Yahoo Finance
Filing
(4) Industry
According to the company, the pain management clinic is very fragmented. There are 60 clinics in Ontario and the company owns the highest number of clinics. The next biggest player owns 9 clinics.
2. Management
7.Links
Filing
Jan. 13, 2021
Sept. 30, 2020 Data
Price: $0.70. Shares :42m, Diluted: 70m, Cap: $29m
Sept. 30, 2020 Data
Price: $0.70. Shares :42m, Diluted: 70m, Cap: $29m
1.Business
(1) History
(1) History
The company was founded in 2017 as a healthcare investment shell company. I think Bloom Burton is the major player behind this. It acquired 9 chronic pain clinic chains across Ontario called CPM(Centre for Pain Management). The price is around $12m including shares and taken over around 7m in debt. Those 9 centers generated less than 20m in revenue and with a loss of several million.
From 2018 to 2019, the company was able to improve the utilization rate of those clinics from around 30% to over 50% and make them profitable. The revenue from these clinics also grew to over 35m I think.
In May 2018, it acquired 3 more pain management clinics called InMedic from RAM(Renaissance Asset Management) for around $12m including $8m in cash and $4m(6.5m shares) in stock. At the time, InMedic generates $12m in revenue and 900k income annually.
In June 2020, it IPOed through a reverse merger. In Nov. 2020, it issued around 13m new shares for $0.9/share which is oversubscribed.
(2) Major business
Currently, it has 12 pain management centers across Ontario. 9 under the CPM brand and 3 under the InMedic brand. In total, they serve around 11,000 customers. On average, each clinic generates around $4m in revenue and maybe $200k in EBITDA.
(3) Debt and cash
By Sept. 2020, it has around 5m in debt and owns over 3m to BloomBurton. After Nov., the company should be cash positive.
By Sept. 2020, it has around 5m in debt and owns over 3m to BloomBurton. After Nov., the company should be cash positive.
(4) Industry
According to the company, the pain management clinic is very fragmented. There are 60 clinics in Ontario and the company owns the highest number of clinics. The next biggest player owns 9 clinics.
2. Management
Grant Connelly: Current CEO. He was CPM's general manager in 2018 and promoted to CEO in early 2019. Previously he was CFO of two companies for 6 years. From 2014 to 2018, he found a health care tech company called VroomHealth aiming to reduce patients waiting time. Not sure how the company is doing now. He holds very few shares but has 350k options at the price of $1.00.
Grishanth Ram: From InMedic, he was CEO of the company briefly from 2018 to early 2019. still a current director. Owns around 5m shares. The biggest shareholder.
Bloom Burton: Owns 4.4m shares. Founder Jolyon Burton is the current director of the company.
There are around 10m warrants at $0.0001/share which really puzzles me. It might not valid for exercise for the full amount.
(Update Mar. 26, 2021)
After reading the AIF document, I found the 10m cheap warrant was from the conversion of debt at $0.75/share. As of today, 3.2m of the $0.0001/share warrants were exercised. Also, there are 1.95m warrants at $1/share expired.
By now, it has 45m shares outstanding, 23m warrants +2m options outstanding. Around 12m of them price< $1. Rest >= $1.
3. Financial data
4. Valuation and comments
(1) Currently, the company generates around 50m in revenue and over $2m in EBITDA. Currently, its Market Cap is over 40m which is not really cheap. On the EV to revenue basis, it is just traded less than one time of its revenue which is relatively cheap for a healthcare stock.
(1) Currently, the company generates around 50m in revenue and over $2m in EBITDA. Currently, its Market Cap is over 40m which is not really cheap. On the EV to revenue basis, it is just traded less than one time of its revenue which is relatively cheap for a healthcare stock.
(2) The is plenty of room to grow organically since the utilization rate is just around 50%.
(3) The company is intended to acquire other clinics.
5. Risk
(1) It is a new IPO and there is very limited information about the company and its management.
(1) It is a new IPO and there is very limited information about the company and its management.
(2) Both organic growth and acquisition are yet to see.
(3) Unlike PHA(premier health), the company seems to has no tech advantages.
6. Conclusion
The company seems doing well and has some growth potential. However, it is still too early to tell. Should watch closely.
7.Links
