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December 01, 2022


Investment information for the new generation

Here’s why VitalHub (VHI.V) jumped 90% in 6 weeks (and 25% today)

VitalHub (VHI.V) – is a healthcare technology company marrying medical information networks with blockchain technology.

The company’s  robust two-pronged growth strategy, targets growth opportunities within its product suite while pursuing an aggressive M&A plan.

VitalHub is on our watchlist, we wrote about them up a couple of times in May 2018 and watched the stock surge 90% – from .13 to .25.

We haven’t reached “peak-grandiosity” so we didn’t assume that we alone were the cause of the stock price surge.

We gave VitalHub’s CEO, Dan Matlow a call and asked him: “Why is your stock running?”

Typically, the CEO’s reply will be one of the following:

“We’re doing a road show”
“We just did a massive promotional blast”
“Take-over rumours”
“Our numbers beat the street” etc.

Matlow’s answer?

“I honestly don’t know – I think investors are catching on.”

Fair enough – but what are they catching on to?

On May 29, 2018 VHI published its Q1, 2018 Consolidated Financial Statements.

Highlights for the quarter ended March 31, 2018:

  • Acquisition of H.I. Next, which has historical unaudited revenues of $2.695 million, $3.329 million and $3.572 million for 2015, 2016 and 2017.
  • Acquisition of Clarity, with $200,000 in revenue in its last fiscal year.
  • Royalty-free license sale to a customer of HI Next software.
  • $1,613,362 of perpetual license fees and $58,015 of services revenue, with the remaining balance of $1,719,499 in deferred revenue.
  • Introduction of WellLinc, a proprietary electronic health record interoperability solution powered by blockchain technology.
  • 16 new customers in New York State, through the Behavioral Health Information Technology Grant Program.
  • Licensed B Care Electronic Health Record software to Manitoba’s Northern Regional Hospital
  • Additional contracts in the quarter including: Bluewater Health, ON, Canada; HKS Counselling Services, ON, Canada; United Chiefs and Councils of Mnidoo Mnising, ON, Canada; Alzheimer’s Society of Toronto, ON, Canada; and Stella’s Place, ON, Canada.
  • Revenue of $2,923,390, representing an increase of 2172.3% over the same period last year.

“We are starting to realize the impact of our strategy as we combine our acquisitions for the first time,” stated Matlow.

If you drill down into the business activities of a lot of blockchain companies, you pull out a core sample of porridge.

I’m sorry, your technology does…what?

And it’s going to make money…how?

The VHI numbers are good.  VHI owns a lot of different businesses.

But here’s what’s really interesting.  Everywhere you dig, there is mineralisation.

Example:  On April 19, 2018 MaRS Discovery District – an urban innovation hub published a case study describing the success of Trinity Village Care Centre’s implementation of the VitalHub Long Term Care (VH LTC)  application.

MaRS is a non-profit organisation dedicated to driving economic and social prosperity by “harnessing the full potential of innovation.”

So MaRS has no dog in this race.  Their objective is to figure out if VitalHub’s technology is brilliant or bollocks.

VH LTC enables Long Term Care organizations to improve coding accuracy, save time and costs, enhance interdisciplinary communication, improve workload planning, provide detailed analytics, improve coordination and improve staff workflow.

MaRS published a “post-mortem case study” – doing statistical analysis to determine what effect, if any, VH LTC has in real-world applications.

The results provided a fascinating look at the life of a healthcare worker.

At the start of a shift, Personal Support Workers (PSW) sign out facility smartphones and immediately have a personalized view of the resident, and all upcoming tasks.

VitalHub’s app highlights pending events required observations or documentation. With this app, documentation can be done in real time.

Case study: a PSW’s smartphone alerts the Registered Nurse (RN) in real time that a patient has bruising on her shoulder. Previously getting notified “wasn’t always so efficient.”

PSWs are always on the move, caring for residents, and injuries would usually get mentioned to the RN at a break or the end of a shift.

In the old (2017) world, documentation was done in bursts, after the fact, often at a break or the end of a shift. PSWs would have to remember everything that had happened during a shift—sometimes for multiple residents—which could lead to inaccurate data. Plus, keeping up with paperwork meant that PSWs and RPNs were often unable to take their breaks – leading to staff exhaustion and further inefficiencies.

MaRS’ conclusion?

“This is an exemplary case of what is possible when a healthcare provider and vendor share an interest in solving a complex problem and a commitment to innovation.”

Measurable highlights:

  • Better use of time
  • Increased data accuracy
  • Cost efficiencies
  • Improved care
  • Frontline staff saved 23 minutes per shift
  • Registered practical nurses saved 1.5 hours per shift
  • Fewer recording errors
  • Data quality and accuracy improved by 30%

VH LTC is a good example of the VitalHub’s effectiveness in this health sector.

As we stated a couple of weeks ago, “VHI – a healthcare technology company marrying medical information networks with blockchain technology – is gobbling up other companies.”

Matlow’s acquisition criteria:

  • Breakeven or profitable
  • Owner operated businesses with limited outside investment
  • Large component of expense is on research and
  • Development vs. sales and marketing
  • Little commercialization or sales and marketing expertise
  • Significant customer base with minimal retention issues
  • Limited or no expansion beyond geographical boundaries
  • Creating a large growth barrier
  • Ability to upsell to existing install bases of target companies
  • Targets bringing their product into a mobile environment
  • Recurring revenue above 60% of total revenue

According to the Decision Research Group, “Industry projections expect the global Blockchain Healthcare market to grow to $2.3 billion by 2021, up from roughly $340 million in 2017.”

VitalHub has 124.8 million shares outstanding.  78.8 Million shares (62.5%) are owned by the public, 48 million (38.5%) are owned by insiders.

Matlow is right: investors are catching on to VitalHub.

And maybe for the simplest of reasons: it’s a really good company.

Full Disclosure:  VitalHub is an Equity Guru marking client, we also own stock.

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