Delaware
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8099
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83-3838045
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||
(State or Other Jurisdiction of
Incorporation or Organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification No.)
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Jeffrey C. Selman, Esq.
Brad Rock
, Esq.
DLA Piper LLP (US)
555 Mission Street, Suite 2400
San Francisco, CA 94105
(415)
615-6095
|
|
Ivan K. Blumenthal, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
666 Third Avenue
New York, New York 10017
(212)
935-3000
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Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated
filer
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☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
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||||
Title of Each Class of
Securities to be Registered
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|
Proposed
Maximum
Aggregate
Offering Price
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|
Amount of
Registration Fee
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Common Stock, $0.0001 par value per share
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$57,500,000(2)
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$6,273.25(3)
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|
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Total
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$57,500,000
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$6,273.25
|
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||||
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(1)
|
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
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(2)
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Includes the aggregate offering price of shares that the underwriters have the option to purchase additional shares.
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(3)
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Previously paid.
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Price to
Public |
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Underwriting
Discounts(1) |
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Proceeds to
Us |
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|||
Per Share
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$
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$
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$
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Total
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$
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$
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$
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|
|
(1)
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We have also agreed to reimburse the underwriters for certain of their expenses in connection with this offering. See “Underwriting.”
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Oppenheimer & Co.
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Lake Street
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Northland Capital Markets
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F-1
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• |
our financial and business performance, including financial projections and business metrics and any underlying assumptions thereunder;
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• |
changes in our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans;
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• |
our product development timeline and expected start of production;
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• |
the implementation, market acceptance and success of our business model;
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• |
our ability to scale in a cost-effective manner;
|
• |
developments and projections relating to our competitors and industry;
|
• |
the impact of health epidemics, including the
COVID-19
pandemic, on our business and the actions the we may take in response thereto;
|
• |
our expectations regarding its ability to obtain and maintain intellectual property protection and not infringe on the rights of others;
|
• |
expectations regarding the time during which we will be an emerging growth company under the JOBS Act;
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• |
our future capital requirements and sources and uses of cash;
|
• |
our ability to obtain funding for our operations;
|
• |
our business, expansion plans and opportunities; and
|
• |
the outcome of any known and unknown litigation and regulatory proceedings.
|
• |
Integrated Care Management
Thrasys
|
automates workflows across health plans, health systems, government agencies and community organizations. Clinical and community-based care teams use the platform to coordinate programs to address medical, behavioral health and social factors that affect the health of individuals and populations.
|
• |
Global Telehealth
Glocal
|
• |
Digital Pharmacy
MedQuest Pharmacy
Innovations Group
|
• |
Tech-Enabled Behavioral Health
TTC Healthcare
BHS
|
• |
Implement Executed/Signed Contracts
|
approximately $6,000,000 in annualized bookings. Our Integrated Care Management business, which signs initial multi-year contract terms with sticky recurring revenue and annual renewals, has won and will implement $8,000,000 in new and expansion contracted revenue in 2021.
|
• |
Drive New Bookings
|
• |
Explore Synergistic Opportunities with Existing Clients
|
• |
Product, Service and Partner Expansion
Medical Horizons
|
• |
Strategic Acquisition
|
• |
An Integrated Global Digital Health Platform Addressing Critical Market Needs
|
• |
Expansive Reach across Domestic and International Markets
|
• |
A Diverse Management Team of Industry Leaders
|
• |
Our limited operating history as a combined company makes it difficult to evaluate our current business and future prospects;
|
• |
The impact of health epidemics, including the
COVID-19
pandemic, on our business, financial condition, growth and the actions we may take in response thereto;
|
• |
The high degree of uncertainty of the level of demand for and market utilization of our solutions;
|
• |
Substantial regulation and the potential for unfavorable changes to, or failure by us to comply with, these regulations, which could substantially harm our business and operating results;
|
• |
Our dependency upon third-party service providers for certain technologies;
|
• |
Increases in costs, disruption of supply or shortage of materials, which could harm our business;
|
• |
Developments and projections relating to our competitors and industry;
|
• |
The unavailability, reduction or elimination of government and economic incentives, which could have a material adverse effect on our business, prospects, financial condition and operating results;
|
• |
Our management team’s limited experience managing a public company;
|
• |
The possibility of our need to defend ourselves against fines, penalties and injunctions if we are determined to be promoting products for unapproved uses;
|
• |
Concentration of ownership among our existing executive officers, directors and their respective affiliates, which may prevent new investors from influencing significant corporate decisions;
|
• |
The lack of assurance that we will be able to comply with the continued listing standards of the NYSE;
|
• |
If we do not meet the expectations of investors or securities analysts, the market price of the Company’s securities may decline; and
|
• |
Our significant increased expenses and administrative burdens as a public company, which could have an adverse effect on its business, financial condition and results of operations.
|
Shares offered by us
|
12,594,458 shares of Common Stock at an assumed offering price of $3.97 per share, which is the last reported sale price of our common stock on September 23, 2021. |
Option to purchase additional shares
|
We have granted to the underwriters the option, exercisable for a period of 30 days from the date of this prospectus, to purchase up to 1,889,168 additional shares of Common Stock. |
Shares outstanding after this offering(1)(2)
|
130,199,068 shares of Common Stock (132,088,236 shares of Common Stock if the underwriters exercise their option to purchase additional shares in full), assuming the sale of our common stock at an assumed public offering price of $3.97 per share, which is the last reported sale price of our common stock on September 23, 2021. |
Use of proceeds
|
We estimate that the net proceeds to us from this offering will be approximately $ million, based on an assumed offering price of $3.97 per share, or approximately $ million if the underwriters exercise their option to purchase additional shares in full, after deducting underwriting discounts and commissions. |
We intend to use the net proceeds for working capital and general corporate purposes, although we do not currently have any specific or preliminary plans with respect to the use of proceeds for such purposes. See “
Use of Proceeds
|
Dividend policy
|
We do not expect to pay any dividends on our Common Stock in the foreseeable future. See “
Dividend Policy
|
Risk factors
|
You should carefully read and consider the information set forth under the heading “
Risk Factors
|
NYSE ticker symbol
|
Our Common Stock is listed on the NYSE under the symbol “UPH”. |
(1) |
The number of shares of Common Stock that will be outstanding after this offering is based on 117,604,610 shares of Common Stock outstanding as of June 30, 2021, assumes the sale and issuance by us of 12,594,458 shares of Common Stock and excludes:
|
• |
538,616 shares of Common Stock issuable upon the vesting of outstanding restricted stock units;
|
• |
16,420,813 shares of Common Stock that are reserved for issuance under the GigCapital2, Inc. 2021 Equity Incentive Plan (the “
2021 Equity Incentive Plan
|
• |
1,711,613 shares of Common Stock that are reserved for issuance under the Cloudbreak Health, LLC 2015 Unit Incentive Plan (the “
2015 Equity Incentive Plan
|
• |
15,023,475 shares of Common Stock to be issued upon conversion of the Convertible Notes; and
|
• |
18,117,494 shares of Common Stock issuable upon exercise of the outstanding warrants at an exercise price of $11.50 per share.
|
(2) |
Unless otherwise indicated, all information contained in this prospectus assumes no exercise by the underwriters of their option to purchase additional shares and no exercise of any other options or warrants.
|
• |
Our limited operating history as a combined company makes it difficult to evaluate our current business and future prospects;
|
• |
The impact of health epidemics, including the
COVID-19
pandemic, on our business, financial condition, growth and the actions we may take in response thereto;
|
• |
The high degree of uncertainty of the level of demand for and market utilization of our solutions;
|
• |
Substantial regulation and the potential for unfavorable changes to, or failure by us to comply with, these regulations, which could substantially harm our business and operating results;
|
• |
Our dependency upon third-party service providers for certain technologies;
|
• |
Increases in costs, disruption of supply or shortage of materials, which could harm our business;
|
• |
Developments and projections relating to our competitors and industry;
|
• |
The unavailability, reduction or elimination of government and economic incentives, which could have a material adverse effect on our business, prospects, financial condition and operating results;
|
• |
Our management team’s limited experience managing a public company;
|
• |
The possibility of our need to defend ourselves against fines, penalties and injunctions if we are determined to be promoting products for unapproved uses;
|
• |
Concentration of ownership among our existing executive officers, directors and their respective affiliates, which may prevent new investors from influencing significant corporate decisions;
|
• |
The lack of assurance that we will be able to comply with the continued listing standards of the NYSE;
|
• |
If we do not meet the expectations of investors or securities analysts, the market price of the Company’s securities may decline; and
|
• |
Our significant increased expenses and administrative burdens as a public company, which could have an adverse effect on its business, financial condition and results of operations.
|
• |
the popularity, pricing and timing of digital health consultation services being launched and distributed by us and our competitors;
|
• |
general economic conditions, particularly economic conditions adversely affecting discretionary and reimbursable healthcare spending;
|
• |
federal and state policy initiatives impacting the need for and pricing of digital health services;
|
• |
changes in customer needs and preferences;
|
• |
the development of specialty care practice standards or industry norms applicable to digital health consultation services;
|
• |
the availability of other forms of medical and digital health assistance;
|
• |
lack of additional evidence or peer-reviewed publication of clinical evidence supporting the safety,
ease-of-use,
|
• |
perceived risks associated with the use of our solutions or similar products or technologies generally; and
|
• |
critical reviews and public tastes and preferences, all of which change rapidly and cannot be predicted.
|
• |
accessibility, ease of use and convenience;
|
• |
price and affordability;
|
• |
personalization;
|
• |
brand recognition;
|
• |
long-term outcomes;
|
• |
breadth and efficacy of offerings;
|
• |
market penetration;
|
• |
marketing resources and effectiveness;
|
• |
partnerships and alliances;
|
• |
relationships with providers, suppliers and partners; and
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• |
regulatory compliance recourses.
|
• |
the addition or loss of large customers, including through acquisitions or consolidations of such customers;
|
• |
seasonal and other variations in the timing of our sales and implementation cycles, especially in the case of our large customers;
|
• |
travel restrictions, shelter in place orders and other social distancing measures implemented to combat the
COVID-19
pandemic, and their respective impact on economic, industry and market conditions, customer spending budgets and our ability to conduct business;
|
• |
the timing of recognition of revenue, including possible delays in the recognition of revenue due to unpredictable implementation timelines;
|
• |
the timing and success of introductions of new products and services by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, hospital and healthcare system customers or strategic partners;
|
• |
the amount of operating expenses and timing related to the maintenance and expansion of our business, operations and infrastructure;
|
• |
our ability to effectively manage the size and composition of our proprietary network of healthcare professionals relative to the level of demand for services from our customers;
|
• |
customer renewal rates and the timing and terms of such renewals;
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• |
technical difficulties or interruptions in our services;
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• |
breaches of information security or privacy;
|
• |
our ability to hire and retain qualified personnel;
|
• |
changes in the structure of healthcare provider and payment systems;
|
• |
changes in the legislative or regulatory environment, including with respect to healthcare, privacy or data protection, or enforcement by government regulators, including fines, orders or consent decrees;
|
• |
the cost and potential outcomes of ongoing or future regulatory investigations or examinations, or of future litigation;
|
• |
political, economic and social instability, including terrorist activities and health epidemics (including the
COVID-19
pandemic), and any disruption these events may cause to the global economy; and
|
• |
changes in business or macroeconomic conditions.
|
• |
government regulations or private initiatives that affect the manner in which healthcare providers interact with patients, payors or other healthcare industry participants, including changes in pricing or means of delivery of healthcare products and services;
|
• |
consolidation of healthcare industry participants;
|
• |
federal amendments to, lack of enforcement or development of applicable regulations for, or repeal of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (as amended, the “
ACA
|
• |
reductions in government funding for healthcare; and
|
• |
adverse changes in business or economic conditions affecting healthcare payors, providers or other healthcare industry participants.
|
• |
management’s lack of experience in acquiring and integrating business;
|
• |
inability to integrate or benefit from acquired technologies or services in a profitable manner;
|
• |
unanticipated costs or liabilities, including legal liabilities, associated with the acquisition;
|
• |
entry into new markets and locations in which we have little operating experience or experience with government rules, regulations and restrictions;
|
• |
difficulty integrating the accounting systems, operations and personnel of the acquired business;
|
• |
difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;
|
• |
difficulty converting the customers of the acquired business onto our platform and contract terms, including disparities in the revenue, licensing, support or professional services model of the acquired company;
|
• |
diversion of management’s attention from other business concerns;
|
• |
adverse effects to our existing business relationships with business partners and customers as a result of the acquisition;
|
• |
the potential loss of key employees or contractors;
|
• |
use of resources that are needed in other parts of our business; and
|
• |
use of substantial portions of our available cash to consummate the acquisition.
|
• |
delaying, deferring or preventing a change of control of us;
|
• |
impeding a merger, consolidation, takeover or other business combination involving us; or
|
• |
discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.
|
• |
the federal physician self-referral law, commonly referred to as the Stark Law, that, subject to limited exceptions, prohibits physicians from referring Medicare patients to an entity for the provision of certain “designated health services” if the physician or a member of such physician’s immediate family has a direct or indirect financial relationship (including an ownership interest or a compensation arrangement) with the entity, and prohibits the entity from billing Medicare for such designated health services;
|
• |
the federal Anti-Kickback Statute, which is an intent-based federal criminal statute that prohibits the knowing and willful offer, payment, provision, solicitation or receipt of any remuneration, directly or indirectly, in cash or in kind, for referring an individual, in return for ordering, leasing, purchasing or recommending or arranging for or to induce the referral of an individual or the ordering, purchasing or
|
leasing of items or services covered, in whole or in part, by any federal healthcare program, such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act;
|
• |
the criminal healthcare fraud provisions of the federal HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“
HITECH
|
• |
the federal False Claims Act that imposes civil liability, including through
qui tam
|
• |
the federal criminal statute on false statements relating to health care matters, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with the delivery of or payment for health care benefits, items or services;
|
• |
The Civil Monetary Penalties Law authorizes the imposition of civil monetary penalties, assessments and exclusion against an individual or entity based on a variety of prohibited conduct, including, but not limited to:
|
• |
presenting, or causing to be presented, claims for payment to Medicare, Medicaid or other third-party payors that the individual or entity knows or should know are for an item or service that was not provided as claimed or is false or fraudulent;
|
• |
offering remuneration to a Medicare or Medicaid beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive health care items or services from a particular provider or supplier;
|
• |
employing or contracting with an entity or individual excluded from participation in the federal health care programs;
|
• |
violating the federal Anti-Kickback Statute;
|
• |
making, using or causing to be made or used a false record or statement material to a false or fraudulent claim for payment for items and services furnished under a federal health care program;
|
• |
making, using or causing to be made any false statement, omission or misrepresentation of a material fact in any application, bid or contract to participate or enroll as a provider of services or a supplier under a federal health care program; and
|
• |
failing to timely report and return an overpayment owed to the federal government;
|
• |
substantial civil monetary penalties may be imposed under the federal Civil Monetary Penalties Law and may vary depending on the underlying violation. In addition, an assessment of not more than three times the total amount claimed for each item or service may also apply and a violator may be subject to exclusion from federal and state health care programs;
|
• |
the federal Eliminating Kickbacks in Recovery Act of 2018 (“
EKRA
Use-Disorder
Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act, was signed into law on Oct. 24, 2018. The EKRA provisions, similar to the federal Anti-Kickback Statute,
|
makes it a felony for certain entities (including substance abuse treatment centers, clinical treatment facilities and clinical laboratories) to engage in remunerative arrangements that induce or reward individuals or entities for the referral of patients to such facilities, unless an exception applies. EKRA applies regardless of payor source, including for services reimbursed exclusively through commercial insurance or self-paying patients. Violations of EKRA can lead to fines of not more than $200,000 and imprisonment of not more than 10 years, or both, for each occurrence” 18 U.S.C. 220(a);
|
• |
reassignment of payment rules that prohibit certain types of billing and collection practices in connection with claims payable by the Medicare or Medicaid programs;
|
• |
similar state law provisions pertaining to anti-kickback, self-referral,
fee-splitting,
patient inducement and false claims issues, some of which may apply to items or services reimbursed by any payer, including patients and commercial insurers;
|
• |
state laws that prohibit general business corporations, such as us, from practicing medicine, controlling physicians’ medical decisions or engaging in some practices such as splitting fees with physicians;
|
• |
laws that regulate debt collection practices as applied to our debt collection practices;
|
• |
a provision of the Social Security Act that imposes criminal penalties on healthcare providers who fail to disclose or refund known overpayments;
|
• |
federal and state laws that prohibit providers from billing and receiving payment from Medicare and Medicaid for services unless the services are medically necessary, adequately and accurately documented and billed using codes that accurately reflect the type and level of services rendered;
|
• |
federal and state laws and policies related to healthcare providers, licensure, certification, accreditation and related to the Medicare and Medicaid programs enrollment;
|
• |
federal and state laws and policies related to the practice of pharmacy, pharmacy licensure, and the prescribing and dispensing of pharmaceuticals and controlled substances;
|
• |
federal and state laws and policies related to the provision of substance use disorder treatment and substance use disorder program and facility licensure and accreditation; and
|
• |
licensure, CLIA certification and accreditation of diagnostic laboratory services.
|
• |
licensure of health providers, certification of organizations and enrollment with government reimbursement programs;
|
• |
necessity and adequacy of medical care;
|
• |
relationships with physicians and other referral sources and referral recipients;
|
• |
billing and coding for services;
|
• |
properly handling overpayments;
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• |
quality of medical equipment and services;
|
• |
qualifications of medical and support personnel;
|
• |
confidentiality, maintenance, data breach, identity theft and security issues associated with health-related and personal information and medical records; and
|
• |
communications with patients and consumers.
|
• |
uncertain legal and regulatory requirements applicable to digital health, technology services and solutions and prescription medication;
|
• |
multiple, conflicting and changing laws and regulations such as tax laws, privacy and data protection laws and regulations, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses;
|
• |
our inability to replicate our domestic business structure consistently outside of the United States, especially as it relates to our contractual arrangement with affiliated professional entities;
|
• |
the need to localize and adapt our solutions for specific countries, including translation into foreign languages and associated expenses;
|
• |
potential loss of proprietary information due to misappropriation or laws that may be less protective of our intellectual property rights than U.S. laws or that may not be adequately enforced;
|
• |
requirements of foreign laws and other governmental controls, including compliance challenges related to the complexity of multiple, conflicting and changing governmental laws and regulations, including employment, healthcare, tax, privacy and data protection laws and regulations;
|
• |
data privacy laws that require that client data be stored and processed in a designated territory;
|
• |
new and different sources of competition and laws and business practices favoring local competitors;
|
• |
local business and cultural factors that differ from our normal standards and practices, including business practices that we are prohibited from engaging in by the U.S. Foreign Corrupt Practices Act of 1977 (the “
FCPA
|
• |
changes to economic sanctions laws and regulations;
|
• |
central bank and other restrictions on our ability to repatriate cash from international subsidiaries;
|
• |
adverse tax consequences;
|
• |
fluctuations in currency exchange rates, economic instability and inflationary conditions, which could make our solutions more expensive or increase our costs of doing business in certain countries;
|
• |
limitations on future growth or inability to maintain current levels of revenues from international sales if we do not invest sufficiently in our international operations;
|
• |
different pricing environments, longer sales cycles and longer accounts receivable payment cycles and collections issues;
|
• |
difficulties in staffing, managing and operating our international operations, including difficulties related to administering our stock plans in some foreign countries and increased financial accounting and reporting burdens and complexities;
|
• |
difficulties in coordinating the activities of our geographically dispersed and culturally diverse operations;
|
• |
natural disasters, political and economic instability, including wars, terrorism, social or political unrest, including civil unrest, protests, and other public demonstrations, outbreaks of disease, pandemics or epidemics, boycotts, curtailment of trade, and other market restrictions; and
|
• |
regulatory and compliance risks that relate to maintaining accurate information and control over activities subject to regulation under the FCPA, and comparable laws and regulations in other countries.
|
• |
cease offering or using technologies that incorporate the challenged intellectual property;
|
• |
make substantial payments for legal fees, settlement payments or other costs or damages;
|
• |
obtain a license, which may not be available on reasonable terms, to sell or use the relevant technology; or
|
• |
redesign technology to avoid infringement.
|
• |
changes in the valuation of our deferred tax assets and liabilities;
|
• |
expected timing and amount of the release of any tax valuation allowances;
|
• |
tax effects of stock-based compensation;
|
• |
costs related to intercompany restructurings;
|
• |
changes in tax laws, regulations or interpretations thereof; or
|
• |
lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.
|
• |
a limited availability of market quotations for UpHealth’s securities;
|
• |
a determination that UpHealth Common Stock is a “penny stock” which will require brokers trading in UpHealth Common Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of UpHealth Common Stock;
|
• |
a limited amount of analyst coverage; and
|
• |
a decreased ability to issue additional securities or obtain additional financing in the future.
|
• |
actual or anticipated fluctuations in the Company’s quarterly financial results or the quarterly financial results of companies perceived to be similar to the Company;
|
• |
changes in the market’s expectations about the Company’s operating results;
|
• |
success of competitors;
|
• |
the Company’s operating results failing to meet the expectation of securities analysts or investors in a particular period;
|
• |
changes in financial estimates and recommendations by securities analysts concerning the Company or the market in general;
|
• |
operating and stock price performance of other companies that investors deem comparable to the Company’s;
|
• |
the Company’s ability to market new and enhanced services and products on a timely basis;
|
• |
changes in laws and regulations affecting the Company’s business;
|
• |
commencement of, or involvement in, litigation involving the Company;
|
• |
changes in the Company’s capital structure, such as future issuances of securities or the incurrence of additional debt;
|
• |
the volume of shares of the Company’s securities available for public sale;
|
• |
any major change in the board or management;
|
• |
sales of substantial amounts of Common Stock by the Company’s directors, executive officers or significant stockholders or the perception that such sales could occur; and
|
• |
general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.
|
• |
no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
|
• |
a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of the Board;
|
• |
the right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on our Board;
|
• |
a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; and
|
• |
the requirement that a meeting of stockholders may only be called by members of our Board or the stockholders holding a majority of our shares, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors.
|
• |
on an actual basis; and
|
• |
on an as adjusted basis to give effect to the issuance and sale of 12,594,458 shares of Common Stock in this offering (assuming a public offering price of $3.97 per share and no exercise of the underwriters’ option to purchase additional shares), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
|
As of June 30, 2021
|
||||||||
(in thousands, except per share data)
|
Actual
|
As Adjusted
|
||||||
Cash, cash equivalents, and restricted cash:
|
||||||||
Cash and cash equivalents (1)
|
98,116 | 144,864 | ||||||
Restricted cash
|
586 | 586 | ||||||
|
|
|
|
|||||
Total cash, cash equivalents, and restricted cash
|
98,702 | 145,450 | ||||||
|
|
|
|
|||||
Debt (including current portion):
|
||||||||
Convertible notes
|
160,000 | 160,000 | ||||||
Unamortized original issue discount and derivative liability
|
(69,110 | ) | (69,110 | ) | ||||
Other debt facilities (various maturities and interest rates)
|
23,147 | 23,147 | ||||||
Paycheck Protection Program loans
|
1,015 | 1,015 | ||||||
Provider Relief Funds
|
735 | 735 | ||||||
Seller notes
|
29,831 | 29,831 | ||||||
|
|
|
|
|||||
Total debt
|
145,618 | 145,618 | ||||||
|
|
|
|
|||||
Stockholders’ equity:
|
||||||||
Preferred stock, $0.0001 par value, 1,000 shares authorized, none issued or outstanding
|
— | — | ||||||
Common stock, $0.0001 par value, 300,000 shares authorized, 117,605 issued or outstanding
|
12 | 13 | ||||||
Additional paid-in capital
|
620,455 | 667,202 | ||||||
Accumulated deficit
|
(37,920 | ) | (37,920 | ) | ||||
Accumulated other comprehensive income
|
(3,478 | ) | (3,478 | ) | ||||
|
|
|
|
|||||
Total stockholders’ equity
|
579,069 | 625,817 | ||||||
Noncontrolling interests
|
15,048 | 15,048 | ||||||
|
|
|
|
|||||
Total stockholders’ equity
|
594,117 | 640,865 | ||||||
|
|
|
|
|||||
Total capitalization
|
739,735 | 786,483 | ||||||
|
|
|
|
• |
538,616 shares of Common Stock issuable upon the vesting of outstanding restricted stock units;
|
• |
16,420,813 shares of Common Stock that are reserved for issuance under the 2021 Equity Incentive Plan;
|
• |
1,711,613 shares of Common Stock that are reserved under the 2015 Unit Incentive Plan;
|
• |
15,023,475 shares of Common Stock to be issued upon conversion of the Convertible Notes; and
|
• |
18,117,494 shares of common stock issuable upon exercise of the outstanding warrants at an exercise price of $11.50 per share.
|
Assumed public offering price per share
|
$ | 3.97 | ||||||
Historical net tangible book value per share as of June 30, 2021
|
$ | (0.83 | ) | |||||
Increase in as adjusted net tangible book value per share attributable to this offering
|
0.44 | |||||||
|
|
|||||||
As adjusted net tangible book value per share after this offering
|
0.39 | |||||||
|
|
|||||||
Dilution per share to new investors participating in this offering
|
$ | 4.36 | ||||||
|
|
• |
538,616 shares of Common Stock issuable upon the vesting of outstanding restricted stock units;
|
• |
16,420,813 shares of Common Stock that are reserved for issuance under the 2021 Equity Incentive Plan;
|
• |
1,711,613 shares of Common Stock that are reserved under the 2015 Unit Incentive Plan;
|
• |
15,023,475 shares of Common Stock to be issued upon conversion of the Convertible Notes; and
|
• |
18,117,494 shares of common stock issuable upon exercise of the outstanding warrants at an exercise price of $11.50 per share.
|
• |
accompanying notes to the unaudited pro forma condensed combined financial statements;
|
• |
unaudited historical financial statements of UpHealth as of and for the six months ended June 30, 2021;
|
• |
unaudited historical financial statements of the merger entities as of and for the six months ended June 30, 2021; and
|
• |
audited historical consolidated financial statements of the merger entities as of and for the year ended December 31, 2020 (year ended March 31, 2020 for Glocal).
|
UpHealth,
Inc. and Subsidiaries |
TTC
Healthcare, Inc. and Subsidiaries |
Glocal
Healthcare Systems Private Limited (India) and Subsidiaries |
Innovations
Group, Inc. and Subsidiaries |
Cloudbreak
Health, LLC and Subsidiaries |
Pro Forma
|
|||||||||||||||||||||||||
In thousands, except per share amounts, unaudited
|
Historical
June 30, 2021 |
Historical
January 1 through January 24, 2021 |
Historical
January 1 through March 25, 2021 |
Historical
January 1 through April 26, 2021 |
Historical
January 1 through June 8, 2021 |
Transaction
Accounting Adjustments |
Note
|
Pro
Forma Combined Company |
||||||||||||||||||||||
Revenue
|
44,696 | 559 | 2,256 | 8,920 | 13,347 | — | 69,778 | |||||||||||||||||||||||
Cost of goods and services
|
26,415 | 724 | 1,086 | 5,598 | 8,420 | — | 42,243 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Gross margin
|
18,281 | (165 | ) | 1,170 | 3,322 | 4,927 | — | 27,535 | ||||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||||||||
Selling, general, and administrative
|
14,832 | 696 | 162 | 6,847 | 5,820 | — | 28,357 | |||||||||||||||||||||||
Research and development
|
2,631 | — | — | 58 | — | — | 2,689 | |||||||||||||||||||||||
Depreciation and amortization
|
3,869 | 8 | 137 | 42 | 64 | 3,557 | 2(a) | 7,677 | ||||||||||||||||||||||
Acquisition-related
|
35,340 | — | 480 | 227 | 272 | — | 36,319 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total operating expenses
|
56,672 | 704 | 779 | 7,174 | 6,156 | 3,557 | 75,042 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Income (loss) from operations
|
(38,391 | ) | (869 | ) | 391 | (3,852 | ) | (1,229 | ) | (3,557 | ) | (47,507 | ) | |||||||||||||||||
Other income (expense):
|
||||||||||||||||||||||||||||||
Interest expense
|
(5,579 | ) | (32 | ) | (573 | ) | (54 | ) | (2,403 | ) | — | (8,641 | ) | |||||||||||||||||
Gain on consolidation of equity method investment
|
640 | — | — | — | — | — | 640 | |||||||||||||||||||||||
Gain on fair value of warrant liabilities
|
1,074 | — | — | — | — | — | 1,074 | |||||||||||||||||||||||
Gain on extinguishment of debt
|
151 | — | — | 1,174 | 2,698 | — | 4,023 | |||||||||||||||||||||||
Other income (expense), net, including interest income
|
(222 | ) | — | — | (25 | ) | 386 | — | 139 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total other income (expense)
|
(3,936 | ) | (32 | ) | (573 | ) | 1,095 | 681 | — | (2,765 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Income (loss) before income taxes
|
(42,327 | ) | (901 | ) | (182 | ) | (2,757 | ) | (548 | ) | (3,557 | ) | (50,272 | ) | ||||||||||||||||
Income tax benefit (expense)
|
7,053 | 222 | (123 | ) | — | — | — | 7,152 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Income (loss) before equity in net earnings of unconsolidated entity
|
(35,274 | ) | (679 | ) | (305 | ) | (2,757 | ) | (548 | ) | (3,557 | ) | (43,120 | ) | ||||||||||||||||
Loss from equity method investment
|
(561 | ) | — | — | — | — | — | (561 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income (loss)
|
(35,835 | ) | (679 | ) | (305 | ) | (2,757 | ) | (548 | ) | (3,557 | ) | (43,681 | ) | ||||||||||||||||
Net income (loss) attributable to noncontrolling interests
|
(101 | ) | 7 | (8 | ) | 29 | — | — | (73 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income (loss) attributable to UpHealth, Inc.
|
$ | (35,734 | ) | $ | (686 | ) | $ | (297 | ) | $ | (2,786 | ) | $ | (548 | ) | $ | (3,557 | ) | $ | (43,608 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net income (loss) per share:
|
||||||||||||||||||||||||||||||
Basic and diluted
|
$ | (0.43 | ) | $ | (0.37 | ) | ||||||||||||||||||||||||
Weighted average common shares outstanding:
|
||||||||||||||||||||||||||||||
Basic and diluted
|
83,585 | 34,020 | 2(b) | 117,605 | ||||||||||||||||||||||||||
Dividends declared per share
|
$ | — | $ | — |
UpHealth,
Inc. and Subsidiaries |
Behavioral
Services, LLC and Subsidiaries |
Thrasys, Inc.
and Subsidiaries (accounting acquirer) |
TTC
Healthcare, Inc. and Subsidiaries |
Glocal
Healthcare Systems Private Limited (India) and Subsidiaries |
Innovations
Group, Inc. and Subsidiaries |
Cloudbreak
Health, LLC and Subsidiaries |
Pro Forma
|
|||||||||||||||||||||||||||||||
In thousands, except per share amounts, unaudited
|
Historical
December 31, 2020 |
Historical
January 1 through November 19, 2020 |
Historical
January 1 through November 19, 2020 |
Historical
December 31, 2020 |
Historical
December 31, 2020 |
Historical
December 31, 2020 |
Historical
December 31, 2020 |
Transaction
Accounting Adjustments |
Note
|
Pro
Forma Combined Company |
||||||||||||||||||||||||||||
Revenue
|
5,396 | 11,842 | 13,505 | 19,367 | 9,983 | 28,335 | 28,089 | — | 116,517 | |||||||||||||||||||||||||||||
Cost of goods and services
|
1,183 | 8,866 | 1,930 | 9,031 | 3,841 | 17,736 | 19,814 | — | 62,400 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Gross margin
|
4,213 | 2,976 | 11,575 | 10,336 | 6,142 | 10,599 | 8,275 | — | 54,117 | |||||||||||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||||||||||||||||
Selling, general, and administrative
|
4,945 | 3,219 | 3,666 | 10,927 | 1,614 | 7,981 | 14,105 | — | 46,457 | |||||||||||||||||||||||||||||
Research and development
|
874 | — | 6,989 | — | — | — | — | — | 7,863 | |||||||||||||||||||||||||||||
Depreciation and amortization
|
321 | (435 | ) | (619 | ) | 121 | 439 | (6 | ) | (444 | ) | 13,844 | 3(a) | 13,220 | ||||||||||||||||||||||||
Acquisition-related
|
— | — | — | — | — | — | — | 36,319 | 3(b) | 36,319 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total operating expenses
|
6,140 | 2,784 | 10,035 | 11,048 | 2,053 | 7,975 | 13,660 | 50,163 | 103,859 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Income (loss) from operations
|
(1,927 | ) | 192 | 1,540 | (712 | ) | 4,089 | 2,624 | (5,385 | ) | (50,163 | ) | (49,742 | ) | ||||||||||||||||||||||||
Other income (expense):
|
||||||||||||||||||||||||||||||||||||||
Interest expense
|
(134 | ) | — | (297 | ) | (879 | ) | (2,252 | ) | (269 | ) | (6,638 | ) | — | (10,469 | ) | ||||||||||||||||||||||
Other income (expense), net, including interest income
|
4 | — | 1 | 658 | 4,950 | (39 | ) | 485 | — | 6,059 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total other income (expense)
|
(130 | ) | — | (296 | ) | (221 | ) | 2,698 | (308 | ) | (6,153 | ) | — | (4,410 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Income (loss) before income taxes
|
(2,057 | ) | 192 | 1,244 | (933 | ) | 6,787 | 2,316 | (11,538 | ) | (50,163 | ) | (54,152 | ) | ||||||||||||||||||||||||
Income tax benefit (expense)
|
(50 | ) | — | — | 299 | — | — | — | — | 249 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Income (loss) before equity in net earnings of unconsolidated entity
|
(2,107 | ) | 192 | 1,244 | (634 | ) | 6,787 | 2,316 | (11,538 | ) | (50,163 | ) | (53,903 | ) | ||||||||||||||||||||||||
Loss from equity method investment
|
(79 | ) | — | — | — | — | — | — | — | (79 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net income (loss)
|
(2,186 | ) | 192 | 1,244 | (634 | ) | 6,787 | 2,316 | (11,538 | ) | (50,163 | ) | (53,982 | ) | ||||||||||||||||||||||||
Net income (loss) attributable to noncontrolling interests
|
— | — | — | (28 | ) | 214 | 78 | — | — | 264 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net income (loss) attributable to UpHealth, Inc.
|
$ | (2,186 | ) | $ | 192 | $ | 1,244 | $ | (606 | ) | $ | 6,573 | $ | 2,238 | $ | (11,538 | ) | $ | (50,163 | ) | $ | (54,246 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net income (loss) per share:
|
||||||||||||||||||||||||||||||||||||||
Basic and diluted
|
$ | (0.04 | ) | $ | (0.46 | ) | ||||||||||||||||||||||||||||||||
Weighted average common shares outstanding:
|
||||||||||||||||||||||||||||||||||||||
Basic and diluted
|
54,985 | 62,620 | 3(c) | 117,605 | ||||||||||||||||||||||||||||||||||
Dividends declared per share
|
$ | — | $ | — |
(a) |
Depreciation and amortization have been recorded as transaction adjustments for the six months ended June 30, 2021, as if the Business Combinations had been consummated on January 1, 2020.
|
(b) |
Issuance of additional shares upon consummation of mergers.
|
(a) |
Depreciation and amortization have been recorded as transaction adjustments for the year ended December 31, 2020, as if the Business Combinations had been consummated on January 1, 2020.
|
(b) |
Accrued transaction cost incurred, which are not reflected in the historical financial statements, but were incurred through the date of this registration filing, as if the Business Combinations had been consummated on January 1, 2020.
|
(c) |
Issuance of additional shares upon consummation of mergers.
|
(Unaudited, in thousands)
|
Three Months Ended
June 30, |
$
Change |
% Change
|
Six Months Ended
June 30, |
$
Change |
% Change
|
||||||||||||||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||||||||||||||||||
Revenue
|
||||||||||||||||||||||||||||||||
Services
|
$ | 14,773 | $ | — | $ | 14,773 | — | % | $ | 22,911 | $ | — | $ | 22,911 | — | % | ||||||||||||||||
Licenses and subscriptions
|
9,145 | — | 9,145 | — | % | 12,803 | — | 12,803 | — | % | ||||||||||||||||||||||
Products
|
7,964 | — | 7,964 | — | % | 8,984 | — | 8,984 | — | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total revenue
|
|
31,882
|
|
—
|
|
|
31,882
|
|
—
|
%
|
|
44,698
|
|
—
|
|
|
44,698
|
|
—
|
%
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Cost of goods and services
|
||||||||||||||||||||||||||||||||
Services
|
9,381 | — | 9,381 | — | % | 14,102 | — | 14,102 | — | % | ||||||||||||||||||||||
License and subscriptions
|
6,173 | — | 6,173 | — | % | 6,670 | — | 6,670 | — | % | ||||||||||||||||||||||
Products
|
4,727 | — | 4,727 | — | % | 5,644 | — | 5,644 | — | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total cost of goods and services
|
|
20,281
|
|
—
|
|
|
20,281
|
|
—
|
%
|
|
26,416
|
|
—
|
|
|
26,416
|
|
—
|
%
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Gross margin
|
|
11,601
|
|
—
|
|
|
11,601
|
|
—
|
%
|
|
18,282
|
|
—
|
|
|
18,282
|
|
—
|
%
|
||||||||||||
Operating expenses
|
||||||||||||||||||||||||||||||||
Sales and marketing
|
1,695 | — | 1,695 | — | % | 2,580 | — | 2,580 | — | % | ||||||||||||||||||||||
Research and development
|
872 | — | 872 | — | % | 2,630 | — | 2,630 | — | % | ||||||||||||||||||||||
General and administrative
|
8,974 | 336 | 8,638 | 2,571 | % | 12,254 | 539 | 11,715 | 2,173 | % | ||||||||||||||||||||||
Depreciation and amortization
|
2,966 | — | 2,966 | — | % | 3,870 | — | 3,870 | — | % | ||||||||||||||||||||||
Acquisition-related expenses
|
32,646 | — | 32,646 | — | % | 35,339 | — | 35,339 | — | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total operating expenses
|
|
47,153
|
|
336
|
|
46,817
|
|
13,934
|
%
|
|
56,673
|
|
539
|
|
56,134
|
|
10,414
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Loss from operations
|
|
(35,552
|
)
|
|
(336
|
)
|
|
(35,216
|
)
|
|
10,481
|
%
|
|
(38,391
|
)
|
|
(539
|
)
|
|
(37,852
|
)
|
|
7,023
|
%
|
||||||||
Other income (expense)
|
||||||||||||||||||||||||||||||||
Interest expense
|
(4,870 | ) | — | (4,870 | ) | — | % | (5,581 | ) | — | (5,581 | ) | — | % | ||||||||||||||||||
Gain on consolidation of equity method investment
|
— | — | — | — | % | 640 | — | 640 | — | % | ||||||||||||||||||||||
Gain on fair value of warrant liabilities
|
1,074 | — | 1,074 | — | % | 1,074 | — | 1,074 | — | % | ||||||||||||||||||||||
Gain on extinguishment of debt
|
151 | — | 151 | — | % | 151 | — | 151 | — | % | ||||||||||||||||||||||
Other expense, net, including interest income
|
(258 | ) | — | (258 | ) | — | % | (221 | ) | — | (221 | ) | — | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total other expense
|
|
(3,903
|
)
|
|
—
|
|
|
(3,903
|
)
|
|
—
|
%
|
|
(3,937
|
)
|
|
—
|
|
|
(3,937
|
)
|
|
—
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Loss before income tax benefit
|
|
(39,455
|
)
|
|
(336
|
)
|
|
(39,119
|
)
|
|
11,643
|
%
|
|
(42,328
|
)
|
|
(539
|
)
|
|
(41,789
|
)
|
|
7,753
|
%
|
||||||||
Income tax benefit
|
6,647 | — | 6,647 | — | % | 7,053 | — | 7,053 | — | % | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net loss before loss from equity method investment
|
|
(32,808
|
)
|
|
(336
|
)
|
|
(32,472
|
)
|
|
9,664
|
%
|
|
(35,275
|
)
|
|
(539
|
)
|
|
(34,736
|
)
|
|
6,445
|
%
|
||||||||
Loss from equity method investment
|
— | — | — | — | % | (561 | ) | — | (561 | ) | — | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net loss
|
|
(32,808
|
)
|
|
(336
|
)
|
|
(32,472
|
)
|
|
9,664
|
%
|
|
(35,836
|
)
|
|
(539
|
)
|
|
(35,297
|
)
|
|
6,549
|
%
|
||||||||
Less: net loss attributable to noncontrolling interests
|
(24 | ) | — | (24 | ) | — | % | (102 | ) | — | (102 | ) | — | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net loss attributable to UpHealth, Inc.
|
$
|
(32,784
|
)
|
$
|
(336
|
)
|
$
|
(32,448
|
)
|
|
9,657
|
%
|
$
|
(35,734
|
)
|
$
|
(539
|
)
|
$
|
(35,195
|
)
|
|
6,530
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Revenue
|
||||||||||||||||
Services
|
46 | % | — | % | 51 | % | — | % | ||||||||
Licenses and subscriptions
|
29 | % | — | % | 29 | % | — | % | ||||||||
Products
|
25 | % | — | % | 20 | % | — | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue
|
|
100
|
%
|
|
—
|
%
|
|
100
|
%
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|||||||||
Cost of goods and services
|
||||||||||||||||
Services
|
29 | % | — | % | 32 | % | — | % | ||||||||
License and subscriptions
|
19 | % | — | % | 15 | % | — | % | ||||||||
Products
|
15 | % | — | % | 13 | % | — | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of goods and services
|
|
64
|
%
|
|
—
|
%
|
|
59
|
%
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|||||||||
Gross margin
|
36 | % | — | % | 41 | % | — | % | ||||||||
Operating expenses
|
||||||||||||||||
Sales and marketing
|
5 | % | — | % | 6 | % | — | % | ||||||||
Research and development
|
3 | % | — | % | 6 | % | — | % | ||||||||
General and administrative
|
28 | % | — | % | 27 | % | — | % | ||||||||
Depreciation and amortization
|
9 | % | — | % | 9 | % | — | % | ||||||||
Acquisition-related expenses
|
102 | % | — | % | 79 | % | — | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses
|
|
148
|
%
|
|
—
|
%
|
|
127
|
%
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations
|
|
(112
|
)%
|
|
—
|
%
|
|
(86
|
)%
|
|
—
|
%
|
||||
Other income (expense)
|
||||||||||||||||
Interest expense
|
(15 | )% | — | % | (12 | )% | — | % | ||||||||
Gain on consolidation of equity method investment
|
— | % | — | % | 1 | % | — | % | ||||||||
Gain on fair value of warrant liabilities
|
3 | % | — | % | 2 | % | — | % | ||||||||
Gain on extinguishment of debt
|
— | % | — | % | — | % | — | % | ||||||||
Other expense, net, including interest income
|
(1 | )% | — | % | — | % | — | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other expense
|
|
(12
|
)%
|
|
—
|
%
|
|
(9
|
)%
|
|
—
|
%
|
||||
Loss before income tax benefit
|
|
(124
|
)%
|
|
—
|
%
|
|
(95
|
)%
|
|
—
|
%
|
||||
Income tax benefit
|
21 | % | — | % | 16 | % | — | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss before loss from equity method investment
|
|
(103
|
)%
|
|
—
|
%
|
|
(79
|
)%
|
|
—
|
%
|
||||
Loss from equity method investment
|
— | % | — | % | (1 | )% | — | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
|
(103
|
)%
|
|
—
|
%
|
|
(80
|
)%
|
|
—
|
%
|
||||
Less: net loss attributable to noncontrolling interests
|
— | % | — | % | — | % | — | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to UpHealth, Inc.
|
|
(103
|
)%
|
|
—
|
%
|
|
(80
|
)%
|
|
—
|
%
|
||||
|
|
|
|
|
|
|
|
In thousands
|
Three Months
Ended June 30,
2021
|
Six Months
Ended June 30, 2021 |
||||||
Integrated Care Management
|
$ | 11,280 | $ | 17,570 | ||||
Global Telehealth
|
6,964 | 7,554 | ||||||
Digital Pharmacy
|
5,299 | 5,299 | ||||||
Behavioral Health
|
8,339 | 14,275 | ||||||
|
|
|
|
|||||
Total revenue
|
$ | 31,882 | $ | 44,698 | ||||
|
|
|
|
In thousands
|
Three Months
Ended June 30, 2021 |
Six Months
Ended June 30, 2021 |
||||||
Integrated Care Management
|
$ | 4,615 | $ | 9,722 | ||||
Global Telehealth
|
2,634 | 2,933 | ||||||
Digital Pharmacy
|
1,982 | 1,982 | ||||||
Behavioral Health
|
2,370 | 3,645 | ||||||
|
|
|
|
|||||
Total gross margin
|
$ | 11,601 | $ | 18,282 | ||||
|
|
|
|
Six Months Ended June 30,
|
||||||||
(In thousands)
|
2021
|
2020
|
||||||
Net cash used in operating activities
|
$ | (37,229 | ) | $ | — | |||
Net cash provided by investing activities
|
3,860 | — | ||||||
Net cash provided by financing activities
|
129,801 | — | ||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
(99 | ) | — | |||||
|
|
|
|
|||||
Net increase in cash, cash equivalents, and restricted cash
|
$ | 96,332 | — | |||||
|
|
|
|
• |
Integrated Care Management.
|
• |
Global Telehealth.
in-hospital
care. Cloudbreak provides digital health infrastructure enabling its partners to ensure healthcare equity and implement unique, private-label telehealth strategies customized to their specific needs and markets. Our international division is powered by Glocal, a platform that delivers comprehensive primary care and specialty consultations at a significantly reduced cost, based upon the typical cost for a Glocal primary care visit compared to the cost generally in India, based on government data. This helps open access to care for individuals in North America, India, Southeast Asia and Africa. Its technologies and services are performing over 50,000 digital health encounters per month with contracts now in place that if fully implemented would increase this number by nearly ten times by 2022.
|
• |
Digital Pharmacy.
|
• |
Tech-Enabled Behavioral Health.
physician-led
clinical model has a proven approach to networking with a growing panel of providers, which is critically important in the field of mental health.
|
• |
Create virtual, cross-sector care communities;
|
• |
Integrate and organize information from a wide range of data sources;
|
• |
Gain insight into health, risks, and opportunities with advance analytics;
|
• |
Qualify and enroll groups into programs;
|
• |
Coordinate care teams across the continuum of care; and
|
• |
Analyze and report on various measures of success.
|
• |
Connect Anywhere—Virtual Visit Platform:
|
• |
MARTTI Interpretation
|
• |
Telehealth Interoperability
EMR
|
1. |
Its digital primary care offerings, which feature digital health applications combined with physical IoT devices to deliver care. The digital health interface for patients and providers is driven by its HelloLyf App, a virtual
on-demand
clinic for identifying patients and automated TeleCRM. Glocal has also developed LitmusDx, a clinical decision support system for differential diagnosis, investigation and treatment protocols. LitmusDx is cloud-based, regularly updated and cross-checked to ensure the latest in evidence-based protocols. It is a semantic-based engine for accurate differential diagnosis covering over 960 diseases, 8,000 symptoms, 11,000 signs, 300 risk factors and 450 parameters. Over 440 treatment protocols are referenced, covering most diseases, and it has stored more than 50,000 prescription brands covering over 6,500 formulations. Lastly, it references more than 20,000 drug precautions which cover contraindications, drug interactions, adverse reactions and food & alcohol interactions to reduce medical errors.
|
2. |
Glocal’s Digital Dispensaries, HelloLyf CX, are carefully engineered to deliver critical healthcare services in hard to reach locations where access to primary care and complementary services is constrained. It requires only about 250 sq. ft. of rented or owned space. It needs only nurses, while doctors are available virtually. It is a
one-stop-shop
where almost all tests can be done, all kinds of doctors accessed and medicines are dispensed.
|
3. |
Glocal’s acute care hospitals have been designed and set up as eleven modular hospitals, each with a
three-bed
ER,
twenty-bed
ICU, four operating theatres (including one with Laminar Air Flow systems, 4Slice CT Scan, X Ray, Echo, Color Doppler, and Ultrasound), treadmill stress testing, two to four dialysis units, a complete clinical lab, pharmacy, general ward beds, and private rooms. These compact hospitals are compliant with local clinical establishment code norms, infection control systems, medical gas pipeline, national building codes and green building norms. They focus on all acute cases like trauma, neuro trauma, pacemaking, thrombolysis, acute surgeries, medical emergencies and also routine surgeries.
|
• |
Number of lives
|
• |
Number of care venues
|
• |
Number of digital and virtual encounters globally
|
• |
Implement Executed/Signed Contracts
.
|
• |
Drive New Bookings
.
go-to-market
|
• |
Explore Synergistic Opportunities with Existing Clients
.
|
• |
Product, Service and Partner Expansion
.
e-commerce
platform to allow providers to sell Medical Horizons’ nutraceutical supplements line to their patients. Additionally, our Behavioral Health capability plans to roll out IOP services nationally. Innovative features of our International telemedicine digital dispensary and
AI-guided-evidence-based
care solution will be reengineered to enable introduction into U.S. and other developed international markets. Cloudbreak will continue to roll out specific teleconsult applications beyond telepsych and telestroke. Each of these initiatives are expected to provide meaningful revenue opportunities.
|
• |
Strategic Acquisition
.
|
• |
consumer/provider/patient user acceptance, satisfaction and utilization;
|
• |
continuous innovation of technologies and services, including an integrated platform that unifies the users’ experiences;
|
• |
effectively building a brand and reputation;
|
• |
building interoperable platforms that can connect with legacy enterprise and integrated care network infrastructures;
|
• |
integrating into the workflows and processes of providers, payors and government entities;
|
• |
reducing care delivery costs across multiple stakeholders;
|
• |
enabling a suite of digital health tools from within existing customer workflows;
|
• |
depth of expertise in care delivery of varying acuity, technology, sales and service;
|
• |
scalability of our business models; and
|
• |
operational execution abilities.
|
• |
Differential diagnosis:
|
• |
Evidence-based care:
|
• |
Integrated care:
|
• |
PACS:
|
• |
PCAB:
|
• |
Population health management:
|
• |
Post-acute:
|
• |
TeleCRM:
|
• |
Tele-ICU:
|
• |
Telepsychiatry:
|
• |
Telesitting:
|
• |
Telestroke:
|
Name
|
Age
|
Position
|
||
Dr. Chirinjeev Kathuria
|
56 |
Co-Chairman
of the Board of Directors
|
||
Dr. Avi S. Katz
|
63 |
Co-Chairman
of the Board of Directors
|
||
Dr. Raluca Dinu
|
47 | Director | ||
Dr. Mariya Pylypiv
|
33 | Director | ||
Neil Miotto
|
75 | Director | ||
Nathan Locke
|
38 | Director | ||
Jerome Ringo
|
66 | Director | ||
Agnès
Rey-Giraud
|
57 | Director | ||
Moshe
Bar-Siman-Tov
|
44 | Director | ||
Dr. Ramesh Balakrishnan
|
67 | Chief Executive Officer | ||
Dr. Alfonso W. Gatmaitan
|
61 | Chief Operating Officer | ||
Dr. Syed Sabahat Azim
|
46 | Chief Executive Officer, International | ||
Jamey Edwards
|
47 | President | ||
Martin S. A. Beck
|
55 | Chief Financial Officer |
• |
assisting the Board in the oversight of (i) the accounting and financial reporting processes of the Company and the audits of the financial statements of Company, (ii) the preparation and integrity of the financial statements of the Company, (iii) the compliance by the Company with financial statement and regulatory requirements, (iv) the performance of the Company’s internal finance and accounting personnel and its independent registered public accounting firms, and (v) the qualifications and independence of the Company’s independent registered public accounting firms;
|
• |
reviewing with each of the internal and independent registered public accounting firms the overall scope and plans for audits, including authority and organizational reporting lines and adequacy of staffing and compensation;
|
• |
reviewing and discussing with management and internal auditors the Company’s system of internal control and discuss with the independent registered public accounting firm any significant matters regarding internal controls over financial reporting that have come to its attention during the conduct of its audit;
|
• |
reviewing and discussing with management, internal auditors and independent registered public accounting firm the Company’s financial and critical accounting practices, and policies relating to risk assessment and management;
|
• |
receiving and reviewing reports of the independent registered public accounting firm discussing (i) all critical accounting policies and practices to be used in the firm’s audit of the Company’s financial statements, (ii) all alternative treatments of financial information within U.S. GAAP that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent registered public accounting firm, and (iii) other material written communications between the independent registered public accounting firm and management, such as any management letter or schedule of unadjusted differences;
|
• |
reviewing and discussing with management and the independent registered public accounting firm the annual and quarterly financial statements and section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company prior to the filing of the Company’s Annual Report on Form
10-K
and Quarterly Reports on Form
10-Q;
|
• |
reviewing, or establishing, standards for the type of information and the type of presentation of such information to be included in, earnings press releases and earnings guidance provided to analysts and rating agencies;
|
• |
discussing with management and the independent registered public accounting firm any changes in Company’s critical accounting principles and the effects of alternative U.S. GAAP methods,
off-balance
sheet structures and regulatory and accounting initiatives;
|
• |
reviewing material pending legal proceedings involving the Company and other contingent liabilities;
|
• |
meeting periodically with the Chief Executive Officer, Chief Financial Officer, the senior internal auditing executive and the independent registered public accounting firm in separate executive sessions to discuss results of examinations;
|
• |
reviewing and approving all transactions between the Company and related parties or affiliates of the officers of the Company requiring disclosure under Item 404 of Regulation
S-K
prior to the Company entering into such transactions;
|
• |
establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submissions by employees or contractors of concerns regarding questionable accounting or accounting matters;
|
• |
reviewing periodically with the Company’s management, the independent registered public accounting firm and outside legal counsel (i) legal and regulatory matters which may have a material effect on the financial statements, and (ii) corporate compliance policies or codes of conduct, including any
|
correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding the Company’s financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities; and
|
• |
establishing policies for the hiring of employees and former employees of the independent registered public accounting firm.
|
• |
reviewing the performance of the Chief Executive Officer and executive management;
|
• |
assisting the Board in developing and evaluating potential candidates for executive positions (including Chief Executive Officer);
|
• |
reviewing and approving goals and objectives relevant to the Chief Executive Officer and other executive officer compensation, evaluating the Chief Executive Officer’s and other executive officers’ performance in light of these corporate goals and objectives, and setting Chief Executive Officer and other executive officer compensation levels consistent with its evaluation and the Company’s philosophy;
|
• |
approving the salaries, bonus and other compensation for all executive officers;
|
• |
reviewing and approving compensation packages for new corporate officers and termination packages for corporate officers as requested by management;
|
• |
reviewing and discussing with the Board and senior officers plans for officer development and corporate succession plans for the Chief Executive Officer and other senior officers;
|
• |
reviewing and making recommendations concerning executive compensation policies and plans;
|
• |
reviewing and recommending to the Board the adoption of or changes to the compensation of the Company’s directors;
|
• |
reviewing and approving the awards made under any executive officer bonus plan, and providing an appropriate report to the Board;
|
• |
reviewing and making recommendations concerning long-term incentive compensation plans, including the use of stock options and other equity-based plans, and, except as otherwise delegated by the Board, acting as the “Plan Administrator” for equity-based and employee benefit plans;
|
• |
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for the Company’s executive officers and employees;
|
• |
reviewing periodic reports from management on matters relating to the Company’s personnel appointments and practices;
|
• |
assisting management in complying with the Company’s proxy statement and annual report disclosure requirements;
|
• |
issuing an annual Report of the Compensation Committee on Executive Compensation for the Company’s annual proxy statement in compliance with applicable SEC rules and regulations;
|
• |
annually evaluating the Committee’s performance and the committee’s charter and recommending to the Board any proposed changes to the charter or the committee; and
|
• |
undertaking all further actions and discharging all further responsibilities imposed upon the committee from time to time by the Board, the federal securities laws or the rules and regulations of the SEC.
|
• |
developing and recommending to the Board the criteria for appointment as a director;
|
• |
identifying, considering, recruiting and recommending candidates to fill new positions on the Board;
|
• |
reviewing candidates recommended by stockholders;
|
• |
conducting the appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates; and
|
• |
recommending director nominees for approval by the Board and election by the stockholders at the next annual meeting.
|
Name and Principal Position(1)
|
Year
|
Salary ($)
|
Bonus ($)
|
All Other
Compensation ($)(2) |
Total ($)
|
|||||||||||||||
Dr. Chirinjeev Kathuria,
|
2020 | $ | – | $ | – | $ | – | $ | – | |||||||||||
Executive Chairman
|
2019 | $ | – | $ | – | $ | – | $ | – | |||||||||||
Dr. Mariya Pylypiv,
|
2020 | $ | – | $ | – | $ | – | $ | – | |||||||||||
Vice Chairwoman and Chief Strategy Officer
|
2019 | $ | – | $ | – | $ | – | $ | – | |||||||||||
Dr. Alfonso W. Gatmaitan,(3)
|
2020 | $ | – | $ | – | $ | – | $ | – | |||||||||||
Co-Chief
Executive Officer and President
|
2019 | $ | – | $ | – | $ | – | $ | – | |||||||||||
Dr. Ramesh Balakrishnan,
|
2020 | $ | 240,000 | $ | 250,000 | $ | 39,509 | $ | 529,509 | |||||||||||
Co-Chief
Executive Officer
|
2019 | $ | 240,000 | $ | – | $ | 39,509 | $ | 279,509 | |||||||||||
Martin S.A. Beck,(3)
|
2020 | $ | – | $ | – | $ | – | $ | – | |||||||||||
Chief Financial Officer
|
2019 | $ | – | $ | – | $ | – | $ | – | |||||||||||
Dr. Syed Sabahat Azim,(4)
|
2020 | $ | 30,589 | $ | – | $ | 34,170 | $ | 64,760 | |||||||||||
Chief Executive Officer of Glocal Healthcare
Systems Private Limited
|
2019 | $ | 31,297 | $ | – | $ | 34,961 | $ | 66,257 |
(1) |
None of Dr. Kathuria, Dr. Pylypiv, Dr. Gatmaitan, or Mr. Beck received any compensation during 2020 or 2019. However, pursuant to the terms of the offer letters between each such individual and UpHealth Services, Inc., these individuals were paid their 2020 accrued salary amounts (Dr. Kathuria–$200,000, Dr. Pylypiv–$200,000, Dr. Gatmaitan–$300,000, or Mr. Beck–$196,875) upon the closing of the UpHealth Business Combination. In addition, Dr. Gatmaitan was paid a signing bonus of $50,000 upon the closing of the UpHealth Business Combination. Dr. Gatmaitan is also entitled to bonuses in the aggregate amount of $500,000 to be paid as follows (subject to Dr. Gatmaitan being employed by UpHealth Services, Inc. UpHealth Holdings, Inc., or a successor entity as of such date): $150,000, $150,000, $150,000, and $50,000 on the dates that are six months, eighteen months, thirty months, and
forty-two
months following the closing of the UpHealth Business Combination, respectively. Mr. Beck received $225,000 upon closing of the UpHealth Business Combination.
|
(2) |
“All other compensation” for Dr. Balakrishnan consisted of the following in each of 2020 and 2019: $23,237 for premium payments for additional life insurance, $15,000 for company vehicle and vehicle expenses, and $1,272 for home office internet. All Other Compensation for Dr. Azim consisted of the following for 2020 and 2019: $8,249 and $8,450 for house rent allowance, $131 and $135 for transport allowance, and $25,748 and $26,376 for rural posting allowance, respectively.
