CARESPAN HEALTH, INC. ISSUES FIRST QUARTER 2023 FINANCIAL STATEMENTS
VANCOUVER, BC, June 5, 2023 /CNW/ – CareSpan Health, Inc. (TSXV: CSPN) (the “Company” or “CareSpan”), a company addressing the shortage in primary care and mental health through its provider networks, American-APN and American-Med Psych, and its leading “Clinic-in-the-Cloud” integrated digital care platform, is pleased to announce its consolidated results for the quarter ended March 31, 2023. All amounts are expressed in U.S. dollars.
Rembert de Villa, Chairman and Chief Executive Officer of the Company stated, “Q1 2023 revenues was $904,191, 50% higher than revenues for the prior quarter ending December 31, 2022, of $605,090.
The number of patient encounters declined between Q1 2022 and Q1 2023 (14,085 vs. 8,268). The decline in patient encounters and revenue between Q1 2022 and Q1 2023 (from $1,765,357 in Q1 2022) is due singularly to the significant drop in COVID-19- related encounters and associated reimbursements. The surge in COVID-19/Omicron-related cases in Q4 2021 and Q1 2022, and its subsequent decline during the rest of 2022 and beyond is consistent with COVID-19 case patterns experienced across the United States.
While COVID 19-related encounters declined, patient visits related to medical assessments for U.S. military veterans increased by 82% for the same period, from 323 in Q1 2022 to 588 in Q2 2023.
Despite the decline in COVID-19 cases and reimbursements, we continued to improve financial and operating results. Comprehensive (loss) improved by 29%, from ($670,394) million in Q1 2022 to ($520,002) in Q1 2023. Loss per share improved to ($0.02) in Q1 2022 to ($0.01) in Q1 2023. Adjusted EBITDA improved 18%, from ($663,415) in Q 1 2022 to ($484,343) in Q1 2023.
Operating (loss) in Q1 2023 improved by 22% from Q1 2022. This was achieved through continued cost containment and productivity measures taken by the Company starting in 2022, reducing operating expenses by $1,011,558, or 41.5%, from Q1 2022 to Q1 2023.
“We continue to scale services that drive improved margins, such as conducting medical assessments for U.S. military veterans. As we reported in our 2022 annual results, we are focused on accelerating our path to get to cash flow positive by executing on the current backlog of higher-margin contracts, developing new contracts for our members, and right-sizing operations and SG&A.
In Q1 2023, we continued to be very intentional in our in our technology spend, enhancing our ‘Clinic-in-the-Cloud’ platform through high-impact functions and features that improve revenue capture and profitability.
Leslie Markow, Chief Financial Officer, explains, “Highlights of our financial results are as follows:
First Quarter 2023 Financial Highlights
- The number of billed patient encounters decreased to 8,268 in Q1 2023 from 14,085 in Q1 2022 due to the decrease in COVID-19 visits.
- However, as COVD-19-related cases and reimbursements declined across the country, average revenue per encounter increased to $108.18 in Q1 2023 from $106.51 for Q4 2022.
- Operating expenses in Q1 2022 were $2,435,751 compared to $1,424,193 in Q1 2023, an improvement of $1,011,558 or 41.5%.
- This was primarily the result of a reduction in practice fees, as well as cost reduction measures to reduce salary costs, contractor costs, information technology costs, while improving productivity.
- The resulting operating loss for Q 1 2023 was ($520,002) compared to ($670,394) in Q1 2022, an improvement of 22%.
- Total Comprehensive (Loss) for the Company was ($520,002) in Q1 2023compared to ($671,094) in Q1 2022.
- (Loss) per share improved from ($0.02) in Q1 2022 to ($0.01) in Q1 2023. 2022. The weighted average number of common shares outstanding was 26,933,211 at March 31, 2022, and 45,975,792 at March 31, 2023.
- Adjusted EBITDA, improved to $(484,434) in Q1 2023 compared to ($663,415) in Q1 2022.
- The Company’s cash balance was $82,615 on March 31, 2023, compared to $393,746 as of December 31, 2022.
- Trade and accounts receivable declined from $985,473 on December 31, 2022, compared to $327,224 due to cash receipts in quarter one and lower encounters in Q1 2023.
