MCI Onehealth Reports Fiscal 2022 Financial Results and Announces Review of Strategic Alternatives

April 3, 2023


TORONTO, April 03, 2023 (GLOBE NEWSWIRE) -- MCI Onehealth Technologies Inc. (“MCI” or the “Company”) (TSX: DRDR), a clinician-led healthcare technology company focused on increasing access to and quality of healthcare, has released its financial results for the financial year ended December 31, 2022 and announced that it is engaged in a review of strategic alternatives available to the Company.

A summary of MCI’s financial and operational results is set out below, and more detailed information is contained in the financial statements and related management discussion and analysis, which are available on MCI’s SEDAR page at Financial measures described as “Adjusted” in this news release are non-IFRS financial measures and may not be comparable to other similar measures disclosed by other companies. Please see Non-IFRS Financial Measures below for more information.

Cash and Liquidity Update

As of March 31, 2023, the Company has a cash balance of approximately $1.4 million and accounts payable and other current liabilities of approximately $18 million. The Company will need to obtain additional financing by the end of April to fund ongoing operations in the ordinary course, and may be required to obtain additional financing in future periods.

The Company’s special committee (the “Special Committee”), comprised of two of its independent directors, has initiated a process to evaluate and consider the Company's current financial and liquidity position, operational challenges and possible financing, reorganization or restructuring alternatives that may be available to the Company. The Company is also continually evaluating other alternatives of generating cash in the short term, such as disposing of non-core assets. In the meantime, to address its lack of necessary liquidity, the Company has been and is continuing to responsibly reduce costs while it evaluates the potential options.

Fiscal 2022 Annual Highlights

Significant financial and operational highlights for MCI during the year ended December 31, 2022 included:

  • Operational Challenges: As described above, the Company faced, and is continuing to face, liquidity and operational challenges during FY22, and has taken, and is continuing to take, steps to reduce costs while considering all available options.
  • Revenue Growth: Revenue for FY22 increased 11% year-over-year, driven primarily by higher per-patient revenue and increased patient volumes from the Company’s clinics, telehealth services, MCI Connect virtual healthcare services and the acquisitions of Khure and Polyclinic. Total revenue for FY22 was $53.2 million, compared to $47.8 million in FY21.
  • Information and Data Analytics: FY22 saw the introduction of a new revenue stream generated by the Company’s data insights as a service offering, which has potential to grow in significance in the short- to medium-term.
  • Increased Patient Volumes: Patient volumes grew approximately 2% in FY22, year-over-year, and 7% quarter-over-quarter, helping to increase revenue.
  • Health Technology & Research Services: The Company’s health technology and research services generated revenue of $3.6 million in FY22, up 70% over FY21.
  • Corporate Health Services: The Company added 62 new corporate health customers in FY22. Overall revenue from CHS declined by 51% to $2.8 million in FY22, compared to $5.6 million in FY21, due to decreased demand for COVID-19 services.
  • Financing; The Company obtained a $5 million secured loan facility from The First Canadian Wellness Co. Inc., a related party, to fund ongoing operations and general and administrative expenses while the Company continued to pursue its strategic plan. The loan was subsequently expanded to $7 million at the beginning of 2023, $6.8 million of which is currently drawn.
  • Net Losses:   Net losses for FY22 were $21.0 million, as compared to losses of $15.5 million in FY21. The Company’s revenue increased over the reporting period but these gains were more than offset by higher research and development costs supporting the Company’s technology platform ramp. The Company’s general and administrative expenses declined in 2022 due to cost reduction measures and focus on operational efficiency, but research and development spending increased to support projects relating to the launch of the Company’s data backbone and standing up the Company’s data lake.  
  • Adjusted EBITDA: Adjusted EBITDA(1) for FY22 was negative $9.4 million, as compared to an Adjusted EBITDA of negative $4.6 million in FY21, due to increases in research and development spending.