|
(3) |
The employment offer letters between each Dr. Gatmaitan and Mr. Beck and UpHealth Services, Inc., include the following severance provisions: If the individual’s employment is terminated without Cause (as defined in the offer letter) or for Good Reason (as defined in the offer letter), such individual is entitled to the following: (a) base salary for one year; (b) payment of any bonus earned during prior fiscal years, but not yet paid; and (c) accelerated vesting of all outstanding rights for stock, warrants, or other equity ownership interests (vesting occurs on
one-year
anniversary of termination date, unless termination is within two years following a Change in Control (as defined in the offer letter), in which case vesting occurs on termination date). In addition, in the event of the death or
|
Disability (as defined in the offer letter) of the individual, accelerated vesting of all outstanding rights for stock, warrants, or other equity ownership interests to the date of termination of employment due to death or Disability. Neither the employment offer letter between Dr. Pylypiv and UpHealth Services, Inc. nor the employment agreement between Dr. Balakrishnan and Thrasys, Inc. include severance provisions. Dr. Azim is not a party to an employment agreement. |
(4) |
2020 and 2019 salary and “all other compensation” for Dr. Azim was converted based on the exchange rate reported by the U.S. Federal Reserve Board on December 31, 2020 of 1 USD to 73.0100 Indian Rupees and December 31, 2019 of 1 USD to 71.3600 Indian Rupees, respectively.
|
Name and Principal Position
|
Year
|
Salary ($)
|
Bonus
($) |
All Other
Compensation ($) |
Total ($)
|
|||||||||||||||
Jamey Edwards
|
2020 | $ | 300,000 | $ | 0 | $ | 34,433.64 | $ | 334,433.64 | |||||||||||
Chief Executive Officer of Cloudbreak
|
2019 | $ | 300,000 | $ | 0 | $ | 32,114.88 | $ | 332,114.88 |
• |
each person known by the Company to be the beneficial owner of more than 5% of the Common Stock of the Company;
|
• |
each of the Company’s officers and directors; and
|
• |
all officers and directors of the Company, as a group.
|
Shares Beneficially Owned
|
Shares Beneficially Owned
After this Offering |
|||||||||||||||
Name and Address of Beneficial Owner(1)
|
Number of
Shares |
% of Class
|
Number of
Shares |
% of Class
|
||||||||||||
Dr. Avi S. Katz(2)
|
5,005,549 | 4.2 | % | 5,005,550 | 3.8 | % | ||||||||||
Dr. Raluca Dinu
|
– | – | * | – | – | * | ||||||||||
Neil Miotto
|
– | – | * | – | – | * | ||||||||||
Dr. Chirinjeev Kathuria(7)
|
43,100,443 | 36.3 | % | 43,100,443 | 33.1 | % | ||||||||||
Dr. Mariya Pylypiv
|
7,461,644 | 6.3 | % | 7,461,644 | 5.7 | % | ||||||||||
Dr. Alfonso Gatmaitan
|
1,079,833 | – | * | 1,079,833 | – | * | ||||||||||
Dr. Ramesh Balakrishnan
|
4,351,175 | 3.7 | % | 4,351,175 | 3.3 | % | ||||||||||
Martin S. A. Beck(3)
|
4,424,075 | 3.8 | % | 4,424,075 | 3.4 | % | ||||||||||
Dr. Syed Sabahat Azim(4)
|
6,116,842 | 5.2 | % | 180,145 | – | * | ||||||||||
James Edwards(5)
|
1,523,821 | 1.3 | % | 1,523,821 | 1.2 | % | ||||||||||
Nathan Locke
|
– | – | * | – | – | * | ||||||||||
Agnès
Rey-Giraud
|
– | – | * | – | – | * | ||||||||||
Jerome Ringo
|
– | – | * | – | – | * | ||||||||||
Moshe
Bar-Siman-Tov
|
– | – | * | – | – | * | ||||||||||
All directors and executive officers (14 individuals) as a group
|
73,063,383 | 61.6 | % | 73,063,383 | 56.1 | % |
* |
Less than one percent.
|
(1) |
The business address of Dr. Avi Katz, Dr. Raluca Dinu and Neil Miotto is 1731 Embarcadero Rd., Suite 200, Palo Alto, CA 94303. The business address of each of the other individuals is c/o UpHealth, Inc., 14000 S. Military Trail, Suite 203, Delray Beach, FL 33484.
|
(2) |
Consists of (i) 4,524,300 shares of Common Stock, and (ii) 481,250 shares of Common Stock underlying warrants, all held by the Sponsor. The securities held by the Sponsor are beneficially owned by Dr. Avi S. Katz, the
co-chairman
of the Company’s board of directors and the manager of the Sponsor, who has sole voting and dispositive power over the shares held by the Sponsor.
|
(3) |
Consists of (i) 928,656 shares held by Rewi Enterprises LLC (of which Mr. Beck is the sole owner) and (ii) 3,495,419 shares held by Partners, (of which Mr. Beck is an equity owner and chairman of the board of directors) for which Mr. Beck may be deemed the beneficial owner. Mr. Beck disclaims beneficial ownership of the shares held by Partners.
|
(4) |
Includes (i) 684,981 shares beneficially owned by Kimberlite (of which Dr. Azim and his wife are equity owners and the sole directors) and (ii) 2,715,542 shares beneficially owned by Dr. Azim’s wife for which Dr. Azim may be deemed the beneficial owner. All of the shares listed are held of record by Eligere Limited Liability Company (“
Eligere
|
(5) |
Includes 473,266 shares of Common Stock issuable upon the exercise of options within 60 days of September 23, 2021.
|
• |
in whole and not in part;
|
• |
at a price of $0.01 per warrant;
|
• |
upon a minimum of 30 days’ prior written notice of redemption, which the Company refers to as the
30-day
redemption period; and
|
• |
if, and only if, the last reported sale price of the Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
|
• |
1% of the total number of shares of Common Stock then outstanding; or
|
• |
the average weekly reported trading volume of the Common Stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
|
• |
the issuer of the securities that was formerly a shell company has ceased to be a shell company;
|
• |
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
|
• |
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form
8-K
reports; and
|
• |
at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
|
• |
a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);
|
• |
an affiliate of an interested stockholder; or
|
• |
an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.
|
• |
the Board approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;
|
• |
after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or
|
• |
on or subsequent to the date of the transaction, the business combination is approved by the Board and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least
two-thirds
of the outstanding voting stock not owned by the interested stockholder.
|
• |
banks, insurance companies or other financial institutions;
|
• |
tax-exempt
or governmental organizations;
|
• |
qualified foreign pension funds (or any entities all of the interests of which are held by a qualified foreign pension fund);
|
• |
brokers or dealers in securities or foreign currencies;
|
• |
U.S. persons whose functional currency is not the U.S. dollar;
|
• |
“controlled foreign corporations,” “passive foreign investment companies” and corporations that accumulate earnings to avoid U.S. federal income tax;
|
• |
traders in securities that use the
mark-to-market
|
• |
persons subject to the alternative minimum tax;
|
• |
partnerships or other pass-through entities for U.S. federal income tax purposes or holders of interests therein;
|
• |
persons deemed to sell our Common Stock under the constructive sale provisions of the Code;
|
• |
persons that acquired our Common Stock through the exercise of employee stock options or otherwise as compensation or through a
tax-qualified
retirement plan;
|
• |
real estate investment trusts;
|
• |
regulated investment companies;
|
• |
certain former citizens or long-term residents of the United States; and
|
• |
persons that hold our Common Stock as part of a straddle, appreciated financial position, synthetic security, hedge, conversion transaction or other integrated investment or risk reduction transaction.
|
• |
an individual who is a citizen or resident of the United States;
|
• |
a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
|
• |
an estate the income of which is subject to U.S. federal income tax regardless of its source; or
|
• |
a trust (i) the administration of which is subject to the primary supervision of a U.S. court and which has one or more United States persons (within the meaning of the Code) who have the authority to control all substantial decisions of the trust or (ii) which has made a valid election under applicable U.S. Treasury regulations to be treated as a United States person.
|
• |
the
Non-U.S.
holder is an individual who is present in the United States for a period or periods aggregating 183 days or more during the calendar year in which the sale or disposition occurs and certain other conditions are met;
|
• |
the gain is effectively connected with a trade or business conducted by the
Non-U.S.
holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by the
Non-U.S.
holder in the United States); or
|
• |
we are or have been a USRPHC for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the
Non-U.S.
holder held our Common
|
Stock, and, in the case where shares of our Common Stock are regularly traded on an established securities market, the
Non-U.S.
holder has owned, directly or constructively, more than 5% of our Common Stock at any time within the shorter of the five-year period preceding the disposition or such
Non-U.S.
holder’s holding period for the shares of our Common Stock.
|
Underwriter
|
Number of Shares of
Common Stock |
|||||||
Oppenheimer & Co. Inc.
|
– | – | ||||||
Northland Securities, Inc.
|
– | – | ||||||
Lake Street Capital Markets, LLC
|
||||||||
|
|
|
|
|||||
Total
|
||||||||
|
|
|
|
Per
Share of Common Stock |
Total without
Exercise of
Over-Allotment
Option |
Total with Full
Exercise of
Over-Allotment
Option |
||||||||||
Public offering price
|
$ | – | $ | – | $ | – | ||||||
Underwriting discounts and commissions
(1)
|
||||||||||||
Proceeds, before expenses, to us
|
$ | – | $ | – | $ | – |
(1) |
We have agreed to pay the underwriters a commission of 5.0% of the gross proceeds of this offering.
|
• |
Stabilizing transactions—the representative may make bids or purchases for the purpose of pegging, fixing or maintaining the price of the shares, so long as stabilizing bids do not exceed a specified maximum.
|
• |
Over-allotments and syndicate covering transactions—the underwriters may sell more shares of common stock in connection with this offering than the number of shares of common stock that they have committed to purchase. This over-allotment creates a short position for the underwriters. This short sales position may involve either “covered” short sales or “naked” short sales. Covered short sales are short sales made in an amount not greater than the underwriters’ over-allotment option to purchase additional shares of common stock in this offering described above. The underwriters may close out any covered short position either by exercising its over-allotment option or by purchasing shares of common stock in the open market. To determine how they will close the covered short position, the underwriters will consider, among other things, the price per share of common stock available for purchase in the open market, as compared to the price at which they may purchase shares of common stock through the over-allotment option. Naked short sales are short sales in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares of common stock in the open market. A naked short position is more likely to be created if the underwriters are concerned that, in the open market after pricing, there may be downward pressure on the price per share of common stock that could adversely affect investors who purchase shares of common stock in this offering.
|
• |
Penalty bids—if the representative purchases shares in the open market in a stabilizing transaction or syndicate covering transaction, it may reclaim a selling concession from the underwriters and selling group members who sold those shares as part of this offering.
|
• |
Passive market making—market makers in the shares who are underwriters or prospective underwriters may make bids for or purchases of shares, subject to limitations, until the time, if ever, at which a stabilizing bid is made.
|
A. |
to any legal entity that is a qualified investor as defined under the Prospectus Regulation;
|
B. |
to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation), subject to obtaining the prior consent of the representatives; or
|
C. |
in any other circumstances falling within Article 1(4) of the Prospectus Regulation;
|
(a) |
a fund for joint investments in trust (i.e., mutual fund), as such term is defined in the Law for Joint Investments in Trust, 5754-1994, or a management company of such a fund;
|
(b) |
a provident fund as defined in Section 47(a)(2) of the Income Tax Ordinance of the State of Israel, or a management company of such a fund;
|
(c) |
an insurer, as defined in the Law for Oversight of Insurance Transactions, 5741-1981, (d) a banking entity or satellite entity, as such terms are defined in the Banking Law (Licensing), 5741-1981, other than a joint services company, acting for their own account or for the account of investors of the type listed in Section 15A(b) of the Securities Law 1968;
|
(d) |
a company that is licensed as a portfolio manager, as such term is defined in Section 8(b) of the Law for the Regulation of Investment Advisors and Portfolio Managers, 5755-1995, acting on its own account or for the account of investors of the type listed in Section 15A(b) of the Securities Law 1968;
|
(e) |
a company that is licensed as an investment advisor, as such term is defined in Section 7(c) of the Law for the Regulation of Investment Advisors and Portfolio Managers, 5755-1995, acting on its own account;
|
(f) |
a company that is a member of the Tel Aviv Stock Exchange, acting on its own account or for the account of investors of the type listed in Section 15A(b) of the Securities Law 1968;
|
(g) |
an underwriter fulfilling the conditions of Section 56(c) of the Securities Law, 5728-1968;
|
(h) |
a venture capital fund (defined as an entity primarily involved in investments in companies which, at the time of investment, (i) are primarily engaged in research and development or manufacture of new technological products or processes and (ii) involve above-average risk);
|
(i) |
an entity primarily engaged in capital markets activities in which all of the equity owners meet one or more of the above criteria; and
|
(j) |
an entity, other than an entity formed for the purpose of purchasing shares in this offering, in which the shareholders equity (including pursuant to foreign accounting rules, international accounting regulations and U.S. generally accepted accounting rules, as defined in the Securities Law Regulations (Preparation of Annual Financial Statements), 1993) is in excess of NIS 50 million.
|
(a) |
by an investment firm, bank or intermediary permitted to conduct such activities in Italy in accordance with Legislative Decree No. 58 of 24 February 1998 and Legislative Decree No. 385 of 1 September 1993 (the Banking Act);
|
(b) |
in compliance with Article 129 of the Banking Act and the implementing guidelines of the Bank of Italy; and
|
(c) |
in compliance with any other applicable laws and regulations and other possible requirements or limitations which may be imposed by Italian authorities.
|
|
F-4
|
|
||
|
F-6
|
|
||
|
F-7
|
|
||
|
F-8
|
|
||
|
F-9
|
|
||
|
F-10
|
|
||
|
F-11
|
|
||
|
F-32
|
|
||
|
F-34
|
|
||
|
F-35
|
|
||
|
F-36
|
|
||
|
F-37
|
|
||
|
F-38
|
|
||
|
F-39
|
|
||
|
F-78
|
|
||
|
F-80
|
|
||
|
F-81
|
|
||
|
F-82
|
|
||
|
F-83
|
|
||
|
F-84
|
|
||
|
F-85
|
|
||
|
F-103
|
|
||
|
F-105
|
|
||
|
F-107
|
|
||
|
F-108
|
|
||
|
F-109
|
|
||
|
F-110
|
|
||
|
F-160
|
|
||
|
F-161
|
|
||
|
F-162
|
|
||
|
F-163
|
|
||
|
F-165
|
|
||
|
F-204
|
|
||
|
F-205
|
|
||
|
F-206
|
|
||
|
F-207
|
|
||
|
F-208
|
|
F-6 | ||||
F-7 | ||||
F-8 | ||||
F-9 | ||||
F-10 | ||||
F-11 |
ASSETS
|
||||
Current assets:
|
||||
Cash and cash equivalents
|
$ | 1,838,583 | ||
Restricted cash
|
530,500 | |||
Accounts receivable – trade, net of allowance for doubtful accounts and contractual adjustments
|
6,702,858 | |||
Inventories
|
116,676 | |||
Prepaid expenses and other current assets
|
3,500,908 | |||
|
|
|||
Total current assets
|
12,689,525 | |||
Noncurrent assets:
|
||||
Property, plant and equipment, net of accumulated depreciation of $2,692
|
151,122 | |||
Intangible assets, trade names, net of accumulated amortization of $85,277
|
7,064,723 | |||
Intangible assets, developed technology, net of accumulated amortization of $120,278
|
10,704,722 | |||
Intangible assets, customer relationships, net of accumulated amortization of $112,500
|
10,012,500 | |||
Goodwill
|
164,194,004 | |||
Deferred tax asset
|
335,504 | |||
Equity method investment
|
57,213,902 | |||
Other assets
|
23,749 | |||
|
|
|||
Total Assets
|
$ | 262,389,751 | ||
|
|
|||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||
Current liabilities
|
||||
Accounts payable
|
$ | 2,679,965 | ||
Accrued liabilities
|
8,482,484 | |||
Deferred revenue
|
396,958 | |||
Due to related party
|
70,000 | |||
Seller Note-Thrasys
|
20,000,000 | |||
Seller
Note-BHS
|
1,100,000 | |||
Income tax payable
|
672,809 | |||
Deferred tax liability
|
6,072,101 | |||
Current portion, related party - long term debt
|
39,000 | |||
Current portion, Provider Relief Funds
|
228,794 | |||
Current portion, Paycheck Protection Program loan
|
1,201,836 | |||
|
|
|||
Total current liabilities
|
40,943,947 | |||
Related party - long term debt
|
381,283 | |||
Paycheck Protection Program loan
|
343,564 | |||
|
|
|||
Total liabilities
|
41,668,794 | |||
|
|
|||
Commitments and Contingencies
|
— | |||
Stockholders’ Equity
|
||||
Common stock. Authorized 15,000,000 shares of $0.0001 par value per share;
6,811,043 shares issued and outstanding in 2020 |
681 | |||
Additional paid in capital
|
222,906,709 | |||
Accumulated deficit
|
(2,186,433 | ) | ||
|
|
|||
Total stockholders’ equity
|
220,720,957 | |||
|
|
|||
Total liabilities and stockholders’ equity
|
$ | 262,389,751 | ||
|
|
Revenue
|
||||
Services
|
$ | 1,664,278 | ||
Licenses and subscriptions
|
3,303,636 | |||
Products
|
428,153 | |||
|
|
|||
5,396,067 | ||||
Cost of goods and services (excluding depreciation and amortization)
|
1,182,831 | |||
Operating expenses
|
||||
Selling, general and administrative
|
4,944,522 | |||
Research and development
|
874,112 | |||
Depreciation and amortization
|
320,748 | |||
|
|
|||
6,139,382 | ||||
|
|
|||
Other income (expense)
|
||||
Other expense
|
(133,831 | ) | ||
Other income, net, including interest income
|
3,436 | |||
|
|
|||
(130,395 | ) | |||
|
|
|||
Income before income taxes
|
(2,056,541 | ) | ||
Income tax benefit (expense)
|
(50,194 | ) | ||
|
|
|||
Income before net equity in earnings of affiliate
|
(2,106,735 | ) | ||
Net earnings in equity method investment.
|
(79,698 | ) | ||
|
|
|||
Net Income (Loss)
|
$ | (2,186,433 | ) | |
|
|
|||
Basic earnings per share for common stock:
|
||||
Income from continuing operations attributable to UpHealth Holdings, Inc. common stockholders.
|
(0.43 | ) | ||
(Loss) income from discontinued operations attributable to UpHealth Holdings, Inc. common stockholders.
|
— | |||
|
|
|||
Net income (loss) attributable to UpHealth Holdings, Inc. common stockholders.
|
(0.43 | ) | ||
|
|
|||
Diluted earnings per share for common stock:
|
||||
Income from continuing operations attributable to UpHealth Holdings, Inc. common stockholders.
|
(0.43 | ) | ||
(Loss) income from discontinued operations attributable to UpHealth Holdings, Inc. common stockholders.
|
— | |||
|
|
|||
Net income (loss) attributable to UpHealth Holdings, Inc. common stockholders.
|
(0.43 | ) | ||
|
|
|||
Weighted average number of common shares outstanding:
|
||||
Basic
|
5,091,975 | |||
Diluted
|
5,091,975 |
Common Stock
|
||||||||||||||||||||
Number of
Shares Outstanding |
Par
Amount |
Additional
Paid-In
Capital
|
Retained
Earnings |
Total
|
||||||||||||||||
Balance — January 1, 2020
|
— | $ | — | $ | — | $ | — | $ | — | |||||||||||
Issuance of common stock for formation
|
4,868,443 | 487 | (487 | ) | — | — | ||||||||||||||
Consolidated net loss
|
— | — | — | (2,186,433 | ) | (2,186,433 | ) | |||||||||||||
Issuance of common stock to consummate business combinations
|
1,508,000 | 151 | 165,613,639 | — | 165,613,790 | |||||||||||||||
Issuance of common stock in exchange for a portion of equity method investment.
|
434,600 | 43 | 57,293,557 | — | 57,293,600 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance — December 31, 2020
|
6,811,043 | $ | 681 | $ | 222,906,709 | $ | (2,186,433 | ) | $ | 220,720,957 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Operating activities
|
||||
Net loss
|
$ | (2,186,433 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||
Depreciation and amortization
|
320,747 | |||
Net earnings in equity method investment
|
79,698 | |||
Deferred income taxes
|
(622,615 | ) | ||
Changes in operating assets and liabilities:
|
||||
Accounts receivable
|
(1,954,666 | ) | ||
Inventories
|
(17,093 | ) | ||
Prepaid expenses and other assets
|
(459,952 | ) | ||
Accounts payable and accrued liabilities
|
3,331,517 | |||
Income taxes payable
|
672,809 | |||
Deferred revenue
|
(303,042 | ) | ||
Due to related parties
|
— | |||
|
|
|||
Net cash used in operating activities
|
(1,139,030 | ) | ||
|
|
|||
Investing activities:
|
||||
Net cash acquired in acquisition of businesses
|
3,508,113 | |||
|
|
|||
Net cash provided by investing activities
|
3,508,113 | |||
|
|
|||
Net increase in cash and cash equivalents
|
2,369,083 | |||
Cash and cash equivalents at beginning of period
|
— | |||
|
|
|||
Cash and cash equivalents at end of period
|
$ | 2,369,083 | ||
|
|
|||
Supplement schedule of cash flow information
|
||||
Cash paid for interest
|
— | |||
Cash paid for income taxes
|
— | |||
Supplemental schedule of noncash investing and financing activities:
|
||||
Issuance of common stock for formation
|
— | |||
Issuance of common stock and promissory notes to consummate Thrasys business combinations
|
167,435,352 | |||
Issuance of common stock and promissory notes to consummate BHS business combinations
|
15,770,325 | |||
Issuance of common stock and promissory note for invetment in unconsolidated entity
|
57,293,600 |
1.
|
Organization and Business
|
2.
|
Summary of Significant Accounting Policies
|
• |
the fair value of assets acquired and liabilities assumed for business combinations;
|
• |
the standalone selling price (“SSP”) of performance obligations for revenue contracts with multiple performance obligations;
|
• |
the recognition, measurement and valuation of current and deferred income taxes and uncertain tax positions;
|
• |
the identification and estimated economic lives of intangible assets; and
|
• |
the fair value of stock awards issued.
|
• |
Services – Medical services provided through our behavioral services operations.
|
• |
Services – Medical HIPAA-compliant (Health Insurance Portability and Accountability Act) SaaS internet hosting, licenses, and subscriptions to healthcare communities.
|
• |
Services – Discrete information technology services for
set-up,
configuration, implementation and customization services for healthcare communities
|
3.
|
Business Combinations
|
Thrasys, Inc and
|
||||
Subsidiary
|
||||
As of November 20, 2020
|
||||
Allocation of Purchase price:
|
||||
Accounts receivable, net
|
$ | 3,490,738 | ||
Prepaid expenses and other
|
3,001,150 | |||
Identifiable intangible assets
|
27,875,000 | |||
Property, plant and equipment
|
101,246 | |||
Other assets
|
19,374 | |||
Goodwill
|
148,087,717 | |||
|
|
|||
Total assets acquired
|
182,575,225 | |||
|
|
|||
Accounts payable
|
1,778,849 | |||
Accrued expenses and other current liabilities
|
5,321,761 | |||
Debt
|
960,783 | |||
Deferred tax liability
|
6,378,480 | |||
Deferred revenue
|
700,000 | |||
|
|
|||
Total liabilities assumed
|
15,139,873 | |||
|
|
|||
Net assets acquired
|
$
|
167,435,352
|
||
|
|
Approximate Fair
|
Estimated
|
|||||||
Value
|
Useful Life
|
|||||||
|
(in years)
|
|||||||
Definite-lived intangible assets - Trade names
|
$ | 6,925,000 | 10 | |||||
Definite-lived intangible assets - Technology and intellectual property
|
10,825,000 | 10 | ||||||
Definite-lived intangible asset - Customer relationships
|
10,125,000 | 10 | ||||||
|
|
|||||||
Total fair value of identifiable intangible assets
|
$ | 27,875,000 | ||||||
|
|
Behavioral Health
|
||||
Services , LLC and
|
||||
Subsidiaries
|
||||
As of November 20, 2020
|
||||
Allocation of Purchase price:
|
||||
Accounts receivable, net
|
$ | 1,257,454 | ||
Inventories
|
99,583 | |||
Prepaid expenses and other
|
39,806 | |||
Identifiable intangible assets
|
225,000 | |||
Property, plant and equipment
|
52,568 | |||
Other assets
|
4,375 | |||
Deferred taxes
|
19,268 | |||
Goodwill
|
16,106,287 | |||
|
|
|||
Total assets acquired
|
17,804,341 | |||
|
|
|||
Accounts payable
|
374,532 | |||
Accrued expenses and other current liabilities
|
425,790 | |||
Debt
|
1,233,694 | |||
|
|
|||
Total liabilities assumed
|
2,034,016 | |||
|
|
|||
Net assets acquired
|
$
|
15,770,325
|
|
|
|
|
Approximate Fair
|
Estimated
|
|||||||
Value
|
Useful Life
|
|||||||
|
(in years)
|
|||||||
Definite-lived intangible assets - Trade names
|
$ | 225,000 | 3 | |||||
|
|
|||||||
Total fair value of identifiable intangible assets
|
$ | 225,000 |
|
|||||
|
|
Pro Forma
|
Year Ended
December 31, 2020 |
|||
Revenues
|
$ | 30,742,853 | ||
Net
|
$ | (749,823 | ) | |
Basic Earnings per share
|
$ | (0.15 | ) | |
Diluted earnings per share
|
$ | (0.15 | ) |
4.
|
Investment in Unconsolidated Entities
|
5.
|
Intangible Assets
|
Approximate Fair Value
|
Estimated Useful Life
|
|||||||
|
(in years)
|
|||||||
Technology and intellectual property
|
$ | 10,825,000 | 10 | |||||
Customer relationships
|
10,125,000 | 10 | ||||||
Trade names
|
7,150,000 | 10 | ||||||
|
|
|||||||
Total fair value of identifiable intangible assets
|
$
|
27,875,000
|
|
|||||
|
|
Developed
|
Customer
|
|||||||||||
Trade Name
|
Technology
|
Relationships
|
||||||||||
Amortization
|
Amortization
|
Amortization
|
||||||||||
2021
|
$ | 767,500 | $ | 1,082,500 | $ | 1,012,500 | ||||||
2022
|
767,500 | 1,082,500 | 1,012,500 | |||||||||
2023
|
767,500 | 1,082,500 | 1,012,500 | |||||||||
2024
|
692,500 | 1,082,500 | 1,012,500 | |||||||||
2025
|
692,500 | 1,082,500 | 1,012,500 | |||||||||
Thereafter
|
3,377,223 | 5,292,222 | 4,950,000 | |||||||||
|
|
|
|
|
|
|||||||
$
|
7,064,723
|
|
$
|
10,704,722
|
|
$
|
10,012,500
|
|
||||
|
|
|
|
|
|
6.
|
Accrued Liabilities
|
Accrued professional fees
|
$ | 4,245,772 | ||
Accrued software licenses
|
690,855 | |||
Accrued interest on debt
|
142,446 | |||
Accrued payroll and bonuses
|
1,545,288 | |||
Accrued shareholder distribution
|
1,493,000 | |||
Other accruals
|
365,123 | |||
|
|
|||
$
|
8,482,484
|
|
||
|
|
7.
|
Deferred Compensation
|
8.
|
Debt
|
9.
|
Fair Value of Financial Instruments
|
Level 1- | Quoted (unadjusted) prices in active markets for identical assets or liabilities. | |
Level 2 - | Other observable inputs, either directly or indirectly, other than quoted prices included in Level 1, including: |
• |
Quoted prices for similar assets/liabilities in active markets;
|
• |
Quoted prices for identical or similar assets/liabilities in
non-active
markets (e.g., few transactions, limited information,
non-current
prices, high variability over time);
|
• |
Inputs other than quoted prices that are observable for the asset/liability (e.g., interest rates, yield curves, volatilities, default rates); and
|
• |
Inputs that are derived principally from or corroborated by other observable market data.
|
Level 3 -
|
Unobservable inputs that cannot be corroborated by observable market data. |
10.
|
Capital Structure
|
11.
|
Revenue
|
Fiscal Year Ended December 31
2020
|
||||
Subscriptions and Licenses
|
$ | 3,303,636 | ||
Professional IT Services
|
700,109 | |||
Medical Services
|
964,169 | |||
Product Revenues
|
428,153 | |||
|
|
|||
$5,396,067 | ||||
|
|
Americas
|
$ | 5,036,463 | ||
Europe
|
359,604 | |||
|
|
|||
$
|
5,396,067
|
|
||
|
|
Contract Assets
|
||||
December 31,
2020 |
||||
Contract asset, beginning of period
|
$ | — | ||
Contract assets acquired in business combination
|
65,692 | |||
Reclassifications to billed receivables
|
(51,965 | ) | ||
Revenues recognized in excess of period billings
|
424,494 | |||
|
|
|||
Ending Balance
|
$ | 438,221 | ||
|
|
Deferred Revenue
|
||||
December 31,
2020
|
||||
Beginning Balance, January 1, 2020
|
$ | — | ||
Revenues recognized from balances held at the beginning of the period
|
— | |||
Fair value of deferred revenues from business combination
|
700,000 | |||
Revenues deferred from period collections on unfulfilled performance obligations
|
(303,000 | ) | ||
|
|
|||
Ending Balance
|
$ | 397,000 | ||
|
|
Remaining Performance Obligations
|
Total
|
Current
|
Future
|
|||||||||
Subscriptions
|
$ | 1,016,887 | 782,512 | 234,375 | ||||||||
Licenses
|
8,639,166 | 2,580,000 | 6,059,166 | |||||||||
SaaS and Hosting
|
48,750 | 48,750 | — | |||||||||
Program Management and Services
|
1,331,192 | 1,331,192 | — | |||||||||
|
|
|
|
|
|
|||||||
$ | 11,035,995 | 4,742,454 | 6,293,541 | |||||||||
|
|
|
|
|
|
12.
|
Income Taxes
|
Current:
|
||||
Federal
|
$ | 577,515 | ||
State
|
95,294 | |||
|
|
|||
Total current expense
|
672,809 | |||
|
|
|||
Deferred:
|
||||
Federal
|
(536,497 | ) | ||
State
|
(86,118 | ) | ||
|
|
|||
Total deferred benefit
|
(622,615 | ) | ||
|
|
|||
Income tax expense
|
$ | 50,194 | ||
|
|
Amount
|
Tax Rate
|
|||||||
Federal Statutory income tax
|
(448,674 | ) | 21.00 | % | ||||
State income tax, net of federal benefit
|
(83,884 | ) | 3.93 | % | ||||
Transactions costs
|
560,504 | -26.23 | % | |||||
Other
|
22,248 | -1.04 | % | |||||
|
|
|
|
|||||
Effective Income Tax Rate
|
50,194 | -2.35 | % | |||||
|
|
|
|
Deferred Tax Assets
|
||||
Accrued expenses
|
$ | 573,153 | ||
Transactions costs
|
85,727 | |||
State credits
|
738,134 | |||
Net operating loss carryforwards
|
18,984 | |||
|
|
|||
Total deferred tax assets
|
1,415,997 | |||
|
|
|||
Deferred Tax Liabilities
|
||||
Amortization and depreciation
|
(6,738,591 | ) | ||
Deferred revenue
|
(195,241 | ) | ||
|
|
|||
Total deferred tax liabilities
|
(6,933,831 | ) | ||
|
|
|||
Less: Valuation allowance
|
(554,267 | ) | ||
|
|
|||
Net deferred tax asset (liability)
|
$ | (6,072,101 | ) | |
|
|
13.
|
Earnings (Loss) Per Share
|
14.
|
Employee Benefit Plans
|
15.
|
Related-Party Transactions
|
16.
|
Commitments and Contingencies
|
Year
|
Related Party
|
Third-Party
|
Total
|
|||||||||
2021
|
$ | 136,800 | $ | 538,033 | $ | 674,833 | ||||||
2022
|
78,000 | 199,607 | 277,607 | |||||||||
2023
|
69,333 | 10,776 | 80,109 | |||||||||
2024
|
— | 10,776 | 10,776 | |||||||||
2025
|
— | 9,878 | 9,878 | |||||||||
|
|
|
|
|
|
|||||||
$ | 284,133 | $ | 769,070 | $ | 1,053,203 | |||||||
|
|
|
|
|
|
F-34 | ||||
F-35 | ||||
F-36 | ||||
F-37 | ||||
Condensed Consolidated Statements of Cash Flows for the three and six months ended June 30, 2021 and 2020
|
F-38 | |||
F-39 |
June 30, 2021
|
December 31, 2020
|
|||||||
ASSETS |
|
|||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | 98,116 | $ | 1,839 | ||||
Restricted cash
|
586 | 530 | ||||||
Accounts receivable, net
|
40,636 | 6,703 | ||||||
Inventories
|
3,208 | 117 | ||||||
Due from related parties
|
13 | — | ||||||
Prepaid expenses and other current assets
|
7,060 | 3,501 | ||||||
|
|
|
|
|||||
Total current assets
|
149,619 | 12,690 | ||||||
|
|
|
|
|||||
Property and equipment, net
|
55,154 | 151 | ||||||
Intangible assets, net
|
123,463 | 27,782 | ||||||
Goodwill
|
567,952 | 164,194 | ||||||
Equity method investments
|
— | 57,214 | ||||||
Deferred tax assets
|
— | 335 | ||||||
Other assets
|
1,865 | 24 | ||||||
|
|
|
|
|||||
Total assets
|
$ | 898,053 | $ | 262,390 | ||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$ | 8,232 | $ | 2,680 | ||||
Accrued expenses
|
33,764 | 8,482 | ||||||
Deferred revenue
|
6,572 | 397 | ||||||
Due to related party
|
57 | 70 | ||||||
Income taxes payable
|
902 | 673 | ||||||
Related-party long-term debt, current
|
670 | 39 | ||||||
Long-term debt, current
|
49,487 | 22,531 | ||||||
Derivative liability, current
|
38,598 | — | ||||||
Forward share purchase liability
|
17,123 | — | ||||||
Other current liabilities
|
1,048 | — | ||||||
|
|
|
|
|||||
Total current liabilities
|
156,453 | 34,872 | ||||||
|
|
|
|
|||||
Related-party long-term debt, noncurrent
|
— | 381 | ||||||
Long-term debt, noncurrent
|
96,131 | 344 | ||||||
Deferred tax liabilities
|
24,582 | 6,072 | ||||||
Warrant liabilities, noncurrent
|
772 | — | ||||||
Derivative liability, noncurrent
|
23,225 | — | ||||||
Other long-term liabilities
|
2,773 | — | ||||||
|
|
|
|
|||||
Total liabilities
|
303,936 | 41,669 | ||||||
|
|
|
|
|||||
Commitments and Contingencies (Note 17)
|
||||||||
Stockholders’ Equity:
|
||||||||
Preferred stock, $0.0001 par value, 1,000 shares authorized; none issued or outstanding
|
— | — | ||||||
Common stock, $0.0001 par value, 300,000 shares authorized; 117,605 issued and outstanding at June 30, 2021; 70,021 issued and outstanding at December 31, 2020
|
12 | 7 | ||||||
Additional
paid-in
capital
|
620,455 | 222,900 | ||||||
Accumulated deficit
|
(37,920 | ) | (2,186 | ) | ||||
Accumulated other comprehensive loss
|
(3,478 | ) | — | |||||
|
|
|
|
|||||
Total UpHealth, Inc., stockholders’ equity
|
579,069 | 220,721 | ||||||
|
|
|
|
|||||
Noncontrolling interests
|
15,048 | — | ||||||
|
|
|
|
|||||
Total stockholders’ equity
|
594,117 | 220,721 | ||||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity
|
$ | 898,053 | $ | 262,390 | ||||
|
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Revenue
|
||||||||||||||||
Services
|
$ | 14,773 | $ | — | $ | 22,911 | $ | — | ||||||||
Licenses and subscriptions
|
9,145 | — | 12,803 | — | ||||||||||||
Products
|
7,964 | — | 8,984 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue
|
31,882 | — | 44,698 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cost of goods and services
|
||||||||||||||||
Services
|
9,381 | — | 14,102 | — | ||||||||||||
License and subscriptions
|
6,173 | — | 6,670 | — | ||||||||||||
Products
|
4,727 | — | 5,644 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of goods and services
|
20,281 | — | 26,416 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross margin
|
11,601 | — | 18,282 | — | ||||||||||||
Operating expenses
|
||||||||||||||||
Sales and marketing
|
1,695 | — | 2,580 | — | ||||||||||||
Research and development
|
872 | — | 2,630 | — | ||||||||||||
General and administrative
|
8,974 | 336 | 12,254 | 539 | ||||||||||||
Depreciation and amortization
|
2,966 | — | 3,870 | — | ||||||||||||
Acquisition-related expenses
|
32,646 | — | 35,339 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses
|
47,153 | 336 | 56,673 | 539 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations
|
(35,552 | ) | (336 | ) | (38,391 | ) | (539 | ) | ||||||||
Other income (expense)
|
||||||||||||||||
Interest expense
|
(4,870 | ) | — | (5,581 | ) | — | ||||||||||
Gain on consolidation of equity method investment
|
— | — | 640 | — | ||||||||||||
Gain on fair value of warrant liabilities
|
1,074 | — | 1,074 | — | ||||||||||||
Gain on extinguishment of debt
|
151 | — | 151 | — | ||||||||||||
Other expense, net, including interest income
|
(258 | ) | — | (221 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other expense
|
(3,903 | ) | — | (3,937 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income tax benefit
|
(39,455 | ) | (336 | ) | (42,328 | ) | (539 | ) | ||||||||
Income tax benefit
|
6,647 | — | 7,053 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss before loss from equity method investment
|
(32,808 | ) | (336 | ) | (35,275 | ) | (539 | ) | ||||||||
Loss from equity method investment
|
— | — | (561 | ) | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
(32,808 | ) | (336 | ) | (35,836 | ) | (539 | ) | ||||||||
Less: net loss attributable to noncontrolling interests
|
(24 | ) | — | (102 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to UpHealth, Inc.
|
$ | (32,784 | ) | $ | (336 | ) | $ | (35,734 | ) | $ | (539 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share attributable to UpHealth, Inc.:
|
||||||||||||||||
Basic
|
$ | (0.35 | ) | $ | (0.01 | ) | $ | (0.43 | ) | $ | (0.01 | ) | ||||
Diluted
|
$ | (0.35 | ) | $ | (0.01 | ) | $ | (0.43 | ) | $ | (0.01 | ) | ||||
Weighted average shares outstanding:
|
||||||||||||||||
Basic
|
94,170 | 50,050 | 83,585 | 50,050 | ||||||||||||
Diluted
|
94,170 | 50,050 | 83,585 | 50,050 |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Net loss
|
$ | (32,808 | ) | $ | (336 | ) | $ | (35,836 | ) | $ | (539 | ) | ||||
Foreign currency translation adjustments, net of tax
|
(2,319 | ) | — | (3,478 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss
|
(35,127 | ) | (336 | ) | (39,314 | ) | (539 | ) | ||||||||
Less: comprehensive loss attributable to noncontrolling interests
|
(24 | ) | — | (102 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss attributable to UpHealth, Inc.
|
$ | (35,103 | ) | $ | (336 | ) | $ | (39,212 | ) | $ | (539 | ) | ||||
|
|
|
|
|
|
|
|
Common Stock
|
Additional
Paid-In
Capital |
Accumulated
Deficit |
Accumulated
Other Comprehensive Loss |
Total
UpHealth, Inc. Stockholders’ Equity |
Noncontrolling
Interests |
Total
Stockholders’ Equity |
||||||||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||||||||||
Balance at December 31, 2020(1)
|
70,021 | $ | 7 | $ | 222,900 | $ | (2,186 | ) | $ | — | $ | 220,721 | $ | — | $ | 220,721 | ||||||||||||||||
Issuance of common stock to consummate business combinations(1)
|
8,749 | 1 | 87,408 | — | — | 87,409 | 17,389 | 104,798 | ||||||||||||||||||||||||
Net loss
|
— | — | — | (2,950 | ) | — | (2,950 | ) | (78 | ) | (3,028 | ) | ||||||||||||||||||||
Foreign currency translation adjustments
|
— | — | — | — | (1,159 | ) | (1,159 | ) | — | (1,159 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at March 31, 2021(1)
|
78,771 | $ | 8 | $ | 310,308 | $ | (5,136 | ) | $ | (1,159 | ) | $ | 304,021 | $ | 17,311 | $ | 321,332 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Issuance of common stock to consummate business combinations
|
26,162 | 3 | 243,584 | — | — | 243,587 | (2,239 | ) | 241,348 | |||||||||||||||||||||||
Merger recapitalization
|
9,471 | 1 | 54,604 | — | — | 54,605 | — | 54,605 | ||||||||||||||||||||||||
PIPE common stock issuance
|
3,000 | — | 27,079 | — | — | 27,079 | — | 27,079 | ||||||||||||||||||||||||
Forward share repurchase agreement
|
— | — | (17,000 | ) | — | — | (17,000 | ) | — | (17,000 | ) | |||||||||||||||||||||
Issuance of common stock for debt conversion
|
200 | — | 1,879 | — | — | 1,879 | — | 1,879 | ||||||||||||||||||||||||
Net loss
|
— | — | — | (32,784 | ) | — | (32,784 | ) | (24 | ) | (32,808 | ) | ||||||||||||||||||||
Foreign currency translation adjustments
|
— | — | — | — | (2,319 | ) | (2,319 | ) | — | (2,319 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at June 30, 2021
|
117,605 | $ | 12 | $ | 620,455 | $ | (37,920 | ) | $ | (3,478 | ) | $ | 579,069 | $ | 15,048 | $ | 594,117 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Amounts as of March 31, 2021 and before that date differ from those published in prior consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combinations (as defined below in Note 1). Specifically, the number of common shares outstanding during periods before the Business Combinations are computed on the basis of the number of common shares of UpHealth Holdings (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement (1.00 UpHealth Holdings shares converted to 10.28 GigCapital2 shares). Common stock and additional
paid-in
capital were adjusted accordingly.
|
Common Stock
|
Additional
Paid-In
Capital |
Accumulated
Deficit |
Accumulated
Other Comprehensive Loss |
Total
UpHealth, Inc. Stockholders’ Equity |
Noncontrolling
Interests |
Total
Stockholders’ Equity |
||||||||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||||||||||
Balance at January 1, 2020(1)
|
— | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Issuance of common stock for formation(1)
|
50,050 | 5 | (5 | ) | — | — | — | — | — | |||||||||||||||||||||||
Net loss
|
— | — | — | (203 | ) | — | (203 | ) | — | (203 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at March 31, 2020(1)
|
50,050 | $ | 5 | $ | (5 | ) | $ | (203 | ) | $ | — | $ | (203 | ) | $ | — | $ | (203 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net loss
|
— | — | — | (336 | ) | — | (336 | ) | — | (336 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at June 30, 2020(1)
|
50,050 | $ | 5 | $ | (5 | ) | $ | (539 | ) | $ | — | $ | (539 | ) | $ | — | $ | (539 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, |
||||||||
2021
|
2020
|
|||||||
Operating activities:
|
||||||||
Net loss
|
$ | (35,836 | ) | $ | (539 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
4,353 | — | ||||||
Amortization of debt issuance costs and discount on convertible debt
|
1,913 | — | ||||||
Gain on extinguishment of debt
|
(151 | ) | — | |||||
Loss from equity method investment
|
561 | — | ||||||
Gain on consolidation of equity method investment
|
(640 | ) | — | |||||
Gain on fair value of warrant liabilities
|
(1,074 | ) | — | |||||
Loss on disposal of property and equipment
|
78 | — | ||||||
Deferred income taxes
|
(7,262 | ) | — | |||||
Other
|
(271 | ) | — | |||||
Changes in operating assets and liabilities, net of effects of acquisitions:
|
||||||||
Accounts receivable
|
(21,000 | ) | — | |||||
Inventories
|
(80 | ) | — | |||||
Prepaid expenses and other current assets
|
5 | — | ||||||
Accounts payable and accrued expenses
|
15,592 | 539 | ||||||
Income taxes payable
|
200 | — | ||||||
Deferred revenue
|
5,877 | — | ||||||
Proceeds from Provider Relief Funds
|
506 | — | ||||||
Due to (from) related parties
|
28 | — | ||||||
Other current liabilities
|
(27 | ) | — | |||||
|
|
|
|
|||||
Net cash used in operating activities
|
(37,228 | ) | — | |||||
|
|
|
|
|||||
Investing activities:
|
||||||||
Purchases of property and equipment
|
(669 | ) | — | |||||
Due to (from) related parties
|
265 | — | ||||||
Net cash acquired in acquisition of businesses
|
4,263 | — | ||||||
|
|
|
|
|||||
Net cash provided by investing activities
|
3,859 | — | ||||||
|
|
|
|
|||||
Financing activities:
|
||||||||
Proceeds from merger and recapitalization transaction
|
83,435 | — | ||||||
Proceeds from convertible debt
|
164,500 | — | ||||||
Repayments of debt
|
(17,333 | ) | — | |||||
Payments of debt issuance costs
|
(8,100 | ) | — | |||||
Payments of seller notes
|
(88,056 | ) | ||||||
Payments of capital lease obligations
|
(275 | ) | — | |||||
Distribution to noncontrolling interest
|
(100 | ) | — | |||||
Payments of amount due to member
|
(4,270 | ) | — | |||||
|
|
|
|
|||||
Net cash provided by financing activities
|
129,801 | — | ||||||
|
|
|
|
|||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
(99 | ) | — | |||||
|
|
|
|
|||||
Net increase in cash, cash equivalents, and restricted cash
|
96,333 | — | ||||||
Cash, cash equivalents, and restricted cash, beginning of period
|
2,369 | — | ||||||
|
|
|
|
|||||
Cash, cash equivalents, and restricted cash, end of period
|
$ | 98,702 | $ | — | ||||
|
|
|
|
|||||
Supplemental cash flow information:
|
||||||||
Cash paid for interest, net of amounts capitalized
|
$ | 233 | $ | — | ||||
Cash paid for income taxes
|
$ | — | $ | — | ||||
Non-cash
investing and financing activity:
|
||||||||
Issuance of common stock for debt conversion
|
$ | 1,879 | $ | — | ||||
Issuance of common stock and promissory note to consummate TTC business combination
|
$ | 43,306 | $ | — | ||||
Issuance of common stock and promissory note to consummate Glocal business combination
|
$ | 110,421 | $ | — | ||||
Issuance of common stock and promissory note to consummate Innovations business combination
|
$ | 160,378 | $ | — | ||||
Issuance of common stock and promissory note to consummate Cloudbreak business combination
|
$ | 106,284 | $ | — | ||||
Reconciliation of cash, cash equivalents, and restricted cash:
|
||||||||
Cash and cash equivalents
|
$ | 98,116 | $ | — | ||||
Restricted cash
|
586 | — | ||||||
|
|
|
|
|||||
Total cash, cash equivalents, and restricted cash:
|
$ | 98,702 | $ | — | ||||
|
|
|
|
|
•
|
|
the fair value of assets acquired and liabilities assumed for business combinations;
|
|
•
|
|
the fair value of derivatives and warrants;
|
|
•
|
|
the fair value of stock awards issued;
|
|
•
|
|
the standalone selling price (“SSP”) of performance obligations for revenue contracts with multiple performance obligations;
|
|
•
|
|
the recognition, measurement, and valuation of current and deferred income taxes and uncertain tax positions; and
|
|
•
|
|
the identification and estimated economic lives of intangible assets.
|
Land
|
Indefinite | |||||||
Buildings
|
60 | years | ||||||
Medical and surgical equipment
|
13 | years | ||||||
Electrical and other equipment
|
5-7
|
years | ||||||
Computer equipment, furniture and fixtures
|
3-7
|
years | ||||||
Vehicles
|
5-7
|
years |
|
•
|
|
Services–
|
|
•
|
|
Services–
set-up,
configuration, implementation, and customization services
|
|
•
|
|
Services–
|
|
•
|
|
Services–
|
|
•
|
|
The timing of the receipt of the additional information that management could have used in its evaluation on or after the acquisition date, and
|
|
•
|
|
Whether management can identify a reason that a change to the provisional amounts is warranted and not driven by a discrete independent event occurring subsequent to the acquisition.
|
(In thousands) |
As of
June 30, 2021 |
Measurement
Period Adjustments |
As of
November 20, 2020 |
|||||||||
Accounts receivable
|
$ | 3,491 | $ | — | $ | 3,491 | ||||||
Prepaid expenses and other
|
3,001 | — | 3,001 | |||||||||
Identifiable intangible assets
|
27,875 | — | 27,875 | |||||||||
Property and equipment
|
101 | — | 101 | |||||||||
Other assets
|
19 | — | 19 | |||||||||
Goodwill
|
145,036 | (3,052 | ) | 148,088 | ||||||||
|
|
|
|
|
|
|||||||
Total assets acquired
|
179,523 | (3,052 | ) | 182,575 | ||||||||
|
|
|
|
|
|
|||||||
Accounts payable
|
1,779 | — | 1,779 | |||||||||
Accrued expenses and other current liabilities
|
5,322 | — | 5,322 | |||||||||
Debt
|
430 | (531 | ) | 961 | ||||||||
Deferred tax liabilities
|
6,378 | — | 6,378 | |||||||||
Deferred revenue
|
700 | — | 700 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities assumed
|
14,609 | (531 | ) | 15,140 | ||||||||
|
|
|
|
|
|
|||||||
Net assets acquired
|
$ | 164,914 | $ | (2,521 | ) | $ | 167,435 | |||||
|
|
|
|
|
|
Value
|
Useful Life
|
|||||||
(In thousands) | (in years) | |||||||
Definite-lived intangible assets–Trade names
|
$ | 6,925 | 10 | |||||
Definite-lived intangible assets–Technology and intellectual property
|
10,825 | 10 | ||||||
Definite-lived intangible assets–Customer relationships
|
10,125 | 10 | ||||||
|
|
|||||||
Total fair value of identifiable intangible assets
|
$ | 27,875 | ||||||
|
|
(In thousands) |
As of
June 30, 2021 |
Measurement
Period Adjustments |
As of
November 20, 2020 |
|||||||||
Accounts receivable
|
$ | 1,257 | $ | — | $ | 1,257 | ||||||
Inventories
|
100 | — | 100 | |||||||||
Prepaid expenses and other
|
40 | — | 40 | |||||||||
Identifiable intangible assets
|
225 | — | 225 | |||||||||
Property and equipment
|
53 | — | 53 | |||||||||
Other assets
|
4 | — | 4 | |||||||||
Deferred tax assets
|
19 | — | 19 | |||||||||
Goodwill
|
16,344 | 238 | 16,106 | |||||||||
|
|
|
|
|
|
|||||||
Total assets acquired
|
18,042 | 238 | 17,804 | |||||||||
|
|
|
|
|
|
|||||||
Accounts payable
|
374 | — | 374 | |||||||||
Accrued expenses and other current liabilities
|
847 | 421 | 426 | |||||||||
Debt
|
1,234 | — | 1,234 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities assumed
|
2,455 | 421 | 2,034 | |||||||||
|
|
|
|
|
|
|||||||
Net assets acquired
|
$ | 15,587 | $ | (183 | ) | $ | 15,770 | |||||
|
|
|
|
|
|
Value
|
Useful Life
|
|||||||
(In thousands) | (in years) | |||||||
Definite-lived intangible assets–Trade names
|
$ | 225 | 3 | |||||
|
|
|||||||
Total fair value of identifiable intangible assets
|
$ | 225 | ||||||
|
|
(In thousands) |
As of
June 30, 2021 |
Measurement
Period Adjustments |
As of
January 25, 2021 |
|||||||||
Accounts receivable
|
$ | 1,773 | $ | — | $ | 1,773 | ||||||
Prepaid expenses and other
|
187 | — | 187 | |||||||||
Identifiable intangible assets
|
1,125 | — | 1,125 | |||||||||
Property and equipment
|
531 | — | 531 | |||||||||
Other assets
|
281 | — | 281 | |||||||||
Goodwill
|
57,921 | 347 | 57,574 | |||||||||
|
|
|
|
|
|
|||||||
Total assets acquired
|
61,818 | 347 | 61,471 | |||||||||
|
|
|
|
|
|
|||||||
Accounts payable
|
625 | — | 625 | |||||||||
Accrued expenses and other current liabilities
|
602 | — | 602 | |||||||||
Due to related parties
|
4,200 | 2,807 | 1,393 | |||||||||
Debt
|
11,217 | (1,283 | ) | 12,500 | ||||||||
Deferred tax liabilities
|
474 | — | 474 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities assumed
|
17,118 | 1,524 | 15,594 | |||||||||
|
|
|
|
|
|
|||||||
Net assets acquired
|
$ | 44,700 | $ | (1,177 | ) | $ | 45,877 | |||||
|
|
|
|
|
|
Approximate
Fair Value |
Estimated
Useful Life |
|||||||
(In thousands) | (in years) | |||||||
Definite-life intangible assets–Trade names
|
$ | 1,125 | 3 | |||||
|
|
|||||||
Total fair value of identifiable intangible assets
|
$ | 1,125 | ||||||
|
|
(In thousands) |
As of
June 30, 2021 |
Measurement
Period Adjustments |
As of
March 26, 2021 |
|||||||||
Accounts receivable, net
|
$ | 6,461 | $ | — | $ | 6,461 | ||||||
Inventories
|
326 | — | 326 | |||||||||
Identifiable intangible assets
|
38,039 | — | 38,039 | |||||||||
Property, equipment, and work in progress
|
40,726 | — | 40,726 | |||||||||
Other current assets, including short term advances
|
1,980 | — | 1,980 | |||||||||
Other noncurrent assets, including long term advances
|
509 | — | 509 | |||||||||
Goodwill
|
95,913 | 4,042 | 91,871 | |||||||||
|
|
|
|
|
|
|||||||
Total assets acquired
|
183,954 | 4,042 | 179,912 | |||||||||
|
|
|
|
|
|
|||||||
Accounts payable
|
579 | — | 579 | |||||||||
Accrued expenses and other current liabilities
|
8,271 | — | 8,271 | |||||||||
Deferred tax liability
|
9,890 | 9,890 | — | |||||||||
Debt
|
22,212 | — | 22,212 | |||||||||
Noncontrolling interest
|
17,389 | — | 17,389 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities assumed and noncontrolling interest
|
58,341 | 9,890 | 48,451 | |||||||||
|
|
|
|
|
|
|||||||
Net assets acquired
|
$ | 125,613 | $ | (5,848 | ) | $ | 131,461 | |||||
|
|
|
|
|
|
Approximate
Fair Value |
Estimated
Useful Life |
|||||||
(In thousands) | (in years) | |||||||
Definite-lived intangible assets–Technology and intellectual property
|
$ | 38,039 | 8.5 | |||||
|
|
|||||||
Total fair value of identifiable intangible assets
|
$ | 38,039 | ||||||
|
|
(In thousands) |
As of
April 27, 2021 |
|||
Accounts receivable
|
$ | 47 | ||
Inventories
|
2,693 | |||
Prepaid expenses and other
|
530 | |||
Identifiable intangible assets
|
28,325 | |||
Property and equipment
|
7,937 | |||
Other assets
|
22 | |||
Goodwill
|
143,730 | |||
|
|
|||
Total assets acquired
|
183,284 | |||
|
|
|||
Accounts payable
|
472 | |||
Accrued expenses and other current liabilities
|
780 | |||
Deferred revenue
|
302 | |||
Deferred tax liability
|
7,837 | |||
Debt
|
4,069 | |||
|
|
|||
Total liabilities assumed
|
13,460 | |||
|
|
|||
Net assets acquired
|
$ | 169,824 | ||
|
|
Approximate
Fair Value |
Estimated
Useful Life |
|||||||
(In thousands) | (in years) | |||||||
Definite-lived intangible assets–Trade names
|
$ | 10,925 | 10 | |||||
Definite-lived intangible assets–Technology and intellectual property
|
8,075 | 5 - 7 | ||||||
Definite-lived intangible assets–Customer relationships
|
9,325 | 17 | ||||||
|
|
|||||||
Total fair value of identifiable intangible assets
|
$ | 28,325 | ||||||
|
|
(In thousands) |
As
of June 9, 2021 |
|||
Accounts receivable
|
$ | 4,810 | ||
Prepaid expenses and other
|
921 | |||
Identifiable intangible assets
|
32,475 | |||
Property and equipment
|
6,882 | |||
Other assets
|
1,042 | |||
Goodwill
|
110,968 | |||
|
|
|||
Total assets acquired
|
157,098 | |||
|
|
|||
Accounts payable
|
2,518 | |||
Accrued expenses and other current liabilities
|
905 | |||
Deferred revenue
|
15 | |||
Deferred tax liability
|
7,906 | |||
Debt
|
3,752 | |||
|
|
|||
Total liabilities assumed
|
15,096 | |||
|
|
|||
Net assets acquired
|
$ | 142,002 | ||
|
|
Approximate
Fair Value |
Estimated
Useful Life |
|||||||
(In thousands) | (in years) | |||||||
Definite-lived intangible assets–Trade names
|
$ | 12,975 | 15 | |||||
Definite-lived intangible assets–Technology and intellectual property
|
5,825 | 5 | ||||||
Definite-lived intangible assets–Customer relationships
|
$ | 13,675 | 10 | |||||
|
|
|||||||
Total fair value of identifiable intangible assets
|
$ | 32,475 | ||||||
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||
(In thousands) |
2021
|
2020
|
2021
|
2020
|
||||||||||||
Pro Forma
|
||||||||||||||||
Revenues
|
$ | 39,171 | $ | 28,293 | $ | 69,778 | $ | 59,468 | ||||||||
Net loss
|
$ | (37,052 | ) | $ | (2,549 | ) | $ | (43,627 | ) | $ | (2,008 | ) | ||||
Basic earnings per share
|
$ | (0.39 | ) | $ | (0.05 | ) | $ | (0.52 | ) | $ | (0.04 | ) | ||||
Diluted earnings per share
|
$ | (0.39 | ) | $ | (0.05 | ) | $ | (0.52 | ) | $ | (0.04 | ) |
(In thousands) |
June 30, 2021
|
December 31, 2020
|
||||||
Land
|
$ | 16,210 | $ | — | ||||
Buildings
|
21,547 | — | ||||||
Leasehold improvements
|
3,252 | — | ||||||
Medical and surgical equipment
|
2,704 | — | ||||||
Electrical and other equipment
|
494 | 73 | ||||||
Computer equipment, furniture and fixtures
|
7,980 | 33 | ||||||
Vehicles
|
164 | 48 | ||||||
Construction in progress
|
3,816 | — | ||||||
|
|
|
|
|||||
56,167 | 154 | |||||||
Accumulated depreciation and amortization
|
(1,013 | ) | (3 | ) | ||||
|
|
|
|
|||||
Total property and equipment, net
|
$ | 55,154 | $ | 151 | ||||
|
|
|
|
(In thousands) |
Goodwill
|
|||
Balance at December 31, 2020
|
$ | 164,194 | ||
Business acquisition of TTC
|
57,574 | |||
Measurement period adjustment–TTC
|
347 | |||
Business acquisition of Glocal
|
91,871 | |||
Measurement period adjustment–Glocal
|
4,042 | |||
Measurement period adjustment–BHS
|
238 | |||
Measurement period adjustment–Thrasys
|
(3,052 | ) | ||
Business acquisition of Innovations
|
143,730 | |||
Business acquisition of Cloudbreak
|
110,968 | |||
Foreign exchange
|
(1,960 | ) | ||
|
|
|||
Balance at June 30, 2021
|
$ | 567,952 | ||
|
|
(In thousands) |
Trade
Names |
Technology
and Intellectual Property |
Customer
Relationships |
Total
|
||||||||||||
December 31, 2020
|
$ |
7,065
|
$ | 10,705 | $ | 10,012 | $ | 27,782 | ||||||||
Additions
|
25,025 | 51,939 | 23,000 | 99,964 | ||||||||||||
Amortization
|
(792 | ) | (2,037 | ) | (683 | ) | (3,512 | ) | ||||||||
Foreign exchange
|
— | (771 | ) | — | (771 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
June 30, 2021
|
$ | 31,298 | $ | 59,836 | $ | 32,329 | $ | 123,463 | ||||||||
|
|
|
|
|
|
|
|
(In thousands) |
Trade Name
Amortization |
Technology
and Intellectual Property Amortization |
Customer
Relationships Amortization |
Total
|
||||||||||||
Remaining 2021
|
$ | 1,550 | $ | 4,032 | $ | 1,472 | $ | 7,054 | ||||||||
2022
|
3,100 | 8,063 | 2,945 | 14,108 | ||||||||||||
2023
|
3,092 | 8,063 | 2,945 | 14,100 | ||||||||||||
2024
|
2,674 | 8,063 | 2,945 | 13,682 | ||||||||||||
2025
|
2,650 | 8,063 | 2,945 | 13,658 | ||||||||||||
Thereafter
|
18,232 | 23,552 | 19,077 | 60,861 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 31,298 | $ | 59,836 | $ | 32,329 | $ | 123,463 | |||||||||
|
|
|
|
|
|
|
|
(In thousands) |
June 30, 2021
|
December 31, 2020
|
||||||
Accrued professional fees
|
$ | 13,705 | $ | 4,246 | ||||
Accrued software licenses
|
6,091 | 691 | ||||||
Accrued interest on debt
|
6,781 | 142 | ||||||
Accrued payroll and bonuses
|
2,878 | 1,545 | ||||||
Accrued taxes in connection with shareholder distribution
|
1,493 | 1,493 | ||||||
Other accruals
|
2,816 | 365 | ||||||
|
|
|
|
|||||
Total accrued expenses
|
$ | 33,764 | $ | 8,482 | ||||
|
|
|
|
(In thousands) |
June 30, 2021
|
December 31, 2020
|
||||||
Convertible notes
|
$ | 160,000 | $ | — | ||||
Other debt facilities (various maturities and interest rates)
|
23,147 | — | ||||||
Paycheck Protection Program loans
|
1,015 | 1,545 | ||||||
Provider Relief Funds
|
735 | 230 | ||||||
Seller notes
|
29,831 | 21,100 | ||||||
|
|
|
|
|||||
Total debt
|
214,728 | 22,875 | ||||||
Less: unamortized original issue discount and derivative liability
|
(69,110 | ) | — | |||||
|
|
|
|
|||||
Total debt, net of unamortized original issued discount and derivative liability
|
145,618 | 22,875 | ||||||
Less: current portion of debt
|
(49,487 | ) | (22,531 | ) | ||||
|
|
|
|
|||||
Noncurrent portion of debt
|
$ | 96,131 | $ | 344 | ||||
|
|
|
|
(In thousands) | ||||
Remaining 2021
|
$ | 49,428 | ||
2022
|
120 | |||
2023
|
126 | |||
2024
|
131 | |||
2025
|
137 | |||
Thereafter
|
$ | 164,786 | ||
|
|
|||
Total
|
$ | 214,728 | ||
|
|
|
•
|
|
Quoted prices for similar assets/liabilities in active markets;
|
|
•
|
|
Quoted prices for identical or similar assets/liabilities in
non-active
markets (e.g., few transactions, limited information,
non-current
prices, high variability over time);
|
|
•
|
|
Inputs other than quoted prices that are observable for the asset/liability (e.g., interest rates, yield curves, volatilities, default rates); and
|
|
•
|
|
Inputs that are derived principally from or corroborated by other observable market data.
