Carebook Technologies Inc. ('Carebook' or the 'Company') (TSXV: CRBK) (OTCPK: CRBKF) (XFRA: PMM1), a leading Canadian provider of innovative digital health solutions today announced its results for its third quarter ended September 30, 2022.
Our third quarter results continue the positive trend begun at the start of our current fiscal year as we benefit from our acquisitions of Infotech and CoreHealth,' commented Michael Peters, Carebook CEO. 'Our recent announcements of major wins with tier one employers reflects the strength of our offerings and serves as an endorsement of our relentless focus on delivering quality customer programs in the growing employer market. Major companies across North America, like Air Canada and Metro Inc., are recognizing Carebook for the innovative and powerful digital health and wellness solutions we offer that can provide meaningful relief to the challenges faced by their clients and employees. When coupled with the significant enhancements to our statement of work with our major pharmacy client and our on-going efforts to find efficiencies within our cost structure, Carebook is on a path to profitability.
Revenue
Revenue for the quarter ended September 30, 2022, was $2.1 million, compared to $1.8 million in the quarter ended September 30, 2021, an increase of 15% which was primarily driven by the acquisitions of InfoTech in Q2 2021 and CoreHealth in Q3 2021. Revenue generated in the quarter ended September 30, 2022, was 59% from the employer vertical and 41% from the pharmacy vertical, whereas revenue generated in the quarter ended September 30, 2021 was 52% employer and 48% pharmacy.
Net loss
Net loss for the quarter ended September 30, 2022, was $1.7 million compared to $3.6 million for the quarter ended September 30, 2021, a decrease of 52% year-over-year. While the acquisitions of InfoTech and CoreHealth increased operating expenses for the quarter ended September 30, 2022, this was more than offset by the incremental revenue and cost synergies that were implemented after the acquisitions.
New Contracts Booked
During the quarter, Carebook booked $3 million in new contract value for contracts ranging from one to five years in length. These contracts, from a diverse base of clients located in the U.S. and Canada, provide confirmation of the success of Carebook's strategy and renewed focus on the fast-growing employer vertical as well as significant additional work within the pharmacy sector.
Expansion of Statement of Work With Major Pharmacy Client
On July 13, 2022, Carebook announced a significant order under its pharmacy solution agreement with its major pharmacy client. The additional statement of work expanding the scope under the agreement was signed in June and is worth an incremental $1.5 million over a one-year term, representing an increase of 83% in pharmacy contract value for Carebook.
Carebook has completed the expansion of its existing team for the solution, nearly doubling capacity to deliver on the continued development of its robust, customer-facing platform.
Binding Agreement With Metro Inc.
On August 29, 2022 CoreHealth announced a binding agreement with Metro Inc. (TSX: MRU) ('Metro'), a food and pharmacy leader in Quebec and Ontario, for the provision of digital health and well-being solutions. The agreement provides a unique opportunity for CoreHealth to showcase the flexibility of its platform as it adapts to new markets and continues to deliver solutions that improve health and wellbeing. CoreHealth will be supporting Metro's transformational initiatives in the industry, promoting the health and well-being of Canadians.
Amendments to the Credit Agreement
On April 7, 2022, the Company entered into an amendment to its credit facilities with a leading Canadian Schedule I bank and one of its affiliates (together, the 'Lenders'). Under the amendment, the Lenders agreed to provide the Company with (i) a $3 million demand revolving facility (the 'Revolving Facility') and (ii) a $4 million non-revolving term loan facility (the 'Term Loan Facility' and together with the Revolving Facility, the 'Credit Facilities'). Moreover, the maturity date of Term Loan Facility was extended to November 30, 2022, provided that the Company make a mandatory prepayment of $1 million on the Term Loan Facility which was paid in June 2022, after which the outstanding amount under the Term Loan Facility was $3 million. The applicable margin on each of the Credit Facilities was increased to 9.0%, effective as of April 7, 2022.
Effective July 31, 2022 the Company entered into another amendment to its Credit Facilities with the Lenders. Under the amendment, the maturity date of the Credit Facilities was extended to August 31, 2023, provided that the Company completes a minimum capital raise in the amount of $1 million by September 30, 2022, makes a mandatory prepayment of $250,000 on the Term Loan Facility and maintains a minimum cash balance financial covenant.
