- |
|
|
134 |
|
NM |
|
|
|
2,321 |
|
|
382 |
|
1,939 |
|
NM |
|
|
5,985 |
|
|
887 |
|
|
5,098 |
|
NM |
|
|
|
|
|
|
|
|
|
|
Loss before taxes |
|
(7,771 |
) |
|
(5,308 |
) |
(2,463 |
) |
46 |
|
|
(26,992 |
) |
|
(14,375 |
) |
|
(12,617 |
) |
88 |
|
Income taxes |
|
(218 |
) |
|
3,512 |
|
(3,730 |
) |
(106 |
) |
|
(1,118 |
) |
|
1,481 |
|
|
(2,599 |
) |
(175 |
) |
|
|
|
|
|
|
|
|
|
Net loss-continuing operation |
|
(7,553 |
) |
|
(8,820 |
) |
1,267 |
|
(14 |
) |
|
(25,874 |
) |
|
(15,856 |
) |
|
(10,018 |
) |
63 |
|
|
|
|
|
|
|
|
|
|
Net (income)/loss on discontinued operations, net of tax |
|
190 |
|
|
280 |
|
(90 |
) |
(32 |
) |
|
(828 |
) |
|
1,689 |
|
|
(2,517 |
) |
(149 |
) |
|
|
|
|
|
|
|
|
|
Net loss |
|
(7,743 |
) |
|
(9,100 |
) |
1,357 |
|
(15 |
) |
|
(25,046 |
) |
|
(17,545 |
) |
|
(7,501 |
) |
43 |
|
|
|
|
|
|
|
|
|
|
Continuing operation |
|
|
|
|
|
|
|
|
Adjusted
gross profit (2) |
|
750 |
|
|
1,085 |
|
(335 |
) |
(31 |
) |
|
2,797 |
|
|
3,755 |
|
|
(958 |
) |
(26 |
) |
Adjusted
gross margin (2) |
|
27.3 |
% |
|
35.2 |
% |
|
|
|
31.2 |
% |
|
36.3 |
% |
|
|
Adjusted
EBITDA (1) |
|
(2,571 |
) |
|
(2,647 |
) |
76 |
|
(3 |
) |
|
(6,966 |
) |
|
(7,587 |
) |
|
621 |
|
(8 |
) |
Adjusted
EBITDA margin (1) |
|
(93.4 |
%) |
|
(85.8 |
%) |
|
|
|
(77.7 |
%) |
|
(73.4 |
%) |
|
|
|
|
|
|
|
|
|
|
|
Discontinued operation |
|
|
|
|
|
|
|
|
Adjusted
gross profit (1) |
|
1,457 |
|
|
2,743 |
|
(1,286 |
) |
(47 |
) |
|
6,063 |
|
|
8,569 |
|
|
(2,506 |
) |
(29 |
) |
Adjusted
gross margin (1) |
|
27.8 |
% |
|
28.9 |
% |
|
|
|
28.9 |
% |
|
29.5 |
% |
|
|
Adjusted
EBITDA (1) |
|
(164 |
) |
|
87 |
|
(251 |
) |
(290 |
) |
|
(284 |
) |
|
20 |
|
|
(304 |
) |
(1,497 |
) |
Adjusted
EBITDA margin (1) |
|
(3.1 |
%) |
|
0.9 |
% |
|
|
|
1.4 |
% |
|
0.07 |
% |
|
|
|
|
|
|
|
|
|
|
|
Net
income/(loss) attributable to Company shareholders |
|
|
|
|
|
|
|
|
-
Continuing operation |
$ |
(7,553 |
) |
$ |
(8,820 |
) |
|
|
$ |
(25,874 |
) |
$ |
(15,856 |
) |
|
|
-
Discontinued operation |
|
(190 |
) |
|
(280 |
) |
|
|
|
828 |
|
|
(1,689 |
) |
|
|
|
$ |
(7,743 |
) |
$ |
(9,100 |
) |
|
|
$ |
(25,046 |
) |
$ |
(17,545 |
) |
|
|
Weighted
average number of |
|
|
|
|
|
|
|
|
Of Share outstanding: Basic and diluted |
|
53,869,773 |
|
|
50,075,202 |
|
|
|
|
50,090,760 |
|
|
50,075,202 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share -Basic and diluted |
|
|
|
|
|
|
|
|
- Continuing operation |
$ |
(0.14 |
) |
$ |
(0.18 |
) |
|
|
$ |
(0.52 |
) |
$ |
(0.32 |
) |
|
|
- Discontinued operation |
|
(0.00 |
) |
|
(0.01 |
) |
|
|
|
0.02 |
|
|
(0.03 |
) |
|
|
|
$ |
(0.14 |
) |
$ |
(0.18 |
) |
|
|
$ |
(0.50 |
) |
$ |
(0.35 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1), (2)
Adjusted Gross
Profit, Adjusted Gross Margin, Adjusted EBITDA and Adjusted EBITDA
Margin are non-IFRS measures.