|
June 30, 2021
|
||||||||||||||||
(In thousands) |
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
Liabilities:
|
||||||||||||||||
Derivative liability
|
$ | — | $ | — | $ | 61,823 | $ | 61,823 | ||||||||
Warrant liability
|
$ | — | $ | 772 | $ | — | $ | 772 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | — | $ | 772 | $ | 61,823 | $ | 62,595 | |||||||||
|
|
|
|
|
|
|
|
June 30, 2021
|
||||
Stock price
|
$ | 9.93 | ||
Volatility
|
68.0 | % | ||
Risk free rate
|
0.75 | % | ||
Exercise price
|
$ | 10.65 | ||
Expected life (in years)
|
5.02 | |||
Conversion periods
|
2-5
years
|
|||
Future share price
|
$ |
0.01-$151.53
|
(In thousands) |
Three Months Ended
June 30, 2021 |
Six Months Ended
June 30, 2021 |
||||||
Services
|
$ | 14,773 | $ | 22,911 | ||||
Licenses and subscriptions
|
9,145 | 12,803 | ||||||
Products
|
7,964 | 8,984 | ||||||
|
|
|
|
|||||
Total revenue
|
$ | 31,882 | $ | 44,698 | ||||
|
|
|
|
(In thousands) |
Three Months Ended
June 30, 2021 |
Six Months Ended
June 30, 2021 |
||||||
Americas
|
$ | 20,126 | $ | 29,352 | ||||
Europe
|
7,800 | 10,800 | ||||||
Asia
|
3,956 | 4,546 | ||||||
|
|
|
|
|||||
Total revenue
|
$ | 31,882 | $ | 44,698 | ||||
|
|
|
|
(In thousands) |
Six Months Ended
June 30, 2021 |
|||
Unbilled receivables, beginning of period
|
$ | 3,536 | ||
Reclassifications to billed receivables
|
(1,192 | ) | ||
Revenues recognized in excess of period billings
|
9,783 | |||
|
|
|||
Unbilled receivables, end of period
|
$ | 12,127 | ||
|
|
(In thousands) |
Six Months Ended
June 30, 2021 |
|||
Deferred revenue, beginning of period
|
$ | 397 | ||
Revenues recognized from balances held at the beginning of the period
|
(397 | ) | ||
Revenue deferred from period collections on unfulfilled performance obligations
|
6,572 | |||
|
|
|||
Deferred revenue, end of period
|
$ | 6,572 | ||
|
|
(In thousands) |
Total
|
Remaining
2021 |
2022 - 2024
|
|||||||||
Subscriptions
|
$ | 10,411 | 2,607 | 7,804 | ||||||||
Licenses
|
— | — | — | |||||||||
SaaS and hosting
|
147 | 98 | 49 | |||||||||
Program management and services
|
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
$ | 10,558 | 2,705 | 7,853 | |||||||||
|
|
|
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||||
(In thousands, except per share data) |
2021
|
2020
|
2021
|
2020
|
||||||||||||
Numerator:
|
||||||||||||||||
Net loss attributable to UpHealth, Inc.
|
$ | (32,784 | ) | $ | (336 | ) | $ | (35,734 | ) | $ | (539 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Denominator:
|
||||||||||||||||
Weighted average shares outstanding(1)
|
94,170 | 50,050 | 83,585 | 50,050 | ||||||||||||
Diluted effect of stock awards
|
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding assuming dilution
|
94,170 | 50,050 | 83,585 | 50,050 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share attributable to UpHealth, Inc.:
|
||||||||||||||||
Basic
|
$ | (0.35 | ) | $ | (0.01 | ) | $ | (0.43 | ) | $ | (0.01 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Diluted
|
$ | (0.35 | ) | $ | (0.01 | ) | $ | (0.43 | ) | $ | (0.01 | ) | ||||
|
|
|
|
|
|
|
|
(1)
|
The shares and earnings per share available to our common stock holders, prior to the Business Combinations, have been recasted to reflect the exchange ratio established in the Business Combinations (1.0 UpHealth Holdings share to 10.28 GigCapital2 share). See Note 3,
Business Combinations
|
|
•
|
|
Integrated Care Management–through our Thrasys subsidiary;
|
|
•
|
|
Global Telehealth–through our Glocal and Cloudbreak subsidiaries;
|
|
•
|
|
Digital Pharmacy–through our Innovations subsidiary;
|
|
•
|
|
Behavioral Health–through our BHS and TTC subsidiaries; and
|
|
•
|
|
Corporate–through UpHealth and our UpHealth Holdings subsidiary.
|
In thousands |
Three Months Ended
June 30, 2021 |
Six Months Ended
June 30, 2021 |
||||||
Integrated Care Management
|
$ | 11,280 | $ | 17,570 | ||||
Global Telehealth
|
6,964 | 7,554 | ||||||
Digital Pharmacy
|
5,299 | 5,299 | ||||||
Behavioral Health
|
8,339 | 14,275 | ||||||
|
|
|
|
|||||
Total revenue
|
$ | 31,882 | $ | 44,698 | ||||
|
|
|
|
In thousands |
Three Months Ended
June 30, 2021 |
Six Months Ended
June 30, 2021 |
||||||
Integrated Care Management
|
$ | 4,615 | $ | 9,722 | ||||
Global Telehealth
|
2,634 | 2,933 | ||||||
Digital Pharmacy
|
1,982 | 1,982 | ||||||
Behavioral Health
|
2,370 | 3,645 | ||||||
|
|
|
|
|||||
Total gross margin
|
$ | 11,601 | $ | 18,282 | ||||
|
|
|
|
In thousands |
June 30,
2021 |
December 31,
2020 |
||||||
Integrated Care Management
|
$ | 195,974 | 186,476 | |||||
Global Telehealth
|
349,238 | — | ||||||
Digital Pharmacy
|
184,307 | — | ||||||
Behavioral Health
|
83,350 | 18,383 | ||||||
Corporate
|
85,184 | 57,531 | ||||||
|
|
|
|
|||||
Total assets
|
$ | 898,053 | $ | 262,390 | ||||
|
|
|
|
(In thousands) |
Related
Party |
Third-Party
|
Total
|
|||||||||
Remaining 2021
|
$ | 513 | $ | 2,133 | $ | 2,646 | ||||||
2022
|
1,031 | 2,561 | 3,592 | |||||||||
2023
|
984 | 2,094 | 3,078 | |||||||||
2024
|
928 | 1,934 | 2,862 | |||||||||
2025
|
687 | 1,485 | 2,172 | |||||||||
Thereafter
|
— | 1,258 | 1,258 | |||||||||
|
|
|
|
|
|
|||||||
$ | 4,143 | $ | 11,465 | $ | 15,608 | |||||||
|
|
|
|
|
|
Thrasys, Inc. | Confidential | |
|
Thrasys, Inc. | Confidential | |
|
|
Balance
Sheets
|
Thrasys, Inc. | Confidential | |
|
|
Statements
of
Operations
|
FOR THE PERIOD ENDED NOVEMBER 20, 2020 AND YEAR ENDED DECEMBER 31, 2019
|
|
|||||||
Period ended
11/20/2020
|
Year ended
12/31/2019
|
|||||||
REVENUES
|
||||||||
License revenues
|
$ | 7,706,201 | $ | 4,933,226 | ||||
Services revenues
|
5,798,366 | 8,527,521 | ||||||
Royalty revenues
|
— | 430,769 | ||||||
|
|
|
|
|||||
TOTAL REVENUES
|
13,504,567 | 13,891,516 | ||||||
OPERATING EXPENSES
|
||||||||
Cost of Sales
|
1,686,582 | 1,456,736 | ||||||
Research & Development
|
6,584,979 | 4,992,139 | ||||||
Sales & Marketing
|
315,747 | 340,468 | ||||||
General & Administrative
|
3,350,243 | 1,880,430 | ||||||
Depreciation expense
|
26,626 | 30,311 | ||||||
|
|
|
|
|||||
TOTAL OPERATING EXPENSES
|
11,964,177 | 8,700,084 | ||||||
INCOME FROM OPERATIONS
|
1,540,390 | 5,191,432 | ||||||
OTHER INCOME (EXPENSE):
|
||||||||
Interest income
|
983 | 3,516 | ||||||
Interest expense
|
(297,103 | ) | (734,607 | ) | ||||
Other expense
|
— | (20,800 | ) | |||||
|
|
|
|
|||||
(296,120 | ) | (751,891 | ) | |||||
INCOME BEFORE INCOME TAXES
|
1,244,270 | 4,439,541 | ||||||
INCOME TAXES
|
0 | 0 | ||||||
NET INCOME
|
$ | 1,244,270 | $ | 4,439,541 |
Thrasys, Inc. | Confidential | |
|
|
Statements
of
Stockholders
’
Deficit
|
Common Stock
|
Additional
Paid in
Capital |
Total
Common
Stock |
Accumulated
Deficit
|
Total
Stockholders’
Deficit |
||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||
Balance at December 31, 2018
|
6,124,226 | $ | 1,763,579 | $ | 81,833 | $ | 1,845,412 | $ | (11,572,907 | ) | $ | (9,727,495 | ) | |||||||||||
Options and warrants expense
|
— | — | 18,599 | 18,599 | — | 18,599 | ||||||||||||||||||
Loan to a shareholder
|
— | (980 | ) | — | (980 | ) | — | (980 | ) | |||||||||||||||
Net Income
|
— | — | — | — | 4,439,541 | 4,439,541 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2019
|
6,124,226 | 1,762,599 | 100,432 | 1,863,031 | (7,133,366 | ) | (5,270,335 | ) | ||||||||||||||||
Adjustment for adoption of accounting standard (ASC 606)
|
(688,260 | ) | (688,260 | ) | ||||||||||||||||||||
Loan to a shareholder
|
(732 | ) | (732 | ) | (732 | ) | ||||||||||||||||||
Options and warrants expense
|
6,508 | 6,508 | 6,508 | |||||||||||||||||||||
Exercise of stock options
|
36,500 | 34,100 | 34,100 | 34,100 | ||||||||||||||||||||
Exercise of warrants
|
228,370 | 1,543,515 | 1,543,515 | 1,543,515 | ||||||||||||||||||||
Conversion of convertible notes into Common Stock
|
249,980 | 2,499,800 | 753,000 | 3,252,800 | 3,252,800 | |||||||||||||||||||
Distributions declared
|
(1,493,000 | ) | (1,493,000 | ) | ||||||||||||||||||||
Net Income
|
1,244,270 | 1,244,270 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at November 20, 2020
|
6,639,076 | $ | 5,839,282 | $ | 859,940 | $ | 6,699,222 | $ | (8,070,356 | ) | $ | (1,371,134 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Thrasys, Inc. | Confidential | |
|
|
Statements
of
Cash
Flows
|
Period ended
11/20/2020 |
Year ended
12/31/2019 |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net Income
|
$ | 1,244,270 | $ | 4,439,541 | ||||
Adjustments from Net Income:
|
||||||||
Depreciation expense
|
26,626 | 30,311 | ||||||
Options and warrant expense
|
6,508 | 18,599 | ||||||
Amortization of debt discount
|
0 | 21,724 | ||||||
Change in fair value of derivative liability related to convertible debt
|
85,000 | 341,000 | ||||||
Changes In:
|
||||||||
Accounts receivable
|
(1,884,424 | ) | (1,286,277 | ) | ||||
Prepaid expenses and other assets
|
(155,768 | ) | (2,394,589 | ) | ||||
Deferred revenue
|
(12,780 | ) | (1,402,787 | ) | ||||
Accounts payable and accrued expenses
|
1,106,480 | 2,588,291 | ||||||
|
|
|
|
|||||
Net cash provided by operating activities
|
415,912 | 2,355,813 | ||||||
|
|
|
|
|||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase of property and equipment
|
(50,250 | ) | (6,094 | ) | ||||
|
|
|
|
|||||
Net cash used by investing activities
|
(50,250 | ) | (6,094 | ) | ||||
|
|
|
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Repayment of debt
|
(1,075,000 | ) | (850,000 | ) | ||||
Proceeds from issuance of PPP and EIDL loans
|
540,500 | — | ||||||
Loan to a minority shareholder
|
(732 | ) | (980 | ) | ||||
Proceeds from exercise of warrants and stock options
|
1,034,100 | — | ||||||
|
|
|
|
|||||
Net cash provided/(used) by financing activities
|
498,868 | (850,980 | ) | |||||
|
|
|
|
|||||
NET INCREASE IN CASH
|
864,530 | 1,498,739 | ||||||
CASH, beginning of period
|
1,619,098 | 120,359 | ||||||
CASH, end of period
|
$ | 2,483,628 | $ | 1,619,098 | ||||
|
|
|
|
|||||
Supplemental cash flow information:
|
||||||||
Interest paid
|
64,051 | 36,552 | ||||||
Taxes paid
|
— | — | ||||||
Significant noncash transactions:
|
||||||||
Conversion of convertible debt, conversion option and accrued interest to equity
|
$ | 3,252,800 | — | |||||
Issuance of note payable in settlement of accounts payable
|
381,283 | — | ||||||
Set-off
of accounts payable and accrued interest against warrant exercise
|
543,516 | — | ||||||
Accrued distributions to shareholders
|
1,493,000 | |||||||
Cumulative effect of change in accounting principle
|
688,260 |
Thrasys, Inc. | Confidential | |
|
1
|
SUMMARY
OF
SIGNIFICANT
ACCOUNTING
POLICIES
|
1.1 |
Nature
of
Business
|
• |
Integrate and normalize information across heterogeneous data sources to create
360-degree
view of patients and members;
|
• |
Deploy advanced analytics to gain insight into health risks for individuals and populations;
|
• |
Qualify individuals and groups for enrollment into care management programs;
|
• |
Manage programs with interdisciplinary teams, configurable rules and workflows, embedded intelligence, and guidelines;
|
Thrasys, Inc. | Confidential | |
|
• |
Monitor and measure critical success factors—outcomes, costs, quality, performance—and compliance with regulatory requirements;
|
1.2 |
Accounts
Receivable
|
1.3 |
Prepaid
expenses
and
Other
|
1.4 |
Property
and
Equipment
|
Information technology equipment | Three years | |
Office furniture & other equipment | Seven years | |
Vehicles | Seven years |
1.5 |
Long
lived
asset
impairment
|
Thrasys, Inc. | Confidential | |
|
Period Ended November 20 2020
|
||||
Subscriptions and Licenses
|
$ | 7,706,201 | ||
Implementation and Professional Services
|
5,798,366 | |||
|
|
|||
$ | 13,504,567 | |||
|
|
Period Ended November 20 2020
|
||||
Americas
|
$ | 10,706,671 | ||
Europe
|
2,797,896 | |||
|
|
|||
$ | 13,504,567 | |||
|
|
Thrasys, Inc. | Confidential | |
|
Deferred Revenue
Period Ending |
||||
November 20, 2020
|
||||
Beginning Balance, January 1, 2020
|
$ | (1,924 | ) | |
Revenues recognized from balances held at the beginning of the period
|
913 | |||
Revenues deferred from period collections on unfulfilled performance obligations
|
(1,395 | ) | ||
|
|
|||
Ending Balance, November 20, 2020
|
$ | (2,406 | ) | |
|
|
Thrasys, Inc. | Confidential | |
|
Remaining Performance Obligations
|
Total
|
Current
|
Future
|
|||||||||
Subscriptions
|
$ | 1,017 | 783 | 234 | ||||||||
Licenses
|
8,639 | 2,580 | 6,059 | |||||||||
SaaS and Hosting
|
49 | 49 | — | |||||||||
Program Management and Services
|
1,331 | 1,331 | — | |||||||||
|
|
|
|
|
|
|||||||
$ | 11,036 | 4,742 | 6,294 | |||||||||
|
|
|
|
|
|
• |
Subscription revenues, which are comprised of subscription fees from customers accessing the Company’s cloud computing services
|
• |
Services revenues
|
• |
Royalty income
|
• |
Support and maintenance
|
• |
Sale of intellectual property assets
|
• |
There is persuasive evidence of an arrangement;
|
• |
The service has been or is being provided to the customer;
|
• |
The collection of the fees is reasonably assured; and
|
• |
The amount of fees to be paid by the customer is fixed or determinable
|
Thrasys, Inc. | Confidential | |
|
Thrasys, Inc. | Confidential | |
|
1.7 |
Income
Taxes
|
1.8 |
Cash
and
Cash
equivalents
|
1.9 |
Restricted
Cash
|
1.10 |
Credit
Risk
|
Thrasys, Inc. | Confidential | |
|
1.11 |
Estimates
|
1.12 |
Fair
Value
of
Financial
Instruments
|
Level Input
|
Input Definition
|
|
Level 1 | Inputs are unadjusted quoted prices for identical assets or liabilities in active markets at the measurement date. | |
Level 2 | Inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market data at the measurement date. | |
Level 3 | Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. |
Thrasys, Inc. | Confidential | |
|
Period ended
November 20, 2020 |
Year ended
December 31, 2019 |
|||||||
Expected stock price
|
$10 | $ | 2.8686 | |||||
Estimated term (in years)
|
1.1 years | 2 years | ||||||
Risk free rate
|
0.12 | % | 1.58 | % | ||||
Expected volatility
|
70.0 | % | 47.5 | % |
1.13 |
Stock
Based
Compensation
|
Year Ended December 31
|
2019 | |||
Stock price per share
|
$ | 1.62 | ||
Option period (in years)
|
10 years | |||
Estimated term (in years)
|
6.7 years | |||
Interest rate
|
2.1 | % | ||
Expected volatility
|
60.0 | % |
Thrasys, Inc. | Confidential | |
|
1.14 |
Software Development Costs
|
1.15 |
Research
and
Development
Costs
|
1.16 |
Recently
Issued
Accounting
Standards
|
1.17 |
Recently
Adopted
Accounting
Standards
|
Thrasys, Inc. | Confidential | |
|
As reported on
December 31 2019 |
Impact of
adoption |
As adjusted on
January 1 2020 |
||||||||||
Assets:
|
||||||||||||
Contract assets, current
|
$ | 32,643 | 22,236 | 54,879 | ||||||||
Liabilities:
|
||||||||||||
Deferred revenue, current
|
$ | 1,752,632 | 666,024 | 2,418,656 | ||||||||
Stockholders’ equity:
|
||||||||||||
Accumulated deficit
|
$ | (7,133,366 | ) | (688,260 | ) | (7,821,626 | ) |
November 20, 2020
|
||||||||||||
As reported
|
Adjustments
|
Balances
without adoption of Topic 606 |
||||||||||
Assets:
|
||||||||||||
Contract assets
|
57,557 | (662,814 | ) | 720,371 | ||||||||
Liabilities and stockholders’ equity
|
||||||||||||
Deferred revenue, current
|
2,405,877 | 185,854 | 2,220,023 | |||||||||
Stockholders’ equity:
|
||||||||||||
Accumulated deficit
|
$ | (8,070,356 | ) | (476,960 | ) | (7,593,396 | ) |
Period ended November 20, 2020
|
||||||||||||
As reported
|
Adjustments
|
Balance
without adoption of
Topic 606
|
||||||||||
Revenues
|
|
|||||||||||
License revenues
|
$ | 7,706,201 | (169,493 | ) | 7,536,708 | |||||||
Services revenues
|
5,798,366 | (41,807 | ) | 5,756,559 | ||||||||
|
|
|
|
|
|
|||||||
Total revenues
|
13,504,567 | (211,300 | ) | 13,293,267 | ||||||||
|
|
|
|
|
|
|||||||
Income from Operations
|
1,540,390 | (211,300 | ) | 1,329,090 | ||||||||
|
|
|
|
|
|
|||||||
Net Income
|
$ | 1,244,270 | (211,300 | ) | 1,032,970 | |||||||
|
|
|
|
|
|
Thrasys, Inc. | Confidential | |
|
Period ended November 20, 2020
|
||||||||||||
As reported
|
Adjustments
|
Balance
without adoption of ASC 606 |
||||||||||
Statement of cash flows:
|
||||||||||||
Net Income
|
$ | 1,244,270 | (211,300 | ) | 1,032,970 | |||||||
Adjustments to Net Income
|
||||||||||||
Cash provided by operating activities:
|
||||||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable and contract assets
|
(1,884,424 | ) | 640,578 | (1,243,846 | ) | |||||||
Deferred revenue
|
(12,780 | ) | (851,878 | ) | (864,658 | ) |
2
|
PROPERTY
AND
EQUIPMENT
|
2020
|
2019
|
|||||||
Computer equipment
|
$ | 121,312 | 121,312 | |||||
Furnitures & Fixtures
|
86,152 | 86,152 | ||||||
Other Equipment
|
91,992 | 91,992 | ||||||
Vehicles
|
50,250 | — | ||||||
Artwork
|
13,000 | 13,000 | ||||||
|
|
|
|
|||||
362,706 | 312,456 | |||||||
Less accumulated depreciation
|
261,460 | 234,834 | ||||||
|
|
|
|
|||||
Total
|
$ | 101,246 | 77,622 | |||||
|
|
|
|
3
|
ACCRUED
LIABILITIES
|
2020
|
2019
|
|||||||
Accrued legal expenses
|
$ | 240,267 | $ | 299,988 | ||||
Accrued consulting fees
|
$ | 1,350,953 | $ | 1,343,678 | ||||
Accrued software licenses
|
$ | 888,419 | $ | 2,099,740 | ||||
Accrued interest on debt
|
$ | 9,113 | $ | 966,918 | ||||
Accrued bonuses
|
$ | 447,855 | 0 | |||||
Accrued shareholder distribution
|
$ | 1,493,000 | 0 | |||||
Accrued tax liability
|
$ | 200,000 | $ | 200,000 | ||||
Other accruals
|
$ | 692,154 | $ | 474,021 | ||||
Total
|
$ | 5,321,761 | $ | 5,384,345 |
Thrasys, Inc. | Confidential | |
|
4
|
RELATED
PARTY
DEBT
|
Period ended
November 20, 2020 |
Year ended
December 31, 2019 |
|||||||
Stock price per share
|
$ | 11.42 | $ | 1.62 | ||||
Warrant period (in years)
|
5 years | 6 years | ||||||
Estimated term (in years)
|
5 years | 6 years | ||||||
Interest rate
|
0.30 | % | 2.1 | % | ||||
Expected volatility
|
60.0 | % | 60.0 | % |
5
|
RELATED
PARTY
CONVERTIBLE
NOTES
|
6
|
VARIAN
AGREEMENT
|
Thrasys, Inc. | Confidential | |
|
7
|
PROVISION
FOR
INCOME
TAXES
|
2019
|
2020
|
|||||||
Deferred tax assets
|
847,515 | 957,515 | ||||||
Less valuation allowance
|
(847,515 | ) | (957,515 | ) | ||||
0 | 0 |
Thrasys, Inc. | Confidential | |
|
8
|
RETIREMENT
PLANS
|
9
|
COMMITMENTS
AND
CONTINGENCIES
|
9.1 |
Facility
Lease
|
Years Ending December 31
|
Amount | |||
2020 (remaining)
|
$ | 32,399 | ||
2021
|
331,035 | |||
2022
|
170,483 | |||
|
|
|||
$ | 533,917 | |||
|
|
9.2 |
Indemnification
|
9.3 |
Warranty
|
Thrasys, Inc. | Confidential | |
|
9.4 |
Contingencies
|
10
|
PAYCHECK
PROTECTION
PROGRAM
LOAN
|
11
|
DEPOSITS
AND
OTHER
CURRENT
ASSETS
|
12
|
MAJOR
CUSTOMERS
|
13
|
STOCKHOLDERS
’
EQUITY
|
13.1 |
Common
Stock
|
Thrasys, Inc. | Confidential | |
|
13.2 |
Equity
Incentive
Plan
|
2020
|
2019
|
|||||||||||||||
Shares
|
Weighted
average exercise price |
Shares
|
Weighted
average exercise price |
|||||||||||||
Outstanding at January 1
|
36,500 | $ | 0.93 | 29,000 | $ | 1.15 | ||||||||||
Granted
|
— | — | 7,500 | 0.10 | ||||||||||||
Exercised
|
(36,500 | ) | 0.93 | — | — | |||||||||||
Forfeited/expired
|
— | — | — | — | ||||||||||||
|
|
|
|
|||||||||||||
End of period
|
— | — | 36,500 | 0.93 | ||||||||||||
|
|
|
|
|||||||||||||
Exercisable
|
— | $ | — | 36,500 | $ | 0.93 |
13.3 |
Warrants
|
2020
|
2019
|
|||||||||||||||
Shares
|
Weighted
average exercise price |
Shares
|
Weighted
average exercise price |
|||||||||||||
Outstanding at January 1
|
149,026 | $ | 12.80 | 147,026 | $ | 12.96 | ||||||||||
Granted
|
79,344 | 11.42 | 2,000 | 1.00 | ||||||||||||
Exercised
|
(228,370 | ) | 12.32 | — | — | |||||||||||
Forfeited/expired
|
— | — | — | — | ||||||||||||
|
|
|
|
|||||||||||||
Outstanding at End of period
|
— | — | 149,026 | 12.80 | ||||||||||||
|
|
|
|
|||||||||||||
Exercisable
|
— | $ | — | 149,026 | $ | 12.80 |
Thrasys, Inc. | Confidential | |
|
14
|
SUBSEQUENT
EVENTS
|
D. K. CHHAJER & CO.
CHARTERED ACCOUNTANTS
|
NILHAT HOUSE
11, R. N. MUKHERJEE ROAD
GROUND FL., KOLKATA- 700 001
PHONES:
033-2262
7280 / 2262 7279
TELE-FAX
: 033 2230-6106
E-mail.: dkchhaJer @gmall . com kolkata@dkc lndla.com
|
(i) |
As discussed in Note 1 (x) to the financial statements, the Company has incurred losses in its initial stage of operations resulting in net liquidity constraints. Management’s evaluation of the events and conditions and management’s plans to mitigate these matters are also described in Note 1 (x). Our opinion is not modified with respect to this matter.
|
(ii) |
The management has discussed in Note 42 of the financial statements regarding the uncertainties and the management’s assessment of the financial impact due to the lock-down and other restrictions and conditions related to the
COVID-19
pandemic situation, for which a definitive assessment of the impact is highly dependent upon circumstances / developments as they evolve in the subsequent periods. Our opinion is not modified with respect to this matter.
|
(iii) |
Generally accepted accounting principles in India vary in certain significant respects from accounting principles generally accepted in the United States of America. Information relating to the nature and effect of such differences is presented in note 41 to the consolidated financial statements. Our opinion is not modified with respect to this matter.
|
For
D.K. CHHAJER & CO.
Chartered Accountants
Firm’s Registration Number: 304138E
|
|
For and on behalf of the Board of Directors
|
Tapan K Mukhopadhyay
Partner
|
|
Dr. Syed Sabahat Azim
Director
|
|
Richa Sana Azim
Director
|
Membership No.: 017483
|
|
DIN: 03122895
|
|
DIN: 02609003
|
Place: Kolkata
Date: 30th December 2020
|
|
|
For the year ended | For the year ended | |||||||||||
Note
|
31 March 2020
|
31 March 2019 | ||||||||||
Revenue from operations
|
|
19
|
|
|
9,057,344
|
|
7,220,982 | |||||
Other income
|
|
20
|
|
|
2,136,145
|
|
57,205 | |||||
|
|
|
|
|||||||||
Total revenue
|
|
11,193,489
|
|
7,278,187 | ||||||||
|
|
|
|
|||||||||
Expenses
|
||||||||||||
Purchase
|
|
21
|
|
|
961,711
|
|
1,239,083 | |||||
Course operating expenses
|
|
22
|
|
|
—
|
|
— | |||||
Changes in inventories
|
|
23
|
|
|
(38,620
|
)
|
(50,666 | ) | ||||
Employee benefits expense
|
|
24
|
|
|
1,437,745
|
|
2,167,548 | |||||
Finance costs
|
|
25
|
|
|
2,150,174
|
|
2,778,598 | |||||
Depreciation and amortisation
|
|
26
|
|
|
1,404,801
|
|
1,183,020 | |||||
Other expenses
|
|
27
|
|
|
2,870,913
|
|
4,427,102 | |||||
|
|
|
|
|||||||||
Total expenses
|
|
8,786,723
|
|
11,744,683 | ||||||||
|
|
|
|
|||||||||
Profit/(Loss) before tax
|
|
2,406,766
|
|
(4,466,496 | ) | |||||||
|
|
|
|
|||||||||
Income tax expense
|
||||||||||||
Current tax
|
|
—
|
|
6,123 | ||||||||
Deferred tax
|
|
30
|
|
|
—
|
|
— | |||||
|
|
|
|
|||||||||
Profit/(Loss) after tax (before adjustment of minority interest)
|
|
2,406,766
|
|
|
(4,472,620
|
)
|
||||||
|
|
|
|
|||||||||
Minority Interest
|
22,802 | (462,252 | ) | |||||||||
|
|
|
|
|||||||||
Profit/(Loss) for the year
|
|
2,383,964
|
|
(4,010,368 | ) | |||||||
|
|
|
|
|||||||||
Earnings/(loss) per equity share [nominal value of share INR 10 each (Previous year INR 10 each)]
|
|
28
|
|
|||||||||
Basic
|
|
4.84
|
|
(8.14 | ) | |||||||
Diluted
|
|
0.09
|
|
(8.14 | ) | |||||||
Significant accounting policies
|
|
1
|
|
For
D.K. CHHAJER & CO.
Chartered Accountants
Firm’s Registration Number: 304138E
|
For and on behalf of the Board of Directors |
Tapan K Mukhopadhyay
Partner
|
Dr. Syed Sabahat Azim
Director
|
Richa Sana Azim
Director
|
||
Membership No.: 017483 | DIN: 03122895 | DIN: 02609003 | ||
Place: Kolkata
Date: 30th December 2020
|
31 March 2020
|
31 March 2019 | |||||||||
A.
|
Cash flow from operating activities
|
|||||||||
Profit/(Loss) before tax
|
|
2,406,766
|
|
(4,466,496 | ) | |||||
Adjustments for :
|
||||||||||
Depreciation and amortisation
|
|
1,404,801
|
|
1,183,020 | ||||||
Provisions/liabilities no longer required written back
|
|
(2,109,763
|
)
|
(41,727 | ) | |||||
Interest income
|
|
—
|
|
(12,513 | ) | |||||
Finance costs
|
|
2,150,174
|
|
2,778,598 | ||||||
|
|
|
|
|||||||
|
1,445,212
|
|
3,907,377 | |||||||
Operating cash flow before working capital changes
|
|
3,851,977
|
|
(559,120 | ) | |||||
Adjustments for:
|
||||||||||
(Increase) in trade and other receivables/advances
|
|
(2,817,928
|
)
|
847,409 | ||||||
Decrease in inventories
|
|
(9,631
|
)
|
35,257 | ||||||
Increase in trade payables, other liabilities and provisions
|
|
332,248
|
|
1,599,791 | ||||||
|
|
|
|
|||||||
|
(2,495,312
|
)
|
2,482,457 | |||||||
Cash (used in) operations
|
|
1,356,665
|
|
1,923,337 | ||||||
Income taxes refund (net)
|
|
16,628
|
|
(94,462 | ) | |||||
|
|
|
|
|||||||
Net cash (used in) operating activities (A)
|
|
1,373,293
|
|
1,828,874 | ||||||
B.
|
Cash flow from investing activities
|
|||||||||
Purchase or construction of property, plant and equipment and intangible assets and movement in capital work in progress and capital advances and capital creditors
|
|
(985,522
|
)
|
(2,422,765 | ) | |||||
Proceeds from sale of property, plant & equipment
|
|
—
|
|
10,929 | ||||||
Bank deposits (having original maturity of more than 3 months)
|
|
(8,958
|
)
|
122,810 | ||||||
Interest received
|
|
(10,231
|
)
|
40,082 | ||||||
|
|
|
|
|||||||
Net cash (used in) investing activities (B)
|
|
(1,004,711
|
)
|
(2,248,945 | ) | |||||
C.
|
Cash flow from financing activities
|
|||||||||
Acquisition of minority interest
|
|
—
|
|
69,839 | ||||||
Proceeds from borrowings (net)
|
|
(537,770
|
)
|
3,298,150 | ||||||
Principal payments under finance lease
|
|
—
|
|
(987 | ) | |||||
Finance costs paid
|
|
(311,595
|
)
|
(2,493,507 | ) | |||||
|
|
|
|
|||||||
Net cash provided by financing activities (C)
|
|
(849,365
|
)
|
873,495 | ||||||
|
|
|
|
|||||||
Net (decrease) in cash and cash equivalent (A+B+C)
|
|
(480,782
|
)
|
453,425 | ||||||
Cash and cash equivalents at the beginning of the year
|
|
592,684
|
|
139,258 | ||||||
|
|
|
|
|||||||
Cash and cash equivalents at the end of the year (Refer Note (i) below)
|
|
111,902
|
|
592,683 | ||||||
|
|
|
|
|||||||
Notes:
|
||||||||||
(i)
|
Components of cash and cash equivalent (refer note 16)
|
|||||||||
Cash on hand |
|
32,083
|
|
41,300 | ||||||
Balance with banks | ||||||||||
On current accounts |
|
71,853
|
|
551,025 | ||||||
On deposit accounts (with original maturity of 3 months or less) |
|
7,965
|
|
359 | ||||||
|
|
|
|
|||||||
|
111,901
|
|
592,684 | |||||||
|
|
|
|
(ii) |
Standard 3 on Cash Flow Statement (AS 3 ) specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.
|
For
D.K. CHHAJER & CO.
Chartered Accountants
Firm’s Registration Number: 304138E
|
For and on behalf of the Board of Directors |
Tapan K Mukhopadhyay
Partner
|
Dr. Syed Sabahat Azim
Director
|
Richa Sana Azim
Director
|
||
Membership No.: 017483 | DIN: 03122895 | DIN: 02609003 | ||
Place: Kolkata
Date: 30th December 2020
|
S.No
|
Name of the subsidiaries
|
Country of
incorporation |
Percentage of ownership
interest as at 31 March
2020
|
Percentage of ownership
interest as at 31 March 2019 |
||||
1 |
GHSPL Multispeciality Hospital & Trauma Centre Private Limited
|
India |
100%
|
100% | ||||
2 |
Ficus Health-Infra Private Limited
|
India |
100%
|
100% |
S.No
|
Name of the subsidiaries
|
Country of
incorporation |
Percentage of ownership
interest as at 31 March
2020
|
Percentage of ownership
interest as at 31 March 2019 |
||||||||
Capital
contribution
ratio
|
Profit
sharing
ratio
|
Capital
contribution ratio |
Profit
sharing ratio |
|||||||||
1 |
GHSPL AMRO Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
2 |
GHSPL BEGUSARAI Healthcare LLP
|
India |
95.00%
|
95.00%
|
95.00% | 95.00% | ||||||
3 |
GHSPL BGLP Super Speciality Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% | ||||||
4 |
GHSPL FATEHPUR Super Speciality Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% | ||||||
5 |
GHSPL JEYPORE Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% | ||||||
6 |
GHSPL SAMBHAV KNJ Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% | ||||||
7 |
GHSPL MLD Super Speciality Healthcare LLP
|
India |
63.00%
|
78.00%
|
63.00% | 78.00% | ||||||
8 |
GHSPL MUZF Super Speciality Healthcare LLP
|
India |
42.00%
|
62.00%
|
42.00% | 62.00% | ||||||
9 |
GHSPL SAMBHAV RP Healthcare LLP
|
India |
83.33%
|
96.00%
|
83.33% | 96.00% | ||||||
10 |
GHSPL SAMBHAV BSP Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% | ||||||
11 |
GHSPL JAUNPUR Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
12 |
GHSPL JSPR Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
13 |
GHSPL BEM Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% |
S.No
|
Name of the subsidiaries
|
Country of
incorporation |
Percentage of ownership
interest as at 31 March
2020
|
Percentage of ownership
interest as at 31 March 2019 |
||||||||
Capital
contribution
ratio
|
Profit
sharing
ratio
|
Capital
contribution ratio |
Profit
sharing ratio |
|||||||||
14 |
GHSPL AMBEDKAR SCAN Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
15 |
GHSPL ARA Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
16 |
GHSPL ASNSL Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
17 |
GHSPL FRBD Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
18 |
GHSPL MDPR Super Speciality Healthcare LLP
|
India |
92.00%
|
98.00%
|
92.00% | 98.00% | ||||||
19 |
GHSPL SHRNPR Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
20 |
GHSPL SJPR Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
21 |
GHSPL STP Super Speciality Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% | ||||||
22 |
GHSPL SW Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
23 |
GHSPL DGHR Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
24 |
GHSPL DNBD Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
25 |
GHSPL GYA Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
26 |
GHSPL PRN Super Speciality Healthcare LLP
|
India |
60.00%
|
76.00%
|
60.00% | 76.00% | ||||||
27 |
GHSPL DARBHANGA Super Speciality Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% | ||||||
28 |
GHSPL BALASORE Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
29 |
GHSPL BASTI Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
30 |
GHSPL VARANASI Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
31 |
GHSPL PURI Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
32 |
GHSPL CNTA Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
33 |
GHSPL JHRSD Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
34 |
GHSPL ALIGR Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% |
S.No
|
Name of the subsidiaries
|
Country of
incorporation |
Percentage of ownership
interest as at 31 March
2020 |
Percentage of ownership
interest as at 31 March 2019 |
||||||||
Capital
contribution ratio |
Profit
sharing ratio |
Capital
contribution ratio |
Profit
sharing ratio |
|||||||||
35 |
GHSPL BHNGAR Super Speciality Healthcare LLP
|
India | 56.00% | 89.00% | 56.00% | 89.00% | ||||||
36 |
GHSPL MRBD Super Speciality Healthcare LLP
|
India | 100.00% | 100.00% | 100.00% | 100.00% | ||||||
37 |
GHSPL SMBL Super Speciality Healthcare LLP
|
India | 100.00% | 100.00% | 100.00% | 100.00% | ||||||
38 |
GHSPL KNPR Super Speciality Healthcare LLP
|
India | 100.00% | 100.00% | 100.00% | 100.00% | ||||||
39 |
GHSPL Patna Super Speciality Healthcare LLP
|
India | 100.00% | 100.00% | 100.00% | 100.00% | ||||||
40 |
GHSPL Dhubri Super Speciality Healthcare LLP
|
India | 100.00% | 100.00% | 100.00% | 100.00% |
1
|
Significant accounting policies
|
(a)
|
Basis of preparation of consolidated financial statements:
|
(b)
|
Principles of consolidation
|
(c)
|
Use of estimates
|
(d)
|
Current -
non-current
classification
|
(e) |
Revenue recognition
|
(f) |
Liabilities Written back
|
(g) |
Property, plant and equipment(PPE)
|
(h) |
Depreciation
|
(i) |
Intangible assets
|
• |
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in the Consolidated Statement of Profit and Loss as incurred.
|
• |
Development activities involve a plan or design for the production of new or substantially improved products or processes. Development cost is capitalised only if the development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete development and to use the asset. The expenditure capitalised includes the cost of materials, direct labour, overhead costs that are directly attributable to preparing the asset for its intended use, and directly attributable borrowing costs (in the same manner as in the case of property, plant & equipment). Other development expenditure is recognised in Consolidated Statement of Profit and Loss as incurred.
|
(j) |
Amortisation
|
(k) |
Government grants
|
(l) |
Impairment of property, plant
& equipment and intangible assets
|
(m) |
Inventories
|
(n) |
Foreign currency transaction
|
(o) |
Operating leases
|
(p) |
Investments
|
(q) |
Employee benefits
|
(r) |
Taxation
|
(s) |
Provisions and contingent liabilities
|
(t) |
Earnings/(loss) per share
|
(u) |
Discount on issue of debentures
|
(v) |
Cash and cash equivalents
|
(w) |
Cash flow statement
|
(x) |
Going Concern
|
2
|
Share capital
|
Amount in USD
|
||||||||||||||||
31 March 2020
|
31 March 2019 | |||||||||||||||
Number of
shares |
Amount
|
Number of
shares |
Amount | |||||||||||||
0.001% Compulsorily Convertible Cumulative Preference Shares - Series C1
|
||||||||||||||||
At the commencement and at the end of the year
|
|
157,234
|
|
|
243,565
|
|
157,234 | 243,565 | ||||||||
Shares issued during the year
|
|
—
|
|
|
—
|
|
— | — | ||||||||
|
|
|
|
|
|
|
|
|||||||||
At the end of the year
|
|
157,234
|
|
|
243,565
|
|
157,234 | 243,565 | ||||||||
8% Compulsorily Convertible Cumulative Preference Shares
|
||||||||||||||||
At the commencement of the year
|
|
3,499,588
|
|
|
5,550,528
|
|
3,499,588 | 5,550,528 | ||||||||
Shares issued during the year
|
|
—
|
|
—
|
— | — | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
At the end of the year
|
|
3,499,588
|
|
|
5,550,528
|
|
3,499,588 | 5,550,528 |
b)
|
Shares held by holding company:
|
c)
|
Details of shareholders holding more than 5% are as follows
|
Number of
shares |
% of shares
held |
Number of
shares |
% of shares held | |||||||||||||
Equity shares of INR 10 each fully paid up held by
|
||||||||||||||||
Dr. Syed Sabahat Azim
|
|
154,000
|
|
|
31.24
|
|
154,000 | 31.24 | ||||||||
Mrs. Richa Sana Azim
|
|
154,000
|
|
|
31.24
|
|
154,000 | 31.24 | ||||||||
Mr. M. Damodaran
|
|
52,855
|
|
|
10.72
|
|
52,855 | 10.72 | ||||||||
Elevar Equity Mauritius
|
|
52,555
|
|
|
10.66
|
|
52,555 | 10.66 | ||||||||
0.001% Compulsorily Convertible Cumulative Preference Shares - Series A
|
||||||||||||||||
Elevar Equity Mauritius
|
|
146,616
|
|
|
60.89
|
|
146,616 | 60.89 | ||||||||
Sequoia Capital India Investment Holdings III
|
|
94,161
|
|
|
39.11
|
|
94,161 | 39.11 | ||||||||
0.001% Compulsorily Convertible Cumulative Preference Shares - Series C
|
||||||||||||||||
Elevar Equity Mauritius
|
|
125,774
|
|
|
49.34
|
|
125,774 | 49.34 | ||||||||
Sequoia Capital India Investment Holdings III
|
|
62,887
|
|
|
24.67
|
|
62,887 | 24.67 | ||||||||
Mr. M. Damodaran
|
|
45,311
|
|
|
17.77
|
|
45,311 | 17.77 | ||||||||
Kimberlite Social Infra Private Limited
|
|
20,964
|
|
|
8.22
|
|
20,964 | 8.22 | ||||||||
0.001% Compulsorily Convertible Cumulative Preference Shares - Series C1
|
||||||||||||||||
Elevar Equity Mauritius
|
|
157,234
|
|
|
100
|
|
157,234 | 100 | ||||||||
8% Compulsorily Convertible Cumulative Preference Shares
|
||||||||||||||||
SIDBI Trustee Company Limited A/C Samridhi
|
|
3,499,588
|
|
|
100
|
|
3,499,588 | 100 |
d)
|
Rights, preferences and restrictions in respect of each class of shares including restrictions on the distribution of dividends and the repayment of capital:
|
3
|
Reserves and surplus
|
31 March 2020
|
31 March 2019
|
|||||||
Securities premium account
|
8,320,698 | 8,320,698 | ||||||
Revaluation surplus
|
10,128,170 | 10,128,170 | ||||||
General reserve
|
331,361 | 331,361 | ||||||
Foreign Currency Translation reserve
|
(2,576,594 | ) | (1,908,158 | ) | ||||
Surplus in Statement of Profit and Loss
|
||||||||
At the commencement of the year
|
(17,873,766 | ) | (13,863,398 | ) | ||||
Add: Profit/(Loss) for the year
|
2,383,964 | (4,010,368 | ) | |||||
|
|
|
|
|||||
Balance as at the end of the year
|
|
(15,489,802
|
)
|
|
(17,873,766
|
)
|
||
|
|
|
|
|||||
Total reserves and surplus
|
|
713,832
|
|
|
(1,001,696
|
)
|
||
|
|
|
|
4
|
Long-term borrowings
|
Amount in USD
|
||||||||||||||||||||
Non-current
portion
|
Current portion*
|
|||||||||||||||||||
Secured/
unsecured |
31 March 2020
|
31 March 2019 |
31 March
2020
|
31 March 2019 | ||||||||||||||||
204,540 (previous year: 204,540) 13.55%
non-convertible
debentures of INR 1,000 each
|
Secured | — | — | 2,715,433 | 2,940,868 | |||||||||||||||
Less: Discount on issue of debenture to the extent not written off or adjusted
|
— | — | — | 2,713 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
— | — |
|
2,715,433
|
|
|
2,938,155
|
|
|||||||||||||
Term loans from Banks
|
Secured | — | 10,297,067 | 12,630,603 | 3,487,525 | |||||||||||||||
Term loan from Small Industries Development Bank of India
|
Secured | 561,155 | 718,898 | 107,534 | 93,457 | |||||||||||||||
Term loan from National Skill Development Corporation
|
Secured | 695,997 | 1,129,351 | 1,396,354 | 1,136,706 | |||||||||||||||
Term loan from Caspian Impact Investments Private Limited
|
Unsecured | — | 359,449 | 1,327,580 | 1,078,347 | |||||||||||||||
Term loan from Blacksoil capital Private
|
||||||||||||||||||||
Limited
|
secured | — | 245,079 | 362,333 | 588,477 | |||||||||||||||
Equipment loan
|
Secured | 321,760 | 531,167 | 237,157 | 297,165 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
|
1,578,912
|
|
|
13,281,012
|
|
|
18,776,995
|
|
|
9,619,832
|
|
|||||||||
|
|
|
|
|
|
|
|
* |
Amount disclosed under Other current liabilities - Note 8
|
(a)
|
Secured
non-convertible
debenture
|
(i) |
The Company had issued 13.55% redeemable
non-convertible
debenture of face value of INR 1,000 each agreegating to INR 204,540,000 (USD 2,715,433) at a discount of 0.95% on face value on 19 March 2016 to Essential Capital Consortium BV on private placement basis. These debentures are redeemable at par in two equal instalments of INR 102,270,000 (USD 1,478,574) each on 5 May 2019 and 5 November 2019 and in case put option is exercised by debenture holder, the total balance of INR 204,540,000 (USD 287,172) has to be repaid on any date not earlier than 11 February 2019. Interest is payable semi-annually at the rate of 13.55% per annum (net of withholding tax) on interest payment dates or earlier in case upon the exercise of the put option (interest payment starting from 5 May 2016 and ending on 5 November 2019 and in case put option is exercised, starting from 5 May 2016 and ending on 11 February 2019 ) as per Mortgage Cum Debenture Trust Deed dated 4 February 2016.
|
(ii) |
These debentures are secured by way of a second ranking and continuing charge by way of registered mortgage on the;
|
(iii) |
In view of contribution of the company in the field of medicine especially during the COVID situation, USAID has decided to approve grant by paying off its debts towards Essential Capital Consortium (ECC). The grant has approved as on date of signing off balance sheet and ROC filing ahs been completed in June 2020.
|
(b)
|
Term loans from Allahabad Bank
|
(i) |
Term loan from Allahabad Bank amounting to INR 952,256,998 (USD 12,641,978) [previous year INR 958,730,792 (USD 13,784,592)] is secured by;
|
(ii) |
Interest on the above Term
Loan-I,
II & III carries an interest of 1-year MCLR plus 3.10% p.a. at monthly rests and is payable as and when due. And Term Loan IV and V carries an interest of 1-year MCLR plus 4.10% p.a. at monthly rests and is payable as and when due.
|
(iii) |
The Company has been disputing the EMIs being deducted by Allahabad bank since 2017 in respect to hospital projects that have not achieved COD especially as the disbursal also started
|
late. The Bank and the Company are entering into a restructuring proposal to resolve this issue. The Techno Economic viability report with positive recommendation has been submitted by Dun & Bradstreet which was appointed by bank to examine and report on the viability and Independent Credit Rating has been given by the approved rating agency. It is expected that the restructuring process will be completed in 2021. During this time the loan has been classified by the Bank as technical NPA pending closure of restructuring process. |
(c)
|
Term loan from Small Industries Development Bank of India (SIDBI)
|
(i) |
Term loan from SIDBI amounting to INR 50,900,000 (USD 675,738) [previous year INR56,500,000 (USD 812,355) ] is secured by:
|
(ii) |
Above term loan carries an interest of SIDBI’s Prime Lending Rate (PLR) plus 1.50%, at monthly rests and is payable as and when applied.
|
(d)
|
Term loan from National Skill Development Corporation
|
(i) |
Term loan from National Skill Development Corporation amounting to INR 157,606,322 (USD 2,092,351) [previous year : INR 157,606,322 (USD 2,266,057)] is secured by:
|
(ii) |
The rate of interest being charged is simple interest of 6% p.a. payable on a quarterly basis after the interest-free moratorium period of two years from the date of first disbursement of the loan.
|
(e)
|
Term loan from Caspian Impact Investments Pvt. Ltd.
|
(i) |
Term loan from Caspian Impact Investments Pvt. Ltd. amounting to INR 100,000,000 (USD 1,327,580) [previous year: INR 100,000,000 (USD 1,437,796)] is unsecured and other terms are:
|
(f)
|
Equipment loan
|
(i) |
Equipment loan from India Infoline Finance Limited amounting to INR 11,356,719 (USD 150,770) [previous year: INR 13,548,550 (USD 198,400)] consists of:
|
(ii) |
Equipment loan from India Infoline Finance Limited taken in the books of GHSPL Amroha Super Speciality Healthcare LLP amounting to INR 5,822,799 (USD 77,302) [previous year: INR 7,524,662 (USD 108,189)] is secured by way of exclusive hypothecation charge over equipment being financed and personal guarantee of Dr. Syed Sabahat Azim and Mrs. Richa Sana Azim (Directors of Glocal Healthcare Systems Pvt ltd.- partner in LLP). This equipment loan has been sanctioned with a limit of INR 11,738,210 (USD 155,834) and at the margin of 11%. This loan is repayable in 72 equated monthly instalments of INR 150,100 (USD 2220) starting from 15 January 2016, INR 213,750 (USD 3,138) starting from 15 January 2017 and INR 260,450 (USD 3,899) starting from 15 February 2017. Equipment loan carries an interest at the rate of 13% p.a.
|
(iii) |
Equipment loan from India Infoline Finance Limited taken in the books of GHSPL Sambhav KNJ Healthcare LLP amounting to INR 8,040,442 (USD 106,743) [previous year: INR 10,971,843
|
(USD 157,753)] is secured by way of exclusive hypothecation charge over equipment being financed and personal guarantee of Dr. Syed Sabahat Azim and Mrs. Richa Sana Azim (Directors of Glocal Healthcare Systems Pvt ltd.- partner in LLP). This equipment loan has been sanctioned with a limit of INR17,048,720 and at the margin of 11%. This loan is repayable in 72 monthly installments of INR 201,500 (USD 2,980) starting from 15 January 2016 and INR 383,000 (USD 5,623) starting from 15 January 2017. Equipment loan carries an interest at the rate of 13% p.a. |
(iv) |
Equipment loan from India Infoline Finance Limited taken in the books of GHSPL MUZF Super Speciality Healthcare LLP amounting to INR 9,305,242 (USD 123,535) [previous year: INR 12,837,321 (USD 184,574) is secured by way of exclusive hypothecation charge over equipment being financed and personal guarantee of Dr. Syed Sabahat Azim and Mrs. Richa Sana Azim (Directors of Glocal Healthcare Systems Pvt ltd.- partner in LLP). This equipment loan has been sanctioned with a limit of INR 21,587,395 (USD 286,590) and at the margin of 11%. This loan is repayable in 72 monthly installments of INR 272,500 (USD 4,073) starting from 15 February 2016 and INR 480,000 (USD 7,047) starting from 15 January 2017. Equipment loan carries an interest at the rate of 13% p.a.
|
(v) |
Equipment loan from Dewan Housing Finance Limited taken in the books of GHSPL BGLP Super Speciality Healthcare LLP amounting to INR 2,459,836 (USD 32,656) [previous year: INR 4,529,609 (USD 65,127 )] is secured by way of exclusive hypothecation charge over equipment being financed and personal guarantee of Dr. Syed Sabahat Azim and Mrs. Richa Sana Azim (Directors of Glocal Healthcare Systems Pvt ltd.- partner in LLP). This equipment loan has been sanctioned with a limit of INR 9,999,591 (USD 132,753) and at the margin of 11%. This loan is repayable in 60 monthly installments of INR 224,991 starting from March 2016. Equipment loan carries an interest at the rate of 12.50% p.a.
|
(vi) |
Equipment loan from Dewan Housing Finance Limited taken in the books of GHSPL Jeypore Healthcare LLP amounting to INR 2,693,833 (USD 35,763) [previous year: INR 4,916,556 (USD 70,690) is secured by way of exclusive hypothecation charge over equipment being financed and personal guarantee of two Directors of Glocal Healthcare Systems Private Limited- partner, Dr. Syed Sabahat Azim and Mrs. Richa Sana Azim. This equipment loan has been sanctioned with a limit of INR 10,011,423 (USD 132,910). This loan is repayable in 60 equated monthly instalments of INR 225,257 (USD 3,396) starting from April 2016. Equipment loan carries an interest at the rate of 12.50% p.a.
|
(vii) |
Equipment loan from India Infoline Finance Limited taken in the books of GHSPL Begusarai Healthcare LLP amounting to INR 2,421,567 (USD 32,148) [previous year: INR 3,282,710 (USD 47,199)] is secured by way of exclusive hypothecation charge over equipment being financed and personal guarantee of Dr. Syed Sabahat Azim and Mrs. Richa Sana Azim [Directors of GHSPL (partner in the LLP)]. This equipment loan has been sanctioned with a limit of INR 5,226,970 (USD 69,392). This loan is repayable in 72 monthly installments (including first 12 months as principle moratoriam) starting from 15 January, 2016. Equipment loan carries an interest of 13% p.a
|
(g)
|
Term loan from Blacksoil Capital Private Limited
|
Term loan from Black Soil Private Limited amounting to INR 27,272,723 (USD 362,067) [previous year: INR 57,945,543 (USD 833,139)] is unsecured and other terms are:
|
(h)
|
Loan from Hero Fincorp
|
(i) |
Term loan amounting to
Nil
|
(ii) |
The term loan has been sanctioned for INR 70,000,000 (USD 929,306) as working capital loan & INR 60,000,000 (USD 796,548) as term loan for capex requirements- production & expansion of digital dispensary business and takeover of existing term loan from SIDBI & IIFL respectively.
|
(iii) |
Above term loan is carries an interest of Hero Fincorp Prime Lending Rate @ 13% p.a. at monthly rests
|
(i)
|
Overdue payment of loan
|
( IN
USD) |
||||||||||
Particulars
|
Principal
Amount |
Interest
Amount |
Period
|
|||||||
Allahabad Bank Loan
|
||||||||||
TL-1
|
394,117 | 226,182 |
1.Principal Amount due from June 2018
2.Interest amount due from March 2019
|
|||||||
TL-2
|
256,965 | 152,985 | ||||||||
TL-3
|
491,216 | 344,725 |
1.Principal Amount due from June 2018
2.Interest amount due from January 2019
|
|||||||
TL-4
|
373,050 | 390,837 |
1.Principal Amount due from July 2018
2.Interest amount due from January 2019
|
|||||||
TL-5
|
1,059,409 | 778,657 | 1. Principal & Interest due from Janurary’2019 to March 2020 |
( IN USD)
|
||||||||||
Particulars
|
Principal
Amount |
Interest
Amount |
Period
|
|||||||
Caspian Impact Investments Private Limited (Refer point “f” above)
|
331,895 | 33,278 | Feruary 2019 to March 2020 | |||||||
Blacksoil Capital Private Limited (Refer point “h” above)
|
135,775 | 12,393 | January 2019 to March 2020 | |||||||
National Skill Development Corporation (NSDC)
|
346,783 | 130,903 | April 2019 to March 2020 | |||||||
Small Industries Development Bank Ltd.
