VHI Vitalhub Corp

VitalHub Corp. (the “Company” or “VitalHub”) (TSX:VHI) (OTCQX:VHIBF) announced today it has filed its Interim Condensed Consolidated Financial Statements and Management's Discussion and Analysis report for the three and six months ended June 30, 2022, with the Canadian securities authorities. These documents may be viewed under the Company's profile at www.sedar.com.

VitalHub’s Chief Executive Officer Dan Matlow commented, “The Company’s positive momentum has continued into the second quarter, as demonstrated by another record high revenue result. We continue to see steady upward progress across all our key indicators, with a healthy pipeline of new business and backlog of closed sales that have not yet begun recognizing revenue. Notably, we are experiencing strong organic growth in our annual recurring revenue (ARR) numbers, as we continue to secure long term, recurring contracts. We generated over $800,000 of organic ARR growth in Q2/2022.  This brings our total organic ARR growth over the last eight quarters to approximately $6.8 million. It should also be noted that our Q2 ARR growth does not include the recently announced Ontario Solicitors General transaction, which we expect to start generating revenue in the latter part of this year.”

VitalHub’s quarterly investor conference call will take place on Friday, August 12, 2022, at 9:00AM EST. To join the call, please dial 1-888-664-6383 (Toll-Free North America) or 416-764-8650 (Local – Toronto) and enter confirmation number 51418625.

A replay of the call will be available until Friday, August 19, 2022, and can be accessed by dialing 1-888-390-0541 (Toll-Free North America) or 416-764-8677 (Local – Toronto), using the replay entry code 418625#.

Second Quarter 2022 Highlights

• Revenue of $9,477,464, an increase of $3,685,282 or 64% from the comparative period in the prior year.
• Gross profit as a percentage of revenue for Q2 2022 was 83% compared to 77% in Q2 2021.
• ARR (1, 2) grew by $7,204,418 to $31,219,508, achieving a 30% growth for the quarter ($7,645,906 or 32% on a constant currency basis) from Q2 2022 from Q1 2022.
  • $823,506 or 3.43% organically,
  • $6,748,747 or 28.10% through acquisition and,
  • $367,836 or 1.53% due to an unrealized foreign exchange loss.
• EBITDA (2) of $1,023,686 compared to $157,114 from the comparative period in the prior year.
• Adjusted EBITDA (2) of $1,866,563, or 20% of revenue, compared to $1,053,686 or 18% of revenue from the comparative period in the prior year.
• Cash on hand at June 30, 2022 was $36,830,071 compared to $16,389,982 as at December 31, 2021.
• Cashflow from operations before changes in working capital was $3,984,148 for the period as compared to $647,032 for the same period last year.
• During the quarter, the Company completed a bought deal offering with net proceeds of $16,296,220.
• TREAT Electronic Health Record was selected by the Ministry of the Solicitor General for an initial six year contract valued at $9,000,000. TREAT will be used to better track the essential medical information needed to effectively treat inmates in provincially run adult correctional facilities across Ontario.

(1)   The Company defines annual recurring revenue (“ARR”) as the recurring revenue expected based on yearly subscriptions of the renewable software license fees and maintenance services (2)   Non-IFRS measure