Selected Statement of Financial Position
Data
|
|
|
September 30, 2023 |
|
December 31, 2022 |
|
|
$ in
thousands |
|
|
|
Cash |
833 |
|
1,411 |
|
Accounts receivable |
932 |
|
5,627 |
|
Other assets |
1,686 |
|
1,493 |
|
Assets classified as held for sale |
4,928 |
|
- |
|
Liabilities associated with assets classified as held for sale |
(3,824 |
) |
- |
|
Accounts payable and accrued liabilities |
(7,438 |
) |
(9,227 |
) |
Bank loan |
(1,340 |
) |
(1,685 |
) |
Lease liabilities |
(5,324 |
) |
(10,420 |
) |
Other liabilities |
(3,060 |
) |
(130 |
) |
Related party loan |
(7,853 |
) |
(5,315 |
) |
Non-controlling interest redeemable liability |
(1,305 |
) |
(1,305 |
) |
Liability for contingent consideration |
(1,730 |
) |
(1,637 |
) |
Non-IFRS Financial Measures
The terms Adjusted EBITDA, Adjusted EBITDA
Margin, Adjusted Gross Profit and Adjusted Gross Margin used in
this document do not have any standardized meaning under IFRS, may
not be comparable to similar financial measures disclosed by other
companies and should not be considered a substitute for, or
superior to, IFRS financial measures. Readers are advised to review
the section entitled “Non-IFRS Financial Measures” in the Company’s
management discussion and analysis for the quarter ended September
30, 2023, available on the Company’s SEDAR+ page at
www.sedarplus.ca, for a detailed explanation of the composition of
these measures and their uses.
(1) The following table reconciles Adjusted
EBITDA and Adjusted EBITDA Margin to net income (loss) for the
three-months ended September 30, 2023 and September 30, 2022:
|
Three months ended |
Nine months ended |
|
September 30 |
September 30 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
2022 |
|
|
$ in thousands |
Total Revenue |
|
|
|
|
- Continuing operation |
$ |
2,753 |
|
$ |
3,086 |
|
$ |
8,960 |
|
$ |
10,341 |
|
- Discontinued operation |
|
5,248 |
|
|
9,501 |
|
|
20,919 |
|
|
29,080 |
|
|
$ |
8,001 |
|
$ |
12,587 |
|
$ |
29,879 |
|
$ |
39,421 |
|
Net (loss) income |
|
|
|
|
- Continuing operation |
$ |
(7,553 |
) |
$ |
(8,820 |
) |
$ |
(25,874 |
) |
$ |
(15,856 |
) |
- Discontinued operation |
|
(190 |
) |
|
(280 |
) |
|
828 |
|
|
(1,689 |
) |
|
$ |
(7,743 |
) |
$ |
(9,100 |
) |
$ |
(25,046 |
) |
$ |
(17,545 |
) |
Add back (deduct) |
|
|
|
|
Continuing operation |
|
|
|
|
Depreciation and amortization |
|
917 |
|
|
925 |
|
|
2,703 |
|
|
2,208 |
|
Net finance charges |
|
591 |
|
|
257 |
|
|
1,301 |
|
|
417 |
|
Share of comprehensive loss (income) from associate |
|
- |
|
|
50 |
|
|
- |
|
|
237 |
|
Loss on settlement of shares-contingent consideration |
|
- |
|
|
- |
|
|
677 |
|
|
- |
|
Impairment of investment in associate |
|
- |
|
|
- |
|
|
2,180 |
|
|
- |
|
Impairment of goodwill and intangibles |
|
- |
|
|
200 |
|
|
7,629 |
|
|
200 |
|
Changes in fair value of contingent consideration |
|
1,730 |
|
|
75 |
|
|
1,693 |
|
|
233 |
|
Changes in fair value of investments |
|
- |
|
|
- |
|
|
134 |
|
|
- |
|
Share-based payment expense |
|
1,398 |
|
|
1,089 |
|
|
2,518 |
|
|
3,224 |
|
Acquisition related expenses |
|
564 |
|
|
71 |
|
|
1,293 |
|
|
246 |
|
Expected (recovery) provision of credit losses |
|
- |
|
|
(6 |
) |
|
(103 |
) |
|
23 |
|
Income taxes recovery |
|
(218 |
) |
|
3,512 |
|
|
(1,118 |
) |
|
1,481 |
|
Discontinued operation |
|
|