|
15,931 | 15,912 | January 2020 to February 2020 | |||||||
Total
|
|
3,405,142
|
|
|
5,491,013
|
|
5
|
Provisions
|
Amount in USD
|
||||||||||||||||
Long-term
|
Short-term
|
|||||||||||||||
31 March 2020
|
31 March 2019 |
31 March 2020
|
31 March 2019 | |||||||||||||
Provision for employee benefits
|
||||||||||||||||
Gratuity Compensated
|
|
78,161
|
|
66,285 |
|
3,322
|
|
3,683 | ||||||||
Absences
|
|
51,524
|
|
44,916 |
|
2,471
|
|
3,073 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
|
129,685
|
|
|
111,200
|
|
|
5,793
|
|
|
6,756
|
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Other provisions
|
||||||||||||||||
Provision for Income
|
||||||||||||||||
Tax
|
|
—
|
|
— |
|
1,859
|
|
2,013 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
|
—
|
|
— |
|
1,859
|
|
|
2,013
|
|
|||||||
|
|
|
|
|
|
|
|
|||||||||
|
129,685
|
|
|
111,200
|
|
|
7,651
|
|
|
8,769
|
|
|||||
|
|
|
|
|
|
|
|
5.1 |
Actuarial valuation has not been done for
non-operative
LLP’s and LLP’s which are given on O&M or where there are no employees as on March 31, 2020. Hence, for those LLP’s closing balance is taken as it is from March 31, 2019. Name of LLP’s for whom Actuarial valuation was done in March 31, 2019 but not done in March 31, 2020 as follows:
|
a. |
GHSPL JEYPORE Healthcare LLP
|
b. |
GHSPL SAMBHAV KNJ Healthcare LLP
|
c. |
GHSPL MUZF Super Speciality Healthcare LLP
|
d. |
GHSPL MDPR Super Speciality Healthcare LLP
|
6
|
Short-term borrowings
|
31 March 2020
|
31 March 2019 | |||||||
Cash credit facilities from bank (secured)
|
|
1,117,699
|
|
1,336,656 | ||||
Unsecured loan
|
||||||||
- loan from Hero Fincorp Ltd
|
|
929,306
|
|
431,339 | ||||
- loan from related party (refer note 35)
|
|
373,962
|
|
406,005 | ||||
- loan from directors (refer note 35)
|
|
20,312
|
|
28,468 | ||||
- loan from others
|
|
1,451,329
|
|
1,740,725 | ||||
|
|
|
|
|||||
3,892,608 | 3,943,193 | |||||||
|
|
|
|
6.1(i) |
Cash credit facilities from Allahabad Bank has been sanctioned with a limit of INR 50,000,000 (USD 663,790) (for working capital requirement of the five existing operational hospitals of the Company with a margin of 25%) and is secured by first and exclusive charge of hypothecation of all the current assets of the five units and administrative office of the Company (both present and future). Further, secured by (along with bank guarantee) second charge on land and building, plant and machineries and other fixed assets of the five existing operational hospitals under the Company’s direct ownership (both present and future). The cash credit facilitities carry an interest rate of one year MCLR plus 3.10% p.a. computed on a monthly basis on the actual amount utilised and are repayable as and when due.
|
(ii) |
During the financial year ended 31 March 2020, the Group has availed cash credit facilities from Allahabad Bank for Amroha, Krishnanagar, Jeypore, Begusarai, Bhagalpur, Medinapur, Malda, Bhangar, Basti and Muzafarpur LLP’s. Cash Credit from Allahabad Bank has been sanctioned with a limit of INR 30,000,000 (USD 398,287.15) and is secured by stock (margin of 25% on stocks and 40% on book debts up to 90 days old). The cash credit facilities carry an interest rate of 1 year Allahabad Bank MCLR + 4.10% p.a. computed on a monthly basis on the actual amount utilised and are repayable on demand.
|
(iii) |
The company has been disputing the EMIs being deducted by Allahabad bank since 2017 in respect to hospital projects that have not achieved COD especially as the disbursal also started late. The Bank and the company are entering into a restructuring proposal to resolve this issue. The Techno Economic viability report with positive recommendation has been submitted by Dun & Bradstreet which was appointed by bank to examine and report on the viability and Independent Credit Rating has been given by the approved rating agency. It is expected that the restructuring process will be completed in 2021. During this time the loan has been classified by the Bank as NPA pending closure of restructuring process.
|
6.2 |
Interest free loan taken from directors and related parties are repayable on demand.
|
6.3 |
a. Loan taken from others is repayable on demand.
|
b. |
Loan taken from others carries an interest rate of 12% to 15% p.a. (except for three parties)
|
6.4 |
Loan from Hero Fincorp
|
(i) |
Term loan amounting to INR 70,000,000 (USD 929,306) [previous year INR 30,000,000 (USD 431,339)] is secured by:
|
(ii) |
The term loan has been sanctioned for INR 70,000,000 (USD 929,306) as working capital loan & INR 60,000,000 (USD 862,678) as term loan for capex requirements- production & expansion of digital dispensary business and takeover of existing term loan from SIDBI & IIFL respectively. The term loan facility for takeover of loan from SIDBI & IIFL has not been availed and hence got expired. So the charge created against immovable property is still lying with SIDBI.
|
(iii) |
Above term loan is carries an interest of Hero Fincorp Prime Lending Rate @ 13% p.a. at monthly rests
|
(iv) |
The repayment of loan has not started yet.
|
(v) |
As per circular
DOR.No.BP.BC.47/21.04.048/2019-20
dated March 27, 2020 regulatory measures were announced by RBI to mitigate the burden of debt servicing brought about by disruptions on account of
COVID-19
pandemic by granting a moratorium of three months on payment of all instalments falling due between March 1, 2020 and May 31, 2020. Further, this relief is extended till August 31, 2020 and this package has been taken up the company and installments has been rescheduled accordingly.
|
7
|
Trade payables
|
31 March 2020
|
31 March 2019 | |||||||
Total outstanding dues of micro enterprises and small enterprises
|
— | — | ||||||
Total outstanding dues of creditors other than micro enterprises and small enterprises
|
|
1,471,145
|
|
2,418,496 | ||||
|
|
|
|
|||||
|
1,471,145
|
|
|
2,418,496
|
|
|||
|
|
|
|
7.1 |
For dues to micro and small suppliers, refer to note 31
|
8
|
Other current liabilities
|
31 March 2020
|
31 March 2019 | |||||||
Current maturities of long-term debts (refer note 4)
|
|
18,776,995
|
|
9,619,832 | ||||
Interest accrued and due on term loans
|
|
2,275,228
|
|
596,171 | ||||
Interest accrued and due on cash credit
|
|
145,101
|
|
— | ||||
Interest accrued and due on equipment loan
|
|
32,465
|
|
19,072 | ||||
Interest accrued and due on other loan
|
|
118,523
|
|
— | ||||
Interest accrued but not due on debentures
|
|
—
|
|
158,953 | ||||
Interest accrued but and due on debentures
|
|
182,050
|
|
— | ||||
Creditors for capital goods
|
|
178,446
|
|
717,026 | ||||
Employee benefits payable
|
|
539,903
|
|
911,934 | ||||
Advance from TPA & Customers
|
|
431,960
|
|
431,339 | ||||
Partner’s Current A/c
|
|
17,259
|
|
18,691 | ||||
Statutory dues payable
|
||||||||
Provident fund
|
|
274,585
|
|
176,766 | ||||
Professional tax
|
|
12,484
|
|
10,175 | ||||
Employee state insurance payable
|
|
166,695
|
|
150,015 | ||||
Tax deducted at source payable
|
|
327,555
|
|
457,415 | ||||
Goods and services tax payable
|
|
88,504
|
|
207,322 | ||||
Unearned revenue
|
|
131,424
|
|
341,605 | ||||
Advance from patients and others
|
|
7,220
|
|
35,623 | ||||
Other liabilities/ payables
|
|
128,565
|
|
49,409 | ||||
|
|
|
|
|||||
|
23,834,963
|
|
|
13,901,348
|
|
8.1
|
Due to this financial crunch there has been continuing delay in payment of statutory dues on the part of the company.
|
8.2
|
Advance receipt of INR 30 mm from S.S Earth Moving Mining was for setup of dispensary setup in their mining area. But no space was allocated to us by them, hence setup is not done.
|
8.3
|
Advance include amount received from African medical supply for supply of Digital Dispensary setup but due to COVID outbreak same could not be fulfilled
|
8.4
|
Regarding interest accrued and due on term loan taken from Allahabad bank,the company has been disputing the EMIs being deducted by the bank since 2017 in respect to hospital projects, that have not achieved COD especially as the disbursal also started late. The Bank and the company are entering into a restructuring proposal to resolve this issue. The Techno Economic viability report with positive recommendation has been submitted by Dun & Bradstreet which was appointed by bank to examine and report on the viability and Independent Credit Rating has been given by the approved rating agency. It is expected that the restructuring process will be completed in 2021. During this time the loan has been classified by the Bank as technical NPA pending closure of restructuring process. As the account has been declared technical NPA by the bank so no interest has been charged by the bank but following the concept of mercantile system of accounting interest on term loan from Allahabad Bank and interest on cash credit limit has been calculated and charged in expenses. This interest has been classified as Interest accrued and due under other current liabilities.
|
9
|
Goodwill
|
31 March 2020
|
31 March 2019 | |||||||
Opening balance
|
|
598,136
|
|
639,580 | ||||
Amortisation of Goodwill
|
|
(95,982
|
)
|
— | ||||
Forex Adjustment
|
|
(42,172
|
)
|
(41,444 | ) | |||
|
|
|
|
|||||
Closing balance
|
|
459,982
|
|
|
598,136
|
|
||
|
|
|
|
12
|
Long-term loans and advances
|
31 March 2020
|
31 March 2019 | |||||||
(Unsecured and considered good)
|
||||||||
To parties other than related parties
|
||||||||
(a) Capital advances
|
|
544,996
|
|
559,029 | ||||
(b) Security deposits
|
|
166,558
|
|
179,882 | ||||
|
|
|
|
|||||
|
711,553
|
|
|
738,911
|
|
|||
(c) Other loans and advances
|
||||||||
TDS receivables
|
|
413,507
|
|
398,097 | ||||
|
|
|
|
|||||
|
413,507
|
|
|
398,097
|
|
|||
|
|
|
|
|||||
|
1,125,061
|
|
|
1,137,008
|
|
|||
|
|
|
|
13
|
Other
non-current
assets
|
31 March 2020
|
31 March 2019 | |||||||
(Unsecured and considered good)
|
||||||||
Bank deposits (due to mature after 12 months from the reporting date) [refer note 16]*
|
|
19,289
|
|
47,989 | ||||
Balance with government authorities
|
|
661
|
|
716 | ||||
Interest accrued on bank deposits
|
|
41
|
|
4,999 | ||||
Interest accrued on electricity deposits
|
|
636
|
|
688 | ||||
|
|
|
|
|||||
|
20,626
|
|
|
54,393
|
|
|||
|
|
|
|
14
|
Inventories
|
(Valued at lower of cost and net realisable value)
|
||||||||
Stock of digital dispensary
|
|
51,168
|
|
— | ||||
Stock of medicines and medical consumables
|
|
214,162
|
|
247,135 | ||||
Stores and spares
|
|
3,966
|
|
12,529 | ||||
|
|
|
|
|||||
|
269,296
|
|
|
259,664
|
|
|||
|
|
|
|
15
|
Trade receivables
|
(a) Unsecured and considered good
|
|
1,520,746
|
|
2,289,379 | ||||
(b) Doubtful
|
|
434,940
|
|
471,048 | ||||
Less: Provision for doubtful receivables
|
|
(434,940
|
)
|
(471,048 | ) | |||
|
|
|
|
|||||
|
1,520,746
|
|
2,289,379 | |||||
Other receivables
|
||||||||
(a) Unsecured, considered good
|
|
3,199,210
|
|
968,194 | ||||
|
|
|
|
|||||
|
4,719,956
|
|
|
3,257,573
|
|
|||
|
|
|
|
16
|
Cash and bank balances
|
31 March 2020
|
31 March 2019 | |||||||
Cash and cash equivalents
|
||||||||
Cash on hand
|
|
32,083
|
|
41,300 | ||||
Balance with banks:
|
||||||||
On current accounts
|
|
71,853
|
|
551,025 | ||||
On deposit accounts (with original maturity of 3 months or less)
|
|
7,965
|
|
359 | ||||
|
|
|
|
|||||
|
111,901
|
|
|
592,684
|
|
|||
Other bank balances:
|
||||||||
Deposits in banks with maturity of more than 3 months but less than 12 months*
|
|
59,965
|
|
28,515 | ||||
|
|
|
|
|||||
|
171,867
|
|
|
621,199
|
|
|||
|
|
|
|
* |
Bank deposits of USD 13,276 (31 March 2019: USD 14,378) have been pledged with Black Soil as security for term loan
|
* |
Bank deposits of USD 30,421 (31 March 2019: USD 44,323) have been given as cash margin to banks for issuing bank guarantees to government authorities.
|
17
|
Short-term loans and advances
|
(Unsecured and considered good)
|
||||||||
To parties other than related parties
|
||||||||
Security deposits
|
|
37,376
|
|
40,479 | ||||
Prepaid expenses
|
|
2,652
|
|
3,378 | ||||
Advance for supply of goods and services
|
|
493,214
|
|
221,913 | ||||
Advance to doctors
|
|
26,339
|
|
14,513 | ||||
Advances to employees
|
|
396,399
|
|
99,368 | ||||
Advances to others
|
|
52,262
|
|
39,000 | ||||
|
|
|
|
|||||
|
1,008,242
|
|
|
418,651
|
|
|||
|
|
|
|
18
|
Other current assets
|
(Unsecured and considered good)
|
||||||||
Interest accrued on bank deposits
|
|
16,261
|
|
6,030 | ||||
Government grant receivable
|
|
492,567
|
|
309,455 | ||||
Unbilled revenue
|
|
3,786
|
|
27,472 | ||||
|
|
|
|
|||||
|
512,613
|
|
|
342,956
|
|
|||
|
|
|
|
10
|
Property, Plant & Equipment
|
Freehold
land |
Leasehold
land |
Buildings
|
Electrical
equipment |
Medical &
surgical equipments |
Furniture
and fixtures |
Vehicles
|
Office
equipment |
Computers
and accessories |
Total
|
|||||||||||||||||||||||||||||||
Gross block
|
||||||||||||||||||||||||||||||||||||||||
As at 1 April 2018
|
6,058,520 | 32,426 | 20,286,052 | 930,781 | 4,066,207 | 684,259 | 13,958 | 190,944 | 347,028 |
|
32,610,176
|
|
||||||||||||||||||||||||||||
Adjustments
|
— | — | — | — | — | — | — | — | — |
|
—
|
|
||||||||||||||||||||||||||||
Additions
|
— | — | 112,135 | 491 | 20,382 | 3,451 | — | 350 | 2,418 |
|
139,225
|
|
||||||||||||||||||||||||||||
Disposals
|
— | — | — | — | 13,390 | 284 | — | 89 | — |
|
13,763
|
|
||||||||||||||||||||||||||||
Forex Adjustment
|
(392,584 | ) | (2,101 | ) | (1,318,141 | ) | (60,329 | ) | (290,491 | ) | (45,009 | ) | (904 | ) | (12,560 | ) | (22,565 | ) |
|
(2,144,684
|
)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
As at 31 March 2019
|
5,665,936 | 30,325 | 19,080,046 | 870,943 | 3,809,487 | 642,984 | 13,054 | 178,824 | 326,881 |
|
30,618,480
|
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
As at 1 April 2019
|
|
5,665,936
|
|
|
30,325
|
|
|
19,080,046
|
|
|
870,943
|
|
|
3,809,487
|
|
|
642,984
|
|
|
13,054
|
|
|
178,824
|
|
|
326,881
|
|
|
30,618,480
|
|
||||||||||
Adjustment
|
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Additions
|
— | — | — | 16,981 | 52,856 | 1,683 | — | 1,750 | 1,651 | 74,921 | ||||||||||||||||||||||||||||||
Discard/Disposals
|
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Forex Adjustment
|
(434,327 | ) | (2,325 | ) | (1,462,597 | ) | (67,414 | ) | (294,045 | ) | (49,353 | ) | (1,001 | ) | (13,775 | ) | (25,121 | ) | (2,349,956 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
As at 31 March 2020
|
|
5,231,609
|
|
|
28,001
|
|
|
17,617,449
|
|
|
820,510
|
|
|
3,568,298
|
|
|
595,315
|
|
|
12,053
|
|
|
166,799
|
|
|
303,411
|
|
|
28,343,444
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Accumulated depreciation
|
||||||||||||||||||||||||||||||||||||||||
As at 1 April 2018
|
— | 3,588 | 1,339,858 | 239,065 | 741,386 | 254,169 | 7,055 | 95,186 | 236,580 | 2,916,887 | ||||||||||||||||||||||||||||||
Depreciation for the year
|
— | 1,156 | 316,919 | 92,589 | 287,994 | 57,194 | 1,485 | 10,054 | 43,809 | 811,200 | ||||||||||||||||||||||||||||||
Accumulated depreciation on disposals
|
— | — | — | — | 2,692 | 83 | — | 59 | — | 2,834 | ||||||||||||||||||||||||||||||
Forex Adjustment
|
— | (270 | ) | (97,089 | ) | (18,491 | ) | (62,668 | ) | (18,486 | ) | (505 | ) | (6,610 | ) | (16,749 | ) |
|
(220,869
|
)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
As at 31 March 2019
|
— | 4,474 | 1,559,688 | 313,163 | 969,404 | 292,960 | 8,035 | 98,688 | 263,640 | 3,510,052 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
As at 1 April 2019
|
|
—
|
|
|
4,474
|
|
|
1,559,688
|
|
|
313,163
|
|
|
969,404
|
|
|
292,960
|
|
|
8,035
|
|
|
98,688
|
|
|
263,640
|
|
|
3,510,052
|
|
||||||||||
Depreciation for the year
|
|
—
|
|
|
1,074
|
|
|
296,259
|
|
|
84,338
|
|
|
274,743
|
|
|
52,971
|
|
|
838
|
|
|
8,730
|
|
|
33,945
|
|
|
752,899
|
|
||||||||||
Accumulated depreciation on disposals
|
— | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Forex Adjustment
|
— | (384 | ) | (130,914 | ) | (27,238 | ) | (84,841 | ) | (24,487 | ) | (648 | ) | (7,900 | ) | (21,511 | ) |
|
(297,923
|
)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
As at 31 March 2020
|
|
—
|
|
|
5,164
|
|
|
1,725,033
|
|
|
370,263
|
|
|
1,159,306
|
|
|
321,444
|
|
|
8,225
|
|
|
99,519
|
|
|
276,075
|
|
|
3,965,028
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net block
|
||||||||||||||||||||||||||||||||||||||||
31 March 2019
|
5,665,936 | 25,851 | 17,520,358 | 557,779 | 2,840,084 | 350,024 | 5,019 | 80,135 | 63,240 | 27,108,428 | ||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||
31 March 2020
|
|
5,231,609
|
|
|
22,837
|
|
|
15,892,417
|
|
|
450,247
|
|
|
2,408,992
|
|
|
273,870
|
|
|
3,828
|
|
|
67,280
|
|
|
27,336
|
|
|
24,378,417
|
|
||||||||||
|
|
11
|
Intangible assets
|
Computer software
(internally generated platform/applications) |
Computer
software |
Trademark
|
Content
development |
Total
|
||||||||||||||||
Gross block
|
||||||||||||||||||||
As at 1 April 2018
|
2,206,079 | 495,707 | 246 | 468,139 | 3,170,171 | |||||||||||||||
Additions
|
1,203,852 | — | — | — | 1,203,852 | |||||||||||||||
Deletions
|
— | — | — | — | ||||||||||||||||
Forex Adjustment
|
(181,955 | ) | (32,121 | ) | (16 | ) | (30,335 | ) | (244,427 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
As at 31 March 2019
|
3,227,976 | 463,586 | 230 | 437,804 | 4,129,596 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
As at 1 April 2019
|
|
3,227,976
|
|
|
463,586
|
|
|
230
|
|
|
437,804
|
|
|
4,129,596
|
|
|||||
Additions (refer note)
|
|
663,573
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
663,573
|
|
|||||
Deletions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Forex Adjustment
|
|
(272,877
|
)
|
|
(35,537
|
)
|
|
(18
|
)
|
|
(33,560
|
)
|
|
(341,991
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
As at 31 March 2020
|
|
3,618,673
|
|
|
428,050
|
|
|
212
|
|
|
404,244
|
|
|
4,451,178
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Amortisation
|
||||||||||||||||||||
As at 1 April 2018
|
401,396 | 239,159 | 111 | 191,378 | 832,044 | |||||||||||||||
Amortisation for the year
|
219,398 | 61,881 | 48 | 90,493 | 371,820 | |||||||||||||||
Deletions
|
— | — | — | — | — | |||||||||||||||
Forex Adjustment
|
(33,118 | ) | (17,502 | ) | (9 | ) | (15,333 | ) | (65,962 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
As at 31 March 2019
|
587,676 | 283,538 | 150 | 266,538 | 1,137,902 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
As at 1 April 2019
|
|
587,676
|
|
|
283,538
|
|
|
150
|
|
|
266,538
|
|
|
1,137,902
|
|
|||||
Amortisation for the year
|
|
414,315
|
|
|
57,490
|
|
|
44
|
|
|
84,071
|
|
|
555,920
|
|
|||||
Deletions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Forex Adjustment
|
|
75,249
|
|
|
(79,225
|
)
|
|
(56
|
)
|
|
(104,503
|
)
|
|
(108,534
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
As at 31 March 2020
|
|
1,077,240
|
|
|
261,804
|
|
|
138
|
|
|
246,106
|
|
|
1,585,288
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net block
|
||||||||||||||||||||
31 March 2019
|
2,640,301 | 180,048 | 80 | 171,266 | 2,991,695 | |||||||||||||||
31 March 2020
|
|
2,541,433
|
|
|
166,246
|
|
|
74
|
|
|
158,137
|
|
|
2,865,890
|
|
19
|
Revenue from operations
|
Amount in USD
|
||||||||
31 March 2020
|
31 March 2019 | |||||||
Sale of services:
|
||||||||
Income from hospital services
|
|
4,534,912
|
|
4,909,053 | ||||
Income from training fees
|
|
—
|
|
17,622 | ||||
Income from digital dispensary consultancy
|
|
1,226,063
|
|
964,183 | ||||
Income from consultancy
|
|
—
|
|
10,448 | ||||
Sale of goods:
|
||||||||
Sale of pharmacy/ medicines
|
|
746,317
|
|
930,339 | ||||
Sale of digital dispensary (net of Sales return USD 545,714 (31 March 2019: 365,378))
|
|
2,191,804
|
|
21,510 | ||||
Other operating revenue:
|
||||||||
Income from government grant
|
|
256,771
|
|
352,077 | ||||
Miscellaneous income
|
|
101,477
|
|
15,751 | ||||
|
|
|
|
|||||
|
9,057,344
|
|
7,220,982 | |||||
|
|
|
|
19.1 |
During the year company has entered into revenue sharing arrangement, the contractual arrangement is on principal to principal basis for hospital at Bolpur, Sonamukhi, Malda, Jeypore & Mednipore. These hospitals were earlier operated by Company itself. The
non-refundable
deposit is recognised as revenue at time of entering into contract and include under income from hospital services.
|
19.2 |
Income from government grant represents interest and tax subsidy from government of Bihar under Bihar Industrial Investment Promotion Act, 2016. Interest subsidy is available to GHSPL Muzafarpur Healthcare LLP, GHSPL Bhaglpur Healtcare LLP & GHSPL Begusari Healthcare LLP on the term loan availed by the LLP from Allahabad Bank & State Industrial Development Bank of India.
|
20
|
Other income
|
Interest on bank deposits
|
|
6,994
|
|
9,956 | ||||
Interest on income tax refund
|
|
18,521
|
|
2,556 | ||||
Provision/ liability no longer required written back
|
|
2,109,763
|
|
41,727 | ||||
Miscellaneous income
|
|
868
|
|
2,966 | ||||
|
|
|
|
|||||
|
2,136,145
|
|
|
57,205
|
|
|||
|
|
|
|
21
|
Purchases
|
Amount in USD
|
||||||||
31 March 2020
|
31 March 2019 | |||||||
Medicines and medical consumables
|
898,589 | 1,094,256 | ||||||
Purchase of digital dispensary
|
63,122 | 144,826 | ||||||
|
|
|
|
|||||
961,711 | 1,239,083 | |||||||
|
|
|
|
22
|
Course operating expenses
|
Training cost/ professional fees
|
— | — | ||||||
Fooding and lodging
|
— | — | ||||||
Externship expenses
|
— | — | ||||||
|
|
|
|
|||||
— | — | |||||||
|
|
|
|
23
|
Changes in inventories
|
Inventory at the beginning of the year
|
|
237,285
|
|
204,744 | ||||
Inventory at the end of the year
|
|
275,905
|
|
255,410 | ||||
|
|
|
|
|||||
|
(38,620
|
)
|
|
(50,666
|
)
|
|||
|
|
|
|
24
|
Employee benefits expense
|
Salaries, wages and bonus
|
|
1,291,639
|
|
1,962,288 | ||||
Contribution to provident and other funds
|
|
110,974
|
|
178,045 | ||||
Staff welfare expenses
|
|
35,132
|
|
27,215 | ||||
|
|
|
|
|||||
|
1,437,745
|
|
|
2,167,548
|
|
|||
|
|
|
|
25
|
Finance costs
|
31 March 2020
|
31 March 2019 | |||||||
Interest expense on:
|
||||||||
- debenture
|
38,743 | 448,909 | ||||||
- term loan
|
1,918,935 | 1,825,196 | ||||||
- other loan
|
93,988 | 126,817 | ||||||
- Cash credit
|
144,621 | 130,832 | ||||||
- finance lease
|
— | 109 | ||||||
Other borrowing costs
|
530,982 | 517,794 | ||||||
|
|
|
|
|||||
|
2,727,269
|
|
|
3,049,659
|
|
|||
Less: Borrowing costs capita lised to qualifying assets
|
|
(577,095
|
)
|
|
(271,061
|
)
|
||
|
|
|
|
|||||
|
2,150,174
|
|
|
2,778,598
|
|
|||
|
|
|
|
25.1 |
Interest expenses has been calculated as per contractual term mentioned in sanction letter of Banks/ Financial Insitutions. The company is in discussion with Allahabad Bank for restructuring and other financial institutions for rescheduling of the repayment terms. The management beliefs that no penal interest will be charged by the banks & financial institution and hence no provision has been recognised in the statement of profit & loss.
|
26
|
Depreciation and amortisaton
|
Depreciation of property, plant and equipment (PPE
|
752,899 | 811,200 | ||||||
Amortisation of Goodwill
|
95,982 | — | ||||||
Amortisation of intangible assets
|
555,920 | 371,820 | ||||||
|
|
|
|
|||||
|
1,404,801
|
|
|
1,183,020
|
|
|||
|
|
|
|
27
|
Other expenses
|
31 March 2020
|
Amount in USD
31 March 2019
|
|||||||
Consumption of stores and spares |
|
6,445
|
|
46,321 | ||||
Housekeeping expenses |
|
95,406
|
|
146,309 | ||||
Assets/Receivable written off |
|
7,015
|
|
— | ||||
Power and fuel |
|
176,237
|
|
337,314 | ||||
Rates and taxes |
|
30,818
|
|
27,634 | ||||
Rent (refer note 36) | ||||||||
- equipments |
|
3,918
|
|
58,294 | ||||
- others |
|
94,755
|
|
150,103 | ||||
Patient food expenses |
|
68,707
|
|
108,387 | ||||
Professional fees: | ||||||||
- to doctors |
|
1,579,504
|
|
2,320,968 | ||||
- to others |
|
13,482
|
|
8,226 | ||||
Repairs to building |
|
72,581
|
|
52,990 | ||||
Repairs to surgical/medical equipment/machinery |
|
47,845
|
|
44,960 | ||||
Repairs to others |
|
8,222
|
|
12,425 | ||||
Payment to auditors * |
|
26,329
|
|
24,555 | ||||
Travelling and conveyance expenses |
|
168,930
|
|
325,064 | ||||
Advertisement and sales promotion |
|
231,583
|
|
422,016 | ||||
Testing expenses |
|
60,538
|
|
90,702 | ||||
Printing and stationery |
|
30,137
|
|
60,508 | ||||
Telephone and communication expenses |
|
60,786
|
|
44,474 | ||||
Miscellaneous expenses |
|
87,675
|
|
145,850 | ||||
|
|
|
|
|||||
|
2,870,913
|
|
|
4,427,102
|
|
|||
|
|
|
|
* |
Payment to auditors
|
As auditor | ||||||||
Statutory audit |
|
21,501
|
|
19,503 | ||||
Tax audit |
|
3,313
|
|
5,052 | ||||
Reimbursement of Expenses |
|
1,515
|
|
— | ||||
|
|
|
|
|||||
|
26,329
|
|
|
24,555
|
|
|||
|
|
|
|
28
|
Earnings/ (loss) per share
|
Amount in USD
|
||||||||
31 March 2020
|
31 March 2019
|
|||||||
Particulars
|
||||||||
(Loss) attributable to equity shareholders (a) | 2,383,964 | (4,010,368 | ) | |||||
Less: Dividend on cumulative compulsorily convertible preference shares and tax thereon (b) | 1,976,118 | 1,199,941 | ||||||
Net (loss) adjusted for the effects of dilutive potential equity shares for calculation of diluted EPS [(c) = (a) - (b)] | 407,846 | (5,210,308 | ) | |||||
Weighted average number of equity shares of face value of INR 10 each outstanding during the year (used for calculating Basic EPS) (d) | 492,904 | 492,904 | ||||||
Add: Effect of potential equity shares to be issued under Compulsory | 4,152,535 | 652,947 | ||||||
Convertible Preference Shares (e) | ||||||||
Weighted average number of equity shares of face value of INR 10 each outstanding during the year (used for calculating Diluted EPS) [(f) = (d) + (e)] | 4,645,439 | 1,145,851 | ||||||
Basic earnings per share of INR 10 each [(g)= (a)/(d)] |
|
4.84
|
|
|
(8.14
|
)
|
||
Diluted earnings per share of INR 10 each [(h) = (c)/(f)]** |
|
0.09
|
|
|
(8.14
|
)
|
** |
Considering the impact of weighted average number of potential equity shares on account of compulsorily convertible preference shares in computation of Diluted EPS for F.Y
2018-19,
the same becomes Anti-Dilutive. Accordingly Diluted EPS is equal to Basic EPS as shown above for the
F.Y.2018-19.
|
29
|
Contingent liability and commitments
|
31 March 2020
|
31 March 2019
|
|||||||
(to the extent not provided for) | ||||||||
(a) Claims against the company not acknowledged as debts | ||||||||
(i) Bank guarantee | 156,570 | 235,385 | ||||||
(ii) Claims not acknowledged as debts (in respect of compensation demanded by the patients/ their relatives for deficiency in service) | 106,777 | 115,642 | ||||||
(iii) Arrear dividends on cumulative convertible preference shares (net of tax) from the date of issue to balance sheet date | 1,107,958 | 1,199,941 | ||||||
(iv) Others claims against the company not acknowledged as debts | — | — | ||||||
- Income tax matters | 295,874 | 320,437 | ||||||
|
|
|
|
|||||
1,667,179 | 1,871,405 | |||||||
|
|
|
|
|||||
(b) Commitments: | ||||||||
(i) Estimated amount of contracts remaining to be executed on capital account and not provided for | 9,617 | 114,405 |
30
|
Deferred tax asset/ (liability)
|
Amount in USD
|
||||||||
31 March 2020
|
31 March 2019
|
|||||||
Deferred tax liability
|
||||||||
Difference between net book value of depreciable assets as per books and written down value as per Income tax Act, 1961 | (3,990,796 | ) | (4,301,893 | ) | ||||
|
|
|
|
|||||
Deferred tax asset
|
||||||||
Provision for employee benefits | 50,613 | 78,997 | ||||||
Losses carried forward in tax returns (including current year Business losses & Unabsorbed Depreciation) | 8,001,724 | 10,499,935 | ||||||
Provision for doubtful receivables | 113,084 | 70,389 | ||||||
Others | 595,529 | 78,550 | ||||||
|
|
|
|
|||||
8,760,951 | 10,727,871 | |||||||
|
|
|
|
|||||
Deferred tax asset/(liability) recognised (to the extent of deferred tax liability above) | — | — | ||||||
|
|
|
|
31
|
There are no Micro, Small & Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as 31 March 2020. The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) has been determined to the extent such parties have been identified on the basis of information available with the Company.
|
31 March 2020
|
31 March 2019
|
|||||||
(a) The principal amount and the interest due thereon remaining unpaid to micro and small suppliers at the end of each accounting year | ||||||||
- Principal
|
|
Nil
|
|
Nil | ||||
- Interest
|
|
Nil
|
|
Nil | ||||
(b) The amount of interest paid by the buyer in terms of section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year; |
|
Nil
|
|
Nil | ||||
(c) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under MSMED; |
|
Nil
|
|
Nil | ||||
(d) The amount of interest accrued and remaining unpaid at the end of each accounting year; |
|
Nil
|
|
Nil | ||||
(e) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under Section 23 of MSMED. |
|
Nil
|
|
Nil |
32
|
Employee benefits
|
Defined contribution plans
The Group makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident fund, which is a defined contribution plan. The Group has no obligations other than to make the specified contributions.
The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to Provident fund for the year aggregated to USD 84667 (previous year USD 82047).
Defined benefit plan
The group operates one post-employment defined benefit plan for gratuity. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive
one-half
month’s salary for each year of completed service at the time of retirement/exit. Refer Note 5.1.
|
Amount in USD
|
||||||||||
Sl.
No.
|
Particulars
|
31 March 2020
Gratuity
(unfunded) |
31 March 2019
Gratuity
(unfunded) |
|||||||
(i) |
Net Asset / (liability) recognised in Consolidated Balance Sheet as at the
|
|||||||||
Present value of defined obligation at year end | 75,724 | 69,968 | ||||||||
Fair value of plan assets at year end | ||||||||||
Net Asset / (liability) recognised in the consolidated balance sheet | (75,724 | ) | (69,968 | ) | ||||||
(ii) |
Components of employer expense
|
|||||||||
Current service costs | 19,071 | 26,864 | ||||||||
Interest costs | 4,559 | 6,589 | ||||||||
Actuarial loss/(gain) recognised | (6,118 | ) | (46,762 | ) | ||||||
Past service cost | — | 55 | ||||||||
Expense recognised in the Consolidated Statement of Profit and Loss The gratuity expenses have been recognised in ‘Employee benefits expense’ under note 24 | 17,511 | (13,254 | ) | |||||||
(iii) |
Change in defined benefit obligations
|
|||||||||
Obligation at beginning of the year | 63,773 | 88,530 | ||||||||
Service cost | 19,071 | 26,864 | ||||||||
Past service cost | — | 55 | ||||||||
Interest cost | 4,559 | 6,589 | ||||||||
Actuarial loss/(gain) recognised | (6,118 | ) | (46,762 | ) | ||||||
Benefits paid | — | — | ||||||||
Defined benefit obligation at end of the year
|
75,724 | 69,968 | ||||||||
(iv) |
Assumptions
|
|||||||||
Discount rate | 7.70 | % | 7.70 | % | ||||||
Salary increase | 6.5% to 10% | 6.5% to 10% | ||||||||
Mortality rate |
|
IALM 06-08
Ultimate |
|
|
IALM 06-08
Ultimate
|
|
||||
Withdrawal rate |
|
2.00% to 7.20%
p.a.
|
|
|
2.00% to 7.20%
p.a.
|
|
Amount in USD
|
||||||||||
Sl.
No.
|
Particulars
|
31 March 2020
Gratuity
(unfunded) |
31 March 2019
Gratuity
(unfunded) |
|||||||
(v) | The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotions and other relevant factors. | |||||||||
(vi) | Discount rate is based on the prevailing market yield of Indian Government securities as at the year end for the estimated term of the obligation. The calculation of the defined benefit obligation is sensitive to the mortality assumptions. |
Sl.
No |
Particulars
|
31 March
2020 |
31 March
2019 |
31 March
2018 |
31 March
2017 |
31 March
2016 |
||||||||||||||||
(vii) |
Experience history - Amount of current and previous four years
|
|||||||||||||||||||||
Defined benefit obligation at the end of the year |
|
75,724
|
|
69,968 | 88,530 | 71,529 | 48,956 | |||||||||||||||
Plan assets at the end of the year |
|
—
|
|
— | — | — | — | |||||||||||||||
Surplus/(deficit) |
|
(75,724
|
)
|
(69,968 | ) | (88,530 | ) | (71,529 | ) | (48,956 | ) | |||||||||||
Experience gain/(loss) adjustment on plan liabilities |
|
25,124
|
|
27,210 | 13,215 | 14,691 | 10,894 | |||||||||||||||
Actuarial (gain)/loss due to change in assumption |
|
(31,008
|
)
|
(32,283 | ) | (35,950 | ) | — | — | |||||||||||||
Experience (gain)/loss adjustment on plan assets |
|
—
|
|
— | — | — | — |
33
|
Disclosure under Section 186 of the Companies Act 2013
|
34
|
Minority interest
|
Amount in USD
|
||||||||||||||||
Name of the LLPs
|
Minority %
31 March 2020 |
Minority %
31 March 2019 |
31 March
2020 |
31 March
2019 |
||||||||||||
GHSPL BEGUSARAI Healthcare LLP
|
5 | % | 5 | % | 30,168 | 23,506 | ||||||||||
GHSPL BGLP Super Speciality Healthcare LLP
|
35 | % | 35 | % | 344,304 | 303,399 | ||||||||||
GHSPL FATEHPUR Super Speciality Healthcare LLP
|
35 | % | 35 | % | 37,148 | 37,148 | ||||||||||
GHSPL JEYPORE Healthcare LLP
|
35 | % | 35 | % | 396,836 | 409,385 | ||||||||||
GHSPL SAMBHAV KNJ Healthcare LLP
|
35 | % | 35 | % | 75,317 | 114,676 | ||||||||||
GHSPL MLD Super Speciality Healthcare LLP
|
22 | % | 22 | % | 90,740 | 44,578 | ||||||||||
GHSPL MUZF Super Speciality Healthcare LLP
|
38 | % | 38 | % | 453,144 | 476,402 | ||||||||||
GHSPL MDPR Super Speciality Healthcare LLP
|
2 | % | 2 | % | 58,753 | 54,513 | ||||||||||
GHSPL PRN Super Speciality Healthcare LLP
|
24 | % | 24 | % | 190,007 | 190,007 | ||||||||||
GHSPL BHNGAR Super Speciality Healthcare LLP
|
11 | % | 11 | % | 52,008 | 52,008 | ||||||||||
|
|
|
|
|||||||||||||
1,728,427 | 1,705,624 | |||||||||||||||
|
|
|
|
35
|
Related Party disclosures in accordance with Accounting Standard 18 prescribed under Section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014.
|
(a)
|
List of Related parties
|
(i)
|
Key management personnel
|
(ii)
|
Partner in Limited Liability Partnership firms
|
(iii)
|
Enterprise over which directors have significant influence
|
(iv)
|
Relative of key managerial personel
|
Amount in USD
|
||||||||||||||||||||||||||
Sl.
No.
|
Particulars
|
Key management
personnel and their relatives |
Enterprise over
which directors have significant influence |
Partners in LLP
|
||||||||||||||||||||||
2019-20
|
2018-19
|
2019-20
|
2018-19
|
2019-20
|
2018-19
|
|||||||||||||||||||||
1 Remuneration
|
||||||||||||||||||||||||||
Dr. Syed Sabahat Azim
|
65,271 | 70,257 | — | — | ||||||||||||||||||||||
Mrs. Richa Sana Azim
|
47,121 | 50,720 | — | — | ||||||||||||||||||||||
Gautam Chowdhury
|
52,379 | 56,380 | ||||||||||||||||||||||||
Mr. Ashutosh Kumar Shrivastava
|
— | 31,322 | ||||||||||||||||||||||||
2 Short-term borrowings (taken)
|
||||||||||||||||||||||||||
Kimberlite Social Infra Private Limited
|
— | — | 200,862 | — | ||||||||||||||||||||||
Mrs. Richa Sana Azim
|
— | 743 | ||||||||||||||||||||||||
Sampa Guha (relative of partner- Ratan Guha)
|
49,234 | 29,422 | ||||||||||||||||||||||||
3 Short-term borrowings- repaid
|
||||||||||||||||||||||||||
Kimberlite Social Infra Private Limited
|
— | — | 794 | — | ||||||||||||||||||||||
Mrs. Richa Sana Azim
|
6,212 | — | ||||||||||||||||||||||||
Gautam Chowdhury
|
9,443 | 11,858 | ||||||||||||||||||||||||
4 Contribution Received
|
||||||||||||||||||||||||||
Dr Mahmudul Hassan
|
22,289 | |||||||||||||||||||||||||
Sumaiyah Hassan
|
17,831 | |||||||||||||||||||||||||
5 Advance for supply of goods & services
|
||||||||||||||||||||||||||
Ragaba Mohapatro
|
1,380 |
Amount in USD
|
||||||||||||||||||||||||||
Sl.
No.
|
Particulars
|
Key management
personnel and their relatives |
Enterprise over
which directors have significant influence |
Partners in LLP
|
||||||||||||||||||||||
2019-20
|
2018-19
|
2019-20
|
2018-19
|
2019-20
|
2018-19
|
|||||||||||||||||||||
1 Remuneration payable
|
||||||||||||||||||||||||||
Dr. Syed Sabahat Azim
|
41,457 | 42,613 | — | — | ||||||||||||||||||||||
Mrs. Richa Sana Azim
|
50,208 | 27,553 | — | — | ||||||||||||||||||||||
Gautam Chowdhury
|
||||||||||||||||||||||||||
Mr. Ashutosh Kumar Shrivastava
|
||||||||||||||||||||||||||
2 Short-term borrowings
|
||||||||||||||||||||||||||
Kimberlite Social Infra Private Limited
|
— | — | 368,503 | 190,724 | ||||||||||||||||||||||
Richa Sana Azim
|
11,948 | 19,410 | ||||||||||||||||||||||||
Gautam Chowdhury
|
6,040 | 16,376 | ||||||||||||||||||||||||
Paresh Singhal
|
11,284 | 12,221 | ||||||||||||||||||||||||
Paresh Singhal(Ficus)
|
8,364 | 9,058 | ||||||||||||||||||||||||
Dr Mahesh Kumar
|
19,914 | 21,567 | ||||||||||||||||||||||||
Sampa Guha (relative of partner- Ratan Guha)
|
73,633 | 28,468 |
Amount in USD
|
||||||||||||||||||||||||||
Sl.
No.
|
Particulars
|
Key management
personnel and their relatives |
Enterprise over
which directors have significant influence |
Partners in LLP
|
||||||||||||||||||||||
2019-20
|
2018-19
|
2019-20
|
2018-19
|
2019-20
|
2018-19
|
|||||||||||||||||||||
3 Capital Contribution
|
||||||||||||||||||||||||||
Dr. Hemant Kumar
|
15,931 | 17,254 | ||||||||||||||||||||||||
Dr. Hemant Kumar (current account)
|
17,259 | 18,691 | ||||||||||||||||||||||||
Dr Mahesh Kumar
|
195,482 | 211,711 | ||||||||||||||||||||||||
Ragaba Mohapatro
|
185,861 | 201,291 | ||||||||||||||||||||||||
Ratan Guha
|
26,552 | 28,756 | ||||||||||||||||||||||||
Dr Mahmudul Hassan
|
172,585 | 186,913 | ||||||||||||||||||||||||
Heena Bazmi
|
19,914 | 21,567 | ||||||||||||||||||||||||
Sumaiyah Hassan
|
35,845 | 38,820 | ||||||||||||||||||||||||
Sambhav Learning Private Limited
|
238,964 | 258,803 | ||||||||||||||||||||||||
Jinia Dasgupta
|
39,827 | 43,134 | ||||||||||||||||||||||||
Dr. Parwez Khan
|
33,190 | 35,945 | ||||||||||||||||||||||||
Shahnaz Begum and others
|
46,465 | 50,323 | ||||||||||||||||||||||||
Good Deal Mercantile Pvt Ltd
|
169,758 | 183,851 | ||||||||||||||||||||||||
4 Advance for supply of goods & services
|
||||||||||||||||||||||||||
Ragaba Mohapatro
|
1,328 | — |
36
|
The Company has entered into lease agreements for office premises, residential for doctors accommodations, computers & accessories and medical equipment which are cancelable during the life of the agreement at the option of either party. Minimum lease payments charged during the year to Consolidated Statement of Profit and Loss aggregates USD 98,673
(2018-19:
USD 208,397).
|
37
|
Expenditure in foreign currency
|
31 March
2020 |
31 March
2019 |
|||||||
Interest expense on debenture (net of TDS)
|
38,743 | 448,909 |
38
|
Income in foreign currency
|
Income from Digital dispensary consultancy
|
2,038,117 | — |
39
|
On October 22, 2020, the Company has entered into a business combination agreement with UpHealth Holdings, Inc. The transaction is agreed at a purchase consideration of $171,000,000. Post the consummation of transaction, UpHealth Holdings, Inc. will hold 100% shares in the Company.
|
40
|
Segment information in accordance with Accounting Standard 17 prescribed under Section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014.
|
41
|
This note presents the reconciliation of (i) the consolidated balance sheets, consolidated statement of profit and loss and consolidated statement of cash flows of Glocal Healthcare Systems Private Limited (“Glocal” or the “Company”) as derived from the consolidated financial statements of the Company for the year ended 31 March 2019 and 31 March 2020, prepared in accordance with the accounting principles generally accepted in India (“Indian GAAP”),incorporated above in this document, to (ii) the consolidated balance sheets, consolidated statements of operations and statement of comprehensive income and loss and consolidated statement of cash flows of the Company prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with the U.S. GAAP accounting policies as set out below.
|
41.1
|
Accounting Policies
|
(a)
|
Revenue Recognition
|
(b)
|
Liabilities written back
|
(c)
|
Research and Development Expenses
|
(d)
|
Employee Benefit
|
(e)
|
Preference Shares
|
(f)
|
Business Combination
|
(g)
|
Income Taxes
|
(h)
|
Foreign Currency Translation
|
(i)
|
Comprehensive Income (Loss)
|
(j)
|
Cash and Cash Equivalents
|
(k)
|
Accounts Receivable and Allowance for Doubtful
|
(l)
|
Property and Equipment, net
|
(m)
|
Impairment or disposal of long-lived assets
|
(n)
|
Fair Value of Financial Instruments
|
• |
Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
|
• |
Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
|
• |
Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.
|
Particulars
|
31 March
2020
Indian GAAP
|
Revaluation
Reserve |
Deferred Tax
|
Goodwill
|
Classification
of Mezzanine Equity |
Others*
|
31 March
2020
US GAAP
|
|||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||
Current Assets
|
||||||||||||||||||||||||||||
Cash and cash equivalents
|
171,867 | — | — | — | — | (43,697 | ) | 128,170 | ||||||||||||||||||||
Restricted cash
|
— | — | — | — | — | 43,697 | 43,697 | |||||||||||||||||||||
Accounts Receivables, net of allowance
|
4,719,956 | — | — | — | — | — | 4,719,956 | |||||||||||||||||||||
Inventories
|
269,296 | — | — | — | — | — | 269,296 | |||||||||||||||||||||
Other current assets
|
1,520,855 | — | — | — | — | 22,837 | 1,543,692 | |||||||||||||||||||||
6,681,974 | — | — | — | — | 22,837 | 6,704,811 | ||||||||||||||||||||||
Property, Plant & Equipment (Net)
|
24,378,417 | (12,159,329 | ) | — | — | (22,837 | ) | 12,196,251 | ||||||||||||||||||||
Goodwill
|
459,982 | — | — | (459,982 | ) | — | — | — | ||||||||||||||||||||
Other Intangible Assets (Net)
|
2,865,890 | — | — | — | — | — | 2,865,890 | |||||||||||||||||||||
Capital work in progress
|
4,637,925 | — | — | — | — | — | 4,637,925 | |||||||||||||||||||||
Restricted cash
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Deferred Tax Assets
|
— | — | 3,036,053 | — | — | — | 3,036,053 | |||||||||||||||||||||
Other assets
|
1,145,687 | — | — | — | — | — | 1,145,687 | |||||||||||||||||||||
33,487,901 | (12,159,329 | ) | 3,036,053 | (459,982 | ) | — | (22,837 | ) | 23,881,806 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Assets
|
|
40,169,875
|
|
|
(12,159,329
|
)
|
|
3,036,053
|
|
|
(459,982
|
)
|
|
—
|
|
|
—
|
|
|
30,586,617
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Liabilities and Stockholders Equity
|
||||||||||||||||||||||||||||
Current Liabilities
|
||||||||||||||||||||||||||||
Trade Payables
|
1,471,145 | — | — | — | — | — | 1,471,145 | |||||||||||||||||||||
Accrued Liabilities
|
5,057,967 | — | — | — | — | 85,742 | 5,143,709 | |||||||||||||||||||||
Short-term borrowings
|
3,892,608 | — | — | — | — | — | 3,892,608 | |||||||||||||||||||||
Current portion of long-term borrowings
|
18,776,995 | — | — | — | — | — | 18,776,995 | |||||||||||||||||||||
Short-term provisions
|
7,651 | — | — | — | — | — | 7,651 | |||||||||||||||||||||
29,206,367 | — | — | — | — | 85,742 | 29,292,109 | ||||||||||||||||||||||
Long-term borrowings
|
1,578,912 | — | — | — | — | — | 1,578,912 | |||||||||||||||||||||
Long-term provisions
|
129,685 | — | — | — | — | — | 129,685 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities
|
30,914,964 | — | — | — | — | 85,742 | 31,000,706 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Mezzanine Equity
|
||||||||||||||||||||||||||||
Series A preferreds
|
— | — | — | — | 2,463,470 | — | 2,463,470 | |||||||||||||||||||||
Stockholders Equity
|
|
|||||||||||||||||||||||||||
Common Stock
|
104,371 | — | — | — | — | — | 104,371 | |||||||||||||||||||||
Preferred Stock
|
6,708,281 | — | — | — | (508,086 | ) | — | 6,200,194 | ||||||||||||||||||||
Additional
paid-in-capital
|
8,320,698 | — | — | (105,118 | ) | (1,955,383 | ) | — | 6,260,197 | |||||||||||||||||||
Revaluation Surplus
|
10,128,170 | (10,128,170 | ) | — | — | — | — | — | ||||||||||||||||||||
Retained Earnings
|
(15,158,441 | ) | — | 2,912,325 | (354,865 | ) | — | (92,331 | ) | (12,693,312 | ) | |||||||||||||||||
Foreign Currency Translation Reserve
|
(2,576,594 | ) | — | — | — | — | 6,589 | (2,570,005 | ) | |||||||||||||||||||
Total shareholders equity attributable to the Group
|
7,526,484 | (10,128,170 | ) | 2,912,325 | (459,982 | ) | (0 | ) | (85,742 | ) | (235,085 | ) | ||||||||||||||||
NonControlling Interest
|
1,728,427 | (2,031,159 | ) | 123,728 | — | — | — | (179,005 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Stockholders Equity
|
9,254,911 | (12,159,329 | ) | 3,036,053 | (459,982 | ) | (0 | ) | (85,742 | ) | (414,089 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities and stockholders equity
|
|
40,169,875
|
|
|
(12,159,329
|
)
|
|
3,036,053
|
|
|
(459,982
|
)
|
|
(0
|
)
|
|
—
|
|
|
30,586,617
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
Others include Lease classification and interest expense.
|
Particulars
|
31 March
2020
Indian GAAP
|
Deferred Tax
|
Goodwill
|
Others
|
31 March
2020
US GAAP
|
|||||||||||||||
Revenue
|
9,057,344 | — | — | — | 9,057,344 | |||||||||||||||
Cost of revenues
|
2,956,059 | — | — | — | 2,956,059 | |||||||||||||||
Gross Profit
|
6,101,285 | — | — | — | 6,101,285 | |||||||||||||||
Operating expenses
|
||||||||||||||||||||
Selling & Distribution expense
|
231,583 | — | — | — | 231,583 | |||||||||||||||
General & Administrative expense
|
2,275,690 | — | — | — | 2,275,690 | |||||||||||||||
Depreciation and amortisation
|
1,404,801 | — | (95,982 | ) | — | 1,308,820 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Operating Expenses
|
3,912,074 | — | (95,982 | ) | — | 3,816,092 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating Income
|
|
2,189,211
|
|
|
—
|
|
|
95,982
|
|
|
—
|
|
|
2,285,193
|
|
|||||
Other income
|
2,136,145 | — | — | — | 2,136,145 | |||||||||||||||
Interest expense
|
2,150,174 | — | 47,631 | 2,197,805 | ||||||||||||||||
Income before income tax
|
2,175,182 | — | 95,982 | (47,631 | ) | 2,223,533 | ||||||||||||||
Income tax expense
|
— | 1,468,328 | — | — | 1,468,328 | |||||||||||||||
Net Income
|
|
2,175,182
|
|
|
(1,468,328
|
)
|
|
95,982
|
|
|
(47,631
|
)
|
|
755,205
|
|
|||||
Net income attributable to non controlling interest
|
22,802 | (25,339 | ) | — | — | (2,536 | ) | |||||||||||||
Net income available to the owners of the parent
|
|
2,152,380
|
|
|
(1,442,990
|
)
|
|
95,982
|
|
|
(47,631
|
)
|
|
757,741
|
|
|||||
Net Income
|
2,152,380 | (1,442,990 | ) | 95,982 | (47,631 | ) | 757,741 | |||||||||||||
Other Comprehensive Income/(loss), net of tax
|
||||||||||||||||||||
Translation adjustments with no taxes effects
|
|
(668,436
|
)
|
6,589 | (661,846 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total other comprehensive income/(loss)
|
|
(668,436
|
)
|
|
—
|
|
|
—
|
|
|
6,589
|
|
|
(661,846
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Comprehensive Income
|
|
1,483,944
|
|
|
(1,442,990
|
)
|
|
95,982
|
|
|
(41,042
|
)
|
|
95,895
|
|
|||||
Comprehensive Income (loss) attributable to the
non-
controlling interest
|
— | — | — |
|
—
|
|
|
—
|
|
|||||||||||
Comprehensive Income attributable to the owners of the parent
|
|
1,483,944
|
|
|
(1,442,990
|
)
|
|
95,982
|
|
|
(41,042
|
)
|
|
95,895
|
|
Particulars
|
31 March
2020 Indian GAAP |
Others
|
31 March
2020
US GAAP
|
|||||||||
Net cash (used in) operating activities (A)
|
1,373,293 | — | 1,373,293 | |||||||||
Net cash (used in) investing activities (B)
|
(1,004,711 | ) | — | (1,004,711 | ) | |||||||
Net cash provided by financing activities (C)
|
(849,365 | ) | — | (849,365 | ) | |||||||
Net (decrease) in cash and cash equivalent (A+B+C)
|
|
(480,782
|
)
|
|
—
|
|
|
(480,782
|
)
|
|||
Cash and cash equivalents at the beginning of the year
|
592,684 | — | 592,684 | |||||||||
Cash and cash equivalents at the end of the year
|
|
111,902
|
|
|
—
|
|
|
111,902
|
|
Particulars
|
31 March
2019
Indian GAAP
|
Revaluation
Reserve |
Deferred Tax
|
Goodwill
|
Classification
of Mezzanine Equity |
Others*
|
31 March
2019
US GAAP
|
|||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||
Current Assets
|
||||||||||||||||||||||||||||
Cash and cash equivalents
|
621,199 | — | — | — | — | (58,701 | ) | 562,498 | ||||||||||||||||||||
Restricted Cash
|
— | — | — | — | — | 58,701 | 58,701 | |||||||||||||||||||||
Accounts Receivables, net of allowance
|
3,257,573 | — | — | — | — | — | 3,257,573 | |||||||||||||||||||||
Inventories
|
259,664 | — | — | — | — | — | 259,664 | |||||||||||||||||||||
Other current assets
|
761,607 | — | — | — | — | 25,851 | 787,458 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
4,900,043 | — | — | — | — | 25,851 | 4,925,894 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Property, Plant & Equipment (Net)
|
27,108,428 | (12,159,329 | ) | — | — | — | (25,851 | ) | 14,923,248 | |||||||||||||||||||
Goodwill
|
598,136 | — | — | (598,136 | ) | — | — | 0.00 | ||||||||||||||||||||
Other Intangible Assets (Net)
|
2,991,695 | — | — | — | — | — | 2,991,695 | |||||||||||||||||||||
Capital work in progress
|
4,390,896 | — | — | — | — | — | 4,390,896 | |||||||||||||||||||||
Deferred Tax Assets
|
— | — | 4,228,945 | — | — | — | 4,228,945 | |||||||||||||||||||||
Other assets
|
1,191,401 | — | — | — | — | — | 1,191,401 | |||||||||||||||||||||
36,280,556 | (12,159,329 | ) | 4,228,945 | (598,136 | ) | — | (25,851 | ) | 27,726,186 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Assets
|
|
41,180,599
|
|
|
(12,159,329
|
)
|
|
4,228,945
|
|
|
(598,136
|
)
|
|
—
|
|
|
—
|
|
|
32,652,080
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Liabilities and Stockholders Equity
|
||||||||||||||||||||||||||||
Current Liabilities
|
||||||||||||||||||||||||||||
Accounts payables
|
2,418,496 | — | — | — | — | — | 2,418,496 | |||||||||||||||||||||
Accrued Liabilities
|
4,281,517 | — | — | — | — | 43,252 | 4,324,769 | |||||||||||||||||||||
Short-term borrowings
|
3,943,193 | — | — | — | — | — | 3,943,193 | |||||||||||||||||||||
Current portion of long-term borrowings
|
9,619,832 | — | — | — | — | — | 9,619,832 | |||||||||||||||||||||
Short-term provisions
|
8,769 | — | — | — | — | — | 8,769 | |||||||||||||||||||||
20,271,806 | — | — | — | — | 43,252 | 20,315,058 | ||||||||||||||||||||||
Long-term borrowings
|
13,281,012 | 13,281,012 | ||||||||||||||||||||||||||
Long-term provisions
|
111,200 | — | — | — | — | — | 111,200 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities
|
33,664,018 | — | — | — | — | 43,252 | 33,707,270 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Mezzanine Equity
|
||||||||||||||||||||||||||||
Series A preferred shares
|
— | — | — | — | 2,463,470 | — | 2,463,470 | |||||||||||||||||||||
Stockholders Equity
|
||||||||||||||||||||||||||||
Common Stock
|
104,371 | — | — | — | — | — | 104,371 | |||||||||||||||||||||
Redeemable Preferred Stock
|
6,708,281 | — | — | — | (508,086 | ) | — | 6,200,194 | ||||||||||||||||||||
Additional
paid-in-capital
|
8,320,698 | — | — | (98,306 | ) | (1,955,383 | ) | — | 6,267,009 | |||||||||||||||||||
Revaluation Surplus
|
10,128,170 | (10,128,170 | ) | — | — | — | — | — | ||||||||||||||||||||
Retained Earnings
|
(17,542,405 | ) | 4,079,879 | (499,830 | ) | — | (44,700 | ) | (14,007,056 | ) | ||||||||||||||||||
Foreign Currency Translation Reserve
|
(1,908,158 | ) | — | — | — | — | 1,448 | (1,906,710 | ) | |||||||||||||||||||
Total shareholders equity attributable to the Group
|
5,810,956 | (10,128,170 | ) | 4,079,879 | (598,136 | ) | (0 | ) | (43,252 | ) | (878,722 | ) | ||||||||||||||||
Non Controlling Interest
|
1,705,624 | (2,031,159 | ) | 149,066 | — | — | — | (176,468 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Stockholders Equity
|
|
7,516,581
|
|
|
(12,159,329
|
)
|
|
4,228,945
|
|
|
(598,136
|
)
|
|
(0
|
)
|
|
(43,252
|
)
|
|
(1,055,190
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities and stockholders equity
|
|
41,180,599
|
|
|
(12,159,329
|
)
|
|
4,228,945
|
|
|
(598,136
|
)
|
|
(0
|
)
|
|
—
|
|
|
32,652,080
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
Others include Lease classification and interest expense.
|
Particulars
|
31 March
2019
Indian GAAP
|
Deferred Tax
|
Others
|
31 March
2019
US GAAP
|
||||||||||||
Revenue
|
7,220,982 | — | — | 7,220,982 | ||||||||||||
Cost of revenues
|
4,242,677 | — | — | 4,242,677 | ||||||||||||
Gross Profit
|
2,978,305 | — | — | 2,978,305 | ||||||||||||
Operating expenses
|
||||||||||||||||
Selling & Distribution expense
|
422,016 | — | — | 422,016 | ||||||||||||
General & Administrative expense
|
4,804,762 | — | — | 4,804,762 | ||||||||||||
Depreciation and amortisation
|
1,183,020 | — | — | 1,183,020 | ||||||||||||
Total Operating Expenses
|
6,409,798 | — | — | 6,409,798 | ||||||||||||
Operating Income
|
|
(3,431,494
|
)
|
|
—
|
|
|
—
|
|
|
(3,431,494
|
)
|
||||
Other income
|
57,205 | — | — | 57,205 | ||||||||||||
Interest expense
|
2,778,598 | — | 44,700 | 2,823,298 | ||||||||||||
Income before income tax
|
(6,152,886 | ) | — | (44,700 | ) | (6,197,587 | ) | |||||||||
Income tax expense
|
6,123 | (671,815 | ) | — | (665,691 | ) | ||||||||||
Net Income
|
|
(6,159,010
|
)
|
|
671,815
|
|
|
(44,700
|
)
|
|
(5,531,895
|
)
|
||||
Net income attributable to non controlling interest
|
(462,252 | ) | (11,914 | ) | — | (474,166 | ) | |||||||||
Net income available to the owners of the parent
|
|
(5,696,758
|
)
|
|
683,729
|
|
|
(44,700
|
)
|
|
(5,057,729
|
)
|
||||
Net Income
|
(5,696,758 | ) | 683,729 | (44,700 | ) | (5,057,729 | ) | |||||||||
Other Comprehensive Income/(loss), net of tax
|
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Translation adjustments with no tax effects
|
(903,872 | ) | — | 1,448 | (902,424 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other comprehensive income/(loss)
|
|
(903,872
|
)
|
|
—
|
|
|
1,448
|
|
|
(902,424
|
)
|
||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive Income
|
|
(6,600,630
|
)
|
|
683,729
|
|
|
(43,252
|
)
|
|
(5,960,153
|
)
|
||||
Comprehensive Income (loss) attributable to the
non-controlling
interest
|
||||||||||||||||
Comprehensive Income attributable to the owners of the parent
|
|
(6,600,630
|
)
|
|
683,729
|
|
|
(43,252
|
)
|
|
(5,960,153
|
)
|
Particulars
|
31 March
2019 Indian GAAP |
Other
|
31 March
2019
US GAAP
|
|||||||||
Net cash (used in) operating activities (A)
|
1,828,874 | — | 1,828,874 | |||||||||
Net cash (used in) investing activities (B)
|
(2,248,945 | ) | — | (2,248,945 | ) | |||||||
Net cash provided by financing activities (C)
|
873,495 | — | 873,495 | |||||||||
Net (decrease) in cash and cash equivalent (A+B+C)
|
|
453,425
|
|
|
—
|
|
|
453,425
|
|
|||
Cash and cash equivalents at the beginning of the year
|
139,258 | — | 139,258 | |||||||||
Cash and cash equivalents at the end of the year
|
592,683 | — | 592,683 |
A.
|
Revaluation Reserve
|
B.
|
Recognition of Deferred Taxes
|
C.
|
Goodwill
|
D.
|
Classification of Preference Shares
|
E.
|
Lease classification
|
F.
|
Restricted cash classification
|
G.
|
Interest Expense
|
42
|
Estimation of uncertainties relating to the global health pandemic from
COVID-19
:
|
43
|
disclosure.
|
For
D.K. CHHAJER
& CO.
|
For and on behalf of the Board of Directors of | |
Chartered Accountants
|
||
Firm’s Registration Number:304138E |
Tapan K Mukhopadhyay
Partner
|
Dr. Syed Sabahat Azim
Director
|
Richa Sana Azim
Director
|
||
Membership No.: 017483 | DIN: 03122895 | DIN: 02609003 | ||
Place: Kolkata
Date: 30th December 2020
|
For and on behalf of the Board of Directors of
Glocal Healthcare Systems Private Limited
|
Dr. Syed Sabahat Azim
|
Richa Sana Azim
|
|||
Director
|
Director
|
|||
DIN: 03122895 | DIN: 02609003 |
Amount in USD
|
||||||||||||
For nine months ended | For nine months ended | |||||||||||
Note
|
31 December 2020
|
31 December 2019 | ||||||||||
Unaudited | Unaudited | |||||||||||
Revenue from operations
|
|
19
|
|
|
5,757,140
|
|
4,831,992 | |||||
Other income
|
|
20
|
|
|
3,009,732
|
|
196,297 | |||||
|
|
|
|
|||||||||
Total revenue
|
|
8,766,872
|
|
5,028,289 | ||||||||
|
|
|
|
|||||||||
Expenses
|
||||||||||||
Purchase
|
|
21
|
|
|
714,850
|
|
788,659 | |||||
Course operating expenses
|
|
22
|
|
|
—
|
|
— | |||||
Changes in inventories
|
|
23
|
|
|
(33,543
|
)
|
9,013 | |||||
Employee benefits expense
|
|
24
|
|
|
901,658
|
|
1,149,475 | |||||
Finance costs
|
|
25
|
|
|
1,743,487
|
|
1,641,864 | |||||
Depreciation and amortisation
|
|
26
|
|
|
994,403
|
|
1,083,670 | |||||
Other expenses
|
|
27
|
|
|
1,993,736
|
|
2,283,134 | |||||
|
|
|
|
|||||||||
Total expenses
|
|
6,314,592
|
|
6,955,815 | ||||||||
|
|
|
|
|||||||||
Profit/(Loss) before tax
|
|
2,452,280
|
|
(1,927,526 | ) | |||||||
|
|
|
|
|||||||||
Income tax expense
|
||||||||||||
Current tax
|
|
—
|
|
— | ||||||||
Deferred tax
|
|
—
|
|
— | ||||||||
|
|
|
|
|||||||||
Profit/(Loss) after tax (before adjustment of minority interest)
|
|
2,452,280
|
|
(1,927,526 | ) | |||||||
|
|
|
|
|||||||||
Minority Interest
|
|
58,906
|
|
(131,621 | ) | |||||||
|
|
|
|
|||||||||
Profit/(Loss) for the year
|
|
2,393,374
|
|
(1,795,906 | ) | |||||||
|
|
|
|
|||||||||
Earnings/(loss) per equity share [nominal value of share INR 10 each (Previous year INR 10 each)]
|
|
28
|
|
|||||||||
Basic (not annualised)
|
|
4.86
|
|
(3.64 | ) | |||||||
Diluted (not annualised)
|
|
0.52
|
|
(3.64 | ) | |||||||
Significant accounting policies
|
|
1
|
|
For and on behalf of the Board of Directors of | ||
Glocal Healthcare Systems Private Limited
|
Dr. Syed Sabahat Azim
|
Richa Sana Azim
|
|||
Director
|
Director
|
|||
DIN: 03122895 | DIN: 02609003 |
Amount in USD
|
||||||||
31 December 2020
|
31 December 2019 | |||||||
Unaudited | Unaudited | |||||||
A. Cash flow from operating activities
|
||||||||
Profit/(Loss) before tax
|
|
2,452,280
|
|
(1,927,526 | ) | |||
Adjustments for :
|
||||||||
Depreciation and amortisation
|
|
994,403
|
|
1,083,670 | ||||
Provisions/liabilities no longer required written back
|
|
(3,009,179
|
)
|
(174,239 | ) | |||
Interest income
|
|
—
|
|
(19,053 | ) | |||
Finance costs
|
|
1,743,487
|
|
1,641,864 | ||||
|
|
|
|
|||||
|
(271,289
|
)
|
2,532,241 | |||||
Operating cash flow before working capital changes
|
|
2,180,991
|
|
604,715 | ||||
Adjustments for:
|
||||||||
(Increase) in trade and other receivables/advances
|
|
(583,634
|
)
|
2,008,538 | ||||
Decrease in inventories
|
|
(42,208
|
)
|
17,433 | ||||
Increase in trade payables, other liabilities and provisions
|
|
538,010
|
|
840,354 | ||||
|
|
|
|
|||||
|
(87,832
|
)
|
2,866,325 | |||||
Cash (used in) operations
|
|
2,093,160
|
|
3,471,040 | ||||
Income taxes refund (net)
|
|
(40,561
|
)
|
(9,472 | ) | |||
|
|
|
|
|||||
Net cash (used in) operating activities (A)
|
|
2,052,599
|
|
3,461,567 | ||||
B.