- Accounts payable, accrued liabilities and amounts due to related parties declined from $2,264,244 on December 31, 2022 to $2,027,283 at March 31, 2023. The decrease is due to payments to vendors offset by loans provided of $220,000 in quarter 1 2023.
- Shareholders’ (deficiency) increased to $(1,617,944) on March 31, 2023 compared to $(885,025) on December 31, 2023, mainly resulting from capital transactions in 2022.
Events Subsequent to March 31, 2022
- Between March and May 2023, the Company received loans from the Chairman and CEO, a shareholder, an employee, and the Medical Advisor to the Company of $340,000, of which $220,000 was received before March 31, 2023. These loans are due in one year, bearing an interest rate of 12%. The loan holders have the option to be converted into a future qualified equity financing in excess of CAD $1 million.
- The Company’s loan from a former director of $165,000 plus interest, previously due March 31, 2023, was extended until such time the Company raises significant funds. This loan was registered in first priority of other loans under the British Columbia, Canada company legislation.
- In April 2023, the Company converted CAD $101,765 of accounts payable to a vendor by the issuance of 1,017,650 common shares and issued 508,825 warrants at CAD $0.15 for 5 years.
- In May 2023 the Company signed a Memorandum of Understanding with ChopraX LLC to develop and bring to market a network of integrative medicine providers that will provide virtual consultations globally using the CareSpan platform. This was covered in a separate press release by the Company on May 31, 2023.
CareSpan is focused on executing its growth strategy in 2023 and beyond and achieving positive cash flow position, mainly through the following:
- Fulfilling the backlog of current, higher-margin signed contracts for U.S. military veterans assessments, as well as medical supervision of remote patient monitoring for patients of weight loss programs
- Continued focus on identifying and signing contracts (similar to the disability assessment contract for U.S. military veterans and RPM-related care) to match existing patient backlogs to CareSpan network providers. This will drive higher margins for both CareSpan and its network providers while leveraging CareSpan’s digital care platform to bring better health outcomes to a wider population.
- Narrowed focus on recruiting clinicians (mainly Nurse Practitioners) specifically in geographies matching these contracts to accelerate growth post onboarding and improve margins for both CareSpan and its clinician members.
- Maintain productivity and continued reduced cost structure to improve cash flow. The Company intends to continue strict control of expenses by focusing mainly on expense items that are directly tied to revenue capture.
- Execution of the agreement with ChopraX LLC to bring the integrative medicine offering to market in the U.S. and globally, leveraging the Chopra brand, clinical methodology and protocols, and provider relationships, as well as CareSpan’s Clinic-in-the-Cloud platform and operations.
About CareSpan Health, Inc.
CareSpan is a healthcare technology and services company incorporated in British Columbia. CareSpan’s proprietary “Clinic-in-the Cloud” is a clinical workflow driven platform designed by doctors that integrates remote patient monitoring, diagnostic tools, the patient’s electronic health record, care collaboration capabilities, patient engagement and e-prescribing and lab ordering. CareSpan’s platform seamlessly supports both in-person and virtual/telehealth care. CareSpan is using this platform combined with essential business services to build provider networks across the U.S. that deliver primary and chronic care, and urgent care as well as behavioral health care.
About American-APN and American-MedPsych
American-APN is one of the first professional “group practices without walls” that brings highly qualified Nurse Practitioners to those in need of health care under a collaborative care system that uses digital technologies. American-APN was created for and by advanced practice nurses and NPs (Nurse Practitioners). It is operated exclusively by its nurse practitioner membership with its own executive leadership and board of directors.
American-MedPsych brings together behavioral health specialists in their own “practice without walls,” allowing them to collaborate with American-APN and other primary care providers to address the growing behavioral health shortage in the United States.
American-MedPsych is a growing national group practice of behavioral specialists delivering care using the CareSpan Clinic and supported by CareSpan Integrated Network’s management services organization. American-MedPsych specialists uses sophisticated digital care tools in collaboration with primary care counterparts to manage reinforcing conditions such as depression and diabetes, substance abuse and pain, stress, and job performance, to alleviate suffering and improve outcomes.
Members of both networks benefit from the suite of technology and business services and solutions offered by CareSpan Integrated Networks.