|
|
Depreciation and amortization |
|
2 |
|
|
482 |
|
|
674 |
|
|
1,669 |
|
Net finance charges |
|
24 |
|
|
74 |
|
|
139 |
|
|
227 |
|
Recovery of expected credit losses |
|
- |
|
|
- |
|
|
(55 |
) |
|
- |
|
Gain on disposal of subsidiary |
|
- |
|
|
- |
|
|
(2,016 |
) |
|
- |
|
Gain on subleases |
|
- |
|
|
(190 |
) |
|
- |
|
|
(187 |
) |
Impairment charges |
|
- |
|
|
- |
|
|
146 |
|
|
- |
|
Adjusted EBITDA |
|
|
|
|
- Continuing operation |
$ |
(2,571 |
) |
$ |
(2,647 |
) |
$ |
(6,966 |
) |
$ |
(7,587 |
) |
- Discontinued operation |
|
(164 |
) |
|
86 |
|
|
(284 |
) |
|
20 |
|
Adjusted EBITDA Margin |
|
|
|
|
- Continuing operation |
|
(93.4 |
%) |
|
(85.8 |
%) |
|
(77.8 |
%) |
|
(73.4 |
%) |
- Discontinued operation |
|
(3.1 |
%) |
|
0.9 |
% |
|
(1.4 |
%) |
|
0.07 |
% |
(2) The following table reconciles Adjusted
Gross Profit and Adjusted Gross Margin to revenue and cost of sales
for the three-months ended September 30, 2023 and September 30,
2022:
|
Three months ended |
Period over |
Nine months ended |
Period over |
|
September 30 |
period Change |
September 30 |
period Change |
|
2023 |
|
2022 |
|
$ |
|
% |
|
2023 |
|
2022 |
|
$ |
|
% |
|
|
($ in thousands except percentages) |
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
- Continuing operation |
2,753 |
|
3,086 |
|
(333 |
) |
(11 |
%) |
8,960 |
|
10,341 |
|
(1,381 |
) |
(13 |
%) |
- Discontinued operation |
5,248 |
|
9,501 |
|
(4,253 |
) |
(45 |
%) |
20,919 |
|
29,080 |
|
(8,161 |
) |
(28 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
|
|
|
|
|
|
- Continuing operation |
2,161 |
|
2,159 |
|
2 |
|
- |
|
6,638 |
|
7,061 |
|
(423 |
) |
(6 |
%) |
- Discontinued operation |
3,790 |
|
6,758 |
|
(2,968 |
) |
(44 |
%) |
14,857 |
|
20,512 |
|
(5,655 |
) |
(28 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
- Continuing operation |
(158 |
) |
(158 |
) |
- |
|
|
(475 |
) |
(475 |
) |
- |
|
|
- Discontinued operation |
- |
|
- |
|
- |
|
|
- |
|
- |
|
- |
|
|
|
2,003 |
|
2,001 |
|
2 |
|
- |
|
6,163 |
|
6,586 |
|
(423 |
) |
(6 |
%) |
|
3,790 |
|
6,758 |
|
(2,968 |
) |
(44 |
%) |
14,857 |
|
20,512 |
|
(5,655 |
) |
(28 |
%) |
|
|
|
|
|
|
|
|
|
Continuing operation |
|
|
|
|
|
|
|
|
Adjusted gross profit |
750 |
|
1,085 |
|
(335 |
) |
(31 |
%) |
2,797 |
|
3,755 |
|
(958 |
) |
(26 |
%) |
Adjusted gross margin |
27.3 |
% |
35.2 |
% |
|
|
31.2 |
% |
36.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
Discontinued operation |
|
|
|
|
|
|
|
|
Adjusted gross profit |
1,458 |
|
2,743 |
|
(1,285 |
) |
(47 |
%) |
6,062 |
|
8,568 |
|
(2,506 |
) |
(29 |
%) |
Adjusted gross margin |
27.8 |
% |
28.9 |
% |
|
|
28.9 |
% |
29.5 |
% |
|
|
Alexander DobranowskiChief Executive OfficerHEALWELL AI Inc.
About HEALWELL
HEALWELL is a health care technology company
focused on AI and data science for preventive care. Its mission is
to improve health care and save lives through early identification
and detection of disease. As a physician-led organization with a
proven management team of experienced executives, HEALWELL is
executing a strategy centered around developing and acquiring
technology and clinical sciences capabilities that complement the
company's road map. HEALWELL is publicly traded on the Toronto
Stock Exchange under the symbol AIDX. To learn more about HEALWELL,
please visit: https://healwell.ai/.