Cash flow from investing activities
|
||||||||
Purchase or construction of property, plant and equipment and intangible assets and movement in capital work in progress
|
|
(159,238
|
)
|
(392,294 | ) | |||
Proceeds from sale of property, plant & equipment
|
|
—
|
|
— | ||||
Bank deposits (having original maturity of more than 3 months)
|
|
(6,740
|
)
|
(486,194 | ) | |||
Interest received
|
|
(547
|
)
|
19,170 | ||||
|
|
|
|
|||||
Net cash (used in) investing activities (B)
|
|
(166,524
|
)
|
(859,318 | ) | |||
C. Cash flow from financing activities
|
||||||||
Proceeds from borrowings (net)
|
|
(1,479,939
|
)
|
(2,416,024 | ) | |||
Finance costs paid
|
|
(158,354
|
)
|
(730,133 | ) | |||
|
|
|
|
|||||
Net cash provided by financing activities (C)
|
|
(1,638,293
|
)
|
(3,146,157 | ) | |||
|
|
|
|
|||||
Net (decrease) in cash and cash equivalent (A+B+C)
|
|
247,782
|
|
(543,907 | ) | |||
|
|
|
|
|||||
Cash and cash equivalents at the beginning of the year
|
|
48,777
|
|
592,684 | ||||
|
|
|
|
|||||
Cash and cash equivalents at the end of the year (Refer Note (i) below)
|
|
296,559
|
|
48,777 | ||||
|
|
|
|
|||||
Notes:
|
||||||||
(i) Components of cash and cash equivalent (refer note 16)
|
||||||||
Cash on hand
|
|
216,092
|
|
39,578 | ||||
Balance with banks
|
||||||||
On current accounts
|
|
79,098
|
|
8,847 | ||||
On deposit accounts (with original maturity of 3 months or less)
|
|
1,369
|
|
352 | ||||
|
|
|
|
|||||
|
296,559
|
|
48,777 |
(ii) |
The above cash flow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard 3 on Cash Flow Statement (AS 3 ) specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.
|
Dr. Syed Sabahat Azim
|
Richa Sana Azim
|
|
Director
|
Director
|
|
DIN: 03122895
|
DIN: 02609003
|
S.No
|
Name of the subsidiaries
|
Country of
incorporation |
Percentage of ownership
interest as at 31 December 2020 |
Percentage of ownership
interest as at 31 December
2019
|
||||
1
|
GHSPL Multispeciality Hospital & Trauma Centre Private Limited
|
India |
100%
|
100% | ||||
2
|
Ficus Health-Infra Private Limited
|
India |
100%
|
100% |
S.No
|
Name of the subsidiaries
|
Country of
incorporation |
Percentage of ownership
interest as at 31 December 2020 |
Percentage of ownership
interest as at 31 December 2019 |
||||||||
Capital
contribution
ratio
|
Profit
sharing
ratio
|
Capital
contribution ratio |
Profit
sharing ratio |
|||||||||
1 |
GHSPL AMRO Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
2 |
GHSPL BEGUSARAI Healthcare LLP
|
India |
95.00%
|
95.00%
|
95.00% | 95.00% | ||||||
3 |
GHSPL BGLP Super Speciality Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% | ||||||
4 |
GHSPL FATEHPUR Super Speciality Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% | ||||||
5 |
GHSPL JEYPORE Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% | ||||||
6 |
GHSPL SAMBHAV KNJ Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% | ||||||
7 |
GHSPL MLD Super Speciality Healthcare LLP
|
India |
63.00%
|
78.00%
|
63.00% | 78.00% | ||||||
8 |
GHSPL MUZF Super Speciality Healthcare LLP
|
India |
42.00%
|
62.00%
|
42.00% | 62.00% | ||||||
9 |
GHSPL SAMBHAV RP Healthcare LLP
|
India |
83.33%
|
96.00%
|
83.33% | 96.00% | ||||||
10 |
GHSPL SAMBHAV BSP Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% | ||||||
11 |
GHSPL JAUNPUR Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
12 |
GHSPL JSPR Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
13 |
GHSPL BEM Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% |
S.No
|
Name of the subsidiaries
|
Country of
incorporation |
Percentage of ownership
interest as at 31 December 2020 |
Percentage of ownership
interest as at 31 December 2019 |
||||||||
Capital
contribution
ratio
|
Profit
sharing
ratio
|
Capital
contribution ratio |
Profit
sharing ratio |
|||||||||
14 |
GHSPL AMBEDKAR SCAN Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
15 |
GHSPL ARA Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
16 |
GHSPL ASNSL Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
17 |
GHSPL FRBD Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
18 |
GHSPL MDPR Super Speciality Healthcare LLP
|
India |
92.00%
|
98.00%
|
92.00% | 98.00% | ||||||
19 |
GHSPL SHRNPR Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
20 |
GHSPL SJPR Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
21 |
GHSPL STP Super Speciality Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% | ||||||
22 |
GHSPL SW Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
23 |
GHSPL DGHR Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
24 |
GHSPL DNBD Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
25 |
GHSPL GYA Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
26 |
GHSPL PRN Super Speciality Healthcare LLP
|
India |
60.00%
|
76.00%
|
60.00% | 76.00% | ||||||
27 |
GHSPL DARBHANGA Super Speciality Healthcare LLP
|
India |
50.00%
|
65.00%
|
50.00% | 65.00% | ||||||
28 |
GHSPL BALASORE Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
29 |
GHSPL BASTI Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
30 |
GHSPL VARANASI Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
31 |
GHSPL PURI Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
32 |
GHSPL CNTA Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
33 |
GHSPL JHRSD Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
34 |
GHSPL ALIGR Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
35 |
GHSPL BHNGAR Super Speciality Healthcare LLP
|
India |
56.00%
|
89.00%
|
56.00% | 89.00% | ||||||
36 |
GHSPL MRBD Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
37 |
GHSPL SMBL Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% |
S.No
|
Name of the subsidiaries
|
Country of
incorporation |
Percentage of ownership
interest as at 31 December 2020 |
Percentage of ownership
interest as at 31 December 2019 |
||||||||
Capital
contribution
ratio
|
Profit
sharing
ratio
|
Capital
contribution ratio |
Profit
sharing ratio |
|||||||||
38 |
GHSPL KNPR Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
39 |
GHSPL Patna Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% | ||||||
40 |
GHSPL Dhubri Super Speciality Healthcare LLP
|
India |
100.00%
|
100.00%
|
100.00% | 100.00% |
1
|
Significant accounting policies
|
(a)
|
Basis of preparation of consolidated financial statements:
|
(b)
|
Principles of consolidation
|
(c)
|
Use of estimates
|
(d)
|
Current–non-current
classification
|
(e)
|
Revenue recognition
|
(f)
|
Liabilities Written back
|
(g)
|
Property, plant and equipment(PPE)
|
(h)
|
Depreciation
|
Building
|
60 years | |||
Electrical Equipment
|
10 years | |||
Medical & Surgical Equipment
|
13 years | |||
Furniture & Fixtures
|
10 years | |||
Vehicles
|
10 years | |||
Office Equipment
|
5 Years | |||
Computers and accessories
|
3 Years |
(i)
|
Intangible assets
|
(j)
|
Amortisation
|
(k)
|
Government grants
|
(l)
|
Impairment of property, plant & equipment and intangible assets
|
(m)
|
Inventories
|
(n)
|
Foreign currency transaction
|
(o)
|
Operating leases
|
(p)
|
Investments
|
(q)
|
Employee benefits
|
(r)
|
Taxation
|
(s)
|
Provisions and contingent liabilities
|
(t)
|
Earnings/(loss) per share
|
(u)
|
Discount on issue of debentures
|
(v)
|
Cash and cash equivalents
|
(w)
|
Cash flow statement
|
(x)
|
Going Concern
|
2
|
Share capital
|
Amount in USD
|
||||||||||||||||
31 December 2020
|
31 March 2020
|
|||||||||||||||
Number of
shares |
Amount
|
Number of
shares |
Amount
|
|||||||||||||
Authorised
|
||||||||||||||||
Equity shares of INR 10 each
|
|
13,500,000
|
|
|
2,075,515
|
|
|
13,500,000
|
|
|
2,075,515
|
|
||||
Preference shares of INR 100 each
|
|
5,000,000
|
|
|
7,049,949
|
|
|
5,000,000
|
|
|
7,687,092
|
|
||||
Preference shares of Re. 1 each
|
|
3,200,000
|
|
|
45,120
|
|
|
3,200,000
|
|
|
49,197
|
|
||||
|
|
|
|
|
|
|
|
|||||||||
|
21,700,000
|
|
|
9,170,583
|
|
|
21,700,000
|
|
|
9,811,805
|
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Issued, subscribed and paid up
|
||||||||||||||||
Equity Shares
|
||||||||||||||||
Equity shares of INR 10 each
|
|
492,904
|
|
|
104,371
|
|
|
492,904
|
|
|
104,371
|
|
||||
Preferred Stock
|
||||||||||||||||
0.001% Compulsorily Convertible Cumulative Preference Shares—Series A of INR 100 each
|
|
240,777
|
|
|
508,086
|
|
|
240,777
|
|
|
508,086
|
|
||||
0.001% Compulsorily Convertible Cumulative Preference Shares—Series C of INR 100 each
|
|
254,936
|
|
|
406,102
|
|
|
254,936
|
|
|
406,102
|
|
||||
0.001% Compulsorily Convertible Cumulative Preference Shares—Series C1 of INR 100 each
|
|
157,234
|
|
|
243,565
|
|
|
157,234
|
|
|
243,565
|
|
||||
8% Compulsorily Convertible Cumulative Preference Shares of INR 100 each
|
|
3,499,588
|
|
|
5,550,528
|
|
|
3,499,588
|
|
|
5,550,528
|
|
||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
|
4,645,439
|
|
|
6,812,652
|
|
|
4,645,439
|
|
|
6,812,652
|
|
||||
|
|
|
|
|
|
|
|
a)
|
Reconciliation of the shares outstanding at the beginning and at the end of the period:
|
b)
|
Shares held by holding company:
|
c)
|
Details of shareholders holding more than 5% are as follows
|
d)
|
Rights, preferences and restrictions in respect of each class of shares including restrictions on the distribution of dividends and the repayment of capital:
|
3
|
Reserves and surplus
|
31 December
2020 |
31 March
2020 |
|||||||
Securities premium account
|
8,320,698 | 8,320,698 | ||||||
Revaluation surplus
|
10,128,170 | 10,128,170 | ||||||
General reserve
|
331,361 | 331,361 | ||||||
Foreign Currency Translation reserve
|
(2,289,772 | ) | (2,576,594 | ) | ||||
Surplus in Statement of Profit and Loss
|
||||||||
At the commencement of the period (1st April)
|
(15,489,802 | ) | (17,873,766 | ) | ||||
Add: Profit/(Loss) for the period
|
2,393,374 | 2,383,964 | ||||||
|
|
|
|
|||||
Balance as at the end of the period
|
|
(13,096,428
|
)
|
|
(15,489,802
|
)
|
||
|
|
|
|
|||||
Total reserves and surplus
|
|
3,394,029
|
|
|
713,832
|
|
||
|
|
|
|
4
|
Long-term borrowings
|
Amount in USD
|
||||||||||||||||||||
Non-current
portion
|
Current portion*
|
|||||||||||||||||||
Secured/
unsecured |
31 December
2020 |
31 March
2020 |
31 December
2020 |
31 March
2020 |
||||||||||||||||
204,540 (previous year: 204,540) 13.55%
non-convertible
debentures of INR 1,000 each
|
Secured | — | — | — | 2,715,433 | |||||||||||||||
Less: Discount on issue of debenture to the extent not written off or adjusted
|
— | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
|
—
|
|
|
—
|
|
|
—
|
|
|
2,715,433
|
|
|||||||||
Term loans from Banks
|
Secured | — | — | 13,019,207 | 12,630,603 | |||||||||||||||
Term loan from Small Industries Development Bank of India
|
Secured | 515,531 | 561,155 | 119,084 | 107,534 | |||||||||||||||
Term loan from National Skill Development Corporation
|
Secured | 363,730 | 695,997 | 1,793,564 | 1,396,354 | |||||||||||||||
Term loan from Caspian Impact Investments Private Limited
|
Unsecured | — | — | 1,369,060 | 1,327,580 | |||||||||||||||
Term loan from Blacksoil capital Private Limited
|
secured | 193,327 | — | 217,493 | 362,333 | |||||||||||||||
Equipment loan
|
Secured | 167,300 | 321,760 | 427,475 | 237,157 | |||||||||||||||
|
|
|||||||||||||||||||
|
1,239,889
|
|
|
1,578,912
|
|
|
16,945,884
|
|
|
18,776,995
|
|
|||||||||
|
|
* |
Amount disclosed under Other current liabilities - Note 8
|
(a)
|
Secured
non-convertible
debenture
|
(i) |
The Company had issued 13.55% redeemable
non-convertible
debenture of face value of INR 1,000 each aggregating to INR 204,540,000 (USD 2,715,433) at a discount of 0.95% on face value on 19 March 2016 to Essential Capital Consortium BV on private placement basis. These debentures are redeemable at par in two equal instalments of INR 102,270,000 (USD 1,478,574) each on 5 May 2019 and 5 November 2019 and in case put option is exercised by debenture holder, the total balance of INR 204,540,000 (USD 287,172) has to be repaid on any date not earlier than 11 February 2019. Interest is payable semi-annually at the rate of 13.55% per annum (net of withholding tax) on interest payment dates or earlier in case upon the exercise of the put option (interest payment starting from 5 May 2016 and ending on 5 November 2019 and in case put option is exercised, starting from 5 May 2016 and ending on 11 February 2019 ) as per Mortgage Cum Debenture Trust Deed dated 4 February 2016.
|
In view of contribution of company in the field of medicine especially during the COVID situation, USAID has decided to approve grant by paying off its debts towards Essential Capital Consortium (ECC). The grant has been approved and charged satisfaction has been filed on 13th June 2020.The company has written back the debenture of INR 204,540,000 (USD 2,799,716) and interest accrued and due on debenture of INR 13,712,945 (USD 187,701)under other income.
|
(ii) |
These debentures are secured by way of a second ranking and continuing charge by way of registered mortgage on the;
|
(a) |
immovable secured properties i.e rights in relation to;
|
(i) |
piece and parcel of garden land at Sonamukhi (District: Bankura) together with all buildings, constructions and plant and machinery erected thereon, both present and future.
|
(ii) |
piece and parcel of land at Bolpur (District: Birbhum) together with all buildings, constructions and plant and machinery erected thereon, both present and future.
|
(iii) |
piece and parcel of land at Behrampore (District: Murshidabad) together with all buildings, constructions and plant and machinery erected thereon, both present and future.
|
(iv) |
rooftop of
one-storied
building, ground floor stalls and rear vacant land at Dubrajpur (District: Birbhum) together with all buildings, constructions and plant and machinery erected thereon, both present and future
|
(v) |
office space together with all constructions and plant and machinery erected thereon at Ecospace, New Town Rajarhat (Kolkata)
|
(b) |
movable assets in relation to hospitals at Sonamukhi (District: Bankura), Dubrajpur (District: Birbhum), Behrampur (District: Bankura), Bolpur (District: Birbhum) and head office at Ecospace, New Town Rajarhat (Kolkata).
|
(b)
|
Term loans from Allahabad Bank
|
(i) |
Term loan from Allahabad Bank is secured by;
|
(ii) |
Interest on the above Term
Loan-I,
II & III carries an interest of 1-year MCLR plus 3.10% p.a. at monthly rests and is payable as and when due. And Term Loan IV and V carries an interest of 1-year MCLR plus 4.10% p.a. at monthly rests and is payable as and when due.
|
(iii) |
The Company has been disputing the EMIs being deducted by Allahabad bank since 2017 in respect to hospital projects that have not achieved COD especially as the disbursal also started late. The Bank and the Company are entering into a restructuring proposal to resolve this issue. The Techno Economic viability report with positive recommendation has been submitted by Dun & Bradstreet which was appointed by bank to examine and report on the viability and Independent Credit Rating has been given by the approved rating agency. It is expected that the restructuring process will be completed in 2021. During this time the loan has been classified by the Bank as technical npa pending closure of restructuring process.
|
(c)
|
Term loan from Small Industries Development Bank of India (SIDBI)
|
(i) |
Term loan from SIDBI is secured by :
|
(ii) |
The term loan have been sanctioned for INR 66,500,000 (USD 882,841) for setting up of hospital and purchase of medical instruments and surgical equipment at Beguasarai, Bihar and is repayable in 96 monthly instalments after a moratorium of 2 years from the date of first disbursement of loan. Tentative start date is 10 April 2017 and tentative last instalment date is 10 March 2025.
|
(iii) |
Above term loan carries an interest of SIDBI’s Prime Lending Rate (PLR) plus 1.50%, at monthly rests and is payable as and when applied.
|
(d)
|
Term loan from National Skill Development Corporation
|
(i) |
Term loan from National Skill Development Corporation is secured by:
|
(ii) |
The rate of interest being charged is simple interest of 6% p.a. payable on a quarterly basis after the interest-free moratorium period of two years from the date of first disbursement of the loan.
|
(iii) |
The principal and interest is overdue as on 30th December 2020.
|
(e)
|
Term loan from Caspian Impact Investments Pvt. Ltd.
|
(i) |
Term loan from Caspian Impact Investments Pvt. Ltd. is unsecured and other terms are:
|
(f)
|
Term loan from Blacksoil Capital Private Limited
|
Term |
loan from Black Soil Private Limited is unsecured and other terms are:
|
(g)
|
Loan from Hero Fincorp
|
(i) |
Term loan amounting to
Nil
|
(ii) |
The term loan has been sanctioned for INR 70,000,000 (USD 929,306) as working capital loan & INR 60,000,000 (USD 796,548) as term loan for capex requirements- production & expansion of digital dispensary business and takeover of existing term loan from SIDBI & IIFL respectively.
|
(iii) |
Above term loan is carries an interest of Hero Fincorp Prime Lending Rate @ 13% p.a. at monthly rests
|
(h)
|
Overdue payment of loan
|
Particulars
|
Principal
Amount |
Interest
Amount |
Period
|
|||||||
Allahabad Bank Loan
|
||||||||||
TL-1
|
1,979,263 | 391,485 |
1. Principal Amount due upto December 2020
2. Interest amount due upto December 2020
|
|||||||
TL-2
|
1,336,147 | 264,765 | ||||||||
TL-3
|
2,366,672 | 573,124 | 1. Principal Amount due upto December 2020 | |||||||
TL-4
|
2,539,829 | 657,246 |
1. Principal Amount due upto December 2020
2. Interest amount due upto December 2020
|
|||||||
TL-5
|
5,686,335 | 1,391,224 |
1. Principal Amount due upto December 2020
2. Interest amount due upto December 2020
|
|||||||
National Skill Development Corporation (NSDC)
|
1,082,148 | 460,282 | 1. Principal Amount due upto December 2020 | |||||||
|
|
|
|
|||||||
Total
|
|
14,990,393
|
|
|
3,738,126
|
|
||||
|
|
|
|
5 Provisions
|
Amount in USD
|
Long-term
|
Short-term
|
|||||||||||||||
31 December
2020
|
31 March
2020
|
31 December
2020
|
31 March
2020
|
|||||||||||||
Provision for employee benefits
|
||||||||||||||||
Gratuity
|
|
94,856
|
|
|
78,161
|
|
|
3,425
|
|
3,322 | ||||||
Compensated absences
|
|
63,697
|
|
|
51,524
|
|
|
2,547
|
|
2,471 | ||||||
|
|
|
|
|
|
|
|
|||||||||
|
158,553
|
|
|
129,685
|
|
|
5,972
|
|
5,793 | |||||||
|
|
|
|
|
|
|
|
|||||||||
Other provisions
|
||||||||||||||||
Provision for Income Tax
|
— | — | — | 1,859 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
—
|
|
|
—
|
|
|
—
|
|
1,859 | |||||||
|
|
|
|
|
|
|
|
|||||||||
|
158,553
|
|
|
129,685
|
|
|
5,972
|
|
7,651 | |||||||
|
|
|
|
|
|
|
|
6
|
Short-term borrowings
|
31 December
2020
|
31 March
2020
|
|||||||
Cash credit facilities from bank (secured)
|
|
1,035,788
|
|
1,117,699 | ||||
Unsecured loan
|
||||||||
- loan from Hero Fincorp Ltd
|
|
958,151
|
|
929,306 | ||||
- loan from related party
|
|
362,679
|
|
373,962 | ||||
- loan from directors
|
|
20,942
|
|
20,312 | ||||
- loan from others
|
|
1,452,602
|
|
1,451,329 | ||||
|
|
|
|
|||||
|
3,830,163
|
|
3,892,608 | |||||
|
|
|
|
6.1 |
Cash credit facilities from Allahabad Bank has been sanctioned with a limit of INR 50,000,000 (USD 663,790) for working capital requirement of the five existing operational hospitals of the Company with a margin of 25% and is secured by first and exclusive charge of hypothecation of all the current assets of the five units and administrative office of the Company (both present and future), further, secured by (along with bank guarantee) second charge on land and building, plant and machineries and other fixed assets of the five existing operational hospitals under the Company’s direct ownership (both present and future). The cash credit facilities carry an interest rate of one year MCLR plus 3.10% p.a. computed on a monthly basis on the actual amount utilised and are repayable as and when due.
|
6.2 |
Interest free loan taken from directors and related parties are repayable on demand.
|
6.3 |
a. Loan taken from others is repayable on demand.
|
6.4
|
Loan from Hero Fincorp
|
(i) |
Term loan is secured by:
|
(ii) |
The term loan has been sanctioned for INR 70,000,000 (USD 929,306) as working capital loan & INR 60,000,000 (USD 862,678) as term loan for capex requirements- production & expansion of digital dispensary business and takeover of existing term loan from SIDBI & IIFL respectively. The term loan facility for takeover of loan from SIDBI & IIFL has not been availed and hence got expired. So the charge created against immovable property is still lying with SIDBI.
|
(iii) |
Above term loan carries an interest of Hero Fincorp Prime Lending Rate @ 13% p.a. at monthly rests
|
(iv) |
As per circular
DOR.No.BP.BC.47/21.04.048/2019-20
dated March 27, 2020 regulatory measures were announced by RBI to mitigate the burden of debt servicing brought about by disruptions on account of
|
COVID-19
pandemic by granting a moratorium of three months on payment of all instalments falling due between March 1, 2020 and May 31, 2020. Further, this relief was extended till August 31, 2020 and this package has been taken up the company and installments has been rescheduled accordingly.
|
7
|
Trade payables
|
31 December 2020
|
31 March 2020
|
|||||||
Total outstanding dues of micro enterprises and small enterprises
|
|
—
|
|
— | ||||
Total outstanding dues of creditors other than micro enterprises and small enterprises (Net of Advances for goods)
|
|
1,037,888
|
|
1,471,145 | ||||
|
|
|
|
|||||
|
1,037,888
|
|
1,471,145 | |||||
|
|
|
|
8
|
Other current liabilities
|
31 December 2020
|
31 March 2020
|
|||||||
Current maturities of long-term debts (refer note 4)
|
|
16,945,884
|
|
18,776,995 | ||||
Interest accrued and due on term loans
|
|
4,019,143
|
|
2,275,228 | ||||
Interest accrued but not due on loan
|
|
100,238
|
|
— | ||||
Interest accrued and due on cash credit
|
|
256,787
|
|
145,101 | ||||
Interest accrued and due on equipment loan
|
|
33,592
|
|
32,465 | ||||
Interest accrued and due on other loan
|
|
277,995
|
|
118,523 | ||||
Interest accrued but not due on debentures
|
|
—
|
|
— | ||||
Interest accrued but and due on debentures
|
|
—
|
|
182,050 | ||||
Creditors for capital goods (Net of Capital Advances)
|
|
—
|
|
178,446 | ||||
Employee benefits payable
|
|
596,325
|
|
539,903 | ||||
Temporary Book Overdraft
|
|
3,732
|
|
— | ||||
Advance from TPA & Customers
|
|
445,367
|
|
431,960 | ||||
Partner’s Current A/c
|
|
17,794
|
|
17,259 | ||||
Statutory dues payable
|
||||||||
Provident fund
|
|
346,879
|
|
274,585 | ||||
Professional tax
|
|
15,027
|
|
12,484 | ||||
Employee state insurance payable
|
|
188,519
|
|
166,695 | ||||
Tax deducted at source payable
|
|
289,960
|
|
327,555 | ||||
Goods and services tax payable
|
|
45,163
|
|
88,504 | ||||
Unearned revenue
|
|
135,504
|
|
131,424 | ||||
Advance from patients and others
|
|
13,675
|
|
7,220 | ||||
Other liabilities/ payables
|
|
137,154
|
|
128,565 | ||||
|
|
|
|
|||||
|
23,868,737
|
|
23,834,963 | |||||
|
|
|
|
8.1
|
i. Major clients of the company are ESIC, PSU’s and various other government departments. There has been major delay in receipt of payment from their side which is creating challenges for the company to meet its operational expenses which includes statutory obligations also.
|
8.2
|
Advance receipt of INR 30 mm from S.S Earth Moving Mining was for setup of dispensary setup in their mining area. But no space was allocated to us by them, hence setup is not done.
|
8.3
|
Advance include amount received from African medical supply for supply of DD setup but due to COVID outbreak same could not be fulfilled.
|
8.4
|
Regarding interest accrued and due with respect to the term loan taken from Allahabad bank, the company has been disputing the EMIs being deducted by the bank since 2017 in respect to hospital projects, that have not achieved COD especially as the disbursal also started late. The Bank and the company are entering into a restructuring proposal to resolve this issue. The Techno Economic viability report with positive recommendation has been submitted by Dun & Bradstreet which was appointed by bank to examine and report on the viability and Independent Credit Rating has been given by the approved rating agency. It is expected that the restructuring process will be completed in 2021. During this time the loan has been classified by the Bank as technical NPA pending closure of restructuring process. As the account has been declared technical NPA by the bank so no interest has been charged by the bank but following the concept of mercantile system of accounting interest on term loan from Allahabad Bank and interest on cash credit limit has been calculated and charged in expenses. This interest has been classified as Interest accrued and due under other current liabilities.
|
9
|
Goodwill
|
31 December 2020
|
31 March 2020
|
|||||||
Opening balance
|
|
459,982
|
|
598,136 | ||||
Amortisation of Goodwill
|
|
(70,285
|
)
|
(95,982 | ) | |||
Forex Adjustment
|
|
13,187
|
|
(42,172 | ) | |||
|
|
|
|
|||||
Closing balance
|
|
402,884
|
|
459,982 | ||||
|
|
|
|
12
|
Long-term loans and advances
|
31 December 2020
|
31 March 2020
|
|||||||
(Unsecured and considered good)
|
||||||||
To parties other than related parties | ||||||||
(a) Capital advances (net of Creditors for Capital goods)
|
|
417,032
|
|
544,996 | ||||
(b) Security deposits
|
|
170,885
|
|
166,558 | ||||
|
|
|
|
|||||
|
587,917
|
|
711,553 | |||||
(c) Other loans and advances | ||||||||
TDS receivables
|
|
455,927
|
|
413,507 | ||||
|
|
|
|
|||||
|
455,927
|
|
413,507 | |||||
|
|
|
|
|||||
|
1,043,844
|
|
1,125,061 | |||||
|
|
|
|
13
|
Other
non-current
assets
|
31 December 2020
|
31 March 2020
|
|||||||
(Unsecured and considered good)
|
||||||||
Bank deposits (due to mature after 12 months from the reporting date) [refer note 16]*
|
|
42,707
|
|
19,289 | ||||
Balance with government authorities
|
|
682
|
|
661 | ||||
Interest accrued on bank deposits
|
|
—
|
|
41 | ||||
Interest accrued on electricity deposits
|
|
655
|
|
636 | ||||
|
|
|
|
|||||
|
44,044
|
|
20,626 | |||||
|
|
|
|
14
|
Inventories
|
(Valued at lower of cost and net realisable value)
|
||||||||
Stock of digital dispensary, medicine and medical consumables
|
|
307,629
|
|
265,330 | ||||
Stores and spares
|
|
3,875
|
|
3,966 | ||||
|
|
|
|
|||||
|
311,504
|
|
269,296 | |||||
|
|
|
|
15
|
Trade receivables
|
(a) Unsecured and considered good
|
|
5,912,534
|
|
4,719,956 | ||||
(b) Doubtful
|
|
(448,440
|
)
|
434,940 | ||||
Less: Provision for doubtful receivables
|
|
448,440
|
|
(434,940 | ) | |||
|
|
|
|
|||||
|
5,912,534
|
|
4,719,956 | |||||
Other receivables | ||||||||
(a) Unsecured, considered good
|
— | |||||||
— | ||||||||
|
|
|
|
|||||
|
—
|
|
||||||
|
|
|
|
16
|
Cash and bank balances
|
31 December 2020
|
31 March 2020
|
|||||||
Cash and cash equivalents
|
||||||||
Cash on hand
|
|
216,092
|
|
32,083 | ||||
Balance with banks:
|
— | |||||||
On current accounts
|
|
79,098
|
|
71,853 | ||||
On deposit accounts (with original maturity of 3 months or less)
|
|
1,369
|
|
7,965 | ||||
|
|
|
|
|||||
|
296,558
|
|
111,901 | |||||
Other bank balances:
|
— | |||||||
Deposits in banks with maturity of more than 3 months but less than 12 months*
|
|
45,851
|
|
59,965 | ||||
|
|
|
|
|||||
|
342,409
|
|
171,867 | |||||
|
|
|
|
*Bank |
deposits of USD 13,688 as on 31 December 2020 ( 31 March 2020—USD 13,276) have been pledged with Black Soil as security for term loan
|
*Bank |
deposits of USD 31,365 as on 31 December 2020 ( 31 March 2020- USD 30,421) have been given as cash margin to banks for issuing bank guarantees to government authorities.
|
17
|
Short-term loans and advances
|
(Unsecured and considered good)
|
||||||||
To parties other than related parties
|
||||||||
Security deposits
|
|
39,379
|
|
37,376 | ||||
Prepaid expenses
|
|
1,483
|
|
2,652 | ||||
Advance for supply of goods and services
|
|
73,245
|
|
493,214 | ||||
Advance to doctors
|
|
—
|
|
26,339 | ||||
Advances to employees
|
|
549,456
|
|
396,399 | ||||
Advances to others
|
|
62,106
|
|
52,262 | ||||
|
|
|
|
|||||
|
725,669
|
|
1,008,242 | |||||
|
|
|
|
18
|
Other current assets
|
(Unsecured and considered good)
|
||||||||
Interest accrued on bank deposits
|
|
16,807
|
|
16,261 | ||||
Government grant receivable
|
|
707,500
|
|
492,567 | ||||
Unbilled revenue
|
|
3,903
|
|
3,786 | ||||
|
|
|
|
|||||
|
728,210
|
|
512,613 | |||||
|
|
|
|
Particulars
|
WDV as on 31.12.2020
|
WDV as on 31.03.2020
|
||||||
Freehold land
|
5,393,991 | 5,231,609 | ||||||
Leasehold land
|
22,747 | 22,837 | ||||||
Buildings
|
16,169,070 | 15,892,417 | ||||||
Electrical equipment
|
405,390 | 450,247 | ||||||
Medical & surgical equipment
|
2,304,044 | 2,408,993 | ||||||
Furniture and fixtures
|
243,973 | 273,870 | ||||||
Vehicles
|
3,280 | 3,828 | ||||||
Office equipment
|
64,599 | 67,280 | ||||||
Computers and accessories
|
17,675 | 27,336 | ||||||
|
|
|
|
|||||
Total
|
|
24,624,769
|
|
|
24,378,417
|
|
||
|
|
|
|
Particulars
|
WDV as on 31.12.2020
|
WDV as on 31.03.2020
|
||||||
Computer software (internally generated platform/applications)
|
2,553,133 | 2,541,433 | ||||||
Computer software
|
114,403 | 166,246 | ||||||
Trademark
|
33 | 74 | ||||||
Content development
|
79,687 | 158,137 | ||||||
|
|
|
|
|||||
Total
|
|
2,747,256
|
|
|
2,865,890
|
|
||
|
|
|
|
19
|
Revenue from operations
|
Amount in USD
|
||||||||||
31 December 2020
|
31 December 2019 | |||||||||
Sale of services: | ||||||||||
Income from hospital services |
|
3,923,554
|
|
3,442,155 | ||||||
Income from digital dispensary consultancy |
|
979,116
|
|
885,709 | ||||||
Sale of goods:
|
||||||||||
Sale of pharmacy/ medicines |
|
581,675
|
|
613,423 | ||||||
Sale of digital dispensary (net of Sales return :Nil (31 December 2019: USD 530,802 ))
|
|
—
|
|
(381,022 | ) | |||||
Other operating revenue:
|
||||||||||
Income from government grant* |
|
188,028
|
|
213,028 | ||||||
Miscellaneous income |
|
84,767
|
|
58,699 | ||||||
|
|
|
|
|||||||
|
5,757,140
|
|
|
4,831,992
|
|
|||||
|
|
|
|
19.1 |
The company has entered into revenue sharing arrangement, the contractual arrangement is on principal to principal basis for hospital at Bolpur, Sonamukhi, Malda, Jeypore & Mednipore. These hospitals were earlier operated by Company itself. Reveue sharing arrangement is included within Income from Hospital Services.
|
19.2 |
Income from government grant represents interest and tax subsidy from government of Bihar under Bihar Industrial Investment Promotion Act, 2016. Interest subsidy is available to GHSPL Muzafarpur Healthcare LLP, GHSPL Bhaglpur Healtcare LLP & GHSPL Begusari Healthcare LLP on the term loan availed by the LLP from Allahabad Bank & State Industrial Development Bank of India.
|
20
|
Other income
|
Interest on income tax refund
|
|
—
|
|
19,053 | ||||
Provision/ liability no longer required written back (N
|
|
3,009,179
|
|
174,239 | ||||
Miscellaneous income
|
|
553
|
|
3,004 | ||||
|
|
|
|
|||||
|
3,009,732
|
|
|
196,297
|
|
|||
|
|
|
|
20.1 |
On March 19, 2016 company has issued 13.55%
Non-convertible
Debentures worth INR 204,540,000 (USD 2,715,433) to Essential Consortium Capital but in view of the contribution of company in the field of medicine, especially during the COVID situation, USAID has decided to approve grants by paying off its debts towards Essential Capital Consortium(ECC). Hence, provision /liability no longer required includes write off Debentures, Interest thereon and liability towards ECC worth INR 223,673,406 (USD 3,014,824)
|
21
|
Purchases
|
Medicines and medical consumables |
|
692,497
|
|
723,745 | ||||
Purchase of digital dispensary |
|
22,353
|
|
64,912 | ||||
|
|
|
|
|||||
|
714,850
|
|
|
788,659
|
|
|||
|
|
|
|
22
|
Course operating expenses
|
Training cost/ professional fees |
|
—
|
|
— | ||||
Food and lodging |
|
—
|
|
— | ||||
Externship expenses |
|
—
|
|
— | ||||
|
|
|
|
|||||
|
—
|
|
— | |||||
|
|
|
|
23
|
Changes in inventories
|
Inventory at the beginning of the year |
|
269,385
|
|
244,108 | ||||
Inventory at the end of the year |
|
302,928
|
|
235,094 | ||||
|
|
|
|
|||||
|
(33,543
|
)
|
|
9,013
|
|
|||
|
|
|
|
24
|
Employee benefits expense
|
Salaries, wages and bonus |
|
799,744
|
|
1,069,157 | ||||
Contribution to provident and other funds |
|
90,672
|
|
54,943 | ||||
Staff welfare expenses |
|
11,242
|
|
25,375 | ||||
|
|
|
|
|||||
|
901,658
|
|
|
1,149,475
|
|
|||
|
|
|
|
25
|
Finance costs
|
Interest expense on: | ||||||||
- debenture
|
|
—
|
|
39,857 | ||||
- term loan
|
|
1,693,351
|
|
1,472,201 | ||||
- other loan
|
|
210,416
|
|
244,643 | ||||
- equipment loan
|
|
49,701
|
|
60,436 | ||||
- Cash credit
|
|
102,055
|
|
103,366 | ||||
Unsecured loan
|
|
150,856
|
|
144,226 | ||||
Other borrowing costs |
|
80
|
|
23,064 | ||||
|
|
|
|
|||||
|
2,206,457
|
|
|
2,087,794
|
|
|||
Less: Borrowing costs capitalised to qualifying assets |
|
(462,970
|
)
|
|
(445,930
|
)
|
||
|
|
|
|
|||||
|
1,743,487
|
|
|
1,641,864
|
|
|||
|
|
|
|
25.1 |
Interest expenses as been calculated as per contractual term mentioned in sanction letter of Banks/ Financial Institutions. The company is in discussion with Allahabad Bank for restructuring and other financial institutions for rescheduling of the repayment terms. The management beliefs that no penal interest will be charged by the banks & financial institution and hence no provision has been recognised in the statement of profit & loss.
|
26
|
Depreciation and amortisaton
|
Depreciation of property, plant and equipment (PPE) |
|
527,556
|
|
580,685 | ||||
Amortisation of Goodwill |
|
70,285
|
|
74,056 | ||||
Amortisation of intangible assets |
|
396,562
|
|
428,929 | ||||
|
|
|
|
|||||
|
994,403
|
|
|
1,083,670
|
|
|||
|
|
|
|
Consumption of stores and spares |
|
9,914
|
|
1,827 | ||||
Share of O&M Partner |
|
160,850
|
|
— | ||||
Housekeeping expenses |
|
60,585
|
|
83,212 | ||||
Power and fuel |
|
103,320
|
|
186,882 | ||||
Rates and taxes |
|
12,241
|
|
18,054 | ||||
Rent (refer note 36) | ||||||||
- equipment |
|
2,667
|
|
5,111 | ||||
- others |
|
55,311
|
|
76,300 | ||||
Patient food expenses |
|
41,634
|
|
56,404 | ||||
Professional fees: | ||||||||
- to doctors |
|
1,110,138
|
|
1,222,559 | ||||
- to others |
|
8,447
|
|
29,112 | ||||
Repairs to building |
|
49,077
|
|
63,415 | ||||
Repairs to surgical/medical equipment/machinery |
|
19,508
|
|
35,362 | ||||
Repairs to others |
|
6,447
|
|
5,823 | ||||
Payment to auditors |
|
18,196
|
|
14,873 | ||||
Travelling and conveyance expenses |
|
102,767
|
|
156,770 | ||||
Advertisement and sales promotion |
|
106,732
|
|
253,094 | ||||
Testing expenses |
|
71,034
|
|
56,980 | ||||
Printing and stationery |
|
20,352
|
|
32,006 | ||||
Telephone and communication expenses |
|
26,224
|
|
51,386 | ||||
Miscellaneous expenses |
|
77,189
|
|
73,173 | ||||
Less: Capitalisation for internally generated software |
|
(68,898
|
)
|
(139,207 | ) | |||
|
|
|
|
|||||
|
1,993,736
|
|
2,283,134 | |||||
|
|
|
|
28
|
Earnings/ (loss) per share
|
31 December
2020 |
31 December
2019 |
|||||||
Particulars
|
||||||||
Profit/(Loss) attributable to equity shareholders (a) | 2,393,374 | (1,795,906 | ) | |||||
Less: Dividend on cumulative compulsorily convertible preference shares and tax thereon (b) | 2,037,454 | 903,956 | ||||||
Net profit/(loss) adjusted for the effects of dilutive potential equity shares for calculation of diluted EPS [(c) = (a)—(b)] | 355,920 | (2,699,861 | ) | |||||
Weighted average number of equity shares of face value of INR 10 each outstanding during the year (used for calculating Basic EPS) (d) | 492,904 | 492,904 | ||||||
Add: Effect of potential equity shares to be issued under Compulsory Convertible Preference Shares (e)* | 4,152,535 | 652,947 | ||||||
Weighted average number of equity shares of face value of INR 10 each outstanding during the year (used for calculating Diluted EPS) [(f) = (d) + (e)] | 4,645,439 | 1,145,851 | ||||||
Basic earnings per share of INR 10 each [(g)= (a)/(d)] (not annualised) |
|
4.86
|
|
|
(3.64
|
)
|
||
Diluted earnings per share of INR 10 each [(h) = (c)/(f)] (not annualised)** |
|
0.52
|
|
|
(3.64
|
)
|
29
|
Minority interest
|
Amount in USD
|
||||||||||||||||
Name of the LLPs
|
Minority %
31 December 2020 |
Minority%
31 March 2020 |
31 December
2020 |
31 March 2020
|
||||||||||||
GHSPL BEGUSARAI Healthcare LLP
|
5 | % | 5 | % | 40,264 | 30,168 | ||||||||||
GHSPL BGLP Super Speciality Healthcare LLP
|
35 | % | 35 | % | 347,441 | 344,304 | ||||||||||
GHSPL FATEHPUR Super Speciality Healthcare LLP
|
35 | % | 35 | % | 37,148 | 37,148 | ||||||||||
GHSPL JEYPORE Healthcare LLP
|
35 | % | 35 | % | 349,164 | 396,836 | ||||||||||
GHSPL SAMBHAV KNJ Healthcare LLP
|
35 | % | 35 | % | 110,098 | 75,317 | ||||||||||
GHSPL MLD Super Speciality Healthcare LLP
|
22 | % | 22 | % | 121,579 | 90,740 | ||||||||||
GHSPL MUZF Super Speciality Healthcare LLP
|
38 | % | 38 | % | 479,589 | 453,144 | ||||||||||
GHSPL MDPR Super Speciality Healthcare LLP
|
2 | % | 2 | % | 60,034 | 58,753 | ||||||||||
GHSPL PRN Super Speciality Healthcare LLP
|
24 | % | 24 | % | 190,007 | 190,007 | ||||||||||
GHSPL BHNGAR Super Speciality Healthcare
LLP |
11 | % | 11 | % | 52,008 | 52,008 | ||||||||||
|
|
|
|
|||||||||||||
|
1,787,333
|
|
|
1,728,427
|
|
|||||||||||
|
|
|
|
30
|
On October 22, 2020, the Company has entered into a business combination agreement with UpHealth Holdings, Inc. The transaction is agreed at a purchase consideration of $171 million. Post the consummation of transaction, UpHealth Holdings, Inc. will hold 100% shares in the Company.
|
31. |
This note presents the reconciliation of (i) the unaudited interim consolidated balance sheets, unaudited interim consolidated statement of profit and loss and unaudited interim consolidated statement of cash flows of Glocal Healthcare Systems Private Limited (“Glocal” or the “Company”) as derived from the unaudited interim consolidated financial statements of the Company for the nine months ended 31 December 2019 and 31 December 2020, prepared in accordance with the accounting principles generally accepted in India (“Indian GAAP”),incorporated above in this document, to (ii) the unaudited interim consolidated balance sheets, unaudited interim consolidated statements of operations and unaudited statement of comprehensive income and loss and unaudited consolidated statement of cash flows of the Company prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with the U.S. GAAP accounting policies as set out below.
|
31.1
|
Accounting Policies
|
(a)
|
Revenue Recognition
|
(b)
|
Liabilities written back
|
(c)
|
Research and Development Expenses
|
(d)
|
Employee Benefit
|
(e)
|
Preference Shares
|
(f)
|
Business Combination
|
(g)
|
Income Taxes
|
(h)
|
Foreign Currency Translation
|
(i)
|
Comprehensive Income (Loss)
|
(j)
|
Cash and Cash Equivalents
|
(k)
|
Accounts Receivable and Allowance for Doubtful
|
(l)
|
Property and Equipment, net
|
(m)
|
Impairment or disposal of long-lived assets
|
(n)
|
Fair Value of Financial Instruments
|
• |
Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
|
• |
Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
|
• |
Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.
|
Particulars
|
31 December
2020
Indian GAAP
|
Revaluation
Reserve |
Deferred Tax
|
Goodwill
|
Classification
of Mezzanine Equity |
Others*
|
31 December
2020
US GAAP
|
|||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||
Current Assets
|
||||||||||||||||||||||||||||
Cash and cash equivalents
|
342,409 | — | — | — | — | (45,053 | ) | 297,356 | ||||||||||||||||||||
Restricted cash
|
— | — | — | — | — | 45,053 | 45,053 | |||||||||||||||||||||
Accounts Receivables, net of allowance
|
5,912,534 | — | — | — | — | — | 5,912,534 | |||||||||||||||||||||
Inventories
|
311,504 | — | — | — | — | — | 311,504 | |||||||||||||||||||||
Other current assets
|
1,453,879 | — | — | — | — | 22,747 | 1,476,626 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
8,020,326 | — | — | — | — | 22,747 | 8,043,073 | ||||||||||||||||||||||
Property, Plant & Equipment (Net)
|
24,624,769 | (12,159,329 | ) | — | — | (22,747 | ) | 12,442,693 | ||||||||||||||||||||
Goodwill
|
402,884 | — | — | (402,884 | ) | — | — | — | ||||||||||||||||||||
Other Intangible Assets (Net)
|
2,747,256 | — | — | — | — | — | 2,747,256 | |||||||||||||||||||||
Capital work in progress
|
5,252,093 | — | — | — | — | — | 5,252,093 | |||||||||||||||||||||
Restricted cash
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Deferred Tax Assets
|
— | — | 3,855,318 | — | — | — | 3,855,318 | |||||||||||||||||||||
Other assets
|
1,087,888 | — | — | — | — | — | 1,087,888 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
34,114,889 | (12,159,329 | ) | 3,855,318 | (402,884 | ) | — | (22,747 | ) | 25,385,249 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Assets
|
|
42,135,215
|
|
|
(12,159,329
|
)
|
|
3,855,318
|
|
|
(402,884
|
)
|
|
—
|
|
|
—
|
|
|
33,428,322
|
|
|||||||
Liabilities and Stockholders
Equity |
|
|||||||||||||||||||||||||||
Current Liabilities
|
||||||||||||||||||||||||||||
Accounts payables
|
1,037,888 | — | — | — | — | — | 1,037,888 | |||||||||||||||||||||
Accrued Liabilities
|
6,922,853 | — | — | — | — | 123,824 | 7,046,677 | |||||||||||||||||||||
Short-term borrowings
|
3,830,163 | — | — | — | — | — | 3,830,163 | |||||||||||||||||||||
Current portion of long- term borrowings
|
16,945,884 | — | — | — | — | — | 16,945,884 | |||||||||||||||||||||
Short-term provisions
|
5,972 | — | — | — | — | — | 5,972 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
28,742,760 | — | — | — | — | 123,824 | 28,866,584 | ||||||||||||||||||||||
Long-term borrowings
|
1,239,889 | — | — | — | — | — | 1,239,889 | |||||||||||||||||||||
Long-term provisions
|
158,553 | — | — | — | — | — | 158,553 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities
|
30,141,202 | — | — | — | — | 123,824 | 30,265,026 | |||||||||||||||||||||
Mezzanine Equity
|
||||||||||||||||||||||||||||
Series A preferred shares
|
— | — | — | — | 2,463,470 | — | 2,463,470 | |||||||||||||||||||||
Stockholders Equity
|
||||||||||||||||||||||||||||
Common Stock
|
104,371 | — | — | — | — | — | 104,371 | |||||||||||||||||||||
Money received against share warrant
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Preferred Stock
|
6,708,281 | — | — | — | (508,086 | ) | — | 6,200,194 | ||||||||||||||||||||
Additional
paid-in-capital
|
8,320,698 | — | — | (105,118 | ) | (1,955,383 | ) | — | 6,260,197 | |||||||||||||||||||
Revaluation Surplus
|
10,128,170 | (10,128,170 | ) | — | — | — | — | — | ||||||||||||||||||||
Retained Earnings
|
(12,765,067 | ) | — | 3,731,590 | (310,953 | ) | — | (115,584 | ) | (9,460,013 | ) | |||||||||||||||||
Foreign Currency Translation Reserve
|
(2,289,772 | ) | — | — | 13,187 | — | (8,240 | ) | (2,284,825 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total shareholders equity attributable to the Group
|
10,206,680 | (10,128,170 | ) | 3,731,590 | (402,884 | ) | (0 | ) | (123,824 | ) | 3,283,394 | |||||||||||||||||
Non Controlling Interest
|
1,787,333 | (2,031,159 | ) | 123,728 | — | — | — | (120,099 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Stockholders Equity
|
11,994,013 | (12,159,329 | ) | 3,855,318 | (402,884 | ) | (0 | ) | (123,824 | ) | 3,163,295 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities and stockholders equity
|
|
42,135,215
|
|
|
(12,159,329
|
)
|
|
3,855,318
|
|
|
(402,884
|
)
|
|
(0
|
)
|
|
—
|
|
|
33,428,321
|
|
* |
Others include Lease classification and interest expense.
