Mr. Dan Matlow reports

VITALHUB CORP. REPORTS FOURTH QUARTER AND FULL YEAR 2022 RESULTS

Vitalhub Corp. has filed its consolidated financial statements and management's discussion and analysis report for the fiscal year (FY) ended Dec. 31, 2022, with the Canadian securities authorities. These documents may be viewed under the company's profile on SEDAR.

"Our record fourth quarter revenue capped off fiscal 2022 with strong positive momentum across all of our key performance indicators," said Dan Matlow, chief executive officer of Vitalhub. "The positive organic and accretive inorganic growth contributed to record Q4 and fiscal 2022 revenue, adjusted EBITDA (2) and annual recurring revenue (ARR) (1) (2). We have achieved these milestones despite the continued foreign currency headwinds associated with the British pound as contributions from Community Data Solutions (CDS) and Advanced Digital Innovation (ADI) helped drive ARR (1) (2) to over $36-million. We have continued to grow our organic ARR (1) (2) by 3.0 per cent or $925,000 and achieved record adjusted EBITDA (2) of $2.4-million, representing 22 per cent of revenue for Q4 2022. With the addition of Coyote Software Corp. after the quarter, the company's estimated ARR (1) (2) would be approximately $37-million. We closed the quarter with $17.5-million in cash on hand and, combined with the availability of a Bank of Nova Scotia facility, we currently have $50.5-million at our disposal for operations and to continue progressing our acquisition strategy. We have concluded the fiscal 2022 year with four major acquisitions, including Community Data Solutions, Advanced Digital Innovation, Beautiful Information and Hicom, and in addition grew our organic ARR (1) (2) by 18.5 per cent or $4.1-million and achieved record adjusted EBITDA (2) of $9.5-million, representing 24 per cent of revenue. For fiscal 2022, the company has consistently focused and executed organic growth initiatives that complemented synergistic M&A activities to deliver strong value to our shareholders. We are excited by the market traction and penetration we have achieved in fiscal 2022 and look forward to continuing efforts to scale our business in 2023."

Vitalhub's quarterly investor conference call will take place on Friday, March 24, 2023, at 9 a.m. EST.

Fourth quarter 2022 highlights:

• Revenue of $11,289,606, an increase of $4,359,316 or 63 per cent from the comparative period in the prior year;
• Gross profit as a percentage of revenue for Q4 2022 was 82 per cent, compared with 79 per cent in Q4 2021 and 80 per cent in Q3 2022;
• ARR (1) (2) grew by $5,177,935 to $36,145,150, achieving 17-per-cent growth in Q4 2022 versus Q3 2022;
• ARR (1) (2) growth consists of $925,035 or 3-per-cent organic growth, $3,000,854 from acquisitions (Community Data Solutions -- $2,428,874; My Pathway -- $571,980) or 10 per cent, and $1,252,046 or 4 per cent due to the increase in the value of the British pound relative to the Canadian dollar from the prior quarter;
• EBITDA (earnings before interest, taxes, depreciation and amortization) (2) of $470,020, compared with $470,034 in the comparative period in the prior year;
• Adjusted EBITDA (2) of $2,455,377 or 22 per cent of revenue, compared with $1,351,420 or 20 per cent of revenue in the comparative period in the prior year;
• Cash on hand at Dec. 31, 2022, was $17,452,210, compared with $16,389,982 as at Dec. 31, 2021;
• Subsequent to the quarter, the company acquired all of the issued and outstanding shares of Coyote, a Canadian-based company that specializes in tailored software solutions that streamline the workflows of health and social service organizations. Total closing consideration for the acquisition, not including any postclosing working capital adjustments, was $2,265,528 in cash, subject to a 15-per-cent escrow for six months, and $108,000 through the issuance of 38,163 common shares of Vitalhub, which are subject to a four-month hold from their date of issuance;
• With the addition of the ARR (1) (2) of Coyote, the company's pro forma ARR (1) (2) would be approximately $37-million.

Annual 2022 highlights:

• Revenue of $39,970,814, an increase of $15,306,221 or 62 per cent from the prior year;
• Gross profit as a percentage of revenue for FY 2022 was 82 per cent compared with 79 per cent in FY 2021.
• ARR (1) (2) for FY 2022 grew by $14,038,487 or 64 per cent from FY 2021;
• ARR (1) (2) growth consists of $4,084,909 or 18-per-cent organic growth, $10,781,601 from acquisitions (Beautiful Information -- $1,032,000; Hicom -- $6,748,747; Community Data Solutions -- $2,428,874; and My Pathway -- $571,980) or 49 per cent, and $828,024 or 4 per cent offset by the impact from foreign exchange changes;
• EBITDA (2) of $5,250,015, compared with $1,115,477 in the prior year, an improvement of $4,134,539;
• Adjusted EBITDA (2) of $9,524,708 or 24 per cent of revenue, compared with $4,548,512 or 18 per cent of revenue in the prior year;
• Cash flows from operations before changes in working capital were $7,119,817 for FY 2022, as compared with $1,972,933 for FY 2021;
• Net income of $1,214,636 for the year ended Dec. 31, 2022, compared with a net loss of $1,946,641 in the prior year.

(1) The company defines ARR as the recurring revenue expected based on yearly subscriptions of the renewable software licence fees and maintenance services.

(2) A non-IFRS (international financial reporting standards) measure.

About Vitalhub Corp.

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 co-ordination, patient flow and 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 (merger and acquisition) plan. Currently, Vitalhub serves over 450 clients across Canada, the United States, the United Kingdom, 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.

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