Forward Looking Statements
Certain statements in this press release,
constitute “forward-looking information” and “forward looking
statements” (collectively, “forward looking statements”) within the
meaning of applicable Canadian securities laws and are based on
assumptions, expectations, estimates and projections as of the date
of this press release. Forward-looking statements include
statements with respect to the go-forward business of the Company
following completion of the Strategic Transaction, the strategic
alliance between the Company and WELL, the intention for the
Company to white label new AI-enabled healthcare technologies, and
the statements regarding the Company having sufficient working
capital for future operations. The words “result”, “launch”,
“vision”, “improve”, “grow”, “leverage”, “outcome”, “position”,
“expand”, “emerge”, “facilitate”, “execute”, “obtain”, “implement”,
“provide”, “stabilize”, “pursuit”, “streamline”, “reduce”,
“satisfy”, “to become”, “assist”, “goal”, “commitment”, “intend”,
“generate”, “accelerate”, “continuing to”, “potential”, “future”,
“result in”, “increasing”, “anticipates”, “deliver” or variations
of such words and phrases or statements that certain future
conditions, actions, events or results “will”, “may”, “could”,
“would”, “should”, “might” or “can”, or negative versions thereof,
“occur”, “continue” or “be achieved”, and other similar
expressions, identify forward-looking statements. Forward-looking
statements are necessarily based upon management’s perceptions of
historical trends, current conditions and expected future
developments, as well as a number of specific factors and
assumptions that, while considered reasonable by the Company as of
the date of such statements, are outside of the Company's control
and are inherently subject to significant business, economic and
competitive uncertainties and contingencies which could result in
the forward-looking statements ultimately being entirely or
partially incorrect or untrue. Forward looking statements contained
in this press release are based on various assumptions, including,
but not limited to, the following: the Company's ability to
maintain its relationships and to successfully implement its
strategic alliance with WELL; the Company's future access to debt
and equity financing; the Company's plans for future cost
reduction; the availability of working capital and sources of
liquidity; the Company's ability to achieve its growth and revenue
strategies; the demand for the Company's products and fluctuations
in future revenues; the availability of future business ventures,
commercial arrangements and acquisition targets or opportunities
and the Company's ability to consummate them and to effectively
integrate future acquisition targets into its platform; the
Company's ability to grow its customer base; the effects of
competition in the industry; the requirement for increasingly
innovative product solutions and service offerings; trends in
customer growth; the stability of general economic and market
conditions; currency exchange rates and interest rates; the
Company's ability to comply with applicable laws and regulations;
the Company's continued compliance with third party intellectual
property rights; and that the risk factors noted below,
collectively, do not have a material impact on the Company's
business, operations, revenues and/or results. By their nature,
forward-looking statements are subject to inherent risks and
uncertainties that may be general or specific and which give rise
to the possibility that expectations, forecasts, predictions,
projections or conclusions will not prove to be accurate, that
assumptions may not be correct, and that objectives, strategic
goals and priorities will not be achieved.
Readers are encouraged to review the “Liquidity
and Capital Resources” section of the Company’s MD&A, together
with Note 2(c) of the Company’s condensed interim consolidated
financial statements, for the period ended September 30, 2023,
which indicate the existence of material uncertainties that cast
significant doubt on the Company’s ability to continue as a going
concern. The Company’s ability to continue as a going concern was,
as at September 30, 2023, dependent on, among other things, its
ability to meet its financing requirements on a continuing basis,
to sell certain assets to generate short-term liquidity, to have
access to financing and to generate positive operating results. The
Company’s ability to satisfy its financing requirements and
ultimately achieve necessary levels of profitability and positive
cash flows from operations, to raise additional funds, to sell
assets and to improve operating results were and are dependent on a
number of factors outside the Company’s control, and while the
Company has successfully sold a number of assets and raised
significant financing since September 30, 2023, there can be no
assurance that the Company will continue to be successful in these
endeavors in the future.
Known and unknown risk factors, many of which
are beyond the control of the Company, could cause the actual
results of the Company to differ materially from the results,
performance, achievements or developments expressed or implied by
such forward-looking statements. Such risk factors include but are
not limited to those factors which are discussed under the section
entitled “Risk Factors” in the Company’s annual information form
dated March 31, 2023, which is available under the Company's SEDAR+
profile at www.sedarplus.ca. The risk factors are not intended to
represent a complete list of the factors that could affect the
Company and the reader is cautioned to consider these and other
factors, uncertainties and potential events carefully and not to
put undue reliance on forward-looking statements. There can be no
assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements.
Forward-looking statements are provided for the purpose of
providing information about management’s expectations and plans
relating to the future. The Company disclaims any intention or
obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise,
or to explain any material difference between subsequent actual
events and such forward-looking statements, except to the extent
required by applicable law. All of the forward-looking statements
contained in this press release are qualified by these cautionary
statements.
For more information:
Pardeep S. Sangha
Investor Relations, HEALWELL AI Inc.
Phone: 604-572-6392
ir@healwell.ai
HealWell AI (TSX:AIDX)
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