In order to support its short-to-medium term operations, Toronto-based healthtech company MCI OneHealth is selling five of its multidisciplinary primary care clinics in Calgary to Well Health. Announced May 19, the deal is worth $2 million CAD.
The five clinics include more than 50 physicians, and based on historical results, Well expects the assets to contribute approximately $10 million in revenue moving forward.
“This transaction will help support the operational needs of MCI Onehealth in the short- to medium-term, while preserving quality care for our loyal patient population by placing our Alberta clinics into the hands of an innovative, tech-forward Canadian healthcare leader who shares our values and vision for the future of Canadian healthcare,” said Dr. Alexander Dobranowski, CEO of MCI OneHealth.
MCI OneHealth went pubic with a $30M IPO in 2021, but today the stock is worth pennies
MCI OneHealth went public in 2021, closing a $30-million initial public offering (IPO), but today the company’s stock is worth pennies. Its stock sat at 15 cents a share at press time, down from a 52-week high of $1.59, and down from a 52-week low of 85 cents.
Well said the new clinics will be integrated into its existing primary care clinic network, which includes more than 3,000 healthcare providers in Well’s patient services business units across North America.
“We are very pleased to announce the acquisition of additional primary care clinics in Calgary, as it represents an excellent opportunity for us to expand and bring our comprehensive practitioner enablement platform to more providers in Alberta,” said Hamed Shahbazi, CEO of Well.
Shabazi said the acquisition of the Calgary clinics marked a significant milestone in Well’s national clinic expansion strategy, and builds upon Well’s previous Alberta acquisitions, such as InLive and CloudPractice.
In its 2022 financial results, MCI OneHealth reported a cash balance of approximately $1.4 million and accounts payable and other current liabilities of approximately $18 million. The company said it would need to obtain additional financing by the end of April 2023 to fund ongoing operations, and that it may be required to obtain additional financing in future periods.
In the meantime, two of the company’s independent directors have formed a special committee and are evaluating MCI OneHealth’s current financial and liquidity position, operational challenges, and possible financing, reorganization, or restructuring alternatives available to the company.
At the same time, to address its lack of necessary liquidity, MCI OneHealth said it has been and is continuing to responsibly reduce costs while it evaluated the potential options.
Although the company posted revenue increases for the year, its net losses added up to $21 million compared to $15.5 million in the previous year. Any revenue gains were offset by higher research and development costs related to the ramp up of the company’s technology platform, MCI OneHealth noted.
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In the fourth quarter of 2022, MCI OneHealth also consolidated five of its underperforming Ontario clinics into its remaining 14 clinics in that province. That enabled the company to extend hours and expand services at the remaining clinics while significantly reducing overhead costs. The consolidated clinics ceased operations in the fourth quarter of 2022, and the majority of their physicians, nurses, and staff were redeployed.
For its part, Well has followed an aggressive plan of raising money and acquiring assets. Founded in 2012 by Shahbazi, Well Health is an acquisitive healthtech company that is traded on the Toronto Stock Exchange under the symbol ‘WELL.’
The British Columbia-based firm offers a health-care practitioner platform that includes tools for digital patient engagement, electronic medical records, revenue cycle management, and data protection services. Well Health also claims to own and operate Canada’s largest network of outpatient medical clinics.
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Well sold $30 million worth of its common shares in 2022 to support its acquisitions. Well has used that money to leverage the net proceeds from that deal to support its growth initiatives, including potential future acquisitions in the physician acquisition, specialty clinic, and executive health spaces. The company also intended to use it for working capital and other general corporate purposes.
Well Ventures, the investment arm of Canadian healthtech company Well Health, has launched an “investment program” in 2023 for artificial intelligence companies that are developing solutions for healthcare providers. Well said it aims to make a minimum of 10 AI-related investments of at least $250,000 each. The venture group said it plans to make a minimum investment of $2.5 million.