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CloudMD Software & Services Inc
Symbol DOC
Shares Issued 164,893,832
Close 2021-01-12 C$ 2.30
Market Cap C$ 379,255,814
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ORIGINAL: CloudMD Closes Acquisition of HumanaCare, an Industry Leader in Employee Health Services, Providing a Transformational Platform that Promotes Short and Long-Term Health and Wellness

2021-01-12 09:26 ET - News Release

VANCOUVER, British Columbia, Jan. 12, 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 HumanaCare Organizational Resources Inc. (“HumanaCare”), an integrated, Employee Assistance Services (“EAP”) solution which provides compassionate, holistic, physical and mental health support for employees and their family members, by way of acquiring 100% of the shares of HumanaCare’s parent company, First Health Care Services of Canada Inc. (“First Health”).

HumanaCare is an industry leading EAP, funded by employers to provide access to mental and physical wellness support services. HumanaCare provides employee health services to over 5000 corporate clients, 1 million employees and their family members utilizing a clinical network of more than 3500 clinicians. Currently, HumanaCare has multi-year agreements to service fortune 500 clients, leading corporations and advisors. The solution uses nurse triage to support mental health and short-term incidental issues including counselling, financial stress, nutrition, legal and eldercare consultation. HumanaCare’s programs include, YourNurse, Chronic Disease Management, Eldercare, Medical Second Opinion and Disability Support Services.

HumanaCare has more than 35 years of Canadian healthcare experience and has solidified its place as one of the top EAP providers in Canada. The EAP segment has shown significant year over year growth and is only increasing in importance as the mental and physical strain of remote working and social distancing become more evident. With a focus on innovation, a holistic approach to care, and continuity of care centred around the patient, CloudMD believes HumanaCare will be a market leader.

Historically, EAP’s have focused exclusively on short-term incidental care. This is a transformational acquisition, as HumanaCare combined with CloudMD’s enterprise platform will not only provide short-term support, but now employees and family members will have access to a patient-focused approach to longer-term and chronic care management. CloudMD will be able to optimize and cross-sell into HumanaCare’s current client network by offering corporations and employers a more comprehensive solution which includes telemedicine, triaging, on-demand mental health support, and educational healthcare resources. As a solution to the currently siloed healthcare system, the combined offerings will provide one, centralized platform that breaks down the barriers to access by offering a team-based, longitudinal approach to employee wellbeing.

HumanaCare’s current annualized revenue run rate(1) is approximately $3.3 million with EBITDA (earnings before interest, taxes, depreciation and amortization) margins that are greater than 19 per cent. Upon closing, the acquisition of HumanaCare will be immediately accretive to CloudMD with synergies the Company believes will drive further revenue and increased EBITDA margin through cost savings achieved through scaling of operations and by tapping into CloudMD’s network of counsellors, nurses, and other healthcare professionals.

Terms of Acquisition

HumanaCare was acquired by way of the the Company’s acquisition of 100% of the issued and outstanding shares of First Health (the “Purchased Shares”), which owns 100% of the issued and outstanding shares in the capital of HumanaCare.

In consideration for the purchase of 100% of the Purchased Shares, CloudMD has agreed to pay the sellers thereof an aggregate consideration of $17.5 million payable as follows: (i) $6.3 million in cash, subject to a working capital adjustment; (ii) $6.825 million in common shares of the Company; and (iii) a performance-based earnout of $4.375 million, which is payable in common shares of the Company in equal annual issuances over a period of two years. All common shares issued pursuant to the acquisition will be issued at a deemed price of $2.88 per share and are priced by calculating the 10-day volume-weighted average trading price of the Company's common shares for the 10 trading days prior to the execution of the binding term sheet (press release dated October 28, 2020). The common shares will be subject to certain contractual restrictions on trading for a period of 25 months from the date of issuance.

(1) Annual revenue run rate figures are calculated based on annualizing the total current contracted revenue based on signed agreements. This figure includes approximately $372,000 of signed contracts with start dates ranging from November 1, 2020 to January 1, 2021.

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 HumanaCare

HumanaCare is a Canadian leader in employee health programs focused on delivering improved mental and physical health outcomes to organizations, employees and families. Through its Employee Assistance Programs, Medical Second Opinion Services, Disability Support and Eldercare Case management Services, HumanaCare supports hundreds of thousands of members, employees and their families of more than 5,000 organizations across Canada and the US.  For more information on HumanaCare, visit www.humanacare.com


“Dr. Essam Hamza, MD"
Chief Executive Officer


Julia Becker
VP, Investor Relations

Forward Looking Statements

This news release contains forward-looking statements, including statements regarding projected revenue, completion of the HumanaCare acquisition, future business synergies and cost savings. Such forward-looking statements are based on CloudMD’s expectations, estimates and projections regarding its business and the economic environment in which it operates, including the expectations regarding closing of the HumanaCare acquisition and the ability of the Company to carry out its business plans. 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, including revenue projections, 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 HumanaCare’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 HumanaCare, 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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