CARESPAN HEALTH DIVESTS INTEREST IN CARESPAN ASIA FOR US$1,000,000; NET PROCEEDS TO BE USED TO STRENGTHEN BALANCE SHEET AND FUND WORKING CAPITAL TO SUPPORT PATH TO PROFITABILITY; DR. SAM TONEY ELECTED CHAIRMAN OF THE BOARD OF DIRECTORS, DARRELL MESSERSMITH ELECTED TO CARESPAN BOARD
VANCOUVER, BC, March 4, 2024 /CNW/ - CareSpan Health, Inc. (TSXV: CSPN) ("CareSpan" or the "Company") is pleased to announce that on February 29, 2024 it closed a transaction for aggregate gross proceeds of approximately USD$1,000,000 involving the: (i) sale of the Company's fifteen percent (15%) minority equity interest in CareSpan Asia Inc. ("CareSpan Asia"), a Philippines based corporation and (ii) exchange of certain software rights (as detailed below) between the Company and CareSpan Asia (the "Transaction"). The net proceeds from the Transaction will be used to focus and further build out the Company's offerings in the U.S. market and for general business and working capital purposes.
Details of the Transaction are as follows: CareSpan Asia purchased the remaining equity interest of their company from CareSpan and obtained the rights to exclusively use CareSpan's platform technology in the Asia-Pacific region and for non-exclusive use in South America. In consideration, CareSpan Health received gross proceeds of approximately USD$1,000,000 and rights to exclusively use the microservices-architected version of the CareSpan platform that is currently being developed by CareSpan Asia (anticipated to be completed by December 31, 2024) in North America and Europe.
Both CareSpan Health and CareSpan Asia intend to continue collaborating on focused technology and market opportunities going forward, building upon the strong relationship developed since the inception of a joint venture between the companies in 2020.
According to Darrell Messersmith, Chief Executive Officer of CareSpan Health, "Following the successful completion of the Transaction, CareSpan Health is poised to further pursue its strategic initiatives for healthcare delivery. The proceeds from the Transaction strengthens the Company's balance sheet and provides the necessary working capital for the Company to focus and further build its network to a scale that achieves profitability via the U.S. market – the Company's primary market. Our contract pipeline, mainly in services to U.S. military personnel, is growing. In addition to the heightened focus on the U.S. market, CareSpan is also in the process of expanding the Software-as-a-Service (SaaS) component of the business and completing the pilot for Chopra Whole Person Care, which was announced in the second half of 2023. The Company will continue to support its European Joint Venture, SmartCare, where we have a 15% ownership stake."
Dr. Sam Toney Elected as Chairman and Darrell Messersmith Appointed as Board Member
Dr. Sam Toney has been elected as Chairman of the board of directors of the Company (the "CareSpan Board").
Dr. Toney was initially elected to the CareSpan Board in May 2023 and will serve as the Chairman of the Board going forward. As a resident of Tampa, Florida, Dr. Toney has had a well-respected career in healthcare. He has over thirty years of clinical management experience in health plan populations including Medicare, Medicaid, Tricare and commercial lines of business. He is currently Chief Executive Officer of Toney Healthcare Consulting. Prior to joining CareSpan, Mr. Toney served as Chief Medical Officer for Health Integrated (which he founded) where he developed a unique behavior modification program known as Dynamic Somato-Social Theory to manage individuals with complex co-morbid profiles. In prior roles with CareSpan, Dr. Sam Toney was Senior Medical Director for Behavioral Health, Acting Chief Medical Officer, as well as Senior Medical Advisor.
According to Dr. Toney, "I am excited to continue my affiliation with CareSpan, this time as Chairman of the Board. I am excited to help guide the team to capture the exciting opportunity that is ahead of them, and do that in a very responsible, patient-centric manner. I am also very excited to share my experience and expertise as CareSpan seeks to develop innovative technology and data solutions to improve health outcomes."
Dr. Toney is certified by the American Board of Psychiatry and Neurology and has appeared in such publications as the Journal of Managed Care Pharmacy, Managed Healthcare Executive and Population Health News. He is also a frequent speaker at major healthcare industry conferences and provides thought leadership in the design of an integrated approach to diagnosing and treating patients with chronic physical conditions complicated by co-morbid psychiatric and substance use disorders.
The Company is also pleased to confirm that Darrell Messersmith, Chief Executive Officer, has been appointed to the CareSpan Board. Rembert de Villa, former Chairman and Chief Executive Office of the Company, will continue to serve as member of the CareSpan Board.
According to outgoing Chairman, Rembert de Villa, "I am delighted that both Dr. Toney and Darrell Messersmith, have accepted their new roles on the CareSpan Board. They truly bring deep and extensive healthcare industry knowledge and experience that will be needed for CareSpan to execute its strategic focus on the Company's higher-margin segments and business goals going forward."
CareSpan is a healthcare technology and services company. CareSpan, with its head office in British Columbia, is the parent company of the CareSpan group, which holds a 100% interest in its operating subsidiary, CareSpan Holdings, Inc., a Delaware incorporated company.
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.
This news contains "forward-looking statements" within the meaning of applicable Canadian securities laws (collectively, "forward-looking statements") which reflect the current expectations of management of the company's future growth, results of operations, performance, and business prospects and opportunities, including the statements made above with respect to: (i) the delivery of the microservices software by CareSpan Asia by December 31, 2024; (ii) the Company's ability to further build out its US-software operations; (iii) the anticipated ongoing collaboration between CareSpan and CareSpan Asia; (iv) the growing contract pipeline of the Company; and (v) the Company's ability to capture business opportunities and grow in the future. Forward-looking statements are frequently, but not always, identified by words such as "may", "would", "could", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential for", "intend" and similar expressions or the negative of these terms or other comparable terminology, although these words may not be present in all forward-looking statements.
Forward-looking statements are based on management's assumptions as at the date of the forward-looking statements are provided, including but not limited to the following: the ability of the Company to execute its growth plans and business strategies; CareSpan Asia's ability to sufficiently develop and complete the microservices software development, the ability of Company's management to execute its business strategy and deploy capital in an efficient and profitable manner; no adverse changes in the applicable regulatory environment of the Company; the U.S. market continuing to be a higher-margin market; and sufficiently capturing opportunities to grow the Company. Though management believes that its assumptions are reasonable in the circumstances, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to differ materially from all or any of the future results, performance or achievements expressed or implied by forward-looking statements.
Risk factors that could cause the Company's actual results, performance, or achievements to differ from the forward-looking statements in this news release include, but may not be limited to: general market and economic risk; the ability of the Company's management to execute its strategy; the Company's ability to allocate capital in an efficient manner; the Company may never reach profitability and has a history of losses; risk of dilution and further share issuances to raise capital; CareSpan Asia's ability to execute its strategy and software development, consumer demand for remote patient monitoring in the United States, reliance on key personnel and management, unexpected or adverse regulatory changes in the healthcare space. These factors should be considered carefully, and prospective investors should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in the news release are based upon what management currently believes to be reasonable assumptions, the Company cannot assure prospective investors that actual results, performance or achievements will be consistent with these forward-looking statements. Except as required by law, the Company expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
https://www.carespanhealth.com
SOURCE CareSpan Health, Inc.
Leslie Markow, CFO, Email: [email protected], Telephone: 888) 337-5889
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