Q2 2022 and 2020 Results

	Three months ended							Six months ended
	30-Jun-22		%Revenue	30-Jun-21		%Revenue	Change	30-Jun-22		%Revenue	30-Jun-21		%Revenue	Change
	$			$			%	$			$			%
Revenue	9,477,464		100%	5,792,182		100%	64%	18,900,656		100%	11,115,255		100%	70%
Cost of sales	1,605,282		17%	1,321,428		23%	21%	3,079,861		16%	2,599,527		23%	18%
Gross Profit	7,872,182		83%	4,470,754		77%	76%	15,820,795		84%	8,515,728		77%	86%
Operating Expenses
General and administrative	2,099,943		22%	1,077,532		19%	95%	3,921,577		21%	2,276,451		20%	72%
Sales and marketing	1,023,250		11%	917,407		16%	12%	2,071,639		11%	1,672,037		15%	24%
Research and development	2,694,514		28%	1,294,271		22%	108%	4,742,759		25%	2,452,444		22%	93%
Depreciation	60,556		1%	41,342		1%	46%	103,873		1%	74,689		1%	39%
Depreciation of right-of-use assets	52,094		1%	67,193		1%	(22%)	115,482		1%	130,764		1%	(12%)
Stock based compensation	314,540		3%	284,303		5%	11%	583,784		3%	604,080		5%	(3%)
Foreign currency (gain) loss	186,855		2%	127,858		2%	46%	166,180		1%	192,780		2%	(14%)
Other Income and Expenses
Amortization of intangible assets	795,270		8%	546,845		9%	45%	1,479,198		8%	980,816		9%	51%
Business acquisition, restructuring and integration costs	528,337		6%	612,269		11%	(14%)	943,064		5%	859,086		8%	10%
Interest expense and accretion (net of interest income)	110,405		1%	(7,707	)	(0%)	(1533%)	105,686		1%	(18,294	)	(0%)	117%
Interest expense from lease liabilities	15,318		0%	22,770		0%	(33%)	32,686		0%	43,381		0%	(24%)
Loss on disposal of property and equipment	1,057		0%	0		0%	0%	1,057		0%	2,497		0%	(58%)
Current and deferred income taxes	(84,536	)	(1%)	10,071		0%	100%	41,365		0%	10,071		0%	311%
Net income (loss)	74,579		1%	(523,400	)	(9%)	114%	1,512,194		8%	(765,074	)	(7%)	(298%)
EBITDA (Non-IFRS measure)	1,023,686		11%	157,114		3%	552%	3,390,734		18%	456,353		4%	87%
Adjusted EBITDA (Non-IFRS measure)	1,866,563		20%	1,053,686		18%	77%	4,917,582		26%	1,919,519		17%	61%
Annual Recurring Revenue (Non-IFRS measure)	31,219,508			15,931,628			96%	31,219,508			15,931,628			49%
Recurring revenue (Non-IFRS Measure)	7,232,646		76%	4,628,927		80%	56%	12,965,537		69%	8,497,284		76%	34%
Deferred revenue	18,360,341			8,821,331				18,360,341			8,821,331
Cash balance	36,830,071			16,389,982				36,830,071			16,389,982

ABOUT VITALHUB

Software for Health and Human Services providers designed to simplify the user experience & optimize outcomes.

Vitalhub provides technology to Health and Human Services providers including; Hospitals, Regional Health Authorities, Mental Health, Long Term Care, Home Health, Community and Social Services. Vitalhub solutions span the categories of Electronic Health Record (EHR), Case Management, Care Coordination, Patient Flow & Operational Visibility, and DOCit Mobile Apps.

The Company has a robust two-pronged growth strategy, targeting organic growth opportunities within its product suite, and pursuing an aggressive M&A plan. Currently, Vitalhub serves 275+ clients across Canada, USA, UK, Australia, Qatar, and Latvia. Vitalhub is based in Toronto, Canada, with an offshore development hub in Sri Lanka. The Company is publicly traded on the TSX Venture Exchange under the symbol “VHI”.

CAUTIONARY STATEMENT

This press release includes forward-looking statements regarding the Corporation and its business, which may include, but is not limited to, statements with respect to the appointment of a new directors. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such statements are based on the current expectations of the management of each entity and are based on assumptions and subject to risks and uncertainties. Although the management of each entity believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this release, may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the companies, including risks regarding the technology industry, failure to obtain regulatory or shareholder approvals, market conditions, economic factors, the equity markets generally and risks associated with growth and competition. Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and the Corporation undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

CONTACT INFORMATION

Dan MatlowChief Executive Officer, Director(416) 727-9061dan.matlow@Vitalhub.com