Fourth Quarter 2022 Highlights

Significant financial and operational highlights for MCI during the fourth quarter of 2022 included:

  • Revenue Stable Quarter-over-Quarter: Revenue for Q4 FY22 remained stable over Q4 FY21. Total revenue for Q4 FY22 was $13.8 million, compared to total revenue of $13.9 million in Q4 FY21.
  • Clinic Consolidation: On December 13, 2022, the Company announced that it would be consolidating five of its under-performing Ontario clinics into its remaining fourteen Ontario clinics to enable extended hours and intensification of services at the remaining clinics, as well as to significantly reduce overhead costs. The consolidated clinics ceased operations in the fourth quarter of 2022, and the majority of their physicians, nurses and staff were redeployed.
  • Net Losses: Net losses for the quarter were $3.4 million, as compared to net losses of $4.8 million for the same quarter in the previous year.
  • Adjusted EBITDA: Adjusted EBITDA(1) for the quarter was negative $1.8 million, as compared to an Adjusted EBITDA of negative $1.5 million in the same period last year.

Review of Strategic Alternatives

The Company has faced and continues to face financial, liquidity and operational challenges. As a result, the Company’s Special Committee, comprised of two independent directors, is reviewing and evaluating a range of potential strategic alternatives for the Company. The Special Committee is seeking to identify and evaluate one or more potential transactions that would be in the best interests of the Company and its stakeholders, including potential financing and restructuring alternatives that may be available to the Company. See “Forward-Looking Statements” below and the “Liquidity and Capital Resources” and “Special Committee” sections of the Company’s management discussion and analysis for the FY22 for additional information.

Other than as described in this news release, the Company has not made any decisions related to strategic alternatives at this time. The Company cautions that there are no assurances that the evaluation of strategic alternatives will result in the approval or completion of any specific transaction or outcome and there is no certainty that the Company will be able to secure additional financing, or to secure it on terms favourable to the Company, or that its revenue growth and expense reduction strategies will be successful. The Company does not currently intend to disclose further developments with respect to this review process unless and until the Company concludes the review or disclosure is otherwise required by applicable securities laws.

Financial and legal advisors have been engaged to advise on this process.

Selected Financial Information
(In thousands of dollars, except percentages and per share amounts)

 Three months endedPeriod overYear ended
 Period over
 December 31period ChangeDecember 31
 period Change
  2022  2021  $ %  2022  2021  $ % 
 ($ in thousands except percentages)
Revenues$13,799 $13,936 $(137)NM $53,222 $47,817 $5,405 11 
Cost of sales 9,030  8,986  44 NM  36,602  32,806  3,796 12 
Gross profit 4,769  4,951  (181)(4) 16,620  15,011  1,609 11 
Research and development 2,264  74  2,190 NM  8,144  155  7,989 NM 
Sales and marketing
 588  437  (255)(30) 1,656  1,115  541 49 
General and administrative 6,837  9,619  (2,782)(29) 26,676  30,181  (3,505)(12)
  9,689  10,130  (441)(4) 36,476  31,451  5,025 16 
Net finance costs 318  146  172 118  967  484  483 100 
Changes in FV of the investments 395  -  395 NM  395  -  395 NM 
Share of loss from associates (23) 3  369 NM  214  -  214 NM 
FV changes-contingent liabilities consideration (1,718) (608) (1,110)183  (1,485) (608) (877)NM 
Reversal of impairment charges (200) -  (200)NM  -  -  - NM 
Gain on sublease (4) (28) 24 NM  (194) (28) (166)NM 
  (1,232) (487) (745)153  (103) (152) 49 (32)
Loss before taxes (3,688) (4,692) 1,004 (21) (19,753) (16,288) (3,465)21 
Income taxes (recovery) (263) 119  (382)NM  1,217  (747) 1,964 (263)
Net loss (3,425) (4,811) 1,386 (29) (20,970) (15,541) (5,429)35 
Adjusted gross profit (1) 4,927  5,113  (186)(4) 17,253  15,438  1,815 12 
Adjusted gross margin (1) 35.7% 36.7%    32.4% 32.3%   
Adjusted EBITDA (1) (1,789) (1,514) (276)18  (9,356) (4,644) (4,710)101 
Adjusted EBITDA margin (1) (12.9%) (10.86%)    (17.6%) (9.7%)   
Weighted average number of          
Of Share outstanding: Basic and diluted 50,075,202  49,635,306     50,075,202  47,998,837    
Net loss per share -Basic and diluted$(0.07)$(0.10)   $(0.42)$(0.33)   