The above is a summary of the amendments to the Credit Facilities. This summary is not intended to be complete and is qualified in its entirety by the full text of the amendments, a copy of which have been filed the Company's SEDAR profile at www.sedar.com.
Loan Agreements
As previously announced, the Company entered on September 28, 2022 into amended and restated loan agreements ( the 'Loan Agreements') with each of SAYKL Investments Ltd. and UIL Limited (collectively, the 'Major Shareholders') pursuant to which the Company agreed with the Major Shareholders to amend the terms of the Loan Agreements in order to (i) provide an additional $1 million to the Company, bringing the aggregate principal amount outstanding to the Lenders to $2 million as at the date hereof, and (ii) add a conversion into common shares feature at a conversion price of $0.175 per common share. The proceeds from the financing will be used to make a mandatory prepayment of $250,000 on the Term Loan Facility, and for working capital and general corporate purposes. The financing also enabled the Company to satisfy the condition imposed by the Lenders that the Company complete a minimum capital raise in the amount of $1 million by September 30, 2022.
Cost Reduction Measures and Sublease of Montreal Headquarters
During the quarter, the Company implemented additional cost measures that are expected to result in nearly $750,000 of savings on an annual basis. Furthermore, subsequent to the quarter, on November 10, 2022, the Company entered into an agreement to sublease (the 'Sublease') the entire premises of its Montreal office commencing on May 1, 2023 until the end of the lease on July 31, 2028. The Sublease is subject to the satisfaction of customary closing conditions and is expected to result in over $250,000 in annual savings for the Company. These initiatives, when combined with the strong revenue growth that the Company is experiencing, confirm the trajectory of the Company towards profitability.
About Carebook Technologies
Carebook's digital health platform empowers its clients and more than 3.5 million members to take control of their health journey. During 2021, the Company completed the acquisitions of InfoTech Inc. ('InfoTech'), a global leader in health and productivity risk management, and CoreHealth Technologies Inc. ('CoreHealth'), owner of an industry-leading wellness platform. In combination, these companies create a comprehensive digital health platform that includes both assessment tools and the technology to deliver complementary solutions. Carebook's shares trade on the TSXV under the symbol 'CRBK,' on the OTC Markets under the symbol 'CRBKF,' and are listed on the Open Market of the Frankfurt Stock Exchange under the symbol 'PMM1.'
Contact:
Tel: (450) 977-0709
Notice regarding forward-looking statements
This release includes forward-looking information and forward-looking statements within the meaning of Canadian securities laws regarding Carebook, its subsidiaries and their business. Often, but not always, forward-looking information can be identified by the use of words such as 'plans', 'is expected', 'expects', 'scheduled', 'intends', 'contemplates', 'anticipates', 'believes', 'proposes' or variations (including negative variations) of such words and phrases, or state that certain actions, events or results 'may', 'could', 'would', 'might' or 'will' be taken, occur or be achieved. Forward-looking information in this release include statements with respect to revenue generating contracts, the Company's growth strategy, the overall value of recently signed contracts, the Company's path to profitability and the expected benefits from completed and integrated acquisitions. Such statements are based on the current expectations of the management of Carebook and are based on assumptions and subject to risks and uncertainties. Although the management of Carebook believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and undue reliance should not be placed on such forward-looking statements. The forward-looking statements reflect the Company's current views with respect to future events based on currently available information and are inherently subject to risks and uncertainties. The forward-looking events and circumstances discussed in this release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the Company, including economic factors, management's ability to manage and to operate the business of Carebook, management's ability to successfully integrate the Company's completed acquisitions and to realize the synergies of such acquisitions, management's ability to successfully complete product studies, the equity markets generally and risks associated with growth and competition, management's ability to achieve profitability for the Company, as well as the risk factors identified in the Company's management's discussion and analysis for the year ended December 31, 2021 and described under the heading 'Item 21 - Risk Factors' in the Listing Application of the Company dated September 28, 2020, each of which can be found on SEDAR under the Company's profile at www.sedar.com. Although Carebook has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on any forward-looking statements or information. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Carebook does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. In addition, the current situation and future developments with respect to the COVID-19 pandemic could cause certain of the assumptions and information set forth herein or the fact that on which such assumptions are based to differ materially from previous expectations including in respect of demand for our products, access to debt and equity capital and other factors.
CAREBOOK TECHNOLOGIES INC. 