|
Particulars
|
31 December
2020
Indian GAAP
|
Deferred
Tax |
Goodwill
|
Others
|
31 December
2020
US GAAP
|
|||||||||||||||
Revenue
|
5,757,140 | — | — | — | 5,757,140 | |||||||||||||||
Cost of revenues
|
2,226,596 | — | — | — | 2,226,596 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross Profit
|
3,530,544 | — | — | — | 3,530,544 | |||||||||||||||
Operating expenses
|
||||||||||||||||||||
Selling & Distribution expense
|
106,732 | — | — | — | 106,732 | |||||||||||||||
General & Administrative expense
|
341,715 | — | — | — | 341,715 | |||||||||||||||
Employee benefits expense
|
901,658 | — | — | — | 901,658 | |||||||||||||||
Depreciation and amortisation
|
994,403 | — | (70,285 | ) | — | 924,118 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Operating Expenses
|
2,344,508 | — | (70,285 | ) | — | 2,274,223 | ||||||||||||||
Operating Income
|
|
1,186,036
|
|
|
—
|
|
|
70,285
|
|
|
—
|
|
|
1,256,321
|
|
|||||
Other income
|
3,009,732 | — | — | — | 3,009,732 | |||||||||||||||
Interest expense
|
1,743,487 | — | 23,253 | 1,766,740 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income before income tax
|
2,452,280 | — | 70,285 | (23,253 | ) | 2,499,313 | ||||||||||||||
Income tax expense
|
— | (819,265 | ) | — | — | (819,265 | ) | |||||||||||||
— | ||||||||||||||||||||
Net Income
|
|
2,452,280
|
|
|
819,265
|
|
|
70,285
|
|
|
(23,253
|
)
|
|
3,318,578
|
|
|||||
Net income attributable to non controlling interest
|
58,906 | 50,868 | — | — | 109,774 | |||||||||||||||
Net income available to the owners of the parent
|
|
2,393,374
|
|
|
768,397
|
|
|
70,285
|
|
|
(23,253
|
)
|
|
3,208,804
|
|
|||||
Net Income
|
2,393,374 | 768,397 | 70,285 | (23,253 | ) | 3,208,804 | ||||||||||||||
Other Comprehensive Income/(loss), net of tax
|
||||||||||||||||||||
Translation adjustments
|
|
286,822
|
|
(8,240 | ) | 278,583 | ||||||||||||||
Total other comprehensive income/(loss)
|
|
286,822
|
|
|
—
|
|
|
—
|
|
|
(8,240
|
)
|
|
278,583
|
|
|||||
Comprehensive Income
|
|
2,680,197
|
|
|
768,397
|
|
|
70,285
|
|
|
(31,492
|
)
|
|
3,487,387
|
|
|||||
Comprehensive Income (loss) attributable to the non- controlling interest
|
— | — | — | — | — | |||||||||||||||
Comprehensive Income attributable to the owners of the parent
|
|
2,680,197
|
|
|
768,397
|
|
|
70,285
|
|
|
(31,492
|
)
|
|
3,487,387
|
|
Particulars
|
31 December
2020 Indian GAAP |
Others
|
31 December
2020 US GAAP |
|||||||||
Net cash (used in) operating activities (A)
|
2,052,599 | — | 2,052,599 | |||||||||
Net cash (used in) investing activities (B)
|
(166,524 | ) | — | (166,524 | ) | |||||||
Net cash provided by financing activities (C)
|
(1,638,293 | ) | — | (1,638,293 | ) | |||||||
Net (decrease) in cash and cash equivalent (A+B+C)
|
|
247,782
|
|
|
—
|
|
|
247,782
|
|
|||
Cash and cash equivalents at the beginning of the year
|
48,777 | — | 48,777 | |||||||||
Cash and cash equivalents at the end of the year
|
|
296,559
|
|
|
—
|
|
|
296,559
|
|
Particulars
|
31 March
2020
Indian GAAP
|
Revaluation
Reserve |
Deferred Tax
|
Goodwill
|
Classification
of Mezzanine Equity |
Others*
|
31 March
2020 US GAAP |
|||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||
Current Assets
|
||||||||||||||||||||||||||||
Cash and cash equivalents
|
171,867 | — | — | — | — | (43,697 | ) | 128,170 | ||||||||||||||||||||
Restricted Cash
|
— | — | — | — | — | 43,697 | 43,697 | |||||||||||||||||||||
Accounts Receivables, net of allowance
|
4,719,956 | — | — | — | — | — | 4,719,956 | |||||||||||||||||||||
Inventories
|
269,296 | — | — | — | — | — | 269,296 | |||||||||||||||||||||
Other current assets
|
1,520,855 | — | — | — | — | 22,837 | 1,543,692 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
6,681,974 | — | — | — | — | 22,837 | 6,704,810 | ||||||||||||||||||||||
Property, Plant & Equipment (Net)
|
24,378,417 | (12,159,329 | ) | — | — | — | (22,837 | ) | 12,196,252 | |||||||||||||||||||
Goodwill
|
459,982 | — | — | (459,982 | ) | — | — | — | ||||||||||||||||||||
Other Intangible Assets (Net)
|
2,865,890 | — | — | — | — | — | 2,865,890 | |||||||||||||||||||||
Capital work in progress
|
4,637,925 | — | — | — | — | — | 4,637,925 | |||||||||||||||||||||
Deferred Tax Assets
|
— | — | 3,036,053 | — | — | — | 3,036,053 | |||||||||||||||||||||
Other assets
|
1,145,687 | — | — | — | — | — | 1,145,687 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
33,487,901 | (12,159,329 | ) | 3,036,053 | (459,982 | ) | — | (22,837 | ) | 23,881,806 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Assets
|
|
40,169,874
|
|
|
(12,159,329
|
)
|
|
3,036,053
|
|
|
(459,982
|
)
|
|
—
|
|
|
—
|
|
|
30,586,616
|
|
|||||||
Liabilities and Stockholders Equity
|
|
|||||||||||||||||||||||||||
Current Liabilities
|
||||||||||||||||||||||||||||
Accounts payables
|
1,471,145 | — | — | — | — | — | 1,471,145 | |||||||||||||||||||||
Accrued Liabilities
|
3,991,240 | — | — | — | — | 85,742 | 4,076,983 | |||||||||||||||||||||
Short-term borrowings
|
3,892,608 | — | — | — | — | — | 3,892,608 | |||||||||||||||||||||
Current portion of long- term borrowings
|
19,843,722 | — | — | — | — | — | 19,843,722 | |||||||||||||||||||||
Short-term provisions
|
7,651 | — | — | — | — | — | 7,651 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
29,206,367 | — | — | — | — | 85,742 | 29,292,109 | ||||||||||||||||||||||
Long-term borrowings
|
1,578,912 | 1,578,912 | ||||||||||||||||||||||||||
Long-term provisions
|
129,685 | — | — | — | — | — | 129,685 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities
|
30,914,964 | — | — | — | — | 85,742 | 31,000,706 | |||||||||||||||||||||
Mezzanine Equity
|
||||||||||||||||||||||||||||
Series A preferred shares
|
— | — | — | — | 2,463,470 | — | 2,463,470 | |||||||||||||||||||||
Stockholders Equity
|
||||||||||||||||||||||||||||
Common Stock
|
104,371 | — | — | — | — | — | 104,371 | |||||||||||||||||||||
Redeemable Preferred Stock
|
6,708,281 | — | — | — | (508,086 | ) | — | 6,200,194 | ||||||||||||||||||||
Additional
paid-in-capital
|
8,320,698 | — | — | (105,118 | ) | (1,955,383 | ) | — | 6,260,197 | |||||||||||||||||||
Revaluation Surplus
|
10,128,170 | (10,128,170 | ) | — | — | — | — | — | ||||||||||||||||||||
Retained Earnings
|
(15,158,441 | ) | 2,912,325 | (354,865 | ) | — | (92,331 | ) | (12,693,312 | ) | ||||||||||||||||||
Foreign Currency Translation Reserve
|
(2,576,594 | ) | — | — | — | — | 6,589 | (2,570,005 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total shareholders equity attributable to the Group
|
7,526,484 | (10,128,170 | ) | 2,912,325 | (459,982 | ) | (0 | ) | (85,742 | ) | (235,085 | ) | ||||||||||||||||
Non Controlling Interest
|
1,728,427 | (2,031,159 | ) | 123,728 | — | — | — | (179,005 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Stockholders Equity
|
|
9,254,911
|
|
|
(12,159,329
|
)
|
|
3,036,053
|
|
|
(459,982
|
)
|
|
(0
|
)
|
|
(85,742
|
)
|
|
(414,089
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities and stockholders equity
|
|
40,169,875
|
|
|
(12,159,329
|
)
|
|
3,036,053
|
|
|
(459,982
|
)
|
|
(0
|
)
|
|
—
|
|
|
30,586,617
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
Others include Lease classification and interest expense.
|
Particulars
|
31 December
2019
Indian GAAP
|
Deferred
Tax |
Goodwill
|
Others
|
31 December
2019
US GAAP
|
|||||||||||||||
Revenue
|
4,831,992 | — | — | — | 4,831,992 | |||||||||||||||
Cost of revenues
|
2,414,182 | — | — | — | 2,414,182 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross Profit
|
2,417,810 | — | — | — | 2,417,810 | |||||||||||||||
Operating expenses
|
||||||||||||||||||||
Selling & Distribution expense
|
253,094 | — | — | — | 253,094 | |||||||||||||||
General & Administrative expense
|
413,530 | — | — | — | 413,530 | |||||||||||||||
Employee benefits expense
|
1,149,475 | — | — | — | 1,149,475 | |||||||||||||||
Depreciation and amortisation
|
1,083,670 | — | (70,285 | ) | — | 1,013,385 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Operating Expenses
|
2,899,769 | — | (70,285 | ) | — | 2,829,484 | ||||||||||||||
Operating Income
|
|
(481,959
|
)
|
|
—
|
|
|
70,285
|
|
|
—
|
|
|
(411,674
|
)
|
|||||
Other income
|
196,297 | — | — | — | 196,297 | |||||||||||||||
Interest expense
|
1,641,864 | — | 32,042 | 1,673,906 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income before income tax
|
(1,927,526 | ) | — | 70,285 | (32,042 | ) | (1,889,283 | ) | ||||||||||||
Income tax expense
|
— | (967,452 | ) | — | — | (967,452 | ) | |||||||||||||
Net Income
|
|
(1,927,526
|
)
|
|
967,452
|
|
|
70,285
|
|
|
(32,042
|
)
|
|
(921,830
|
)
|
|||||
Net income attributable to non controlling interest
|
(131,621 | ) | 17,485 | — | — | (114,135 | ) | |||||||||||||
Net income available to the owners of the parent
|
|
(1,795,906
|
)
|
|
949,967
|
|
|
70,285
|
|
|
(32,042
|
)
|
|
(807,695
|
)
|
|||||
Net Income
|
(1,795,906 | ) | 949,967 | 70,285 | (32,042 | ) | (807,695 | ) | ||||||||||||
Other Comprehensive Income/(loss), net of tax
|
||||||||||||||||||||
Translation adjustments
|
(390,819 | ) | — | 6,589 | (384,229 | ) | ||||||||||||||
Comprehensive Income
|
|
(390,819
|
)
|
|
—
|
|
|
—
|
|
|
6,589
|
|
|
(384,229
|
)
|
|||||
Total other comprehensive income/(loss)
|
|
(2,186,724
|
)
|
|
949,967
|
|
|
70,285
|
|
|
(25,452
|
)
|
|
(1,191,924
|
)
|
|||||
Comprehensive Income (loss) attributable to the non- controlling interest
|
— | — | — | |||||||||||||||||
Comprehensive Income attributable to the owners of the parent
|
|
(2,186,724
|
)
|
|
949,967
|
|
|
70,285
|
|
|
(25,452
|
)
|
|
(1,191,924
|
)
|
Particulars
|
31 December
2019 Indian GAAP |
Other
|
31 December
2019 US GAAP |
|||||||||
Net cash (used in) operating activities (A)
|
3,461,567 | — | 3,461,567 | |||||||||
Net cash (used in) investing activities (B)
|
(859,318 | ) | — | (859,318 | ) | |||||||
Net cash provided by financing activities (C)
|
(3,146,157 | ) | — | (3,146,157 | ) | |||||||
Net (decrease) in cash and cash equivalent (A+B+C)
|
|
(543,907
|
)
|
|
—
|
|
|
(543,907
|
)
|
|||
Cash and cash equivalents at the beginning of the year
|
592,684 | — | 592,684 | |||||||||
Cash and cash equivalents at the end of the year
|
48,777 | — | 48,777 |
A.
|
Revaluation Reserve
|
B.
|
Recognition of Deferred Taxes
|
C.
|
Goodwill
|
D.
|
Classification of Preference Shares
|
E.
|
Lease classification
|
F.
|
Restricted cash classification
|
G.
|
Interest Expense
|
32
|
The Company has considered the possible effects that may result from the pandemic relating to
COVID-19
on the carrying amounts of receivables and investment in subsidiaries. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company, as at the date of approval of these financial statements has used internal and external sources of information including credit economic forecasts. There is no significant impact on the Group’s Business on account of pandemic. The impact of
COVID-19
remains uncertain and may be different from what we have estimated as of the date of approval of these consolidated financial statements and the Company will continue to closely monitor any material changes to future economic conditions.
|
For and on behalf of the Board of Directors of | ||
Glocal Healthcare Systems Private Limited
|
Dr. Syed Sabahat Azim
Director
|
Richa Sana Azim
Director
|
|||
DIN: 03122895 | DIN: 02609003 |
Amount in USD
|
||||||||||||
For the period | For the period | |||||||||||
Note
|
01 April 2020-25
|
01 April 2019-31 | ||||||||||
March 2021
|
March 2020 | |||||||||||
Unaudited | Audited | |||||||||||
Revenue from operations
|
|
19
|
|
|
8,013,504
|
|
9,057,344 | |||||
Other income
|
|
20
|
|
|
3,009,732
|
|
2,136,145 | |||||
|
|
|
|
|||||||||
Total revenue
|
|
11,023,236
|
|
11,193,489 | ||||||||
|
|
|
|
|||||||||
Expenses
|
||||||||||||
Purchase
|
|
21
|
|
|
958,447
|
|
961,711 | |||||
Course operating expenses
|
|
22
|
|
|
—
|
|
— | |||||
Changes in inventories
|
|
23
|
|
|
(56,187
|
)
|
(38,620 | ) | ||||
Employee benefits expense
|
|
24
|
|
|
1,149,108
|
|
1,437,745 | |||||
Finance costs
|
|
25
|
|
|
2,311,323
|
|
2,150,174 | |||||
Depreciation and amortisation
|
|
26
|
|
|
1,402,718
|
|
1,404,801 | |||||
Other expenses
|
|
27
|
|
|
3,003,651
|
|
2,870,913 | |||||
Extra Ordinary expenses
|
|
28
|
|
|
—
|
|
— | |||||
Total expenses
|
|
8,769,061
|
|
8,786,724 | ||||||||
|
|
|
|
|||||||||
Profit/(Loss) before tax
|
|
2,254,175
|
|
2,406,765 | ||||||||
|
|
|
|
|||||||||
Income tax expense
|
||||||||||||
Current tax
|
||||||||||||
Deferred tax
|
||||||||||||
|
|
|
|
|||||||||
Profit/(Loss) after tax (before adjustment of
|
|
2,254,175
|
|
2,406,765 | ||||||||
|
|
|
|
|||||||||
minority interest)
|
||||||||||||
Minority Interest
|
|
63,618
|
|
22,802 | ||||||||
Profit/(Loss) for the year
|
|
2,190,558
|
|
2,383,963 | ||||||||
|
|
|
|
|||||||||
Earnings/(loss) per equity share [nominal value of share INR 10 each (Previous year INR 10 each)]
|
|
29
|
|
|||||||||
Basic (not annualized)
|
|
4.44
|
|
4.84 | ||||||||
Diluted (not annualized)
|
|
0.47
|
|
0.51 | ||||||||
Significant accounting policies
|
|
1
|
|
Amount in USD
|
||||||||
25 March 2021
|
31 March 2020 | |||||||
Unaudited | Audited | |||||||
A. Cash flow from operating activities
|
||||||||
Profit/(Loss) before tax
|
|
2,254,175
|
|
2,406,765 | ||||
Adjustments for:
|
||||||||
Depreciation and amortisation
|
|
1,402,718
|
|
1,404,801 | ||||
Provisions/liabilities no longer required written back
|
|
(3,009,179
|
)
|
(2,109,763 | ) | |||
Interest income
|
|
—
|
|
— | ||||
Finance costs
|
|
2,311,323
|
|
2,150,174 | ||||
|
|
|
|
|||||
|
704,862
|
|
1,445,212 | |||||
Operating cash flow before working capital changes
|
|
2,959,038
|
|
3,851,978 | ||||
Adjustments for:
|
||||||||
(Increase) in trade and other receivables/advances
|
|
(1,338,207
|
)
|
(2,817,928 | ) | |||
Decrease in inventories
|
|
(57,612
|
)
|
(9,632 | ) | |||
Increase in trade payables, other liabilities and provisions
|
|
(267,031
|
)
|
332,248 | ||||
|
(1,662,849
|
)
|
(2,495,313 | ) | ||||
Cash (used in) operations
|
|
1,296,188
|
|
1,356,665 | ||||
Income taxes refund (net)
|
|
(31,282
|
)
|
16,628 | ||||
|
|
|
|
|||||
Net cash (used in) operating activities (A)
|
|
1,264,906
|
|
1,373,293 | ||||
B. Cash flow from investing activities
|
||||||||
Purchase or construction of property, plant and equipment and intangible assets and movement in capital work in progress
|
|
(409,959
|
)
|
(985,522 | ) | |||
Proceeds from sale of property, plant & equipment
|
|
(6,739
|
)
|
— | ||||
Bank deposits (having original maturity of more than 3 months)
|
|
—
|
|
(8,958 | ) | |||
Interest received
|
|
0
|
|
(10,231 | ) | |||
Net cash (used in) investing activities (B)
|
|
(416,699
|
)
|
(1,004,711 | ) | |||
C. Cash flow from financing activities
|
||||||||
Proceeds from borrowings (net)
|
|
(107,150
|
)
|
(537,770 | ) | |||
Finance costs paid
|
|
(529,105
|
)
|
(311,595 | ) | |||
Net cash provided by financing activities (C)
|
|
(636,256
|
)
|
(849,365 | ) | |||
Net (decrease) in cash and cash equivalent (A+B+C)
|
|
211,951
|
|
(480,782 | ) | |||
Cash and cash equivalents at the beginning of the year
|
|
111,902
|
|
592,684 | ||||
Cash and cash equivalents at the end of the year (Refer Note (i) below)
|
|
323,854
|
|
111,902 | ||||
Notes:
|
||||||||
(i) Components of cash and cash equivalent (refer note 16)
|
||||||||
Cash on hand
|
|
322,475
|
|
32,083 | ||||
Balance with banks
|
||||||||
On current accounts
|
|
—
|
|
71,853 | ||||
On deposit accounts (with original maturity of 3 months or less)
|
|
1,377
|
|
7,965 | ||||
|
|
|
|
|||||
|
323,854
|
|
111,902 | |||||
|
|
|
|
(ii) |
The above cash flow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard 3 on Cash Flow Statement (AS 3 ) specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.
|
1
|
Significant accounting policies
|
(a)
|
Basis of preparation of consolidated financial statements:
|
(b)
|
Principles of consolidation
|
(c)
|
Use of estimates
|
(d)
|
Current–non-current
classification
|
(e)
|
Revenue recognition
|
(f)
|
Liabilities Written back
|
(g)
|
Property, plant and equipment(PPE)
|
(h)
|
Depreciation
|
Building
|
60 years | |||
Electrical Equipments
|
10 years | |||
Medical & Surgical Equipment
|
13 years | |||
Furniture & Fixtures
|
10 years | |||
Vehicles
|
10 years | |||
Office Equipment
|
5 Years | |||
Computers and accessories
|
3 Years |
(i)
|
Intangible assets
|
(j)
|
Amortisation
|
(k)
|
Government grants
|
(l)
|
Impairment of property, plant & equipment and intangible assets
|
(m)
|
Inventories
|
(n)
|
Foreign currency transaction
|
(o)
|
Operating leases
|
(p)
|
Investments
|
(q)
|
Employee benefits
|
(r)
|
Taxation
|
(s)
|
Provisions and contingent liabilities
|
(t)
|
Earnings/(loss) per share
|
(u)
|
Discount on issue of debentures
|
(v)
|
Cash and cash equivalents
|
(w)
|
Cash flow statement
|
(x)
|
Going Concern
|
2
|
Share capital
|
Amount in USD
|
||||||||||||||||
25 March 2021
|
31 March 2020
|
|||||||||||||||
Number of
shares |
Amount
|
Number of
shares |
Amount
|
|||||||||||||
Authorised
|
||||||||||||||||
Equity shares of INR 10 each
|
|
13,500,000
|
|
1,859,158 | 13,500,000 | 2,075,515 | ||||||||||
Preference shares of INR 100 each
|
|
5,000,000
|
|
6,885,772 | 5,000,000 | 7,687,092 | ||||||||||
Preference shares of Re. 1 each
|
|
3,200,000
|
|
44,069 | 3,200,000 | 49,197 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
21,700,000
|
|
|
8,788,999
|
|
|
21,700,000
|
|
|
9,811,805
|
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Issued, subscribed and paid up
|
||||||||||||||||
Equity Shares
|
||||||||||||||||
Equity shares of INR 10 each
|
|
492,904
|
|
|
104,371
|
|
|
492,904
|
|
|
104,371
|
|
||||
Preferred Stock
|
||||||||||||||||
0.001% Compulsorily Convertible Cumulative Preference Shares—Series A of INR 100 each
|
|
240,777
|
|
|
508,086
|
|
|
240,777
|
|
|
508,086
|
|
||||
0.001% Compulsorily Convertible Cumulative Preference Shares—Series C of INR 100 each
|
|
254,936
|
|
|
406,102
|
|
|
254,936
|
|
|
406,102
|
|
||||
0.001% Compulsorily Convertible Cumulative Preference Shares—Series C1 of INR 100 each
|
|
157,234
|
|
|
243,565
|
|
|
157,234
|
|
|
243,565
|
|
||||
8% Compulsorily Convertible Cumulative Preference Shares of INR 100 each
|
|
3,499,588
|
|
|
5,550,528
|
|
|
3,499,588
|
|
|
5,550,528
|
|
||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
|
4,645,439
|
|
|
6,812,652
|
|
|
4,645,439
|
|
|
6,812,652
|
|
||||
|
|
|
|
|
|
|
|
a)
|
Reconciliation of the shares outstanding at the beginning and at the end of the period:
|
b)
|
Shares held by holding company:
|
c)
|
Details of shareholders holding more than 5% are as follows
|
d)
|
Rights, preferences and restrictions in respect of each class of shares including restrictions on the distribution of dividends and the repayment of capital:
|
3
|
Reserves and surplus
|
25 March
2021 |
31 March
2020 |
|||||||
Securities premium account
|
8,320,698 | 8,320,698 | ||||||
Revaluation surplus
|
10,128,170 | 10,128,170 | ||||||
General reserve
|
331,361 | 331,361 | ||||||
Foreign Currency Translation reserve
|
(2,266,144 | ) | (2,576,594 | ) | ||||
Surplus in Statement of Profit and Loss
|
||||||||
At the commencement of the period (1st April)
|
(15,489,802 | ) | (17,873,766 | ) | ||||
Add: Profit/(Loss) for the period
|
2,190,556 | 2,383,964 | ||||||
|
|
|
|
|||||
Balance as at the end of the period
|
|
(13,299,246
|
)
|
|
(15,489,802
|
)
|
||
|
|
|
|
|||||
Total reserves and surplus
|
|
3,214,839
|
|
|
713,832
|
|
4
|
Long-term borrowings
|
Non-current
portion
|
Current portion*
|
|||||||||||||||||||
Secured/
unsecured |
25 March
2021 |
31 March
2020 |
25 March
2021 |
31 March
2020 |
||||||||||||||||
204,540 (previous year: 204,540) 13.55%
non-convertible
debentures of INR 1,000 each
|
Secured | — | — | — | 2,715,433 | |||||||||||||||
Less: Discount on issue of debenture to the extent not written off or adjusted
|
— | — | — | — | ||||||||||||||||
— | — | — |
|
2,715,433
|
|
|||||||||||||||
Term loans from Banks
|
Secured | — | — | 13,095,050 | 12,630,603 | |||||||||||||||
Term loan from Small Industries Development Bank of India
|
Secured | 464,423 | 561,155 | 123,944 | 107,534 | |||||||||||||||
Term loan from National Skill Development Corporation
|
Secured | 721,986 | 695,997 | 1,448,496 | 1,396,354 | |||||||||||||||
Term loan from Caspian Impact Investments Private Limited
|
Unsecured | — | — | 1,377,430 | 1,327,580 | |||||||||||||||
Term loan from Blacksoil capital Private Limited
|
secured | 121,651 | — | 291,681 | 362,333 | |||||||||||||||
Equipment loan
|
Secured | 303,564 | 321,760 | 242,911 | 237,157 | |||||||||||||||
|
1,611,624
|
|
|
1,578,912
|
|
|
16,579,512
|
|
|
18,776,995
|
|
* |
Amount disclosed under Other current liabilities - Note 8
|
(a) )
|
Secured
non-convertible
debenture
|
(i) |
The Company had issued 13.55% redeemable
non-convertible
debenture of face value of INR 1,000 each aggregating to INR 204,540,000 (USD 2,715,433) at a discount of 0.95% on face value on 19 March 2016 to Essential Capital Consortium BV on private placement basis. These debentures are redeemable at par in two equal instalments of INR 102,270,000 (USD 1,478,574) each on 5 May 2019 and 5 November 2019 and in case put option is exercised by debenture holder, the total balance of INR 204,540,000 (USD 287,172) has to be repaid on any date not earlier than 11 February 2019. Interest is payable semiannually at the rate of 13.55% per annum (net of withholding tax) on interest payment dates or earlier in case upon the exercise of the put option (interest payment starting from 5 May 2016 and ending on 5 November 2019 and in case put option is exercised, starting from 5 May 2016 and ending on 11 February 2019 ) as per Mortgage Cum Debenture Trust Deed dated 4 February 2016.
|
In view of contribution of company in the field of medicine especially during the COVID situation, USAID has decided to approve grant by paying off its debts towards Essential Capital Consortium (ECC). The grant has been approved and charged satisfaction has been filed on 13th June 2020. The company has written back the debenture of INR 204,540,000 (USD 2,799,716) and interest accrued and due on debenture of INR 13,712,945 (USD 187,701) under other income.
|
(ii) |
These debentures are secured by way of a second ranking and continuing charge by way of registered mortgage on the;
|
(a) |
immovable secured properties i.e rights in relation to;
|
(i) |
piece and parcel of garden land at Sonamukhi (District: Bankura) together with all buildings, constructions and plant and machinery erected thereon, both present and future.
|
(ii) |
piece and parcel of land at Bolpur (District: Birbhum) together with all buildings, constructions and plant and machinery erected thereon, both present and future.
|
(iii) |
piece and parcel of land at Behrampore (District: Murshidabad) together with all buildings, constructions and plant and machinery erected thereon, both present and future.
|
(iv) |
rooftop of
one-storied
building, ground floor stalls and rear vacant land at Dubrajpur (District: Birbhum) together with all buildings, constructions and plant and machinery erected thereon, both present and future
|
(v) |
office space together with all constructions and plant and machinery erected thereon at Ecospace, New Town Rajarhat (Kolkata)
|
(b) |
movable assets in relation to hospitals at Sonamukhi (District: Bankura), Dubrajpur (District: Birbhum), Behrampur (District: Bankura), Bolpur (District: Birbhum) and head office at Ecospace, New Town Rajarhat (Kolkata).
|
(b)
|
Term loans from Allahabad Bank
|
(i) |
Term loan from Allahabad Bank is secured by.
|
(ii) |
Interest on the above Term
Loan-I,
II & III carries an interest of 1 year MCLR plus 3.10% p.a. at monthly rests and is payable as and when due. And Term Loan IV and V carries an interest of 1 year MCLR plus 4.10% p.a. at monthly rests and is payable as and when due.
|
(iii) |
The Company has been disputing the EMIs being deducted by Allahabad bank since 2017 in respect to hospital projects that have not achieved COD especially as the disbursal also started late. The Bank and the Company are entering into a restructuring proposal to resolve this issue. The Techno Economic viability report with positive recommendation has been submitted by Dun & Bradstreet which was appointed by bank to examine and report on the viability and Independent Credit Rating has been given by the approved rating agency. It is expected that the restructuring process will be completed in 2021. During this time the loan has been classified by the Bank as technical npa pending closure of restructuring process.
|
(c)
|
Term loan from Small Industries Development Bank of India (SIDBI)
|
(i) |
Term loan from SIDBI is secured by :
|
(ii) |
The term loan have been sanctioned for INR 66,500,000 (USD 882,841) for setting up of hospital and purchase of medical instruments and surgical equipments at Beguasarai, Bihar and is repayable in 96 monthly instalments after a moratorium of 2 years from the date of first disbursement of loan. Tentative start date is 10 April 2017 and tentative last instalment date is 10 March 2025.
|
(iii) |
Above term loan carries an interest of SIDBI’s Prime Lending Rate (PLR) plus 1.50%, at monthly rests and is payable as and when applied.
|
(d)
|
Term loan from National Skill Development Corporation
|
(i) |
Term loan from National Skill Development Corporation is secured by:
|
(ii) |
The rate of interest being charged is simple interest of 6% p.a. payable on a quarterly basis after the interest-free moratorium period of two years from the date of first disbursement of the loan .
|
(iii) |
The principal and interest is overdue as on 30th December 2020.
|
(e)
|
Term loan from Caspian Impact Investments Pvt. Ltd.
|
(i) |
Term loan from Caspian Impact Investments Pvt. Ltd. is unsecured and other terms are:
|
(f)
|
Term loan from Blacksoil Capital Private Limited
|
(g)
|
Loan from Hero Fincorp
|
(i) |
Term loan amounting to
Nil
|
(ii) |
The term loan has been sanctioned for INR 70,000,000 (USD 929,306) as working capital loan & INR 60,000,000 (USD 796,548) as term loan for capex requirements- production & expansion of digital dispensary business and takeover of existing term loan from SIDBI & IIFL respectively.
|
(iii) |
Above term loan carries an interest of Hero Fincorp Prime Lending Rate @ 13% p.a. at monthly rests.
|
(h)
|
Overdue payment of loan
|
5 Provisions
|
Amount in USD
|
Long-term
|
Short-term
|
|||||||||||||||
25 March
2021 |
31 March
2020 |
25 March
2021 |
31 March
2020 |
|||||||||||||
Provision for employee benefits
|
||||||||||||||||
Gratuity
|
|
100,060
|
|
|
78,161
|
|
|
3,608
|
|
3,322 | ||||||
Compensated absences
|
|
67,479
|
|
|
51,524
|
|
|
2,716
|
|
2,471 | ||||||
|
|
|
|
|
|
|
|
|||||||||
|
167,539
|
|
|
129,685
|
|
|
6,324
|
|
|
5,793
|
|
|||||
|
|
|
|
|
|
|
|
|||||||||
Other provisions
|
||||||||||||||||
Provision for Income Tax
|
|
—
|
|
|
—
|
|
|
1,928
|
|
1,859 | ||||||
|
—
|
|
|
—
|
|
|
1,928
|
|
|
1,859
|
|
|||||
|
167,539
|
|
|
129,685
|
|
|
8,252
|
|
|
7,651
|
|
6
|
Short-term borrowings
|
25 March
2021 |
31 March
2020 |
|||||||
Cash credit facilities from bank (secured)
|
|
974,865
|
|
1,117,699 | ||||
Unsecured loan
|
||||||||
- loan from Hero Fincorp Ltd
|
|
964,008
|
|
929,306 | ||||
- loan from related party
|
|
378,104
|
|
373,962 | ||||
- loan from directors
|
|
21,070
|
|
20,312 | ||||
- loan from others
|
|
1,515,451
|
|
1,451,329 | ||||
|
|
|
|
|||||
|
3,853,498
|
|
|
3,892,608
|
|
|||
|
|
|
|
6.1 |
Cash credit facilities from Allahabad Bank has been sanctioned with a limit of INR 50,000,000 (USD 663,790) for working capital requirement of the five existing operational hospitals of the Company with a margin of 25% and is secured by first and exclusive charge of hypothecation of all the current assets of the five units and administrative office of the Company (both present and future), further, secured by (along with bank guarantee) second charge on land and building, plant and machineries and other fixed assets of the five existing operational hospitals under the Company’s direct ownership (both present and future). The cash credit facilities carry an interest rate of
one-year
MCLR plus 3.10% p.a. computed on a monthly basis on the actual amount utilized and are repayable as and when due.
|
6.2 |
Interest free loan taken from directors and related parties are repayable on demand.
|
6.3 |
a. Loan taken from others is repayable on demand.
|
6.4
|
Loan from Hero Fincorp
|
(i) |
Term loan is secured by:
|
(ii) |
The term loan has been sanctioned for INR 70,000,000 (USD 929,306) as working capital loan & INR 60,000,000 (USD 862,678) as term loan for capex requirements- production & expansion of digital dispensary business and takeover of existing term loan from SIDBI & IIFL respectively. The term loan facility for takeover of loan from SIDBI & IIFL has not been availed and hence got expired. So the charge created against immovable property is still lying with SIDBI.
|
(iii) |
Above term loan carries an interest of Hero Fincorp Prime Lending Rate @ 13% p.a. at monthly rests
|
(iv) |
As per circular
DOR.No.BP.BC.47/21.04.048/2019-20
dated March 27, 2020 regulatory measures were announced by RBI to mitigate the burden of debt servicing brought about by disruptions on account of
COVID-19
pandemic by granting a moratorium of three months on payment of all instalments falling due between March 1, 2020 and May 31, 2020. Further, this relief was extended till August 31, 2020 and this pacakage has been taken up the company and installments has been rescheduled accordingly.
|
7
|
Trade payables
|
25 March 2021
|
31 March 2020
|
|||||||
Total outstanding dues of micro enterprises and small enterprises
|
|
—
|
|
— | ||||
Total outstanding dues of creditors other than micro enterprises and small enterprises
|
|
578,719
|
|
1,471,145 | ||||
|
|
|
|
|||||
|
578,719
|
|
|
1,471,145
|
|
|||
|
|
|
|
8
|
Other current liabilities
|
25 March 2021
|
31 March 2020
|
|||||||
Current maturities of long-term debts (refer note 4)
|
|
16,579,512
|
|
18,776,995 | ||||
Interest accrued and due on term loans
|
|
4,713,386
|
|
2,275,228 | ||||
Interest accrued but not due on loan
|
|
—
|
|
|||||
Interest accrued and due on cash credit
|
|
258,722
|
|
145,101 | ||||
Interest accrued and due on equipment loan
|
|
47,112
|
|
32,465 | ||||
Interest accrued but not due on equipment loan
|
|
131,217
|
|
|||||
Interest accrued and due on other loan
|
|
181,638
|
|
118,523 | ||||
Interest accrued but not due on debentures
|
|
—
|
|
— | ||||
Interest accrued and due on debentures
|
|
—
|
|
182,050 | ||||
Creditors for capital goods
|
|
234,384
|
|
178,446 | ||||
Employee benefits payable
|
|
628,395
|
|
539,903 | ||||
Temporary Book Overdraft
|
|
1,073
|
|
|||||
Advance from TPA & Customers
|
|
443,408
|
|
431,960 | ||||
Partner’s Current A/c
|
|
17,903
|
|
17,259 | ||||
Statutory dues payable
|
||||||||
Provident fund
|
|
317,412
|
|
274,585 | ||||
Professional tax
|
|
14,034
|
|
12,484 | ||||
Employee state insurance payable
|
|
193,258
|
|
166,695 | ||||
Tax deducted at source payable
|
|
442,830
|
|
327,555 | ||||
Goods and services tax payable
|
|
40,539
|
|
88,504 | ||||
Unearned revenue
|
|
136,332
|
|
131,424 | ||||
Advance from patients and others
|
|
241,012
|
|
7,220 | ||||
Other liabilities/ payables
|
|
92,232
|
|
128,565 | ||||
|
|
|
|
|||||
|
24,714,399
|
|
|
23,834,963
|
|
|||
|
|
|
|
8.1
|
i. Major clients of the company are ESIC, PSU’s and various other government departments. There has been major delay in receipt of payment from their side which is creating challenges for the company to meet its operational expenses which includes statutory obligations also.
|
8.2
|
Advance receipt of INR 30 mm from S.S Earth Moving Mining was for setup of dispensary setup in their mining area. But no space was allocated to us by them, hence setup is not done.
|
8.3
|
Advance include amount received from African medical supply for supply of DD setup but due to COVID outbreakup same couldnot be fulfilled.
|
8.4
|
Regarding interest accrued and due with respect to the term loan taken from Allahabad bank, the company has been disputing the EMIs being deducted by the bank since 2017 in respect to hospital projects, that have not achieved COD especially as the disbursal also started late. The Bank and the company are entering into a restructuring proposal to resolve this issue. The Techno Economic viability report with positive recommendation has been submitted by Dun & Bradstreet which was appointed by bank to examine and report on the viability and Independent Credit Rating has been given by the approved rating agency. It is expected that the restructuring process will be completed in 2021. During this time the loan has been classified by the Bank as technical NPA pending closure of restructuring process. As the account has been declared technical NPA by the bank so no interest has been charged by the bank but following the concept of mercantile system of accounting interest on term loan from Allahabad Bank and interest on cash credit
|
limit has been calculated and charged in expenses. This interest has been classified as Interest accured and due under other current liabilities. |
9
|
Goodwill
|
25 March 2021
|
31 March 2020
|
|||||||
Opening balance
|
|
459,982
|
|
598,136 | ||||
Amortisation of Goodwill
|
|
(93,867
|
)
|
(95,982 | ) | |||
Forex Adjustment
|
|
16,890
|
|
(42,172 | ) | |||
Closing balance
|
|
383,005
|
|
|
459,982
|
|
10
|
Property, Plant & Equipment
|
Particulars
|
WDV as on 25.03.2021
|
WDV as on 31.03.2020
|
||||||
Freehold land
|
5,426,965 | 5,231,609 | ||||||
Leasehold land
|
22,636 | 22,837 | ||||||
Buildings
|
16,212,476 | 15,892,417 | ||||||
Electrical equipment
|
393,532 | 450,247 | ||||||
Medical & surgical equipment’s
|
2,302,417 | 2,408,992 | ||||||
Furniture and fixtures
|
236,768 | 273,870 | ||||||
Vehicles
|
3,091 | 3,828 | ||||||
Office equipment
|
63,692 | 67,280 | ||||||
Computers and accessories
|
16,494 | 27,336 | ||||||
|
|
|
|
|||||
Total
|
|
24,678,070
|
|
|
24,378,417
|
|
||
|
|
|
|
11
|
Intangible Assets
|
Particulars
|
WDV as on 25.03.2021
|
WDV as on 31.03.2020
|
||||||
Computer software (internally generated platform/applications)
|
2,581,839 | 2,541,433 | ||||||
Computer software
|
57,752 | 166,246 | ||||||
Trademark
|
— | 74 | ||||||
Content development
|
26,230 | 158,137 | ||||||
|
|
|
|
|||||
Total
|
|
2,665,821
|
|
|
2,865,890
|
|
||
|
|
|
|
12
|
Long-term loans and advances
|
25 March 2021
|
31 March 2020
|
|||||||
(Unsecured and considered good)
|
||||||||
To parties other than related parties | ||||||||
(a) ) Capital advances
|
|
411,027
|
|
544,996 | ||||
(b) Security deposits
|
|
53,574
|
|
166,558 | ||||
|
464,602
|
|
|
711,553
|
|
|||
(c) ) Other loans and advances | ||||||||
TDS receivables
|
|
460,919
|
|
413,507 | ||||
|
|
|
|
|||||
|
460,919
|
|
|
413,507
|
|
|||
|
925,521
|
|
|
1,125,061
|
|
13
|
Other
non-current
assets
|
25 March 2021
|
31 March 2020
|
|||||||
(Unsecured and considered good)
|
||||||||
Bank deposits (due to mature after 12 months from the reporting date) [refer note 16]*
|
|
42,968
|
|
19,289 | ||||
Balance with government authorities
|
|
686
|
|
661 | ||||
Interest accrued on bank deposits
|
|
—
|
|
41 | ||||
Interest accrued on electricity deposits
|
|
659
|
|
636 | ||||
|
|
|
|
|||||
|
44,313
|
|
|
20,626
|
|
14
|
Inventories
|
(Valued at lower of cost and net realisable value)
|
||||||||
Stock of digital dispensary, medicine and medical consumables
|
|
322,309
|
|
265,330 | ||||
Stores and spares
|
|
3,263
|
|
3,966 | ||||
|
|
|
|
|||||
|
325,572
|
|
|
269,296
|
|
|||
|
|
|
|
15
|
Trade receivables
|
(a) Unsecured and considered good
|
|
6,460,982
|
|
1,520,746 | ||||
(b) Doubtful
|
|
451,181
|
|
434,940 | ||||
Less: Provision for doubtful receivables
|
|
(451,181
|
)
|
(434,940 | ) | |||
|
|
|
|
|||||
|
6,460,982
|
|
|
1,520,746
|
|
|||
Other receivables | ||||||||
(a) Unsecured, considered good
|
|
—
|
|
|
3,199,210
|
|
||
|
—
|
|
||||||
|
6,460,982
|
|
|
4,719,956
|
|
16
|
Cash and bank balances
|
25 March 2021
|
31 March 2020
|
|||||||
Cash and cash equivalents
|
||||||||
Cash on hand
|
|
322,476
|
|
32,084 | ||||
Balance with banks:
|
|
—
|
|
|||||
On current accounts
|
|
—
|
|
71,853 | ||||
On deposit accounts (with original maturity of 3 months or less)
|
|
1,377
|
|
7,965 | ||||
|
323,854
|
|
|
111,902
|
|
|||
Other bank balances:
|
||||||||
Deposits in banks with maturity of more than 3 months but less than 12 months*
|
|
46,131
|
|
59,965 | ||||
|
369,984
|
|
|
171,867
|
|
* |
Bank deposits of USD 13,772 as on 25 March 2021 (31 March 2020—USD 13,276) have been pledged with Black Soil as security for term loan
|
* |
Bank deposits of USD 31,557 as on 25 March 2021 (31 March 2020- USD 30,421) have been given as cash margin to banks for issuing bank guarantees to government authorities.
|
17
|
Short-term loans and advances
|
25 March 2021
|
31 March 2020
|
|||||||
(Unsecured and considered good)
|
||||||||
To parties other than related parties
|
||||||||
Security deposits
|
|
157,975
|
|
37,376 | ||||
Prepaid expenses
|
|
409
|
|
2,652 | ||||
Advance for supply of goods and services
|
|
25,152
|
|
493,214 | ||||
Advance to doctors
|
|
—
|
|
26,339 | ||||
Advances to employees
|
|
537,319
|
|
396,399 | ||||
Advances to others
|
|
47,634
|
|
52,262 | ||||
|
|
|
|
|||||
|
768,489
|
|
|
1,008,242
|
|
|||
|
|
|
|
18
|
Other current assets
|
25 March 2021
|
31 March 2020
|
|||||||
(Unsecured and considered good)
|
||||||||
Interest accrued on bank deposits
|
|
16,910
|
|
16,261 | ||||
Government grant receivable
|
|
708,823
|
|
492,567 | ||||
Unbilled revenue
|
|
3,927
|
|
3,786 | ||||
|
|
|
|
|||||
|
729,660
|
|
512,613 | |||||
|
|
|
|
19
|
Revenue from operations
|
Amount in USD
|
||||||||||
01 April 2020-25
March 2021 |
01 April 2019-31
March 2020 |
|||||||||
Sale of services:
|
||||||||||
Income from hospital services |
|
5,486,607
|
|
4,534,912 | ||||||
Income from digital dispensary consultancy |
|
1,375,651
|
|
1,226,063 | ||||||
Sale of goods:
|
||||||||||
Sale of pharmacy/ medicines |
|
787,575
|
|
746,317 | ||||||
Sale of digital dispensary
|
2,191,804 | |||||||||
Other operating revenue:
|
||||||||||
Income from government grant* |
|
270,680
|
|
256,771 | ||||||
Miscellaneous income |
|
92,991
|
|
101,477 | ||||||
|
|
|
|
|||||||
|
8,013,504
|
|
|
9,057,344
|
|
|||||
|
|
|
|
19.1 |
The company has entered into revenue sharing arrangement, the contractual arrangement is on
principal-to-principal
basis for hospital at Bolpur, Sonamukhi, Malda, Jeypore & Mednipore. These hospitals were earlier operated by Company itself.
|
19.2 |
Income from government grant represents interest and tax subsidy from government of Bihar under Bihar Industrial Investment Promotion Act, 2016. Interest subsidy is available to GHSPL Muzafarpur Healthcare LLP, GHSPL Bhaglpur Healtcare LLP & GHSPL Begusari Healthcare LLP on the term loan availed by the LLP from Allahabad Bank & State Industrial Development Bank of India.
|
20
|
Other Income
|
01 April 2020-25
March 2021 |
01 April 2019-31
March 2020 |
|||||||
Interest on bank deposits
|
6,994 | |||||||
Interest on income tax refund
|
|
—
|
|
18,521 | ||||
Provision/ liability no longer required written back (Net)
|
|
3,009,179
|
|
2,109,763 | ||||
Miscellaneous income
|
|
553
|
|
868 | ||||
|
|
|
|
|||||
|
3,009,732
|
|
|
2,136,145
|
|
|||
|
|
|
|
20.1 |
On March 19, 2016 company has issued 13.55%
Non-convertible
Debentures worth INR 204,540,000 (USD 2,715,433) to Essential Consortium Capital but in view of the contribution of company in the field of medicine, especially during the COVID situation, USAID has decided to approve grants by paying off its debts towards Essential Capital Consortium (ECC). Hence, provision /liability no longer required includes writte off Debentures, Interest thereon and liability towards ECC worth INR 223,673,406 (USD 3,014,824) as on December 31, 2020
|
21
|
Purchases
|
01 April 2020-25
March 2021 |
01 April 2019-31
March 2020 |
|||||||
Medicines and medical consumables
|
|
936,094
|
|
898,589 | ||||
Purchase of digital dispensary
|
|
22,353
|
|
63,122 | ||||
|
958,447
|
|
|
961,711
|
|
22
|
Course operating expenses
|
Amount in USD
|
||||||||
01 April 2020-25
March 2021 |
01 April 2019-31
March 2020 |
|||||||
Training cost/ professional fees |
|
—
|
|
— | ||||
Fooding and lodging |
|
—
|
|
— | ||||
Externship expenses |
|
—
|
|
— | ||||
|
|
|
|
|||||
|
—
|
|
|
—
|
||||
|
|
|
|
23
|
Changes in inventories
|
Inventory at the beginning of the year
|
|
269,385
|
|
237,285 | ||||
Inventory at the end of the year
|
|
325,572
|
|
275,905 | ||||
|
|
|
|
|||||
|
(56,187
|
)
|
|
(38,620
|
)
|
|||
|
|
|
|
24
|
Employee benefits expense
|
Salaries, wages, and bonus
|
|
1,023,923
|
|
1,291,639 | ||||
Contribution to provident and other funds
|
|
107,513
|
|
110,974 | ||||
Staff welfare expenses
|
|
17,672
|
|
35,132 | ||||
|
|
|
|
|||||
|
1,149,108
|
|
|
1,437,745
|
|
|||
|
|
|
|
25
|
Finance costs
|
Interest expense on:
|
||||||||
- debenture
|
|
—
|
|
38,743 | ||||
- term loan
|
|
2,294,906
|
|
1,574,394 | ||||
- Cash credit
|
|
111,076
|
|
144,621 | ||||
Unsecured loan
|
|
576,098
|
|
624,970 | ||||
Other borrowing costs
|
|
80
|
|
|||||
|
|
|
|
|||||
|
2,982,160
|
|
|
2,382,728
|
|
|||
Less: Borrowing costs capitalized to qualifying assets
|
|
(670,837
|
)
|
(232,554 | ) | |||
|
|
|
|
|||||
|
2,311,323
|
|
|
2,150,174
|
|
|||
|
|
|
|
25.1 |
Interest expenses as been calculated as per contractual term mentioned in sanction letter of Banks/ Financial Institutions. The company is in discussion with Allahabad Bank for restructuring and other financial institutions for rescheduling of the repayment terms. The management beliefs that no penal interest will be charged by the banks & financial institution and hence no provision has been recognized in the statement of profit & loss.
|
26
|
Depreciation and amortization
|
Depreciation of property, plant and equipment (PPE)
|
671,000 | 752,899 | ||||||
Amortization of Goodwill
|
92,559 | 95,982 | ||||||
Amortization of intangible assets
|
639,159 | 555,920 | ||||||
|
|
|
|
|||||
|
1,402,718
|
|
|
1,404,801
|
|
|||
|
|
|
|
27
|
Other expenses
|
Amount in USD
|
||||||||
01 April 2020-25
March 2021 |
01 April 2019-31
March 2020 |
|||||||
Consumption of stores and spares
|
|
13,115
|
|
6,445 | ||||
Share of O&M Partner
|
|
430,138
|
|
|||||
Housekeeping expenses
|
|
85,730
|
|
95,406 | ||||
Assets/Receivable written off
|
7,015 | |||||||
Power and fuel
|
|
124,768
|
|
176,237 | ||||
Rates and taxes
|
|
18,029
|
|
30,818 | ||||
Rent (refer note 36)
|
|
—
|
|
|||||
- equipment’s
|
|
4,542
|
|
3,918 | ||||
- others
|
|
71,720
|
|
94,755 | ||||
Patient food expenses
|
|
57,918
|
|
68,707 | ||||
Professional fees:
|
|
—
|
|
|||||
- to doctors
|
|
1,594,604
|
|
1,579,504 | ||||
- to others
|
|
18,629
|
|
13,482 | ||||
Repairs to building
|
|
61,905
|
|
72,581 | ||||
Repairs to surgical/medical equipment’s/machinery
|
|
37,632
|
|
47,845 | ||||
Repairs to others
|
|
6,590
|
|
8,222 | ||||
Payment to auditors
|
|
25,337
|
|
26,329 | ||||
Travelling and conveyance expenses
|
|
126,097
|
|
168,930 | ||||
Advertisement and sales promotion
|
|
140,919
|
|
231,583 | ||||
Testing expenses
|
|
95,343
|
|
60,538 | ||||
Printing and stationery
|
|
25,505
|
|
30,137 | ||||
Telephone and communication expenses
|
|
30,612
|
|
60,786 | ||||
Miscellaneous expenses
|
|
126,379
|
|
87,675 | ||||
Less: Capitalisation for internally generated software
|
|
(91,860
|
)
|
|||||
|
|
|
|
|||||
|
3,003,651
|
|
|
2,870,913
|
|
|||
|
|
|
|
28
|
Extra-ordinary expenses
|
Equity Transaction Related expenses
|
— | |||||||
Statutory Dues Expenses
|
— |
29
|
Earnings/ (loss) per share
|
Amount in USD
|
||||||||
Particular’s
|
25 March
2021 |
31 March
2020 |
||||||
Profit/(Loss) attributable to equity shareholders (a) | 2,190,558 | 2,383,964 | ||||||
Less: Dividend on cumulative compulsorily convertible preference shares and tax thereon (b) | 2,049,910 | 1,976,118 | ||||||
Net profit/(loss) adjusted for the effects of dilutive potential equity shares for calculation of diluted EPS [(c) = (a)—(b)] | 140,648 | 407,846 | ||||||
Weighted average number of equity shares of face value of INR 10 each outstanding during the year (used for calculating Basic EPS) (d) | 492,904 | 492,904 | ||||||
Add: Effect of potential equity shares to be issued under Compulsory Convertible Preference Shares (e)* | 4,152,535 | 4,152,535 | ||||||
Weighted average number of equity shares of face value of INR 10 each outstanding during the year (used for calculating Diluted EPS) [(f) = (d) + (e)] | 4,645,439 | 4,645,439 | ||||||
Basic earnings per share of INR 10 each [(g)= (a)/(d)] (not annualized) |
|
4.44
|
|
|
4.84
|
|
||
Diluted earnings per share of INR 10 each [(h) = (c)/(f)] (not annualized)** |
|
0.47
|
|
|
0.51
|
|
30
|
Minority interest
|
Amount in USD
|
||||||||||||||||
Name of the LLPs
|
Minority%
25 March 2021 |
Minority%
31 March 2020 |
25 March
2021 |
31 March 2020
|
||||||||||||
GHSPL BEGUSARAI Healthcare LLP
|
5 | % | 5 | % | 51,503 | 30,168 | ||||||||||
GHSPL BGLP Super Speciality Healthcare LLP
|
35 | % | 35 | % | 333,922 | 344,304 | ||||||||||
GHSPL FATEHPUR Super Speciality Healthcare LLP
|
35 | % | 35 | % | 37,148 | 37,148 | ||||||||||
GHSPL JEYPORE Healthcare LLP
|
35 | % | 35 | % | 284,806 | 396,836 | ||||||||||
GHSPL SAMBHAV KNJ Healthcare LLP
|
35 | % | 35 | % | 154,908 | 75,317 | ||||||||||
GHSPL MLD Super Speciality Healthcare LLP
|
22 | % | 22 | % | 164,918 | 90,740 | ||||||||||
GHSPL MUZF Super Speciality Healthcare LLP
|
38 | % | 38 | % | 521,942 | 453,144 | ||||||||||
GHSPL MDPR Super Speciality Healthcare LLP
|
2 | % | 2 | % | 61,420 | 58,753 | ||||||||||
GHSPL PRN Super Speciality Healthcare LLP
|
24 | % | 24 | % | 190,007 | 190,007 | ||||||||||
GHSPL BHNGAR Super Speciality Healthcare LLP
|
11 | % | 11 | % | 52,008 | 52,008 | ||||||||||
|
1,852,582
|
|
|
1,728,427
|
|
31
|
On October 22, 2020, the Company has entered into a business combination agreement with Uphealth Holdings, Inc. The transaction is agreed at a purchase consideration of $171 million. Post the consummation of transaction, Uphealth Holdings, Inc.. will hold 100% shares in the Company.
|
32. |
This note presents the reconciliation of (i) the unaudited interim consolidated balance sheets & audited consolidated balance sheets, unaudited interim consolidated statement of profit and loss & audited consolidated statement of profit and loss and unaudited interim consolidated statement of cash flows & audited consolidated statement of cash flow of Glocal Healthcare Systems Private Limited (“Glocal” or the “Company”) as derived from the unaudited interim consolidated financial statements of the Company for the period from 01 April 2020 to 25 March 2021 and from the audited consolidated financial statement of the company from 01 April 2019 to 31 March 2020 prepared in accordance with the accounting principles generally accepted in India (“Indian GAAP”),incorporated above in this document, to (ii) the unaudited interim consolidated balance sheets & audited consolidated balance sheet , unaudited interim consolidated statements of operations and unaudited statement of comprehensive income and loss & audited consolidated
|
statement of operations and audited statement of comprehensive income and unaudited consolidated statement of cash flows of the Company & audited consolidated cash flows of the Company prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with the U.S. GAAP accounting policies as set out below. |
32.1
|
Accounting Policies
|
(a)
|
Revenue Recognition
|
(b)
|
Liabilities written back
|
(c)
|
Research and Development Expenses
|
(d)
|
Employee Benefit
|
(e)
|
Preference Shares
|
(f)
|
Business Combination
|
(g)
|
Income Taxes
|
(h)
|
Foreign Currency Translation
|
(i)
|
Comprehensive Income (Loss)
|
(j)
|
Cash and Cash Equivalents
|
(k)
|
Accounts Receivable and Allowance for Doubtful
|
(l)
|
Property and Equipment, net
|
(m)
|
Impairment or disposal of long-lived assets
|
(n)
|
Fair Value of Financial Instruments
|
• |
Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
|
• |
Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
|
• |
Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.
|
Particulars
|
25 March
2021
Indian GAAP
|
Revaluation
Reserve |
Deferred Tax
|
Goodwill
|
Classification
of Mezzanine Equity |
Others*
|
25 March
2021 US GAAP |
|||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||
Current Assets
|
||||||||||||||||||||||||||||
Cash and cash equivalents
|
369,984 | — | — | — | — | (45,328 | ) | 324,656 | ||||||||||||||||||||
Restricted cash
|
— | — | — | — | — | 45,328 | 45,328 | |||||||||||||||||||||
Accounts Receivables, net of allowance
|
6,460,982 | — | — | — | — | — | 6,460,982 | |||||||||||||||||||||
Inventories
|
3,25,572 | — | — | — | — | — | 325,572 | |||||||||||||||||||||
Other current assets
|
1,498,149 | — | — | — | — | 22,636 | 1,520,784 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
8,654,687 | — | — | — | — | 22,636 | 8,677,323 | ||||||||||||||||||||||
Property, Plant & Equipment (Net)
|
24,678,070 | (12,159,329 | ) | — | — | (22,636 | ) | 12,496,106 | ||||||||||||||||||||
Goodwill
|
383,005 | — | — | (383,005 | ) | — | — | — | ||||||||||||||||||||
Other Intangible Assets (Net)
|
2,665,821 | — | — | — | — | — | 2,665,821 | |||||||||||||||||||||
Capital work in progress
|
5,462,687 | — | — | — | — | — | 5,462,687 | |||||||||||||||||||||
Restricted cash
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Deferred Tax Assets
|
— | — | 3,755,307 | — | — | — | 3,755,307 | |||||||||||||||||||||
Other assets
|
969,834 | — | — | — | — | — | 969,834 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
34,159,417 | (12,159,329 | ) | 3,755,307 | (383,005 | ) | — | (22,636 | ) | 25,349,755 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Assets
|
|
42,814,104
|
|
|
(12,159,329
|
)
|
|
3,755,307
|
|
|
(383,005
|
)
|
|
—
|
|
|
—
|
|
|
34,027,078
|
|
|||||||
Liabilities and Stockholders Equity
|
||||||||||||||||||||||||||||
Current Liabilities
|
||||||||||||||||||||||||||||
Accounts payables
|
578,719 | — | — | — | — | — | 578,719 | |||||||||||||||||||||
Accrued Liabilities
|
8,134,887 | — | — | — | — | 129,468 | 8,264,355 | |||||||||||||||||||||
Short-term borrowings
|
3,853,498 | — | — | — | — | — | 3,853,498 | |||||||||||||||||||||
Current portion of long-term borrowings
|
16,579,512 | — | — | — | — | — | 16,579,512 | |||||||||||||||||||||
Short-term provisions
|
8,252 | — | — | — | — | — | 8,252 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
29,154,868 | — | — | — | — | 129,468 | 29,284,336 | ||||||||||||||||||||||
Long-term borrowings
|
1,611,624 | — | — | — | — | — | 1,611,624 | |||||||||||||||||||||
Long-term provisions
|
167,539 | — | — | — | — | — | 167,539 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities
|
30,934,031 | — | — | — | — | 1,29,468 | 31,063,499 | |||||||||||||||||||||
Mezzanine Equity
|
||||||||||||||||||||||||||||
Series A preferred shares
|
— | — | — | — | 2,463,470 | — | 2,463,470 | |||||||||||||||||||||
Stockholders Equity
|
||||||||||||||||||||||||||||
Common Stock
|
104,371 | — | — | — | — | — | 104,371 | |||||||||||||||||||||
Money received against share warrant
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Preferred Stock
|
6,708,281 | — | — | — | (508,086 | ) | — | 6,200,194 | ||||||||||||||||||||
Additional
paid-in-capital
|
8,320,698 | — | — | (98,306 | ) | (1,955,383 | ) | — | 6,267,009 | |||||||||||||||||||
Revaluation Surplus
|
10,128,170 | (10,128,170 | ) | — | — | — | — | — | ||||||||||||||||||||
Retained Earnings
|
(12,967,885 | ) | — | 3,580,711 | (301,589 | ) | — | (132,299 | ) | (9,821,062 | ) | |||||||||||||||||
Foreign Currency Translation Reserve
|
(2,266,144 | ) | — | — | 16,890 | — | 2,831 | (2,246,423 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total shareholders’ equity attributable to the Group
|
10,027,490 | (10,128,170 | ) | 3,580,711 | (383,005 | ) | (0 | ) | (129,468 | ) | 2,967,558 | |||||||||||||||||
Non-Controlling
Interest
|
1,852,582 | (2,031,159 | ) | 174,596 | — | — | — | (3,981 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Stockholders’ Equity
|
11,880,073 | (12,159,329 | ) | 3,755,307 | (383,005 | ) | (0 | ) | (129,468 | ) | 2,963,578 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities and stockholders’ equity
|
|
42,814,104
|
|
|
(12,159,329
|
)
|
|
3,755,307
|
|
|
(383,005
|
)
|
|
(0
|
)
|
|
—
|
|
|
34,027,078
|
|
* |
Others include Lease classification and interest expense.