(1)   Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA and Adjusted EBITDA Margin are non-IFRS measures. Please see “Non-IFRS Measures” above for an explanation of the composition of these measures and their usefulness, and “Reconciliation of Non-IFRS Measures” below for a reconciliation of these measures to the IFRS measures found in the Company’s Financial Statements.

Selected Statement of Financial Position Data

 Year ended December 31,
  2022  2021 
 $ in thousands
Cash$1,411 $7,142 
Accounts receivable 5,627  6,328 
Accounts payable and accrued liabilities (9,227) (9,527)
Bank loan (1,685) - 
Related party loan (5,315) - 
Lease liabilities (10,420) (14,347)
Other liabilities (130) (130)
Non-controlling interest redeemable liability (1,305) (1,305)
Liability for contingent consideration (1,637) (3,122)

Non-IFRS Financial Measures

The terms Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit and Adjusted Gross Margin used in this document do not have any standardized meaning under IFRS, may not be comparable to similar financial measures disclosed by other companies and should not be considered a substitute for, or superior to, IFRS financial measures. Readers are advised to review the section entitled “Non-IFRS Financial Measures” in the Company’s management discussion and analysis for year ended December 31, 2022, available on MCI’s SEDAR page at, for a detailed explanation of the composition of these measures and their uses.

(1) The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to net income (loss) for the three-months and years ended December 31, 2022 and December 31, 2021:

 Three months endedYears ended
 December 31December 31
  2022  2021  2022  2021 
 $ in thousands
Total Revenue$13,799 $13,936 $53,222 $47,817 
Net loss (3,425) (4,811) (20,970) (15,541)
Add back (deduct)    
Depreciation and amortization 1,397  1,296  5,273  4,309 
Net finance charges 318  147  967  484 
Changes in FV of the investments 395  -  395  - 
Share of loss from associates (23) 3  214  - 
Expected credit losses 40  330  63  696 
Income taxes expense (recovery) (263) 120  1,217  (747)
Reversal of Impairment charges (200) -  -  - 
Gain on sublease contracts (4) (28) (194) (28)
Loss on disposal of property and equipment 48  -  48  - 
Share-based payment expense 1,609  1,741  4,834  6,111 
Acquisition related legal expenses 37  296  283  679 
Fair value changes in contingent consideration (1,718) (608) (1,485) (608)
Adjusted EBITDA$(1,789)$(1,514)$(9,356)$(4,644)
Adjusted EBITDA Margin (12.9%) (10.9%) (17.6%) (9.7%)

(2) The following table reconciles Adjusted Gross Profit and Adjusted Gross Margin to revenue and cost of sales for the three-months and years ended December 31, 2022 and December 31, 2021:

 Three months endedPeriod overYears endedPeriod over
 December 31period ChangeDecember 31period Change
  2022  2021  $ %  2022  2021  $ % 
 ($ in thousands except percentages)
Revenue$13,799 $13,936 $(137)NM $53,222 $47,817 $5,405 11%
Cost of sales 9,030  8,986  44 NM  36,602  32,806  3,796 12%
Depreciation and amortization (158) (163) 5 (3%) (633) (427) (206)48%
  8,872  8,823  49 1% 35,969  32,379  3,590 11%
Adjusted gross profit$4,927 $5,113    $17,253 $15,438   
Adjusted gross margin 35.7% 36.7%   32.4% 32.3%  

