CloudMD Software and Services (DOC.V) signed a binding term sheet to acquire 51% of mixed telemedicine and family and specialist medical clinic, West Mississauga Medical today.
If a second wave hits then social distancing is going to come back in force. Going to filthy clinics and sitting among sick people, especially when you’re not showing any outward symptoms, is counterproductive to the cause of fighting COVID-19. Having a telemedicine app on hand makes staying away from sick people easier. In Ontario, where they’re still fighting to get COVID-19 numbers down well after flu season has ended, this deal is rather timely.
West Mississauga has eight family doctors and four specialists serving over 100,000 people. It’s a well-established medical clinic located on the border of Brampton, Mississauga and Milton, Ontario. The clinic stayed open during COVID-19, seeing patients both in-person and via telemedicine, and that’s where the synergies lie with CloudMD. This acquisition serves CloudMD’s national growth strategy of adding brick and mortar clinic partners in major provinces.
“This partnership allows us to continue our tradition of providing comprehensive care to our patients. Partnering with CloudMD gives us the opportunity to expand our virtual office and enhance the provision of medical care to patients across Ontario. Integrated medical care with a virtual footprint is the future of medicine and we are excited to be part of the CloudMD family of medical clinics and the first in Ontario. Dr. Hamza and the entire team at CloudMD are a patient centred company primed for growth in the dynamic field of virtual medicine and our core values are aligned,” said Dr. Sohal Goyal, medical director of West Mississauga Medical.
West Mississauga Medical will be added into the CloudMD EMR platform and its network of doctors and specialists will extend their service to include all of the company’s registered users and patients in Ontario. The acquisition will add West Mississauga Medical’s more than $1.8 million in revenues (with EBITDA margins over 11% over the last fiscal year ending December 2019) to the company’s coffers.
Most companies suffered through COVID-19. They shut their doors, laid off their workers and lost money. Not companies with telemedicine apps like CloudMD’s. Instead, they picked up.
Q1 2020 Financial Highlights
- Q1 2020 total revenue was $3,056,729, compared to $1,100,330 in Q1 2019, an increase of 178%. The revenue generated from SAAS model digital services was $427,179 compared to $240,787 in Q1 2019, an increase of 77% primarily attributable to organic growth. The revenue generated from medical clinics and pharmacies was $2,629,550 compared to $859,543 in Q1 2019, an increase of 206% primarily attributable to the Company’s acquisitions over the past year.
- Q1 2020 gross margin was 41%, compared to the same 41% in Q1 2019. Gross margins remained stable as the Company increased the revenue generated from higher margin digital services and telehealth but incurred higher than usual variable costs primarily due to the Company’s expansion into Ontario. The Company expects the gross margin to improve as efficiencies are realized and to remain strong for the remainder of 2020 as it begins to recognize additional revenue from high margin sources like digital services, pharmacy kiosk partnerships and telehealth visits.
- Net loss and comprehensive loss in Q1 2020 was $1,622,994, resulting in a net loss per share (basic and diluted) of $0.02. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss was $914,646 for Q1 2020, compared with adjusted EBITDA loss of $917,112 in Q1 2019.
- CloudMD ended Q1 2020 with a balance sheet of $2,760,136 in cash. This amount did not include subscription receivable of $200,000 subsequently received after March 31, 2020. Additionally, the cash position does not reflect the $13 million bought deal financing CloudMD anticipates closing on June 2, 2020.
One to watch.
—Joseph Morton