|
Particulars
|
25 March
2021 Indian GAAP |
Deferred
Tax |
Goodwill
|
Others
|
25 March
2021 US GAAP |
|||||||||||||||
Revenue
|
8,013,504 | — | — | — | 8,013,504 | |||||||||||||||
Cost of revenues
|
3,290,932 | — | — | — | 3,290,932 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross Profit
|
4,722,572 | — | — | — | 4,722,572 | |||||||||||||||
Operating expenses
|
||||||||||||||||||||
Selling & Distribution expense
|
140,919 | — | — | — | 140,919 | |||||||||||||||
General & Administrative expense
|
474,060 | — | — | — | 474,060 | |||||||||||||||
Employee benefits expense
|
1,149,108 | — | — | — | 1,149,108 | |||||||||||||||
Depreciation and amortisation
|
1,402,718 | — | (92,559 | ) | — | 1,310,159 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Operating Expenses
|
3,166,805 | — | (92,559 | ) | — | 3,074,246 | ||||||||||||||
Operating Income
|
|
1,555,767
|
|
|
—
|
|
|
92,559
|
|
|
—
|
|
|
1,648,325
|
|
|||||
Other income
|
3,009,732 | — | — | — | 3,009,732 | |||||||||||||||
Interest expense
|
2,311,323 | — | 39,968 | 2,351,291 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income before income tax
|
|
2,254,175
|
|
— | 92,559 | (39,968 | ) | 2,306,766 | ||||||||||||
Income tax expense
|
— | (695,686 | ) | — | — | (695,686 | ) | |||||||||||||
— | ||||||||||||||||||||
Net Income
|
|
2,254,175
|
|
|
695,686
|
|
|
92,559
|
|
|
(39,968
|
)
|
|
3,002,452
|
|
|||||
Net income attributable to non controlling interest
|
63,618 | 37,778 | — | — | 101,395 | |||||||||||||||
Net income available to the owners of the parent
|
|
2,190,558
|
|
|
657,908
|
|
|
92,559
|
|
|
(39,968
|
)
|
|
2,901,057
|
|
|||||
Net Income
|
2,190,558 | 657,908 | 92,559 | (39,968 | ) | 2,901,057 | ||||||||||||||
Other Comprehensive Income/(loss), net of tax
|
||||||||||||||||||||
Translation adjustments
|
|
(310,450
|
)
|
2,831 | (307,619 | ) | ||||||||||||||
Total other comprehensive income/(loss)
|
|
(310,450
|
)
|
|
—
|
|
|
—
|
|
|
2,831
|
|
|
(307,619
|
)
|
|||||
Comprehensive Income
|
1,880,107 |
|
657,908
|
|
|
92,559
|
|
|
(37,137
|
)
|
|
2,593,437
|
|
|||||||
Comprehensive Income (loss) attributable to the
non-controlling
interest
|
— | — | — | — | — | |||||||||||||||
Comprehensive Income attributable to the owners of the parent
|
|
1,880,107
|
|
|
657,908
|
|
|
92,559
|
|
|
(37,137
|
)
|
|
2,593,437
|
|
Particulars
|
25 March
2021 Indian GAAP |
Others
|
25 March
2021 US GAAP |
|||||||||
Net cash (used in) operating activities (A)
|
1,264,906 | — | 1,264,906 | |||||||||
Net cash (used in) investing activities (B)
|
(416,699 | ) | — | (416,699 | ) | |||||||
Net cash provided by financing activities (C)
|
(636,256 | ) | — | (636,256 | ) | |||||||
Net (decrease) in cash and cash equivalent (A+B+C)
|
|
211,951
|
|
|
—
|
|
|
211,951
|
|
|||
Cash and cash equivalents at the beginning of the year
|
111,902 | — | 111,902 | |||||||||
Cash and cash equivalents at the end of the year
|
|
323,854
|
|
|
—
|
|
|
323,854
|
|
Particulars
|
31 March
2020 Indian GAAP |
Revaluation
Reserve |
Deferred Tax
|
Goodwill
|
Classification
of Mezzanine Equity |
Others*
|
31 March
2020 US GAAP |
|||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||
Current Assets
|
||||||||||||||||||||||||||||
Cash and cash equivalents
|
171,867 | — | — | — | — | (43,697 | ) | 128,170 | ||||||||||||||||||||
Restricted cash
|
— | — | — | — | — | 43,697 | 43,697 | |||||||||||||||||||||
Accounts Receivables, net of allowance
|
4,719,956 | — | — | — | — | — | 4,719,956 | |||||||||||||||||||||
Inventories
|
269,296 | — | — | — | — | — | 269,296 | |||||||||||||||||||||
Other current assets
|
1,520,855 | — | — | — | — | 22,837 | 1,543,692 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
6,681,974 | — | — | — | — | 22,837 | 6,704,810 | ||||||||||||||||||||||
Property, Plant & Equipment (Net)
|
24,378,417 | (12,159,329 | ) | — | — | (22,837 | ) | 12,196,252 | ||||||||||||||||||||
Goodwill
|
459,982 | — | — | (459,982 | ) | — | — | — | ||||||||||||||||||||
Other Intangible Assets (Net)
|
2,865,890 | — | — | — | — | — | 2,865,890 | |||||||||||||||||||||
Capital work in progress
|
4,637,925 | — | — | — | — | — | 4,637,925 | |||||||||||||||||||||
Restricted cash
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Deferred Tax Assets
|
— | — | 3,036,053 | — | — | — | 3,036,053 | |||||||||||||||||||||
Other assets
|
1,145,687 | — | — | — | — | — | 1,145,687 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
33,487,901 | -12,159,329 | 3,036,053 | -459,982 | — | -22,837 | 23,881,806 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Assets
|
|
40,169,875
|
|
|
-12,159,329
|
|
|
3,036,053
|
|
|
-459,982
|
|
|
—
|
|
|
—
|
|
|
30,586,617
|
|
|||||||
Liabilities and Stockholders Equity
|
|
|||||||||||||||||||||||||||
Current Liabilities
|
||||||||||||||||||||||||||||
Accounts payables
|
1,471,145 | — | — | — | — | — | 1,471,145 | |||||||||||||||||||||
Accrued Liabilities
|
5,057,967 | — | — | — | — | 85,742 | 5,143,709 | |||||||||||||||||||||
Short-term borrowings
|
3,892,608 | — | — | — | — | — | 3,892,608 | |||||||||||||||||||||
Current portion of long-term borrowings
|
18,776,995 | — | — | — | — | — | 18,776,995 | |||||||||||||||||||||
Short-term provisions
|
7,651 | — | — | — | — | — | 7,651 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
29,206,367 | — | — | — | — | 85,742 | 29,292,109 | ||||||||||||||||||||||
Long-term borrowings
|
1,578,912 | — | — | — | — | — | 1,578,912 | |||||||||||||||||||||
Long-term provisions
|
129,685 | — | — | — | — | — | 129,685 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities
|
30,914,964 | — | — | — | — | 85,742 | 31,000,706 | |||||||||||||||||||||
Mezzanine Equity
|
||||||||||||||||||||||||||||
Series A preferred shares
|
— | — | — | — | 2,463,470 | — | 2,463,470 | |||||||||||||||||||||
Stockholders Equity
|
||||||||||||||||||||||||||||
Common Stock
|
104,371 | — | — | — | — | — | 104,371 | |||||||||||||||||||||
Preferred Stock
|
6,708,281 | — | — | — | -508,086 | — | 6,200,194 | |||||||||||||||||||||
Additional
paid-in-capital
|
8,320,698 | — | — | (105,118 | ) | (1,955,383 | ) | — | 6,260,197 | |||||||||||||||||||
Revaluation Surplus
|
10,128,170 | -10,128,170 | — | — | — | — | — | |||||||||||||||||||||
Retained Earnings
|
(15,158,441 | ) | — | 2,912,325 | -354,865 | — | -92,331 | (12,693,312 | ) | |||||||||||||||||||
Foreign Currency Translation Reserve
|
(2,576,594 | ) | — | — | — | — | 6,589 | (2,570,005 | ) | |||||||||||||||||||
Total shareholders equity attributable to the Group
|
7,526,484 | (10,128,170 | ) | 2,912,325 | (459,982 | ) | (0 | ) | (85,742 | ) | (235,085 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Non Controling Interest
|
1,728,427 | (2,031,159 | ) | 123,728 | — | — | — | (179,005 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Stockholders Equity
|
9,254,911 | -12,159,329 | 3,036,053 | -459,982 | -0 | -85,742 | -414,089 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities and stockholders equity
|
40,169,875 | -12,159,329 | 3,036,053 | -459,982 | -0 | — | 30,586,617 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
Others include Lease classification and interest expense.
|
Particulars
|
31 March
2020 Indian GAAP |
Deferred
Tax |
Goodwill
|
Others
|
31 March
2020 US GAAP |
|||||||||||||||
Revenue
|
9,057,344 | — | — | — | 9,057,344 | |||||||||||||||
Cost of revenues
|
2,956,059 | — | — | — | 2,956,059 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross Profit
|
6,101,285 | — | — | — | 6,101,285 | |||||||||||||||
Operating expenses
|
||||||||||||||||||||
Selling & Distribution expense
|
231,583 | — | — | — | 231,583 | |||||||||||||||
General & Administrative expense
|
837,945 | — | — | — | 837,945 | |||||||||||||||
Employee benefits expense
|
1,437,745 | — | — | — | 1,437,745 | |||||||||||||||
Depreciation and amortisation
|
1,404,801 | — | (95,982 | ) | — | 1,308,820 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Operating Expenses
|
3,912,074 | — | (95,982 | ) | — | 3,816,092 | ||||||||||||||
Operating Income
|
|
2,189,211
|
|
|
—
|
|
|
95,982
|
|
|
—
|
|
|
2,285,193
|
|
|||||
Other income
|
2,136,145 | — | — | — | 2,136,145 | |||||||||||||||
Interest expense
|
2,150,174 | — | 47,631 | 2,197,805 | ||||||||||||||||
Income before income tax
|
|
2,175,182
|
|
|
—
|
|
|
95,982
|
|
|
(47,631
|
)
|
2,223,533 | |||||||
Income tax expense
|
— | 1,468,328 | — | — | 1,468,328 | |||||||||||||||
Net Income
|
|
2,175,182
|
|
|
(1,468,328
|
)
|
|
95,982
|
|
|
(47,631
|
)
|
|
755,205
|
|
|||||
Net income attributable to non controlling interest
|
22,802 | (25,339 | ) | — | — | (2,536 | ) | |||||||||||||
Net income available to the owners of the parent
|
|
2,152,380
|
|
|
(1,442,990
|
)
|
|
95,982
|
|
|
(47,631
|
)
|
|
757,741
|
|
|||||
Net Income
|
2,152,380 | (1,442,990 | ) | 95,982 | (47,631 | ) | 757,741 | |||||||||||||
Other Comprehensive Income/(loss), net of tax
|
||||||||||||||||||||
Translation adjustments with no tax impact
|
|
(668,436
|
)
|
6,589 |
|
(661,846
|
)
|
|||||||||||||
Total other comprehensive income/(loss)
|
|
(668,436
|
)
|
|
—
|
|
|
—
|
|
|
6,589
|
|
|
(661,846
|
)
|
|||||
Comprehensive Income
|
1,483,944 | (1,442,990 | ) | 95,982 | (41,042 | ) | 95,895 | |||||||||||||
Comprehensive Income (loss) attributable to the
non-controlling
interest
|
— | — | — | — | — | |||||||||||||||
Comprehensive Income attributable to the owners of the parent
|
|
1,483,944
|
|
|
(1,442,990
|
)
|
|
95,982
|
|
|
(41,042
|
)
|
|
95,895
|
|
Particulars
|
31 March
2020 Indian GAAP |
Others
|
31 March
2020 US GAAP |
|||||||||
Net cash (used in) operating activities (A)
|
1,373,293 | — | 1,373,293 | |||||||||
Net cash (used in) investing activities (B)
|
(1,004,711 | ) | — | (1,004,711 | ) | |||||||
Net cash provided by financing activities (C)
|
(849,365 | ) | — | (849,365 | ) | |||||||
Net (decrease) in cash and cash equivalent (A+B+C)
|
|
(480,782
|
)
|
|
—
|
|
(480,782 | ) | ||||
Cash and cash equivalents at the beginning of the year
|
592,684 | — | 592,684 | |||||||||
Cash and cash equivalents at the end of the year
|
|
111,902
|
|
— | 111,902 |
A. |
Revaluation Reserve
|
B. |
Recognition of Deferred Taxes
|
C. |
Goodwill
|
D. |
Classification of Prefernce Shares
|
E. |
Lease classification
|
F. |
Restricted cash classification
|
G. |
Interest Expense
|
33
|
The Company has considered the possible effects that may result from the pandemic relating to
COVID-19
on the carrying amounts of receivables and investment in subsidiaries. In
|
34
|
Previous year’s figures have been regrouped/ reclassified wherever necessary to conform to current year’s classification/ disclosure.
|
For and on behalf of the Board of Directors of | ||
Glocal Healthcare Systems Private Limited
|
Dr. Syed Sabahat Azim
Director
|
Richa Sana Azim
Director
|
|||
DIN: 03122895 | DIN: 02609003 |
Page | ||||
F-245 -F-246 | ||||
CONSOLIDATED FINANCIAL STATEMENTS
|
||||
F-248 -F-249 | ||||
F-250 | ||||
F-251 - F-252 | ||||
F-253 - F-255 | ||||
F-256 - F-276
|
|
Plante & Moran, LLC
Suite 600
8181 E. Tufts Avenue
Denver, CO 80237
Tel: 303.740.9400
Fax: 303.740.9009
plantemoran.com
|
Successor | ||||||||
December 31,
2020 |
December 31,
2019 |
|||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash
|
$ | 2,426,780 | $ | 549,669 | ||||
Restricted cash
|
1,332,600 | — | ||||||
Accounts receivable, net
|
1,554,378 | 3,163,975 | ||||||
Prepaid expenses and other current assets
|
241,304 | 80,096 | ||||||
|
|
|
|
|||||
Total current assets
|
5,555,062 | 3,793,740 | ||||||
|
|
|
|
|||||
PROPERTY AND EQUIPMENT, net
|
520,907 | 420,957 | ||||||
|
|
|
|
|||||
OTHER ASSETS
|
||||||||
Security deposits
|
271,070 | 265,734 | ||||||
Goodwill
|
13,299,090 | 13,299,090 | ||||||
|
|
|
|
|||||
13,570,160 | 13,564,824 | |||||||
|
|
|
|
|||||
$ | 19,646,129 | $17,779,521 | ||||||
|
|
|
|
Successor | ||||||||
December 31,
2020 |
December 31,
2019 |
|||||||
LIABILITIES AND EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Revolving line of credit
|
$ | 1,750,000 | $ | 250,000 | ||||
Current maturities of long-term debt, net of unamortized debt issuance costs
|
957,813 | 957,813 | ||||||
Current maturities of paycheck protection program loans
|
850,135 | — | ||||||
Current portion of contingent consideration due to seller (Note B)
|
28,667 | 631,604 | ||||||
Current portion of due to related parties
|
1,393,258 | — | ||||||
Accounts payable
|
860,794 | 483,668 | ||||||
Income taxes payable
|
29,058 | 89,058 | ||||||
Accrued payroll and other
|
562,263 | 109,385 | ||||||
|
|
|
|
|||||
Total current liabilities
|
6,431,988 | 2,521,528 | ||||||
|
|
|
|
|||||
LONG-TERM LIABILITIES
|
||||||||
Long-term debt, less current maturities, net of unamortized debt issuance costs
|
8,433,987 | 9,391,800 | ||||||
Deferred income taxes
|
420,056 | 718,787 | ||||||
Contingent consideration due to seller (Note B), less current portion
|
— | 421,944 | ||||||
Due to related parties, less current portion
|
— | 25,000 | ||||||
Paycheck protection program loans, less current portion
|
433,366 | — | ||||||
|
|
|
|
|||||
9,287,409 | 10,557,531 | |||||||
|
|
|
|
|||||
MEZZANINE EQUITY - REDEEMABLE PREFERRED UNITS
|
||||||||
2,000,000 shares authorized, $.0001 par value; 2,000,000 shares issued and outstanding at December 31, 2020 and 2019 (See Note H and Note I)
|
1,920,403 | 1,829,431 | ||||||
|
|
|
|
|||||
STOCKHOLDERS’ EQUITY
|
||||||||
TTC Healthcare, Inc. stockholders’ equity
|
2,033,736 | 2,871,031 | ||||||
Noncontrolling interest
|
(27,407 | ) | — | |||||
|
|
|
|
|||||
Total stockholders’ equity
|
2,006,329 | 2,871,031 | ||||||
|
|
|
|
|||||
$ | 19,646,129 | $ | 17,779,521 | |||||
|
|
|
|
Successor | Predecessor | |||||||||||
January 1, 2020
through December 31, 2020 |
September 5, 2019
through December 31, 2019 |
January 1, 2019
through September 4, 2019 |
||||||||||
Revenues, net
|
||||||||||||
Inpatient and outpatient treatment related services
|
$ | 14,839,751 | $ | 5,056,558 | $ | 14,602,429 | ||||||
Detoxification related services
|
2,028,532 | 900,152 | 1,662,656 | |||||||||
Diagnostic laboratory related services
|
1,700,370 | 772,400 | 1,678,613 | |||||||||
Ancillary medical services
|
798,146 | — | — | |||||||||
19,366,799 | 6,729,110 | 17,943,698 | ||||||||||
|
|
|
|
|
|
|||||||
Cost of service
|
9,030,391 | 2,964,587 | 6,326,657 | |||||||||
|
|
|
|
|
|
|||||||
Gross profit
|
10,336,408 | 3,764,523 | 11,617,041 | |||||||||
|
|
|
|
|
|
|||||||
Operating expenses
|
||||||||||||
Selling, general, and administrative
|
10,926,543 | 3,193,312 | 8,173,090 | |||||||||
Depreciation
|
121,469 | 50,952 | 110,741 | |||||||||
Transaction expenses
|
— | 366,825 | — | |||||||||
|
|
|
|
|
|
|||||||
11,048,012 | 3,611,089 | 8,283,831 | ||||||||||
Operating (expense) income
|
(711,604 | ) | 153,434 | 3,333,210 | ||||||||
|
|
|
|
|
|
|||||||
Other income (expenses)
|
||||||||||||
Interest expense
|
(879,366 | ) | (222,618 | ) | — | |||||||
Gain on extinguishment of debt - paycheck protection program loans
|
660,851 | — | — | |||||||||
Other income (expense)
|
(2,342 | ) | 121,325 | 18,790 | ||||||||
|
|
|
|
|
|
|||||||
(220,857 | ) | (101,293 | ) | 18,790 | ||||||||
|
|
|
|
|
|
|||||||
(Loss) income before income tax expense
|
(932,461 | ) | 52,141 | 3,352,000 | ||||||||
Income tax benefit (expense)
|
298,731 | (106,385 | ) | — | ||||||||
|
|
|
|
|
|
|||||||
NET (LOSS) INCOME
|
(633,730 | ) | (54,244 | ) | 3,352,000 | |||||||
|
|
|
|
|
|
|||||||
Less net loss attributable to noncontrolling interest
|
27,407 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Net (loss) income attributable to TTC Healthcare Inc. (successor) Transformations Treatment Center, Inc. and Affiliates (predecessor)
|
$ | (606,323 | ) | $ | (54,244 | ) | $ | 3,352,000 | ||||
|
|
|
|
|
|
Predecessor | ||||||||||||||||||||
Common Stock |
Additional
Paid-in
Capital |
Retained
Earnings |
Total Equity | |||||||||||||||||
Shares | Amount | |||||||||||||||||||
Balance, January 1, 2019
|
— | — | — | 7,843,908 | 7,843,908 | |||||||||||||||
Contributions
|
— | — | — | 1,186,374 | 1,186,374 | |||||||||||||||
Distributions
|
— | — | — | (8,369,388) | (8,369,388) | |||||||||||||||
Net income
|
— | — | — | 3,352,000 | 3,352,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance, September 4, 2019
|
— | $ | — | $— | $4,012,894 | $4,012,894 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
Successor | ||||||||||||||||||||||||||||
TTC Healthcare, Inc. Stockholders’ |
Noncontrolling
Interest |
Total
Equity |
||||||||||||||||||||||||||
Common Stock |
Additional
Paid-in
Capital |
Accumulated
Deficit |
Stockholders’
Equity |
|||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance, September 5, 2019 (Inception)
|
— | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
Issuance of common stock
|
8,000,000 | 800 | 2,999,200 | — | 3,000,000 | — | 3,000,000 | |||||||||||||||||||||
Preferred stock dividends
|
— | — | — | (45,294 | ) | (45,294 | ) | — | (45,294 | ) | ||||||||||||||||||
Accretion of preferred stock discount
|
— | — | — | (29,431 | ) | (29,431 | ) | — | (29,431 | ) | ||||||||||||||||||
Net loss
|
— | — | — | (54,244 | ) | (54,244 | ) | — | (54,244 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2019
|
8,000,000 | 800 | 2,999,200 | (128,969 | ) | 2,871,031 | — | 2,871,031 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Preferred stock dividends
|
— | — | — | (140,000 | ) | (140,000 | ) | — | (140,000 | ) | ||||||||||||||||||
Accretion of preferred stock discount
|
— | — | — | (90,972 | ) | (90,972 | ) | — | (90,972 | ) | ||||||||||||||||||
Net loss
|
— | — | — | (606,323 | ) | (606,323 | ) | (27,407 | ) | (633,730 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2020
|
8,000,000 | $ | 800 | $ | 2,999,200 | $ | (966,264 | ) | $ | 2,033,736 | $ | (27,407 | ) | $ | 2,006,329 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor | Predecessor | |||||||||||
January 1, 2020
through December 31, 2020 |
September 5, 2019
through December 31, 2019 |
January 1, 2019
through September 4, 2019 |
||||||||||
Cash flows from operating activities
|
||||||||||||
Net (loss) income
|
$ | (633,730 | ) | $ | (54,244 | ) | $ | 3,352,000 | ||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities
|
||||||||||||
Depreciation
|
121,469 | 50,952 | 110,741 | |||||||||
Amortization of debt issuance costs
|
42,187 | 10,547 | — | |||||||||
Deferred income tax (benefit) expense
|
(298,731 | ) | 17,327 | — | ||||||||
Gain on extinguishment of debt - paycheck protection program loans
|
(660,851 | ) | — | — | ||||||||
Accretion of contingent consideration due to seller discount
|
271,846 | — | — | |||||||||
(Increase) decrease in assets
|
||||||||||||
Accounts receivable
|
1,609,597 | (104,167 | ) | 549,447 | ||||||||
Prepaid expenses and other current assets
|
(161,208 | ) | 221,867 | (55,451 | ) | |||||||
Security deposits
|
(5,336 | ) | (95,331 | ) | (52,700 | ) | ||||||
Increase (decrease) in liabilities
|
||||||||||||
Accounts payable
|
377,126 | (68,590 | ) | 129,140 | ||||||||
Income taxes payable
|
(60,000 | ) | 89,058 | — | ||||||||
Accrued payroll and other
|
452,878 | 109,385 | (38,732 | ) | ||||||||
Payment of contingent consideration due to seller
|
(68,469 | ) | (3,082 | ) | — | |||||||
|
|
|
|
|
|
|||||||
Net cash provided by operating activities
|
986,778 | 173,722 | 3,994,445 | |||||||||
|
|
|
|
|
|
|||||||
Cash flows from investing activities
|
||||||||||||
Net assets acquired, net of cash
|
— | (13,192,825 | ) | — | ||||||||
Purchase of property and equipment
|
(221,419 | ) | — | (6,000 | ) | |||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities
|
(221,419 | ) | (13,192,825 | ) | (6,000 | ) | ||||||
|
|
|
|
|
|
Successor | Predecessor | |||||||||||
January 1, 2020
through December 31, 2020 |
September 5, 2019
through December 31, 2019 |
January 1, 2019
through September 4, 2019 |
||||||||||
Cash flows from financing activities
|
||||||||||||
Proceeds from revolving line of credit
|
$ | 1,500,000 | $ | 500,000 | $ | — | ||||||
Payments on revolving line of credit
|
— | (250,000 | ) | — | ||||||||
Proceeds from long-term debt
|
— | 10,800,000 | — | |||||||||
Payments on long-term debt
|
(1,000,000 | ) | (250,000 | ) | — | |||||||
Debt issuance costs
|
— | (210,934 | ) | — | ||||||||
Advances from a related party
|
— | 25,000 | — | |||||||||
Issuance of common stock
|
— | 3,000,000 | — | |||||||||
Preferred stock dividends
|
— | (45,294 | ) | — | ||||||||
Proceeds from paycheck protection program loans
|
1,944,352 | — | — | |||||||||
Distributions
|
— | — | (8,369,388 | ) | ||||||||
Contributions
|
— | — | 1,186,374 | |||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) financing activities
|
2,444,352 | 13,568,772 | (7,183,014 | ) | ||||||||
|
|
|
|
|
|
|||||||
INCREASE (DECREASE) IN CASH
|
3,209,711 | 549,669 | (3,194,569 | ) | ||||||||
Cash and restricted cash, beginning of year/period
|
549,669 | — | 3,689,559 | |||||||||
|
|
|
|
|
|
|||||||
Cash and restricted cash, end of year/period
|
$ | 3,759,380 | $ | 549,669 | $ | 494,990 | ||||||
|
|
|
|
|
|
|||||||
Supplemental disclosure of cash flow information
|
||||||||||||
Cash paid for interest
|
$ | 568,073 | $ | 168,015 | $ | — | ||||||
|
|
|
|
|
|
|||||||
Cash paid for income taxes
|
$ | 60,000 | $ | — | $ | — | ||||||
|
|
|
|
|
|
|||||||
Supplemental disclosure of reconciliation of cash and restricted cash
|
||||||||||||
Cash
|
$ | 2,426,780 | $ | 549,669 | $ | 494,990 | ||||||
Restricted cash
|
1,332,600 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Cash and restricted cash, end of year/period
|
$ | 3,759,380 | $ | 549,669 | $ | 494,990 | ||||||
|
|
|
|
|
|
Successor | Predecessor | |||||||||||
January 1, 2020
through December 31, 2020 |
September 5, 2019
through December 31, 2019 |
January 1, 2019
through September 4, 2019 |
||||||||||
Supplemental schedule of noncash activities
|
||||||||||||
Total identifiable net assets acquired net of cash acquired (see Note B)
|
||||||||||||
Accounts receivable
|
$ | — | $ | 3,059,808 | $ | — | ||||||
Prepaid expenses and other current assets
|
— | 301,963 | — | |||||||||
Property and equipment
|
— | 471,909 | — | |||||||||
Security deposits
|
— | 170,403 | — | |||||||||
Accounts payable and accrued expenses
|
— | (552,258 | ) | — | ||||||||
Deferred tax liability
|
— | (701,460 | ) | — | ||||||||
|
|
|
|
|
|
|||||||
— | 2,750,365 | — | ||||||||||
Goodwill
|
— | 13,299,090 | — | |||||||||
|
|
|
|
|
|
|||||||
— | 16,049,455 | — | ||||||||||
Less redeemable preferred stock
|
— | (1,800,000 | ) | — | ||||||||
Less
non-cash
consideration - contingent consideration due to seller
|
— | (1,056,630 | ) | — | ||||||||
|
|
|
|
|
|
|||||||
Cash considerations
|
$ | — | $ | 13,192,825 | $ | — | ||||||
|
|
|
|
|
|
|||||||
Contingent consideration earned by seller reported as to due to related parties
|
$ | 1,228,258 | $ | — | $ | — | ||||||
|
|
|
|
|
|
|||||||
Accrued unpaid preferred dividends reported as to due to related parties
|
$ | 140,000 | $ | — | $ | — | ||||||
|
|
|
|
|
|
1. |
Nature of Business
|
2. |
Basis of Consolidation
|
2. |
Basis of Consolidation (Continued)
|
3. |
Reclassification
|
4. |
Restricted Cash
|
5. |
New Accounting Pronouncement
|
5. |
New Accounting Pronouncement (Continued)
|
6. |
Revenue Recognition
|
6. |
Revenue Recognition (Continued)
|
a.
|
Transformations Treatment Center, Inc. and Transformations Mending Fences, LLC
|
b.
|
Summit Detox, Inc.
|
c.
|
Pinnacle Testings, Inc.
|
d.
|
Wrigley Healthcare Services, Inc.
|
e.
|
Freedom Now, Inc.
|
6. |
Revenue Recognition (Continued)
|
Successor | Predecessor | |||||||||||||||
December 31,
2020 |
December 31,
2019 |
September 4,
2019 |
||||||||||||||
Inpatient and outpatient treatment related services
|
$ | 14,839,751 | $ | 5,056,558 |
|
$ | 14,602,429 | |||||||||
Detoxification related services
|
2,028,532 | 900,152 |
|
1,662,656 | ||||||||||||
Diagnostic laboratory related services
|
1,700,370 | 772,400 |
|
1,678,613 | ||||||||||||
Ancillary medical services
|
798,146 | — |
|
— | ||||||||||||
|
|
|
|
|
|
|||||||||||
$ | 19,366,799 | $ | 6,729,110 | $ | 17,943,698 | |||||||||||
|
|
|
|
|
|
7. |
Accounts Receivable
|
8. |
Property and Equipment
|
Years | ||||
Office equipment
|
5 | |||
Furnitures and fixtures
|
7 | |||
Vehicles
|
5 | |||
Software
|
3 |
9. |
Goodwill
|
9. |
Goodwill (Continued)
|
10. |
Business Combinations
|
11. |
Debt Issuance Costs
|
12. |
Income Taxes
|
12. |
Income Taxes (Continued)
|
13. |
Use of Estimates
|
14. |
Fair Value of Financial Instruments
|
15. |
Marketing and Promotion Costs
|
16. |
Significant Accounting Standards Applicable In A Future Year
|
a. |
Leases
|
Consideration
|
||||
Consideration, net of cash acquired of $495,014
|
$ | 13,192,825 | ||
Non-cash
consideration - preferred stock
|
1,800,000 | |||
Contingent consideration due to seller
|
1,056,630 | |||
|
|
|||
$ | 16,049,455 | |||
|
|
Accounts receivable
|
$ | 3,059,808 | ||
Prepaid expenses and other current assets
|
301,963 | |||
Property and equipment
|
471,909 | |||
Security deposits
|
170,403 | |||
Goodwill
|
13,299,090 | |||
Accounts payable and accrued expenses
|
(552,258 | ) | ||
Deferred tax liability
|
(701,460 | ) | ||
|
|
|||
$ | 16,049,455 | |||
|
|
Amounts billed for services provided
|
$ | 16,003,541 | ||
Less implicit or explicit price concessions
|
(12,943,733 | ) | ||
|
|
|||
$ | 3,059,808 | |||
|
|
Successor
|
||||||||
December 31,
2020 |
December 31,
2019 |
|||||||
Total contingent consideration due to seller
|
$ | 28,667 | $ | 1,053,548 | ||||
Less current portion of contingent consideration due to seller
|
(28,667 | ) | (631,604 | ) | ||||
|
|
|
|
|||||
Contingent consideration due to seller, less current portion
|
$ | — | $ | 421,944 | ||||
|
|
|
|
Successor
Net Receivables |
||||||||
December 31,
2020 |
December 31,
2019 |
|||||||
Third-party payors
|
100.00 | % | 100.00 | % | ||||
Patient
|
0.00 | % | 0.00 | % | ||||
|
|
|
|
|||||
100.00 | % | 100.00 | % | |||||
|
|
|
|
Successor
Net Revenues |
Predecessor
Net Revenues |
|||||||||||||||
January 1, 2020
through December 31, 2020 |
September 5, 2019
through December 31, 2019 |
January 1, 2019
through September 4, 2019 |
||||||||||||||
Third-party payors
|
94.12 | % | 97.80 | % |
|
95.24 | % | |||||||||
Patient
|
5.88 | % | 2.20 | % |
|
4.76 | % | |||||||||
|
|
|
|
|
|
|||||||||||
100.00 | % | 100.00 | % | 100.00 | % | |||||||||||
|
|
|
|
|
|
Successor | ||||||||
December 31,
2020 |
December 31,
2019 |
|||||||
Office equipment
|
$ | 44,776 | $ | 23,871 | ||||
Furnitures and fixtures
|
58,400 | 21,556 | ||||||
Leasehold improvements
|
409,891 | 311,428 | ||||||
Vehicles
|
134,433 | 110,726 | ||||||
Software
|
44,307 | 4,328 | ||||||
|
|
|
|
|||||
691,807 | 471,909 | |||||||
Less accumulated depreciation
|
170,900 | 50,952 | ||||||
|
|
|
|
|||||
$ | 520,907 | $ | 420,957 | |||||
|
|
|
|
Successor | ||||||||
December 31,
2020 |
December 31,
2019 |
|||||||
As defined in the Agreement described in Note E, the term loan bears interest at the same rate of the revolving line of credit. Principal payments of $83,333 are required monthly for the first forty eight months and $125,000 for the final twelve months, a balloon payment of all outstanding principal and accrued interest due on the maturity date in September 2024
|
$ | 9,550,000 | $ | 10,550,000 | ||||
Less unamortized debt issuance costs
|
158,200 | 200,387 | ||||||
|
|
|
|
|||||
9,391,800 | 10,349,613 | |||||||
Less current maturities
|
957,813 | 957,813 | ||||||
|
|
|
|
|||||
$ | 8,433,987 | $ | 9,391,800 | |||||
|
|
|
|
The |
total future maturities of long-term debt consist of the following at December 31, 2020:
|
Principal |
Unamortized
Debt Issuance Costs |
Net
Outstanding Long-Term Debt |
||||||||||
2021
|
$ | 1,000,000 | $ | 42,187 | $ | 957,813 | ||||||
2022
|
1,000,000 | 42,187 | 957,813 | |||||||||
2023
|
1,125,000 | 42,187 | 1,082,813 | |||||||||
2024
|
6,425,000 | 31,639 | 6,393,361 | |||||||||
|
|
|
|
|
|
|||||||
Total
|
$ | 9,550,000 | $ | 158,200 | $ | 9,391,800 | ||||||
|
|
|
|
|
|
Related
Party |
Non-Related
Party |
Total | ||||||||||
2021
|
$ | 887,339 | $ | 833,303 | $ | 1,720,642 | ||||||
2022
|
900,757 | 953,424 | 1,854,181 | |||||||||
2023
|
914,175 | 934,270 | 1,848,445 | |||||||||
2024
|
927,592 | 815,002 | 1,742,594 | |||||||||
2025
|
686,716 | 427,028 | 1,113,744 | |||||||||
Thereafter
|
— | 383,415 | 383,415 | |||||||||
|
|
|
|
|
|
|||||||
$ | 4,316,579 | $ | 4,346,442 | $ | 8,663,021 | |||||||
|
|
|
|
|
|
Successor | ||||||||
December 31,
2020 |
December 31,
2019 |
|||||||
Deferred tax assets before valuation allowance
|
$ | 192,590 | $ | — | ||||
Valuation allowance
|
— | — | ||||||
|
|
|
|
|||||
Deferred tax assets after valuation allowance
|
192,590 | — | ||||||
|
|
|
|
|||||
Deferred tax liabilities
|
612,646 | 718,787 | ||||||
|
|
|
|
|||||
Net deferred tax assets and liabilities
|
$ | 420,056 | $ | 718,787 | ||||
|
|
|
|
Successor | ||||||||
January 1, 2020
through December 31, 2020 |
September 5, 2019
through December 31, 2019 |
|||||||
Current expense
|
$ | — | $ | 89,058 | ||||
Deferred (benefit) expense
|
(298,731 | ) | 17,327 | |||||
|
|
|
|
|||||
Total income tax (benefit) expense
|
$ | (298,731 | ) | $ | 106,385 | |||
|
|
|
|
Successor | ||||||||
January 1, 2020
through December 31, 2020 |
September 5, 2019
through December 31, 2019 |
|||||||
Income tax (benefit) expense at federal statutory rate
|
$ | (195,817 | ) | $ | 10,950 | |||
State and local income taxes net of federal tax benefit
|
(44,867 | ) | 1,836 | |||||
Nontaxable Paycheck Protection Program loan forgiveness
|
(138,779 | ) | — | |||||
Nondeductible contingent consideration
|
57,088 | — | ||||||
Nondeductible transaction expenses
|
— | 89,058 | ||||||
Other permanent differences
|
23,644 | 4,541 | ||||||
|
|
|
|
|||||
Total income tax (benefit) expense
|
$ | (298,731 | ) | $ | 106,385 | |||
|
|
|
|
1. |
Management Fees
|
1. |
Management Fees (Continued)
|
2. |
Due to Related Parties
|
1. |
Uninsured Cash
|
2. |
Significant Third-Party Payors
|
2. |
Significant Third-Party Payors (Continued)
|
3. |
Contingencies
|
4. |
COVID-19
|
1. |
Merger
|
2. |
Provider Relief Fund
|
2. |
Provider Relief Fund (Continued)
|
Page | ||||
CONSOLIDATED FINANCIAL STATEMENTS
|
||||
F-279 - F-280 | ||||
F-281 | ||||
F-282 | ||||
F-283 - F-284 | ||||
F-285 - F-300 |
January 24,
2021 |
December 31,
2020 |
|||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash
|
$ | 1,023,945 | $ | 2,426,780 | ||||
Restricted cash
|
1,332,532 | 1,332,600 | ||||||
Accounts receivable, net
|
1,714,612 | 1,554,378 | ||||||
Prepaid expenses and other current assets
|
245,332 | 241,304 | ||||||
|
|
|
|
|||||
Total current assets
|
4,316,421 | 5,555,062 | ||||||
|
|
|
|
|||||
PROPERTY AND EQUIPMENT, net
|
530,719 | 520,907 | ||||||
|
|
|
|
|||||
OTHER ASSETS
|
||||||||
Security deposits
|
281,070 | 271,070 | ||||||
Goodwill
|
13,299,090 | 13,299,090 | ||||||
|
|
|
|
|||||
13,580,160 | 13,570,160 | |||||||
|
|
|
|
|||||
$ | 18,427,300 | $ | 19,646,129 | |||||
|
|
|
|
January 24,
2021 |
December 31,
2020 |
|||||||
LIABILITIES AND EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Revolving line of credit
|
$ | 1,750,000 | $ | 1,750,000 | ||||
Current maturities of long-term debt, net of unamortized debt issuance costs
|
874,480 | 957,813 | ||||||
Current maturities of paycheck protection program loans
|
850,135 | 850,135 | ||||||
Current portion of contingent consideration due to seller
|
28,667 | 28,667 | ||||||
Current portion of due to related parties
|
1,393,258 | 1,393,258 | ||||||
Accounts payable
|
595,626 | 860,794 | ||||||
Income taxes payable
|
29,058 | 29,058 | ||||||
Accrued payroll and other
|
592,773 | 562,263 | ||||||
|
|
|
|
|||||
Total current liabilities
|
6,133,997 | 6,431,988 | ||||||
|
|
|
|
|||||
LONG-TERM LIABILITIES
|
||||||||
Long-term debt, less current maturities, net of unamortized debt issuance costs
|
8,433,987 | 8,433,987 | ||||||
Deferred income taxes
|
197,801 | 420,056 | ||||||
Paycheck protection program loans, less current portion
|
433,366 | 433,366 | ||||||
|
|
|
|
|||||
9,065,154 | 9,287,409 | |||||||
|
|
|
|
|||||
MEZZANINE EQUITY—REDEEMABLE PREFERRED UNITS
|
||||||||
2,000,000 shares authorized, $.0001 par value; 2,000,000 shares issued and outstanding at January 24, 2021 and December 31, 2020 (See Note G)
|
1,929,435 | 1,920,403 | ||||||
|
|
|
|
|||||
STOCKHOLDERS’ EQUITY
|
||||||||
TTC Healthcare, Inc. stockholders’ equity
|
1,339,081 | 2,033,736 | ||||||
Noncontrolling interest
|
(20,367 | ) | (27,407 | ) | ||||
|
|
|
|
|||||
Total stockholders’ equity
|
1,318,714 | 2,006,329 | ||||||
|
|
|
|
|||||
$ | 18,427,300 | $ | 19,646,129 | |||||
|
|
|
|
January 1, 2021
through January 24, 2021 |
January 1, 2020
through March 31, 2020 |
|||||||
Revenues, net
|
||||||||
Inpatient and outpatient treatment related services
|
$ | 357,465 | $ | 4,397,157 | ||||
Detoxification related services
|
109,802 | 509,947 | ||||||
Diagnostic laboratory related services
|
11,073 | 397,591 | ||||||
Ancillary medical services
|
81,043 | 29,329 | ||||||
|
|
|
|
|||||
559,383 | 5,334,024 | |||||||
|
|
|
|
|||||
Cost of service
|
724,299 | 3,006,242 | ||||||
|
|
|
|
|||||
Gross profit
|
(164,916 | ) | 2,327,782 | |||||
|
|
|
|
|||||
Operating expenses
|
||||||||
General and administrative
|
431,330 | 921,336 | ||||||
Selling and marketing
|
264,434 | 1,077,169 | ||||||
Depreciation and amortization
|
8,323 | 35,267 | ||||||
|
|
|
|
|||||
704,087 | 2,033,772 | |||||||
Operating (expense) income
|
(869,003 | ) | 294,010 | |||||
|
|
|
|
|||||
Other income (expenses)
|
||||||||
Interest expense
|
(31,834 | ) | (184,923 | ) | ||||
Other income
|
— | 8,931 | ||||||
|
|
|
|
|||||
(31,834 | ) | (175,992 | ) | |||||
|
|
|
|
|||||
(Loss) income before income tax expense
|
(900,837 | ) | 118,018 | |||||
Income tax benefit (expense)
|
222,255 | (36,380 | ) | |||||
|
|
|
|
|||||
NET (LOSS) INCOME
|
(678,582 | ) | 81,638 | |||||
Less net income attributable to noncontrolling interest
|
7,040 | — | ||||||
|
|
|
|
|||||
Net (loss) income attributable to TTC Healthcare Inc.
|
$ | (685,622 | ) | $ | 81,638 | |||
|
|
|
|
Common Stock |
Additional
Paid-in
Capital |
Accumulated
Deficit |
Stockholders’
Equity |
Noncontrolling
Interest |
Total
Equity |
|||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance, January 1, 2021
|
8,000,000 | $ | 800 | $ | 2,999,200 | $ | (966,264 | ) | $ | 2,033,736 | $ | (27,407 | ) | $ | 2,006,329 | |||||||||||||
Accretion of preferred stock discount
|
— | — | — | (9,033 | ) | (9,033 | ) | — | (9,033 | ) | ||||||||||||||||||
Net (loss) income
|
— | — | — | (685,622 | ) | (685,622 | ) | 7,040 | (678,582 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, January 24, 2021
|
8,000,000 | $ | 800 | $ | 2,999,200 | $ | (1,660,919 | ) | $ | 1,339,081 | $ | (20,367 | ) | $ | 1,318,714 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, January 1, 2020
|
8,000,000 | $ | 800 | $ | 2,999,200 | $ | (128,969 | ) | $ | 2,871,031 | $ | — | $ | 2,871,031 | ||||||||||||||
Preferred stock dividends
|
— | — | — | (35,000 | ) | (35,000 | ) | — | (35,000 | ) | ||||||||||||||||||
Accretion of preferred stock discount
|
— | — | — | (22,743 | ) | (22,743 | ) | — | (22,743 | ) | ||||||||||||||||||
Net income
|
— | — | — | 81,638 | 81,638 | — | 81,638 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, March 31, 2020
|
8,000,000 | $ | 800 | $ | 2,999,200 | $ | (105,074 | ) | $ | 2,894,926 | $ | — | $ | 2,894,926 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 1, 2021
through January 24, 2021 |
January 1, 2020
through March 31, 2020 |
|||||||
Cash flows from operating activities
|
||||||||
Net (loss) income
|
$ | (678,582 | ) | $ | 81,638 | |||
Adjustments to reconcile net (loss) income to net cash used in operating activities
|
||||||||
Depreciation
|
8,323 | 35,267 | ||||||
Amortization of debt issuance costs
|
— | 10,547 | ||||||
Deferred income tax benefit
|
(222,255 | ) | (164,810 | ) | ||||
(Increase) decrease in assets
|
||||||||
Accounts receivable
|
(160,234 | ) | (921,334 | ) | ||||
Prepaid expenses and other current assets
|
(4,028 | ) | 4,253 | |||||
Security deposits
|
(10,000 | ) | (17,826 | ) | ||||
Increase (decrease) in liabilities
|
||||||||
Accounts payable
|
(265,168 | ) | 4,950 | |||||
Income taxes payable
|
— | 201,190 | ||||||
Accrued payroll and other
|
30,510 | 556,588 | ||||||
Payment of contingent consideration due to seller
|
— | (68,469 | ) | |||||
|
|
|
|
|||||
Net cash used in operating activities
|
(1,301,434 | ) | (278,006 | ) | ||||
|
|
|
|
|||||
Cash flows from investing activities
|
||||||||
Purchase of property and equipment
|
(18,136 | ) | (3,745 | ) |
January 1, 2021
through January 24, 2021 |
January 1, 2020
through March 31, 2020 |
|||||||
Cash flows from financing activities
|
||||||||
Proceeds from revolving line of credit
|
$ | — | $ | 1,500,000 | ||||
Payments on long-term debt
|
(83,333 | ) | (250,000 | ) | ||||
Preferred stock dividends
|
— | (35,000 | ) | |||||
|
|
|
|
|||||
Net cash (used in) provided by financing activities
|
(83,333 | ) | 1,215,000 | |||||
|
|
|
|
|||||
(Decrease) increase in cash
|
(1,402,903 | ) | 933,249 | |||||
Cash, beginning of period
|
3,759,380 | 549,669 | ||||||
|
|
|
|
|||||
Cash, end of period
|
$ | 2,356,477 | $ | 1,482,918 | ||||
|
|
|
|
|||||
Supplemental disclosure of cash flow information
|
||||||||
Cash paid for interest
|
$ | 32,284 | $ | 133,982 | ||||
|
|
|
|
|||||
Supplemental disclosure of reconciliation of cash and restricted cash
|
||||||||
Cash
|
$ | 1,023,945 | $ | 1,482,918 | ||||
Restricted cash
|
1,332,532 | — | ||||||
|
|
|
|
|||||
Cash and restricted cash, end of period
|
$ | 2,356,477 | $ | 1,482,918 | ||||
|
|
|
|
1. |
Nature of Business and Subsequent Event
|
2. |
Basis of Consolidation
|
3. |
Restricted Cash
|
4. |
New Accounting Pronouncement
|
4. |
New Accounting Pronouncement (continued)
|
5. |
Revenue Recognition
|
5. |
Revenue Recognition (continued)
|
a.
|
Transformations Treatment Center, Inc. and Transformations Mending Fences, LLC
|
b.
|
Summit Detox, Inc.
|
c.
|
Pinnacle Testings, Inc.
|
d.
|
Wrigley Healthcare Services, Inc.
|
e.
|
Freedom Now, Inc.
|
5. |
Revenue Recognition (continued)
|
January 24,
2021 |
March 31,
2020 |
|||||||
Inpatient and outpatient treatment related services
|
$ | 357,465 | $ | 4,397,157 | ||||
Detoxification related services
|
109,802 | 509,947 | ||||||
Diagnostic laboratory related services
|
11,073 | 397,591 | ||||||
Ancillary medical services
|
81,043 | 29,329 | ||||||
|
|
|
|
|||||
$ | 559,383 | $ | 5,334,024 | |||||
|
|
|
|
6. |
Accounts Receivable
|
6. |
Accounts Receivable (continued)
|
7. |
Property and Equipment
|
Years | ||||
Office equipment
|
5 | |||
Furnitures and fixtures
|
7 | |||
Vehicles
|
5 | |||
Software
|
3 |
8. |
Goodwill
|
8. |
Goodwill (continued)
|
9. |
Debt Issuance Costs
|
10. |
Income Taxes
|
11. |
Use of Estimates
|
12. |
Fair Value of Financial Instruments
|
13. |
Marketing and Promotion Costs
|
14. |
Significant Accounting Standard Applicable In A Future Year
|
a.
|
Leases
|
Net Receivables | Net Revenues | |||||||||||||||
January 24,
2021 |
December 31,
2020 |
January 1, 2021
through January 24, 2021 |
January 1, 2020
through March 31, 2020 |
|||||||||||||
Third-party payors
|
100.00 | % | 100.00 | % | 81.30 | % | 95.00 | % | ||||||||
Patient
|
0.00 | % | 0.00 | % | 18.70 | % | 5.00 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | |||||||||
|
|
|
|
|
|
|
|
January 24,
2021 |
December 31,
2020 |
|||||||
Office equipment
|
$ | 61,527 | $ | 44,776 | ||||
Furnitures and fixtures
|
58,400 | 58,400 | ||||||
Leasehold improvements
|
411,275 | 409,891 | ||||||
Vehicles
|
134,433 | 134,433 | ||||||
Software
|
44,307 | 44,307 | ||||||
|
|
|
|
|||||
709,942 | 691,807 | |||||||
Less accumulated depreciation
|
179,223 | 170,900 | ||||||
|
|
|
|
|||||
$ | 530,719 | $ | 520,907 | |||||
|
|
|
|
January 24,
2021 |
December 31,
2020 |
|||||||
As defined in the Agreement described in Note D, the term loan bears interest at the same rate of the revolving line of credit. Principal payments of $83,333 are required monthly for the first forty-eight months and $125,000 for the final twelve months, a balloon payment of all outstanding principal and accrued interest due on the maturity date in September 2024.
|
$ | 9,466,667 | $ | 9,550,000 | ||||
Less unamortized debt issuance costs
|
158,200 | 158,200 | ||||||
|
|
|
|
|||||
9,308,467 | 9,391,800 | |||||||
Less current maturities
|
874,480 | 957,813 | ||||||
|
|
|
|
|||||
$ | 8,433,987 | $ | 8,433,987 | |||||
|
|
|
|
Year
|
Principal |
Unamortized
Debt Issuance Costs |
Net
Outstanding Long-term debt |
|||||||||
Remaining 2021
|
$ | 916,667 | $ | 42,187 | $ | 874,480 | ||||||
2022
|
1,000,000 | 42,187 | 957,813 | |||||||||
2023
|
1,125,000 | 42,187 | 1,082,813 | |||||||||
2024
|
6,425,000 | 31,639 | 6,393,361 | |||||||||
|
|
|
|
|
|
|||||||
Total
|
$ | 9,466,667 | $ | 158,200 | $ | 9,308,467 | ||||||
|
|
|
|
|
|
Related
Party |
Non-Related
Party |
Total | ||||||||||
Remaining 2021
|
$ | 813,689 | $ | 789,007 | $ | 1,602,696 | ||||||
2022
|
900,757 | 953,424 | 1,854,181 | |||||||||
2023
|
914,175 | 934,270 | 1,848,445 | |||||||||
2024
|
927,592 | 815,002 | 1,742,594 | |||||||||
2025
|
686,716 | 427,028 | 1,113,744 | |||||||||
Thereafter
|
— | 383,415 | 383,415 | |||||||||
|
|
|
|
|
|
|||||||
$ | 4,242,929 | $ | 4,302,146 | $ | 8,545,075 | |||||||
|
|
|
|
|
|
January 24,
2021 |
December 31,
2020 |
|||||||
Deferred tax assets before valuation allowance
|
$ | 243,200 | $ | 192,590 | ||||
Valuation allowance
|
— | — | ||||||
|
|
|
|
|||||
Deferred tax assets after valuation allowance
|
243,200 | 192,590 | ||||||
|
|
|
|
|||||
Deferred tax liabilities
|
441,001 | 612,646 | ||||||
|
|
|
|
|||||
Net deferred tax assets and liabilities
|
$ | 197,801 | $ | 420,056 | ||||
|
|
|
|
January 1, 2021
through January 24, 2021 |
January 1, 2020
through March 31, 2020 |
|||||||
Current expense
|
$ | — | $ | 201,190 | ||||
Deferred benefit
|
(222,255 | ) | (164,810 | ) | ||||
|
|
|
|
|||||
Total income tax (benefit) expense
|
$ | (222,255 | ) | $ | 36,380 | |||
|
|
|
|
January 1, 2021
through January 24, 2021 |
January 1, 2020
through March 31, 2020 |
|||||||
Income tax (benefit) expense at federal statutory rate
|
$ | (189,176 | ) | $ | 24,784 | |||
State and local income taxes net of federal tax (benefit) expense
|
(31,920 | ) | 3,262 | |||||
Nondeductible contingent consideration
|
— | (7,350 | ) | |||||
Other permanent (benefit) expense
|
(1,159 | ) | 15,684 | |||||
|
|
|
|
|||||
Total income tax (benefit) expense
|
$ | (222,255 | ) | $ | 36,380 | |||
|
|
|
|
1. |
Management Fees
|
2. |
Due to Related Parties
|
1. |
Uninsured Cash
|
2. |
Significant Third-Party Payors
|
3. |
Contingencies
|
3. |
Contingencies (continued)
|
4. |
COVID-19
|
F-303 | ||||
F-304 | ||||
F-305 | ||||
F-306 | ||||
F-307 | ||||
F-308 |
December 31
|
||||||||
2020
|
2019
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 3,319,074 | $ | 2,199,018 | ||||
Accounts receivable, net
|
36,024 | 11,710 | ||||||
Other receivables
|
30,613 | 93,162 | ||||||
Inventory
|
2,467,216 | 1,990,744 | ||||||
Prepaid expenses and other current assets
|
587,647 | 419,761 | ||||||
|
|
|
|
|||||
Total current assets
|
6,440,574 | 4,714,395 | ||||||
Property and Equipment, net of accumulated depreciation
|
8,068,620 | 8,193,587 | ||||||
Other assets
|
22,805 | 15,063 | ||||||
|
|
|
|
|||||
Total Assets
|
$ | 14,531,999 | $ |
12,923,045
|
||||
|
|
|
|
|||||
Liabilities and Shareholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 408,738 | $ | 739,929 | ||||
Accrued expenses
|
541,098 | 315,709 | ||||||
Accrued compensation and related taxes
|
611,068 | 612,620 | ||||||
Unearned revenue
|
86,224 | 189,847 | ||||||
Notes payable, current portion
|
540,327 | 212,761 | ||||||
|
|
|
|
|||||
Total current liabilities
|
2,187,455 | 2,070,866 | ||||||
Long-term liabilities:
|
||||||||
Notes payable, net of current portion
|
5,384,819 | 4,473,679 | ||||||
|
|
|
|
|||||
Total liabilities
|
7,572,274 | 6,544,545 | ||||||
Shareholders’ equity:
|
||||||||
Common stock, no par value, 1,000,000 shares authorized 475,000 shares issued and outstanding as of December 31, 2020 and 2019
|
5,080 | 5,080 | ||||||
Retained earnings
|
6,250,843 | 5,747,432 | ||||||
Non-controlling
interest
|
703,802 | 625,988 | ||||||
|
|
|
|
|||||
6,959,725 | 6,378,500 | |||||||
|
|
|
|
|||||
Total Liabilities and Shareholders’ Equity
|
$ | 14,531,999 | $ | 12,923,045 | ||||
|
|
|
|
2020
|
2019
|
|||||||
Revenue, net of returns and allowances
|
$ | 28,335,405 | $ | 28,829,841 | ||||
Cost of sales
|
13,226,492 | 14,297,936 | ||||||
|
|
|
|
|||||
Gross profit
|
15,108,913 | 14,531,905 | ||||||
Operating expenses
|
12,484,392 | 11,192,295 | ||||||
Operating income
|
2,624,521 | 3,339,610 | ||||||
Nonoperating income and (expense):
|
||||||||
Interest expense
|
(269,382 | ) | (183,269 | ) | ||||
Other expense
|
(38,914 | ) | (103,578 | ) | ||||
|
|
|
|
|||||
Total nonoperating other income and (expense)
|
(308,296 | ) | (286,847 | ) | ||||
|
|
|
|
|||||
Net income
|
$ | 2,316,225 | $ | 3,052,763 | ||||
Less: Income attributable to
non-controlling
interest
|
77,814 | 48,430 | ||||||
|
|
|
|
|||||
Net income attributable to Innovations Group, Inc.