About MCI
MCI is a healthcare technology company focused on empowering patients and doctors with advanced technologies to increase access, improve quality, and reduce healthcare costs. As part of the healthcare community for over 30 years, MCI operates one of Canada’s leading primary care networks with approximately 280 physicians and specialists, serves more than one million patients annually and had nearly 300,000 telehealth visits last year, including online visits via MCI additionally offers an expanding suite of occupational health service offerings that support a growing list of more than 650 corporate customers. Led by a proven management team of doctors and experienced executives, MCI remains focused on executing a strategy centered around acquiring technology and health services that complement the company’s current roadmap. For more information, visit

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Forward Looking Statements

Certain statements in this press release, constitute “forward-looking information” and "forward looking statements" (collectively, "forward looking statements") within the meaning of applicable Canadian securities laws and are based on assumptions, expectations, estimates and projections as of the date of this press release. Forward-looking statements include statements with respect to projected cash and liquidity, the need for financing, the Company’s ongoing review of strategic alternatives and the work of its Special Committee; the possibility of disposing of non-core assets; plans for future cost reduction and the anticipated outcome and benefits of the consolidation of some of the Company’s clinics. The words “engaged in”, “evaluating”, “continuing to”, “enable”, “is reviewing”, “potential”, “intend” or variations of such words and phrases or statements that certain future conditions, actions, events or results “will”, “may”, “could”, “would”, “should”, “might” or “can”, or negative versions thereof, “occur”, “continue” or “be achieved”, and other similar expressions, identify forward-looking statements. Forward-looking statements are necessarily based upon management’s perceptions of historical trends, current conditions and expected future developments, as well as a number of specific factors and assumptions that, while considered reasonable by MCI as of the date of such statements, are outside of MCI's control and are inherently subject to significant business, economic and competitive uncertainties and contingencies which could result in the forward-looking statements ultimately being entirely or partially incorrect or untrue. Forward looking statements contained in this press release are based on various assumptions, including, but not limited to, the following: MCI's short- and medium-term liquidity and working capital needs, the availability of working capital and liquidity and the company’s ability to continue to operate as a going concern; MCI’s ability to secure additional debt or equity financing and the terms on which that financing may be secured; MCI’s ability to find potential transaction partners to acquire the business or its non-core assets; MCI’s ability to achieve its growth and revenue strategies; the demand for MCI's products and fluctuations in future revenues; the availability of future business ventures, commercial arrangements and acquisition targets or opportunities and MCI’s ability to consummate them and to effectively integrate future acquisition targets into its platform; MCI’s ability to effectively roll out its smart referral system and monetize its data lake; the effects of competition in the industry; the requirement for increasingly innovative product solutions and service offerings; trends in customer growth; the stability of general economic and market conditions; currency exchange rates and interest rates; MCI's ability to comply with applicable laws and regulations; MCI's continued compliance with third party intellectual property rights; the anticipated effects of COVID-19; and that the risk factors noted below, collectively, do not have a material impact on MCI's business, operations, revenues and/or results. By their nature, forward-looking statements are subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct, and that objectives, strategic goals and priorities will not be achieved.

Readers are encouraged to review the “Liquidity and Capital Resources” section of the Company’s MD&A, together with Note 2(c) of the Company’s financial statements, for the year ended December 31, 2022, which indicate the existence of material uncertainties that cast significant doubt on the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on, among other things, its ability to meet its financing requirements on a continuing basis, to have access to financing and to generate positive operating results. The Company’s ability to satisfy its financing requirements and ultimately achieve necessary levels of profitability and positive cash flows from operations, to raise additional funds and to improve operating results are dependent on a number of factors outside the Company’s control and there can be no assurance that the Company will be able to do so in the future.

Known and unknown risk factors, many of which are beyond the control of MCI, could cause the actual results of MCI to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements. Such risk factors include but are not limited to those factors which are discussed under the section entitled “Risk Factors” in MCI's annual information form dated March 31, 2023, which is available under MCI's SEDAR profile at The risk factors are not intended to represent a complete list of the factors that could affect MCI and the reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future. MCI disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law. All of the forward-looking statements contained in this press release are qualified by these cautionary statements.