Mr. Dan Matlow reports

VITALHUB CONTINUES TO REPORT POSITIVE ADJUSTED EBITDA RESULTS AND INCREASED REVENUES

Vitalhub Corp. has filed its interim condensed consolidated financial statements and management's discussion and analysis report for the quarter ended Dec. 31, 2018, with the Canadian securities authorities. These documents may be viewed under the company's profile on SEDAR.

When asked to comment on the results of the fourth quarter and all of 2018, Vitalhub chief executive officer Dan Matlow said: "In 2018, the Vitalhub significantly evolved from a small and fragile software start-up into a robust, developed firm with a solid foundation for future success and continued growth. Through the integration of six companies, Vitalhub now possesses the customers, recurring revenue base, management experience and leading software solutions to advance in a progressive fashion. During Q4, we continued to grow as we added some significant customer contracts, while remaining EBITDA positive."

Company highlights

Revenue for the three months ended Dec. 31, 2018, was $2,215,911, representing an increase of 206.9 per cent over revenues of $721,989 in the same period last year, and an increase of 4.60 per cent over revenues of $2,118,093 in the third quarter of 2018. Revenue for the year ended Dec. 31, 2018, was $9,113,840, representing an increase of 695.0 per cent over revenues of $1,146,391 from the previous year. This increase is primarily a result of acquisitions, new customer contracts, as highlighted herein, and the inclusion of $1,613,362 of perpetual licence revenue from a customer for the HI Next software during the year.

EBITDA (defined as earnings before interest, taxation, depreciation and amortization) for the three months ended Dec. 31, 2018, was $333,195, compared with EBITDA of ($953,544) in Q4 2017 and $155,794 in Q3 2018. For the year ended Dec. 31, 2018, EBITDA was $837,304, compared with ($2,319,803) in the same period last year. EBITDA is a non-international financial reporting standard measure.

Adjusted EBITDA (defined as earnings before interest, taxation, depreciation, amortization and share-based compensation) for the three months ended Dec. 31, 2018, was $441,335, compared with adjusted EBITDA of ($481,659) in Q4 2017 and $296,403 in Q3 2018. For the year ended Dec. 31, 2018, adjusted EBITDA was $1,509,306, compared with ($1,760,719) in the same period last year. Adjusted EBITDA is a non-IFRS measure.

Net loss for the three months ended Dec. 31, 2018, was ($112,574) as compared with ($293,434) in Q3 2018. For the year ended Dec. 31, 2018, the net loss was ($862,433) as compared with ($2,380,860) in the prior year.

The company defines annualized contract value (ACV) of recurring revenue as the contracted annual renewable software licence fees and maintenance services. The ACV of recurring revenue at Dec. 31, 2018, was $4,486,680 as compared with $4,273,773 at Sept. 30, 2018, an increase of 4.9 per cent, which includes approximately $125,000 from the Province of Nova Scotia. ACV is a non-IFRS measure.

During the last quarter of 2018, the company signed a five-year agreement with the Province of Nova Scotia, with options to extend for a total of five additional years, to license Vitalhub's Treat client management software to support the Department of Community Services (DCS). Vitalhub's Treat software was selected following an extensive and thorough evaluation process. Once deployed across all programs, the Treat software will support DCS and affiliated service provider employees and offer on-line access to DCS Services for the citizens of the province. This agreement represents a significant and material event for Vitalhub. The five-year contract value includes a combination of recurring licence revenue and professional services delivered over five years, which together are expected to equal approximately $9-million over the initial term.

The B Care solution was sold to The Salvation Army Toronto Grace Health Centre. The revenue associated with this project is anticipated to exceed $1-million with approximately 60 per cent of that total allocated to software licensing. For the year ended Dec. 31, 2018, $158,000 of perpetual fees were recognized.

The company also signed a contract to provide its long-term care solution to the Elliott Community, a long-term care home and retirement living residential facility based in Guelph, Ont. The VH LTC mobile app will allow Elliott Community front-line caregivers to become truly mobile, providing fingertip access to what used to be manual paper forms, schedules and task lists, integrating smart phone and tablet technology into clinical workflow, and providing the ability to document and record critical resident information at the point of care.

Subsequent to the year-end on Jan. 18, 2019, the company completed a non-brokered private placement of units with the former founders and management team of Aastra Technologies Ltd. The offering was completed at a price of 16 cents per unit for gross proceeds of $3.3-million and a total of 20,625,000 units issued.

Subsequent to the year-end on March 20, 2019, the company completed its fifth acquisition. The company purchased all of the assets of the Oak Group, which included all of the issued and outstanding share capital in the Oak Group's wholly owned subsidiary, The Oak Group (UK) Ltd. The Oak Group is a software and service provider of its propriety Making Care Appropriate for Patients (MCAP) system and was ranked first (based on combined quality and value scores) on the NHS England framework and is licensed on more United Kingdom health care beds than any other product of its class.

About Vitalhub Corp.

Vitalhub develops and supports mission-critical health care information systems in the mental health (child, youth and adult), long-term care, community health service, home health and hospital sectors. Vitalhub technologies include blockchain, mobile, and Web-based assessment and electronic health record solutions.

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