|
2,238,411 | 3,004,333 | ||||||
Net income per share
|
$ | 4.71 | $ | 6.33 | ||||
|
|
|
|
|||||
Weighted average number of shares outstanding
|
475,000 | 475,000 | ||||||
|
|
|
|
Common Stock
|
Retained
Earnings
|
Total
Shareholders’
Equity
|
Non-controlling
Interest
|
Total
|
||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||
Balance at December 31, 2018
|
475,000 | $ | 5,080 | $ | 4,222,099 | $ | 4,227,179 | $ | 791,927 | $ | 5,019,106 | |||||||||||||
Distributions
|
— | — | (1,479,000 | ) | (1,479,000 | ) | (214,369 | ) | (1,693,369 | ) | ||||||||||||||
Net income
|
— | — | 3,004,333 | 3,004,333 | 48,430 | 3,052,763 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2019
|
475,000 | 5,080 | 5,747,432 | 5,752,512 | 625,988 | 6,378,500 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Distributions
|
— | — | (1,735,000 | ) | (1,735,000 | ) | — | (1,735,000 | ) | |||||||||||||||
Net income
|
— | — | 2,238,411 | 2,238,411 | 77,814 | 2,316,225 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2020
|
475,000 | $ | 5,080 | $ | 6,250,843 | $ | 6,255,923 | $ | 703,802 | $ | 6,959,725 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
||||||||
2020
|
2019
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 2,316,225 | $ | 3,052,763 | ||||
Adjustments to reconcile net income to net cash provided by operating activities;
|
||||||||
Depreciation and Amortization
|
522,075 | 318,629 | ||||||
Loss (gain) on disposal of assets
|
4,676 | 62,513 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(24,314 | ) | 10,308 | |||||
Other receivables
|
62,549 | 48,841 | ||||||
Inventory
|
(476,472 | ) | 221,117 | |||||
Prepaid expenses and other current assets
|
(167,886 | ) | 48,028 | |||||
Accounts payable
|
(331,191 | ) | 239,365 | |||||
Accrued Expenses
|
225,389 | (26,819 | ) | |||||
Accrued compensation and related taxes
|
(1,552 | ) | (10,803 | ) | ||||
Unearned revenue
|
(103,623 | ) | (81,917 | ) | ||||
|
|
|
|
|||||
Net cash provided by operating activities
|
2,025,876 | 3,882,025 | ||||||
Cash flows from investing activities
|
||||||||
Proceeds from sale of fixed assets
|
2,870 | — | ||||||
Purchases of property and equipment
|
(412,396 | ) | (3,809,455 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities
|
(409,526 | ) | (3,809,455 | ) | ||||
Cash flows from financing activities
|
||||||||
Distributions
|
(1,735,000 | ) | (1,693,369 | ) | ||||
Repayment of debt
|
(835,294 | ) | (72,293 | ) | ||||
Proceeds from borrowing from bank
|
2,074,000 | 1,379,418 | ||||||
|
|
|
|
|||||
Net cash used in financing activities
|
(496,294 | ) | (386,244 | ) | ||||
Net increase decrease in cash
|
1,120,056 | (313,674 | ) | |||||
Cash and cash equivalents — beginning
|
2,199,018 | 2,512,692 | ||||||
|
|
|
|
|||||
Cash and cash equivalents — ending
|
$ | 3,319,074 | $ | 2,199,018 | ||||
|
|
|
|
|||||
Supplemental disclosures:
|
||||||||
Interest paid
|
$ | 269,382 | $ | 183,269 | ||||
|
|
|
|
Category
|
Estimated Useful Life | |
Furniture and Fixtures
|
5 – 10 years | |
Office Equipment and Software
|
3 – 7 years | |
Compounding and Lab Equipment
|
5 – 10 years | |
Building and building improvements
|
5 – 39 years |
2020 | 2019 | |||||||
Raw materials
|
$ | 1,300,615 | $ | 1,136,848 | ||||
Work in process
|
11,723 | 30,319 | ||||||
Finished goods
|
1,172,561 | 886,258 | ||||||
|
|
|
|
|||||
2,484,899 | 2,053,425 | |||||||
Inventory allowance
|
(17,683 | ) | (62,681 | ) | ||||
|
|
|
|
|||||
Total net inventory
|
$ | 2,467,216 | $ | 1,990,744 | ||||
|
|
|
|
2020 | 2019 | |||||||
Furniture and fixtures
|
$ | 366,397 | $ | 316,384 | ||||
Office equipment and software
|
866,428 | 837,537 | ||||||
Compounding and lab equipment
|
746,437 | 653,355 | ||||||
Building and building improvements
|
7,289,708 | 7,079,748 | ||||||
Land
|
811,103 | 811,103 | ||||||
|
|
|
|
|||||
10,083,073 | 9,698,127 | |||||||
Accumulated Depreciation
|
(2,014,453 | ) | (1,504,540 | ) | ||||
|
|
|
|
|||||
Total net fixed assets
|
$ | 8,068,620 | $ | 8,193,587 | ||||
|
|
|
|
2021
|
$ | 540,327 | ||
2022
|
612,851 | |||
2023
|
619,909 | |||
2024
|
418,742 | |||
2025
|
255,559 | |||
Thereafter
|
3,477,758 | |||
|
|
|||
Total future payments
|
$ | 5,925,146 | ||
|
|
Years of Vesting Service
|
Vesting Percentage | |
Less than 1
|
0% | |
1
|
25% | |
2
|
50% | |
3 or more
|
100% |
2021
|
60,480 | |||
2022
|
60,480 | |||
2023
|
60,480 | |||
2024
|
60,480 | |||
|
|
|||
Total minimum lease payments
|
$ | 241,920 | ||
|
|
2020 | 2019 | |||||||
Operating expenses
|
$ | 260,381 | $ | 116,058 | ||||
Profit sharing contributions
|
138,845 | 125,995 | ||||||
Credit cards
|
80,675 | 20,573 | ||||||
Sale tax
|
61,197 | 53,083 | ||||||
|
|
|
|
|||||
Total
|
$ | 541,098 | $ | 315,709 | ||||
|
|
|
|
F-318 | ||||
F-319 | ||||
F-320 | ||||
F-321 | ||||
F-322 |
As of
|
||||||||
April 26, 2021
|
December 31, 2020
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 554,776 | $ | 3,319,074 | ||||
Accounts receivable, net
|
18,204 | 36,024 | ||||||
Other receivables
|
29,190 | 30,613 | ||||||
Inventory
|
2,692,768 | 2,467,216 | ||||||
Prepaid expenses and other current assets
|
529,925 | 587,647 | ||||||
|
|
|
|
|||||
Total current assets
|
3,824,863 | 6,440,574 | ||||||
Property and equipment, net of accumulated depreciation
|
7,936,504 | 8,068,620 | ||||||
Other assets
|
22,124 | 22,805 | ||||||
|
|
|
|
|||||
Total Assets
|
$ | 11,783,491 | $ | 14,531,999 | ||||
|
|
|
|
|||||
Liabilities and Shareholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 472,088 | $ | 408,738 | ||||
Accrued expenses
|
268,330 | 541,098 | ||||||
Accrued compensation and related taxes
|
511,708 | 611,068 | ||||||
Unearned revenue
|
301,737 | 86,224 | ||||||
Notes payable, current portion
|
116,480 | 540,327 | ||||||
|
|
|
|
|||||
Total current liabilities
|
1,670,343 | 2,187,455 | ||||||
Long-term liabilities:
|
||||||||
Notes payable, net of current portion
|
3,952,595 | 5,384,819 | ||||||
|
|
|
|
|||||
Total liabilities
|
5,622,938 | 7,572,274 | ||||||
Shareholders’ equity:
|
||||||||
Common stock, no par value, 1,000,000 shares authorized 475,000 shares issued and outstanding as of April 26, 2021 and December 31, 2020
|
2,555,080 | 5,080 | ||||||
Retained earnings
|
3,071,792 | 6,250,843 | ||||||
Non-controlling
interest
|
533,681 | 703,802 | ||||||
|
|
|
|
|||||
6,160,553 | 6,959,725 | |||||||
|
|
|
|
|||||
Total Liabilities and Shareholders’ Equity
|
$ | 11,783,491 | $ | 14,531,999 | ||||
|
|
|
|
April 1, 2021
to
April 26, 2021
|
April 1, 2020
to
June 30, 2020
|
January 1, 2021
to
April 26, 2021
|
January 1, 2020
to
June 30, 2020
|
|||||||||||||
Revenue, net
|
$ | 1,896,154 | $ | 6,756,820 | $ | 8,920,349 | $ | 14,321,409 | ||||||||
Cost of sales
|
1,145,615 | 3,050,649 | 5,597,688 | 6,699,405 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit
|
750,539 | 3,706,171 | 3,322,661 | 7,622,004 | ||||||||||||
Operating expenses
|
(5,163,334 | ) | 3,064,327 | 7,254,978 | 5,997,004 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income (loss)
|
(4,412,795 | ) | 641,844 | (3,932,317 | ) | 1,625,000 | ||||||||||
Nonoperating other income (expense)
|
||||||||||||||||
Forgiveness of debt income
|
— | — | 1,174,000 | — | ||||||||||||
Other income (expense)
|
(20,232 | ) | 14,463 | (79,855 | ) | (65,193 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total nonoperating other income (expense)
|
(20,232 | ) | 14,463 | 1,094,145 | (65,193 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss)
|
(4,433,027 | ) | 656,307 | (2,838,172 | ) | 1,559,807 | ||||||||||
Less: Income attributable to
non-controling
interest
|
6,874 | 21,289 | 29,879 | 40,369 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) attributable to Innovations Group, Inc.
|
$ | (4,439,901 | ) | $ | 635,018 | $ | (2,868,051 | ) | $ | 1,519,438 | ||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) per share
|
$ | (9.35 | ) | $ | 1.34 | $ | (6.04 | ) | $ | 3.20 | ||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average number of shares outstanding
|
475,000 | 475,000 | 475,000 | 475,000 | ||||||||||||
|
|
|
|
|
|
|
|
Common Stock
|
Retained
Earnings |
Total
Shareholders’
Equity
|
Non-controlling
Interest
|
Total
|
||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||
Balance at December 31, 2019
|
475,000 | $ | 5,080 | $ | 5,747,432 | $ | 5,752,512 | $ | 625,988 | $ | 6,378,500 | |||||||||||||
Distributions
|
— | — | (267,000 | ) | (267,000 | ) | — | (267,000 | ) | |||||||||||||||
Net income
|
— | — | 884,420 | 884,420 | 19,080 | 903,500 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at March 31, 2020 (unaudited)
|
475,000 | 5,080 | 6,364,852 | 6,369,932 | 645,068 | 7,015,000 | ||||||||||||||||||
Distributions
|
— | — | (579,000 | ) | (579,000 | ) | — | (579,000 | ) | |||||||||||||||
Net income
|
— | — | 635,018 | 635,018 | 21,289 | 656,307 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at June 30, 2020 (unaudited)
|
475,000 | $ | 5,080 | $ | 6,420,870 | $ | 6,425,950 | $ | 666,357 | $ | 7,092,307 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2020
|
475,000 | $ | 5,080 | $ | 6,250,843 | $ | 6,255,923 | $ | 703,802 | $ | 6,959,725 | |||||||||||||
Distributions
|
— | — | (111,000 | ) | (111,000 | ) | (200,000 | ) | (311,000 | ) | ||||||||||||||
Net income
|
— | — | 1,571,850 | 1,571,850 | 23,005 | 1,594,855 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at March 31, 2021 (unaudited)
|
475,000 | 5,080 | 7,711,693 | 7,716,773 | 526,807 | 8,243,580 | ||||||||||||||||||
Distributions
|
— | — | (200,000 | ) | (200,000 | ) | — | (200,000 | ) | |||||||||||||||
Stock contribution
|
2,550,000 | 2,550,000 | 2,550,000 | |||||||||||||||||||||
Net income (loss)
|
— | — | (4,439,901 | ) | (4,439,901 | ) | 6,874 | (4,433,027 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at April 26, 2021 (unaudited)
|
475,000 | $ | 2,555,080 | $ | 3,071,792 | $ | 5,626,872 | $ | 533,681 | $ | 6,160,553 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
January 1 to
April 26, 2021 |
January 1 to
June 30 2020 |
|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
|
$ | (2,838,172 | ) | $ | 1,559,807 | |||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
170,115 | 255,450 | ||||||
Forgiveness of debt income
|
(1,174,000 | ) | — | |||||
Stock contribution
|
2,550,000 | — | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
17,820 | — | ||||||
Other receivables
|
1,423 | (145,145 | ) | |||||
Inventory
|
(225,551 | ) | (144,547 | ) | ||||
Prepaid expenses and other current assets
|
57,722 | (44,711 | ) | |||||
Accounts payable
|
63,350 | (135,106 | ) | |||||
Accrued expenses
|
(272,268 | ) | 101,484 | |||||
Accrued compensation and related taxes
|
(99,360 | ) | 22,721 | |||||
Unearned revenue
|
215,513 | (30,892 | ) | |||||
|
|
|
|
|||||
Net cash (used in) provided by operating activities
|
(1,533,408 | ) | 1,439,061 | |||||
Cash flows from investing activities
|
||||||||
Purchases of property and equipment
|
(37,819 | ) | (326,738 | ) | ||||
|
|
|
|
|||||
Net cash (used in) investing activities
|
(37,819 | ) | (326,738 | ) | ||||
Cash flows from financing activities
|
||||||||
Distributions
|
(511,000 | ) | (579,000 | ) | ||||
Repayment of debt
|
(682,071 | ) | (101,041 | ) | ||||
Proceeds from borrowing from bank
|
— | 900,000 | ||||||
|
|
|
|
|||||
Net cash provided by financing activities
|
(1,193,071 | ) | 219,959 | |||||
|
|
|
|
|||||
Net (decrease) increase in cash
|
(2,764,298 | ) | 1,332,282 | |||||
|
|
|
|
|||||
Cash and cash equivalents — beginning
|
3,319,074 | 2,199,018 | ||||||
|
|
|
|
|||||
Cash and cash equivalents — ending
|
$ | 554,776 | $ | 3,531,300 | ||||
|
|
|
|
|||||
Supplemental disclosures:
|
||||||||
Interest paid
|
$ | 79,177 | $ | 127,817 | ||||
|
|
|
|
Category
|
Estimated Useful Life | |
Furniture and Fixtures
|
5 – 10 years | |
Office Equipment and Software
|
3 – 7 years | |
Compounding and Lab Equipment
|
5 – 10 years | |
Building and building improvements
|
5 – 39 years |
2021 | 2020 | |||||||
Raw materials
|
$ | 1,386,560 | $ | 1,300,615 | ||||
Work in process
|
1,463 | 11,723 | ||||||
Finished goods
|
1,324,535 | 1,172,561 | ||||||
|
|
|
|
|||||
2,712,558 | 2,484,899 | |||||||
Inventory allowance
|
(19,790 | ) | (17,683 | ) | ||||
|
|
|
|
|||||
Total net inventory
|
$ | 2,692,768 | $ | 2,467,216 | ||||
|
|
|
|
2021 | 2020 | |||||||
Furniture and fixtures
|
$ | 371,102 | $ | 366,397 | ||||
Office equipment and software
|
711,258 | 869,428 | ||||||
Compounding and lab equipment
|
746,437 | 746,437 | ||||||
Building and building improvements
|
7,289,708 | 7,289,708 | ||||||
Land
|
811,103 | 811,103 | ||||||
|
|
|
|
|||||
9,929,608 | 10,083,073 | |||||||
Accumulated Depreciation
|
(1,993,104 | ) | (2,014,453 | ) | ||||
|
|
|
|
|||||
Total net fixed assets
|
$ | 7,936,504 | $ | 8,068,620 | ||||
|
|
|
|
Remaining 2021
|
$ | 77,071 | ||
2022
|
120,016 | |||
2023
|
125,535 | |||
2024
|
131,320 | |||
2025
|
137,384 | |||
Thereafter
|
3,477,749 | |||
|
|
|||
Total future payments
|
$ | 4,069,075 | ||
|
|
Years of Vesting Service
|
Vesting Percentage | |
Less than 1
|
0% | |
1
|
25% | |
2
|
50% | |
3 or more
|
100% |
Remaining 2021
|
40,320 | |||
2022
|
60,480 | |||
2023
|
60,480 | |||
2024
|
60,480 | |||
|
|
|||
Total minimum lease payments
|
$ | 221,760 | ||
|
|
Page | ||||
F-332 | ||||
F-334 | ||||
F-335 | ||||
F-336 | ||||
F-337 | ||||
F-338-F-347 |
November 20,
2020 |
December 31,
2019 |
|||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash
|
$ | 1,024,485 | $ | 111,346 | ||||
Accounts receivable
|
||||||||
Patient receivables, net
|
1,239,075 | 882,925 | ||||||
Other accounts receivable
|
18,379 | 25,278 | ||||||
Inventories
|
99,583 | 158,357 | ||||||
Prepaid expenses
|
39,806 | 18,568 | ||||||
Due from related parties
|
327,061 | 27,936 | ||||||
|
|
|
|
|||||
Total current assets
|
2,748,389 | 1,224,410 | ||||||
|
|
|
|
|||||
PROPERTY AND EQUIPMENT, net
|
52,568 | 61,812 | ||||||
SECURITY DEPOSITS
|
4,375 | 4,375 | ||||||
|
|
|
|
|||||
$ | 2,805,332 | $ | 1,290,597 | |||||
|
|
|
|
|||||
LIABILITIES AND MEMBERS’ EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable
|
$ | 261,706 | $ | 577,725 | ||||
Accounts payable, related party
|
42,826 | — | ||||||
Due to member
|
70,000 | — | ||||||
Accrued payroll and related liabilities
|
425,790 | 93,896 | ||||||
Paycheck protection program loan
|
1,004,900 | — | ||||||
Provider relief funds
|
228,794 | — | ||||||
|
|
|
|
|||||
Total current liabilities
|
2,034,016 | 671,621 | ||||||
|
|
|
|
|||||
MEMBERS’ EQUITY
|
771,316 | 618,976 | ||||||
|
|
|
|
|||||
$ | 2,805,332 | $ | 1,290,597 | |||||
|
|
|
|
January 1, 2020
through November 20, 2020 |
January 1, 2019
through December 31, 2019 |
|||||||
Revenues, net
|
$ | 11,842,219 | $ | 12,528,464 | ||||
Cost of goods sold
|
3,151,603 | 3,384,859 | ||||||
|
|
|
|
|||||
Gross profit
|
8,690,616 | 9,143,605 | ||||||
|
|
|
|
|||||
Operating expenses
|
||||||||
Provider compensation
|
5,261,139 | 5,436,758 | ||||||
Selling, general, and administrative
|
3,219,247 | 3,485,518 | ||||||
Depreciation and amortization
|
17,890 | 18,205 | ||||||
|
|
|
|
|||||
8,498,276 | 8,940,481 | |||||||
|
|
|
|
|||||
NET INCOME
|
$ | 192,340 | $ | 203,124 | ||||
|
|
|
|
Members’
Capital |
Members’
Retained Earnings |
Total
Members’ Equity |
||||||||||
Balance, January 1, 2019
|
$ | 20,000 | $ | 395,852 | $ | 415,852 | ||||||
Net income
|
— | 203,124 | 203,124 | |||||||||
|
|
|
|
|
|
|||||||
Balance, December 31, 2019
|
20,000 | 598,976 | 618,976 | |||||||||
Capital contribution
|
40,000 | — | 40,000 | |||||||||
Member redemptions
|
(20,000 | ) | (60,000 | ) | (80,000 | ) | ||||||
Net income
|
— | 192,340 | 192,340 | |||||||||
|
|
|
|
|
|
|||||||
Balance, November 20, 2020
|
$ | 40,000 | $ | 731,316 | $ | 771,316 | ||||||
|
|
|
|
|
|
January 1, 2020
through November 20, 2020 |
January 1, 2019
through December 31, 2019 |
|||||||
Cash flows from operating activities
|
||||||||
Net income
|
$ | 192,340 | $ | 203,124 | ||||
Adjustments to reconcile net income to net cash used in operating activities
|
||||||||
Depreciation
|
17,890 | 18,205 | ||||||
(Increase) decrease in assets
|
||||||||
Patient receivables
|
(356,150 | ) | (38,522 | ) | ||||
Other accounts receivable
|
6,899 | 517 | ||||||
Inventories
|
58,774 | 14,043 | ||||||
Prepaid expenses
|
(21,238 | ) | (3,402 | ) | ||||
Increase (decrease) in liabilities
|
||||||||
Accounts payable
|
(316,019 | ) | (225,505 | ) | ||||
Accounts payable, related party
|
42,826 | — | ||||||
Accrued payroll and related liabilities
|
331,894 | 6,081 | ||||||
Proceeds from provider relief funds
|
228,794 | — | ||||||
|
|
|
|
|||||
Net provided by (used in) operating activities
|
186,010 | (25,459 | ) | |||||
|
|
|
|
|||||
Cash flows from investing activities
|
||||||||
Purchase of property and equipment
|
(8,646 | ) | (3,198 | ) | ||||
Due from related parties
|
(299,125 | ) | (22,477 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities
|
(307,771 | ) | (25,675 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities
|
||||||||
Member contributions
|
40,000 | — | ||||||
Member redemptions
|
(10,000 | ) | — | |||||
Proceeds from paycheck protection program loan
|
1,004,900 | — | ||||||
|
|
|
|
|||||
Net cash provided by financing activities
|
1,034,900 | — | ||||||
|
|
|
|
|||||
INCREASE (DECREASE) IN CASH
|
913,139 | (51,134 | ) | |||||
Cash, beginning of period
|
111,346 | 162,480 | ||||||
|
|
|
|
|||||
Cash, end of period
|
$ | 1,024,485 | $ | 111,346 | ||||
|
|
|
|
|||||
Supplemental schedule of noncash financing activities
|
||||||||
Redemption proceeds due to member
|
$ | 70,000 | $ | — | ||||
|
|
|
|
1. |
Nature of Business and Subsequent Event
|
2. |
Basis of Consolidation
|
3. |
New Accounting Pronouncement
|
4. |
Revenue Recognition
|
4. |
Revenue Recognition (Continued)
|
5. |
Accounts Receivable
|
6. |
Inventories
|
7. |
Property and Equipment
|
Years | ||
Office equipment
|
5 - 7 | |
Office furniture
|
7 | |
Medical equipment
|
7 |
8. |
Income Taxes
|
9. |
Use of Estimates
|
10. |
Fair Value of Financial Instruments
|
11. |
Significant Accounting Standards Applicable In A Future Year
|
11. |
Significant Accounting Standards Applicable In A Future Year (Continued)
|
January 1, 2020
Through November 20, 2020 |
January 1, 2019
Through December 31, 2019 |
|||||||
Revenue recognized over-time
|
||||||||
Psychiatric and mental health services
|
$ | 7,992,540 | $ | 8,447,041 | ||||
Billing services
|
319,891 | 307,910 | ||||||
|
|
|
|
|||||
8,312,431 | 8,754,951 | |||||||
Revenue recognized at a point-in-time
|
||||||||
Retail pharmacy services
|
3,529,788 | 3,773,513 | ||||||
|
|
|
|
|||||
$ | 11,842,219 | $ | 12,528,464 | |||||
|
|
|
|
January 1, 2020
through November 20, 2020 |
January 1, 2019
through December 31, 2019 |
|||||||
Third-party payors
|
$ | 9,815,871 | $ | 10,320,044 | ||||
Patient self-pays
|
1,706,457 | 1,900,510 | ||||||
Billing service customers
|
319,891 | 307,910 | ||||||
|
|
|
|
|||||
$ | 11,842,219 | $ | 12,528,464 | |||||
|
|
|
|
Net Receivables | ||||||||
November 20,
2020 |
December 31,
2019 |
|||||||
Commercial and other third party payors
|
90.6 | % | 90.3 | % | ||||
Patient self-pays
|
2.8 | % | 2.8 | % | ||||
Billing service customers
|
6.6 | % | 6.9 | % | ||||
|
|
|
|
|||||
100.0 | % | 100.0 | % | |||||
|
|
|
|
|||||
Revenue | ||||||||
January 1, 2020
through November 20, 2020 |
January 1, 2019
through December 31, 2019 |
|||||||
Commercial and other third party payors
|
82.9 | % | 82.3 | % | ||||
Patient self-pays
|
14.4 | % | 15.2 | % | ||||
Billing service customers
|
2.7 | % | 2.5 | % | ||||
|
|
|
|
|||||
100.0 | % | 100.0 | % | |||||
|
|
|
|
December 31,
2020 |
December 31,
2019 |
|||||||
Office equipment
|
$ | 103,088 | $ | 103,088 | ||||
Office furniture
|
12,010 | 3,364 | ||||||
Medical equipment
|
1,839 | 1,839 | ||||||
|
|
|
|
|||||
116,937 | 108,291 | |||||||
Less accumulated depreciation
|
64,369 | 46,479 | ||||||
|
|
|
|
|||||
$ | 52,568 | $ | 61,812 | |||||
|
|
|
|
1. |
Due From Related Parties
|
2. |
Membership Redemptions and Due to Member
|
2. |
Membership Redemptions and Due to Member (Continued)
|
3. |
Payments To Related Parties
|
Year
|
Related
Party |
Third
Party |
Total | |||||||||
2020
|
$ | 4,900 | $ | 17,250 | $ | 22,150 | ||||||
2021
|
58,800 | 206,998 | 265,798 | |||||||||
2022
|
— | 28,764 | 28,764 | |||||||||
2023
|
— | 10,776 | 10,776 | |||||||||
2024
|
— | 10,776 | 10,776 | |||||||||
2025
|
— | 9,878 | 9,878 | |||||||||
|
|
|
|
|
|
|||||||
$ | 63,700 | $ | 284,442 | $ | 348,142 | |||||||
|
|
|
|
|
|
1. |
Uninsured Cash
|
2. |
Contingencies
|
3. |
COVID-19
|
3. |
COVID-19 (Continued)
|
2020
|
2019
|
|||||||
Net Sales
|
$ | 28,089,434 | $ | 30,129,803 | ||||
Cost Of Sales
|
14,342,965 | 16,868,951 | ||||||
|
|
|
|
|||||
Gross Profit
|
13,746,469 | 13,260,852 | ||||||
Operating Expenses
|
||||||||
Depreciation and amortization
|
4,041,318 | 3,155,410 | ||||||
Salaries and wages
|
5,901,060 | 5,919,129 | ||||||
General and administrative expenses
|
9,188,703 | 9,582,808 | ||||||
|
|
|
|
|||||
Total operating expenses
|
19,131,081 | 18,657,347 | ||||||
|
|
|
|
|||||
Loss From Operations
|
(5,384,612 | ) | (5,396,495 | ) | ||||
Other Income (Expense)
|
||||||||
Interest expense
|
(6,638,524 | ) | (4,777,972 | ) | ||||
Other income (expense), net
|
62,872 | 79,632 | ||||||
Rental income
|
422,335 | 339,895 | ||||||
|
|
|
|
|||||
Total other expense, net
|
(6,153,317 | ) | (4,358,445 | ) | ||||
|
|
|
|
|||||
Net Loss
|
($ | 11,537,929 | ) | ($ | 9,754,940 | ) | ||
|
|
|
|
|||||
Net Loss Per Common Unit
|
($2.29 | ) | ($1.94 | ) | ||||
Weighted Average Units Outstanding – Basic And Diluted
|
5,034,700 | 5,034,700 |
Redeemable Series A
Preferred Units |
Members’
|
Loans to
Officer
|
Accumulated
Members’
Deficit
|
Total
Members’
Interests
|
||||||||||||||||||||||||
Units
|
Amount
|
Units
|
Amount
|
|||||||||||||||||||||||||
Mezzanine Equity and Members’ Interests, December 31, 2018
|
3,000,000 | $ | 15,000,000 | 5,034,700 | $ | 10,057,771 | ($ | 450,000 | ) | ($35,327,666 | ) | ($25,719,895 | ) | |||||||||||||||
Net loss
|
— | — | — | — | — | (9,754,940 | ) | (9,754,940 | ) | |||||||||||||||||||
Unit-based compensation
|
— | — | — | 92,032 | — | — | 92,032 | |||||||||||||||||||||
Accrued dividends
|
— | — | — | — | — | (1,200,000 | ) | (1,200,000 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Mezzanine Equity and Members’ Interests, December 31, 2019
|
3,000,000 | $ | 15,000,000 | 5,034,700 | 10,149,803 | ($ | 450,000 | ) | ($46,282,606 | ) | ($36,582,803 | ) | ||||||||||||||||
Net loss
|
— | — | — | — | — | (11,537,929 | ) | (11,537,929 | ) | |||||||||||||||||||
Issuance of warrant to purchase common units
|
— | — | — | 1,304,013 | — | — | 1,304,013 | |||||||||||||||||||||
Unit-based compensation
|
— | — | — | 139,304 | — | — | 139,304 | |||||||||||||||||||||
Accrued dividends
|
— | — | — | — | — | (1,200,000 | ) | (1,200,000 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Mezzanine Equity and Members’ Interests, December 31, 2020
|
3,000,000 | $ | 15,000,000 | 5,034,700 | $ | 11,593,120 | ($ | 450,000 | ) | ($59,020,535 | ) | ($47,877,415 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
2019
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net loss
|
($ | 11,537,929 | ) | ($ | 9,754,940 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Employee unit-based compensation
|
139,304 | 92,032 | ||||||
Paid in kind interest
|
994,425 | — | ||||||
Amortization of debt discount and issuance costs
|
815,690 | 709,610 | ||||||
Forgiveness on paycheck protection program loan
|
(202,176 | ) | — | |||||
Depreciation and amortization
|
4,041,318 | 3,155,410 | ||||||
Noncash lease expense
|
866,669 | 899,673 | ||||||
Gain from fixed asset reimbursement
|
— | (79,632 | ) | |||||
Bad debt expense
|
138,611 | 360,205 | ||||||
Changes in operating assets and liabilities:
|
||||||||
(Increase) decrease in assets:
|
||||||||
Accounts receivable
|
(1,346,474 | ) | (47,392 | ) | ||||
Inventory
|
42,306 | — | ||||||
Prepaid expenses and other current assets
|
(49,383 | ) | (88,864 | ) | ||||
Other noncurrent assets
|
12,698 | (217,827 | ) | |||||
Increase (decrease) in liabilities:
|
||||||||
Accounts payable
|
(55,457 | ) | 4,798 | |||||
Accrued expenses
|
23,954 | 66,617 | ||||||
Deferred revenues
|
(36,819 | ) | (8,777 | ) | ||||
Operating lease liability
|
(902,889 | ) | (562,489 | ) | ||||
Interest payable
|
3,266,962 | 3,070,017 | ||||||
|
|
|
|
|||||
Net cash used in operating activities
|
(3,789,190 | ) | (2,401,557 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Purchase of property and equipment
|
(2,687,034 | ) | (1,694,895 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities
|
(2,687,034 | ) | (1,694,895 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Payments of finance lease obligations
|
(2,489,286 | ) | (2,416,107 | ) | ||||
Net borrowings (payments) on line of credit
|
(2,446,180 | ) | 939,505 | |||||
Paycheck protection program loan
|
2,900,276 | 0 | ||||||
Borrowings on note payable
|
9,738,629 | 5,000,000 | ||||||
|
|
|
|
|||||
Net cash provided by financing activities
|
7,703,439 | 3,523,398 | ||||||
|
|
|
|
|||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
$ | 1,227,215 | ($ | 573,054 | ) | |||
|
|
|
|
CASH AND CASH EQUIVALENTS
|
$ | 290,185 | $ | 863,262 | ||||
CASH AND CASH EQUIVALENTS
|
$ | 1,517,400 | $ | 290,185 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
||||||||
Interest paid
|
$ | 1,580,180 | $ | 2,194,234 | ||||
Taxes paid
|
$ | 201,336 | $ | 209,616 | ||||
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES
|
||||||||
Debt discount related to warrants
|
$ | 1,304,013 | $ | — | ||||
Preferred dividends declared and accrued
|
$ | 1,200,000 | $ | 1,200,000 |
1.
|
ORGANIZATION AND NATURE OF OPERATIONS
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
2020
|
2019
|
|||||||
Unit options outstanding
|
1,933,303 | 1,941,150 | ||||||
Warrants
|
741,135 | 526,312 | ||||||
|
|
|
|
|||||
Total
|
2,674,438 | 2,467,462 |
• |
Level
1 inputs:
|
• |
Level
2 inputs:
|
• |
Level
3 inputs:
|
1. |
Identification of the contract with a customer
|
2. |
Identification of the performance obligations in the contract
|
3. |
Determination of the transaction price
|
4. |
Allocation of the transaction price to the performance obligations in the contract
|
5. |
Recognition of revenue when, or as, the Company satisfies a performance obligation
|
1. |
The Company elected to not adjust the promised amount of consideration for the effect of a significant financing component if it expects, at contract inception, that the period between the Company’s transfer of a promised good or service to a customer and the customer’s payment for that good or service will be one year or less.
|
2. |
The Company is excluding from its transaction price all sales and similar taxes collected from its customers.
|
3. |
The Company elected to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.
|
4. |
The Company elected to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations.
|
5. |
The portfolio approach has been elected by the Company as it expects any effects of adoption would not be materially different in application at the portfolio level compared with the application at an individual contract level.
|
6. |
The Company elected the “right to invoice” expedient which states that for performance obligations satisfied over time, if an entity has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, the entity may recognize revenue in the amount to which the entity has a right to invoice.
|
7. |
The Company elected not to disclose information about its remaining performance obligations for any contract that has an original expected duration of one year or less.
|
8. |
The Company elected not to disclose information about its remaining performance obligations when it recognizes revenue from the satisfaction of performance obligations in accordance with the “right to invoice” practical expedient.
|
9. |
The Company elected all transition-related practical expedients available under the full retrospective transition method of adoption.
|
3.
|
PROPERTY AND EQUIPMENT, NET
|
Useful Life (Years)
|
2020
|
2019
|
||||||||||
Furniture and fixtures
|
7 | $ | 480,515 | $ | 470,945 | |||||||
Computer and related equipment
|
5 | 3,490,045 | 2,000,103 | |||||||||
Vehicle
|
5 | 10,500 | — | |||||||||
|
|
|
|
|||||||||
3,981,060 | 2,471,048 | |||||||||||
Less accumulated depreciation
|
(1,627,855 | ) | (1,221,329 | ) | ||||||||
|
|
|
|
|||||||||
Property and equipment, net
|
$ | 2,353,205 | $ | 1,249,719 | ||||||||
|
|
|
|
4.
|
SOFTWARE AND WEBSITE DEVELOPMENT COSTS, NET
|
Useful Life (Years)
|
2020
|
2019
|
||||||||||
IT Infrastructure – software development costs
|
5 | $ | 5,335,022 | $ | 3,286,318 | |||||||
Software and website development costs
|
3 | 1,026,913 | 1,037,855 | |||||||||
Work in Progress Assets
|
— | 272,230 | 654,670 | |||||||||
|
|
|
|
|||||||||
6,634,165 | 9,969,827 | |||||||||||
Less accumulated depreciation
|
(1,731,796 | ) | (4,999,981 | ) | ||||||||
|
|
|
|
|||||||||
Software and website development costs, net
|
$ | 4,902,369 | $ | 4,969,846 | ||||||||
|
|
|
|
5.
|
LOANS TO OFFICERS
|
6.
|
ACCRUED EXPENSES
|
2020
|
2019
|
|||||||
Payroll and related expenses
|
$ | 231,576 | $ | 385,201 | ||||
Other (including accrued outsourced labor)
|
745,870 | 568,291 | ||||||
|
|
|
|
|||||
$ | 977,446 | $ | 953,492 | |||||
|
|
|
|
7.
|
RELATED PARTY TRANSACTIONS
|
8.
|
MEMBERS’ INTERESTS
|
9.
|
OPTIONS TO PURCHASE MEMBER UNIT
|
Number of
Shares |
Weighted-Average
Exercise Price |
|||||||
Outstanding, December 31, 2018
|
1,941,150 | 5.70 | ||||||
Granted
|
— | — | ||||||
Exercised
|
— | — | ||||||
Canceled and forfeited
|
— | — | ||||||
|
|
|
|
|||||
Outstanding, December 31, 2019
|
1,941,150 | 5.70 | ||||||
Granted
|
192,153 | 6.99 | ||||||
Exercised
|
— | — | ||||||
Canceled and forfeited
|
(200,000 | ) | 12.50 | |||||
|
|
|
|
|||||
Outstanding, December 31, 2020
|
1,933,303 | 4.91 | ||||||
Exercisable, December 31, 2019
|
1,799,255 | 5.19 | ||||||
Exercisable, December 31, 2020
|
1,725,650 | 4.51 |
Options Outstanding
|
Options
Exercisable
|
|||||
Exercise Prices
|
Number Outstanding
|
Weighted-Average
Remaining Contractual Life (Years) |
Number
Exercisable
|
|||
0.23 | 155,100 | 4.48 | 155,100 | |||
1.55 | 336,050 | 4.48 | 336,050 | |||
5.00 | 1,075,000 | 4.53 | 1,075,000 | |||
6.99 | 242,153 | 9.50 | 67,885 | |||
15.00 | 125,000 | 1.50 | 91,615 | |||
|
|
|||||
1,933,303 | 1,725,650 |
Options Outstanding
|
Options
Exercisable
|
|||||
Exercise Prices
|
Number Outstanding
|
Weighted-Average
Remaining Contractual Life (Years) |
Number
Exercisable
|
|||
0.23 | 155,100 | 5.48 | 155,100 | |||
1.55 | 336,050 | 5.48 | 336,050 | |||
5.00 | 1,075,000 | 5.53 | 1,075,000 | |||
12.50 | 200,000 | 7.11 | 116,279 | |||
15.00 | 175,000 | 8.00 | 116,826 | |||
|
|
|||||
1,941,150 | 1,799,255 |
Year Ended
December 31, 2020 |
||
Expected term (years)
|
6.25 | |
Volatility
|
34.00% | |
Risk-free interest rate
|
2.38 – 2.47% | |
Dividend yield
|
— | |
Weighted-average fair value
|
$2.49 |
10.
|
PERFORMANCE UNIT PLAN
|
11.
|
EMPLOYEE BENEFIT PLAN
|
12.
|
REVOLVING LINE OF CREDIT
|
13.
|
CONVERTIBLE NOTES PAYABLE TO RELATED PARTY
|
14.
|
CONVERTIBLE NOTES PAYABLE
|
15.
|
DEBT
|
Expected term (in years)
|
3 years | |||
Risk-free interest rate
|
1.48 | % | ||
Volatility
|
33.07 | % |
16.
|
OPERATING AND FINANCE LEASE RIGHT OF USE ASSETS
|
December 31,
2020 |
December 31,
2019 |
|||||||
Amortization of finance ROU assets
|
$ | 1,857,607 | $ | 2,322,673 | ||||
Interest on finance lease liabilities
|
281,174 | 284,096 | ||||||
|
|
|
|
|||||
Finance lease expense
|
$ | 2,138,781 | $ | 2,606,769 | ||||
Operating lease expense
|
1,315,440 | 1,340,321 | ||||||
Variable lease expense
|
0 | 1,507 | ||||||
Sublease income
|
(422,335 | ) | (339,895 | ) | ||||
|
|
|
|
|||||
Total lease expense
|
$ | 3,031,886 | $ | 3,608,702 |
December 31,
2020 |
December 31,
2019 |
|||||||
Operating cash flows from operating leases
|
$ | 1,315,440 | $ | 1,000,802 | ||||
Operating cash flows from finance leases
|
281,174 | 284,096 | ||||||
Financing cash flows from finance leases
|
2,623,157 | 2,416,108 | ||||||
|
|
|
|
|||||
Cash paid for amounts included in the measurement of lease liabilities
|
$ | 4,219,771 | $ | 3,701,006 | ||||
|
|
|
|
December 31,
2020 |
December 31,
2019 |
|||||||
Weighted average remaining lease term (months)
|
||||||||
Operating leases
|
74 | 79 | ||||||
Finance leases
|
20 | 23 | ||||||
Weighted average discount rate
|
||||||||
Operating leases
|
6.7 | % | 6.7 | % | ||||
Finance leases
|
8.1 | % | 9.8 | % |
Operating
leases |
Finance leases
|
Total
|
||||||||||
Years Ending December 31
|
||||||||||||
2021
|
$ | 1,381,229 | $ | 1,965,509 | $ | 3,346,738 | ||||||
2022
|
1,374,443 | 886,663 | 2,261,106 | |||||||||
2023
|
1,037,855 | 218,119 | 1,255,974 | |||||||||
Thereafter
|
2,950,392 | 0 | 2,950,392 | |||||||||
|
|
|
|
|
|
|||||||
Undiscounted cash flows
|
6,743,919 | 3,070,292 | 9,814,211 | |||||||||
Less: imputed interest
|
(1,209,437 | ) | (175,157 | ) | (1,384,594 | ) | ||||||
|
|
|
|
|
|
|||||||
Total
|
$ | 5,534,482 | $ | 2,895,135 | $ | 8,429,617 | ||||||
|
|
|
|
|
|
|||||||
Reconciliation to lease liabilities:
|
||||||||||||
Lease liabilities – current
|
$ | 1,041,754 | $ | 1,821,725 | $ | 2,863479 | ||||||
Lease liabilities –
non-current
|
4,492,728 | 1,073,410 | 5,566,138 | |||||||||
|
|
|
|
|
|
|||||||
Total lease liabilities
|
$ | 5,534,482 | $ | 2,895,135 | $ | 8,429,619 | ||||||
|
|
|
|
|
|
17.
|
COMMITMENTS AND CONTINGENCIES
|
18.
|
SUBSEQUENT EVENTS
|
June 8, 2021
|
December 31,
2020 |
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 3,735,307 | $ | 1,517,400 | ||||
Accounts receivable, net
|
4,592,383 | 4,876,281 | ||||||
Prepaid expenses and other current assets
|
959,879 | 822,669 | ||||||
|
|
|
|
|||||
Total current assets
|
9,287,569 | 7,216,350 | ||||||
Noncurrent Assets
|
||||||||
Property and equipment, net
|
1,944,666 | 2,353,205 | ||||||
Software and website development costs, net
|
4,601,375 | 4,902,369 | ||||||
Operating lease right of use asset
|
4,349,873 | 4,829,292 | ||||||
Finance lease right of use asset
|
3,855,292 | 2,966,970 | ||||||
Other noncurrent assets
|
1,046,395 | 1,050,858 | ||||||
|
|
|
|
|||||
Total noncurrent assets
|
15,797,601 | 16,102,694 | ||||||
|
|
|
|
|||||
Total assets
|
$ | 25,085,170 | $ | 23,319,044 | ||||
|
|
|
|
|||||
LIABILITIES, MEZZANINE EQUITY, AND MEMBERS’ INTERESTS
|
|
|||||||
Current Liabilities
|
||||||||
Accounts payable
|
$ | 3,015,684 | $ | 2,827,911 | ||||
Accrued expenses
|
903,357 | 977,446 | ||||||
Deferred revenue
|
16,474 | 45,644 | ||||||
Line of credit
|
7,253,325 | 7,253,325 | ||||||
Convertible note payable to related party, net
|
10,000,000 | 10,000,000 | ||||||
Term credit facility, net of debt issuance costs and debt discount
|
13,709,341 | 9,911,193 | ||||||
Interest payable, current portion
|
7,611,700 | 7,221,990 | ||||||
Operating lease liability, current portion
|
1,041,754 | 1,041,754 | ||||||
Paycheck protection program loan
|
2,394,419 | 1,798,733 | ||||||
Finance lease liability, current portion
|
2,358,123 | 1,821,725 | ||||||
|
|
|
|
|||||
Total current liabilities
|
48,304,177 | 42,899,721 | ||||||
Operating lease liability, net of current portion
|
3,993,421 | 4,492,728 | ||||||
Finance lease liability, net of current portion
|
1,394,050 | 1,073,410 | ||||||
Paycheck protection program loan
|
303,681 | 899,367 | ||||||
Convertible note payable,
non-current,
net
|
200,000 | 200,000 | ||||||
Dividends payable – Series A preferred units
|
7,131,233 | 6,631,233 | ||||||
|
|
|
|
|||||
Total noncurrent liabilities
|
13,022,385 | 13,296,738 | ||||||
|
|
|
|
|||||
Total liabilities
|
$ | 61,326,562 | $ | 56,196,459 | ||||
|
|
|
|
|||||
Mezzanine Equity – Redeemable Series A Preferred Units
|
|
|||||||
Series A preferred units, 3,000,000 issued and outstanding at June 8, 2021 and December 31, 2020 (Aggregate liquidation preference $22,131,233 and $21,631,233 at June 8, 2021 and December 31, 2020 respectively)
|
15,000,000 | 15,000,000 | ||||||
|
|
|
|
|||||
Members’ Interests
|
||||||||
Common units, 5,034,700 issued and outstanding at June 8, 2021 and December 31, 2020
|
11,641,012 | 11,593,120 | ||||||
Loans to officers
|
— | (450,000 | ) | |||||
Accumulated deficit
|
(62,882,404 | ) | (59,020,535 | ) | ||||
|
|
|
|
|||||
Total members’ interests
|
($ | 51,241,392 | ) | ($ | 47,877,415 | ) | ||
|
|
|
|
|||||
Total liabilities, mezzanine equity, and members’ interests
|
$ | 25,085,170 | $ | 23,319,044 | ||||
|
|
|
|
April 1, 2021
to June 8,
2021
|
April 1, 2020
to June 30,
2020
|
January 1,
2021 to
June 8,
2021
|
January 1,
2020 to June 30,
2020
|
|||||||||||||
Net Sales
|
$ | 5,394,615 | $ | 6,504,089 | $ | 13,347,488 | $ | 13,275,361 | ||||||||
Cost Of Sales
|
2,504,907 | 3,356,364 | 5,884,520 | 7,089,465 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross Profit
|
2,889,708 | 3,147,725 | 7,462,968 | 6,185,896 | ||||||||||||
Depreciation and amortization
|
||||||||||||||||
Operating Expenses
|
||||||||||||||||
Depreciation and amortization
|
835,102 | 726,647 | 2,144,136 | 1,705,021 | ||||||||||||
Salaries and wages
|
987,213 | 1,433,771 | 2,697,534 | 2,756,157 | ||||||||||||
General and administrative expenses
|
1,841,163 | 1,742,099 | 4,388,010 | 3,889,839 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses
|
3,663,478 | 3,902,517 | 9,229,680 | 8,351,017 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss From Operations
|
(773,770 | ) | (754,792 | ) | (1,766,712 | ) | (2,165,121 | ) | ||||||||
Other Income (Expense)
|
||||||||||||||||
Interest expense
|
(739,152 | ) | (1,568,148 | ) | (1,644,245 | ) | (5,164,483 | ) | ||||||||
Other income (expense), net
|
(31,377 | ) | (37,251 | ) | 251,041 | (91,204 | ) | |||||||||
Rental income
|
144,192 | 111,138 | 248,046 | 214,276 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other expense, net
|
(626,337 | ) | (1,494,261 | ) | (1,145,158 | ) | (5,041,411 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Income (Loss)
|
($ | 1,400,107 | ) | ($ | 2,249,053 | ) | ($ | 2,911,870 | ) | ($ | 7,206,532 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net Loss Per Common Unit
|
($ | 0.28 | ) | ($ | 0.45 | ) | ($ | 0.58 | ) | ($ | 1.43 | ) | ||||
Weighted Average Units Outstanding – Basic And Diluted
|
5,034,700 | 5,034,700 | 5,034,700 | 5,034,700 |
Redeemable Series A
Preferred Units |
Members’
|
Loans to
Officer
|
Accumulated
Members’
Deficit
|
Total
Members’
Interests
|
||||||||||||||||||||||||||||
Units
|
Amount
|
Units
|
Amount
|
|||||||||||||||||||||||||||||
Mezzanine Equity and Members’ Interests, December 31, 2019
|
3,000,000 | $ | 15,000,000 |
|
5,034,700 | $ | 10,149,803 | ($ | 450,000 | ) | ($ | 46,282,606 | ) | ($ | 36,582,803 | ) | ||||||||||||||||
Net loss
|
— | — |
|
— | — | — | (4,957,480 | ) | (4,957,480 | ) | ||||||||||||||||||||||
Issuance of warrant to purchase common units
|
— | — |
|
— | 1,304,013 | — | — | 1,304,013 | ||||||||||||||||||||||||
Unit-based compensation
|
— | — |
|
— | 8,047 | — | — | 8,047 | ||||||||||||||||||||||||
Accrued dividends
|
— | — |
|
— | — | — | (300,000 | ) | (300,000 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Mezzanine Equity and Members’ Interests, March 31, 2020
|
3,000,000 | 15,000,000 | 5,034,700 | 11,461,863 | (450,000 | ) | (51,540,086 | ) | (40,528,223 | ) | ||||||||||||||||||||||
Net loss
|
— | — | — | — | — | (2,249,053 | ) | (2,249,053 | ) | |||||||||||||||||||||||
Accrued dividends
|
— | — | — | — | — | (300,000 | ) | (300,000 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Mezzanine Equity and Members’ Interests, June 30, 2020
|
3,000,000 | $ | 15,000,000 | 5,034,700 | $ | 11,461,863 | ($ | 450,000 | ) | ($ | 54,089,139 | ) | ($ | 43,085,323 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Mezzanine Equity and Members’ Interests, December 31, 2020
|
3,000,000 | $ | 15,000,000 | 5,034,700 | $ | 11,593,120 | ($ | 450,000 | ) | ($ | 59,020,535 | ) | ($ | 47,877,415 | ) | |||||||||||||||||
Net loss
|
— | — | — | — | — | (1,511,762 | ) | (1,511,762 | ) | |||||||||||||||||||||||
Unit-based compensation
|
— | — | — | 47,892 | — | — | 47,892 | |||||||||||||||||||||||||
Distributions to members
|
— | — | — | — | 450,000 | (450,000 | ) | — | ||||||||||||||||||||||||
Accrued dividends
|
— | — | — | — | — | (300,000 | ) | (300,000 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Mezzanine Equity and Members’ Interests, March 31, 2021
|
3,000,000 | 15,000,000 | 5,034,700 | 11,641,012 | $ | — | (61,282,297 | ) | (49,641,285 | ) | ||||||||||||||||||||||
Net loss
|
— | — | — | — | — | (1,400,107 | ) | (1,400,107 | ) | |||||||||||||||||||||||
Accrued dividends
|
— | — | — | — | — | (200,000 | ) | (200,000 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Mezzanine Equity and Members’ Interests, June 8, 2021
|
3,000,000 | $ | 15,000,000 | 5,034,700 | $ | 11,641,012 | $ | — | ($ | 62,882,404 | ) | ($ | 51,241,392 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. ORGANIZATION
|
AND NATURE OF OPERATIONS
|
2. SUMMARY
|
OF SIGNIFICANT ACCOUNTING POLICIES
|
June 8,
2021
|
December 31,
2020
|
|||||||
Unit options outstanding
|
1,808,303 | 1,933,303 | ||||||
Warrants
|
741,135 | 741,135 | ||||||
|
|
|
|
|||||
Total
|
2,549,438 | 2,674,438 | ||||||
|
|
|
|
• |
Level
1 inputs:
|
• |
Level
2 inputs:
|
• |
Level
3 inputs:
|
1. |
Identification of the contract with a customer
|
2. |
Identification of the performance obligations in the contract
|
3. |
Determination of the transaction price
|
4. |
Allocation of the transaction price to the performance obligations in the contract
|
5. |
Recognition of revenue when, or as, the Company satisfies a performance obligation
|
1. |
The Company is excluding from its transaction price all sales and similar taxes collected from its customers.
|
2. |
The Company elected to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.
|
3. |
The Company elected to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations.
|
4. |
The portfolio approach has been elected by the Company as it expects any effects of adoption would not be materially different in application at the portfolio level compared with the application at an individual contract level.
|
5. |
The Company elected the “right to invoice” expedient which states that for performance obligations satisfied over time, if an entity has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, the entity may recognize revenue in the amount to which the entity has a right to invoice.
|
6. |
The Company elected not to disclose information about its remaining performance obligations for any contract that has an original expected duration of one year or less.
|
7. |
The Company elected not to disclose information about its remaining performance obligations when it recognizes revenue from the satisfaction of performance obligations in accordance with the “right to invoice” practical expedient.
|
8. |
The Company elected all transition-related practical expedients available under the full retrospective transition method of adoption.
|
3.
|
PROPERTY AND EQUIPMENT, NET
|
Useful Life
(Years) |
June 8,
2021
|
December,31
2020
|
||||||||||
Furniture and fixtures
|
7 | $ | 480,515 | $ | 480,515 | |||||||
Computer and related equipment
|
5 | 3,266,897 | 3,490,045 | |||||||||
Vehicle
|
5 | 10,500 | 10,500 | |||||||||
|
|
|
|
|||||||||
3,757,912 | 3,981,060 | |||||||||||
Less accumulated depreciation
|
(1,813,246 | ) | (1,627,855 | ) | ||||||||
|
|
|
|
|||||||||
Property and equipment, net
|
$ | 1,944,666 | $ | 2,353,205 | ||||||||
|
|
|
|
4.
|
SOFTWARE AND WEBSITE DEVELOPMENT COSTS, NET
|
Useful Life
(Years) |
June 8,
2021
|
December,31
2020
|
||||||||||
IT Infrastructure—software development costs
|
5 | $ | 5,335,022 | $ | 5,335,022 | |||||||
Software and website development costs
|
3 | 1,026,913 | 1,026,913 | |||||||||
Work in Progress Assets
|
— | 414,530 | 272,230 | |||||||||
|
|
|
|
|||||||||
6,776,465 | 6,634,165 | |||||||||||
Less accumulated depreciation
|
(2,175,090 | ) | (1,731,796 | ) | ||||||||
|
|
|
|
|||||||||
Software and website development costs, net
|
$ | 4,601,375 | $ | 4,902,369 | ||||||||
|
|
|
|
5.
|
LOANS TO OFFICERS
|
6.
|
RELATED PARTY TRANSACTIONS
|
7.
|
MEMBERS’ INTERESTS
|
8.
|
OPTIONS TO PURCHASE MEMBER UNIT
|
Number of
Shares |
Weighted-Average
Exercise Price |
|||||||
Outstanding, January 1, 2020
|
1,941,150 | 5.70 | ||||||
Granted
|
132,153 | 6.99 | ||||||
Exercised
|
— | — | ||||||
Canceled and forfeited
|
— | — | ||||||
|
|
|
|
|||||
Outstanding, June 30, 2020
|
2,073,303 | 5.78 | ||||||
|
|
|
|
|||||
Outstanding, January 1, 2021
|
1,933,303 | 4.91 | ||||||
Granted
|
— | — | ||||||
Exercised
|
— | — | ||||||
Canceled and forfeited
|
(125,000 | ) | 15.00 | |||||
|
|
|
|
|||||
Outstanding, June 30, 2021
|
1,808,303 | 4.21 | ||||||
|
|
|
|
|||||
Exercisable, June 30, 2020
|
1,856,699 | 4.52 | ||||||
Exercisable, June 30, 2021
|
1,665,734 | 3.98 |
Options Outstanding
|
Options
Exercisable |
|||||
Exercise Prices
|
Number Outstanding
|
Weighted-Average
Remaining Contractual Life (Years) |
Number
Exercisable |
|||
0.23 | 155,100 | 4.31 | 155,100 | |||
1.55 | 336,050 | 4.31 | 336,050 | |||
5 | 1,075,000 | 4.36 | 1,075,000 | |||
6.99 | 242,153 | 9.33 | 99,584 | |||
|
|
|||||
1,808,303 | 1,665,734 | |||||
|
|
9.
|
PERFORMANCE UNIT PLAN
|
10.
|
EMPLOYEE BENEFIT PLAN
|
11.
|
REVOLVING LINE OF CREDIT
|
12.
|
CONVERTIBLE NOTES PAYABLE TO RELATED PARTY
|
13.
|
CONVERTIBLE NOTES PAYABLE
|
14.
|
DEBT
|
Expected term (in years)
|
3 years | |||
Risk-free interest rate
|
1.48 | % | ||
Volatility
|
33.07 | % |
15.
|
OPERATING AND FINANCE LEASE RIGHT OF USE ASSETS
|
January 1, 2021
to June 8, 2021 |
January 1, 2020
to June 30, 2020 |
|||||||
Amortization of finance ROU assets
|
$ | 1,378,074 | $ | 1,041,000 | ||||
Interest on finance lease liabilities
|
132,122 | 168,486 | ||||||
|
|
|
|
|||||
Finance lease expense
|
1,510,196 | 1,209,486 | ||||||
Operating lease expense
|
730,020 | 797,551 | ||||||
Variable lease expense
|
— | — | ||||||
Sublease income
|
(200,420 | ) | (198,538 | ) | ||||
|
|
|
|
|||||
Total lease expense
|
$ | 2,039,796 | $ | 1,808,499 | ||||
|
|
|
|
January 1, 2021
to June 8, 2021 |
January 1, 2020
to June 30, 2020 |
|||||||
Operating cash flows from operating leases
|
$ | 730,020 | $ | 797,551 | ||||
Operating cash flows from finance leases
|
132,122 | 168,486 | ||||||
Financing cash flows from finance leases
|
1,428,170 | 1,334,369 | ||||||
|
|
|
|
|||||
Cash paid for amounts included in the measurement of lease liabilities
|
$ | 2,290,312 | $ | 2,300,406 | ||||
|
|
|
|
January 1, 2021
to June 8, 2021 |
January 1, 2020
to June 30, 2020 |
|||||||
Weighted average remaining lease term (months)
|
||||||||
Operating leases
|
76 | 81 | ||||||
Finance leases
|
20 | 27 | ||||||
Weighted average discount rate
|
||||||||
Operating leases
|
6.70 | % | 6.70 | % | ||||
Finance leases
|
9.60 | % | 8.10 | % |
Operating
leases |
Finance leases
|
Total
|
||||||||||
Years Ending December 31
|
||||||||||||
Remaining 2021
|
$ | 703,441 | $ | 1,818,467 | $ | 2,521,908 | ||||||
2022
|
1,374,443 | 1,495,388 | 2,869,831 | |||||||||
2023
|
1,037,855 | 632,803 | 1,670,658 | |||||||||
Thereafter
|
2,950,392 | 56,285 | 3,006,677 | |||||||||
|
|
|
|
|
|
|||||||
Undiscounted cash flows
|
6,066,131 | 4,002,943 | 10,069,074 | |||||||||
Less: imputed interest
|
(1,030,956 | ) | (250,770 | ) | (1,281,726 | ) | ||||||
|
|
|
|
|
|
|||||||
Total
|
$ | 5,035,175 | $ | 3,752,173 | $ | 8,787,348 | ||||||
|
|
|
|
|
|
|||||||
Reconciliation to lease liabilities:
|
||||||||||||
Lease liabilities – current
|
$ | 1,041,754 | $ | 2,358,123 | $ | 3,399,877 | ||||||
Lease liabilities –
non-current
|
3,993,421 | 1,394,050 | 5,387,471 | |||||||||
|
|
|
|
|
|
|||||||
Total lease liabilities
|
$ | 5,035,175 | $ | 3,752,173 | $ | 8,787,348 | ||||||
|
|
|
|
|
|
16.
|
COMMITMENTS AND CONTINGENCIES
|
17.
|
SUBSEQUENT EVENTS
|
Oppenheimer & Co.
|
Lake Street
Northland Capital Markets
|
Amount
Paid or to be Paid |
||||
SEC registration fee
|
$ | 6,723 | ||
Legal fees and expenses
|
$ | 250,000 | ||
Accounting fees and expenses
|
$ | 95,000 | ||
Financial printing and miscellaneous expenses
|
$ | 400,000 | ||
|
|
|||
Total
|
$ | 751,723 | ||
|
|
Exhibit
No. |
Description
|
|
23.4 | Consent of Plante & Moran, PLLC, with respect to TTC Healthcare. | |
23.5 | Consent of Plante & Moran, PLLC, with respect to Behavioral Health Services. | |
23.6 | Consent of D. K. Chhajer & Co., PLLC, with respect to Glocal. | |
23.7 | Consent of Hall & Company, with respect to Cloudbreak. | |
23.8 | Consent of Macias Gini & O’Connell LLP, with respect to Cloudbreak. | |
23.9 | Consent of Plante & Moran, PLLC, with respect to UpHealth Holdings, Inc. | |
24.1** | Power of Attorney, incorporated by reference to page II-9 to initial filing of this Registration Statement on Form S-1. | |
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because iXBRL tags are embedded within the Inline XBRL document). | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | The Cover Page Interactive Data File, formatted in Inline XBRL (included within the Exhibit 101 attachments). |
** |
Previously filed.
|
† |
Certain exhibits and schedules to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation
S-K.
The registrant agrees to furnish a copy of the omitted exhibits and schedules to the SEC on a supplemental basis upon its request.
|
# |
Indicates management contract or compensatory plan or arrangement
|
(b) |
Financial Statements
|
1) |
The undersigned Registrant will provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
|
2) |
For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
|
3) |
For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
UPHEALTH, INC.
|
||
By: |
/s/ Dr. Ramesh Balakrishnan
|
|
Name: | Dr. Ramesh Balakrishnan | |
Title: | Chief Executive Officer |
Name
|
Title
|
Date
|
||
/s/ Ramesh Balakrishnan
Dr. Ramesh Balakrishnan
|
Chief Executive Officer
(
Principal Executive Officer
|
September 27, 2021 | ||
/s/ Martin S. A. Beck
Martin S. A. Beck
|
Chief Financial Officer
(
Principal Accounting and
Financial Officer
|
September 27, 2021 | ||
*
Dr. Chirinjeev Kathuria
|
Co-Chairman
of the Board of Directors
|
September 27, 2021 | ||
*
Dr. Avi S. Katz
|
Co-Chairman
of the Board of Directors
|
September 27, 2021 | ||
*
Moshe
Bar-Siman-Tov
|
Director | September 27, 2021 | ||
*
Dr. Raluca Dinu
|
Director | September 27, 2021 | ||
*
Nathan Locke
|
Director | September 27, 2021 | ||
*
Neil Miotto
|
Director | September 27, 2021 | ||
*
Dr. Mariya Pylypiv
|
Director | September 27, 2021 | ||
*
Agnès
Rey-Giraud
|
Director | September 27, 2021 | ||
*
Jerome Ringo
|
Director | September 27, 2021 |
*By: |
/s/ Dr. Ramesh Balakrishnan
|
|
Dr. Ramesh Balakrishnan
Attorney-in-fact
|
Exhibit 1.1
[_____] Shares of Common Stock
UPHEALTH, INC.
UNDERWRITING AGREEMENT
_____________, 2021
Oppenheimer & Co. Inc.
as Representative of the several
Underwriters named on Schedule I hereto
c/o Oppenheimer & Co. Inc.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
UpHealth, Inc., a Delaware corporation (the Company), proposes, subject to the terms and conditions stated herein, to issue and sell to Oppenheimer & Co. Inc., as representative (the Representative) of the several underwriters named in Schedule I hereto (each, an Underwriter), an aggregate of [_____] authorized but unissued shares (the Firm Shares) of common stock, par value $0.0001 per share, of the Company (the Common Stock). In addition, the Company proposes to grant to the Underwriters an option to purchase up to an additional [_____] shares (the Option Shares) of Common Stock. The Firm Shares and the Option Shares are collectively called the Shares.
The Company and the Underwriters hereby confirm their agreement as follows:
1. Registration Statement and Prospectus. The Company has prepared and filed with the Securities and Exchange Commission (the Commission) a registration statement on Form S-1 (File No. 333-259143), including the related preliminary prospectus or prospectuses, covering the registration of the sale of the Shares under the Securities Act of 1933, as amended (the Securities Act) and the rules and regulations of the Commission thereunder (the Rules and Regulations). Promptly after execution and delivery of this Agreement, the Company will prepare and file a prospectus in accordance with the provisions of Rule 430A (Rule 430A) of the Rules and Regulations and Rule 424(b) (Rule 424(b)) of the Rules and Regulations. The information included in such prospectus that was omitted from such registration statement at the time it became effective but that is deemed to be part of such registration statement at the time it became effective pursuant to Rule 430A(b) is herein called the Rule 430A Information. Such registration statement, including the amendments thereto, the exhibits thereto and any schedules thereto, at the time it became effective, and including the Rule 430A Information, is herein called the Registration Statement. Any registration statement filed pursuant to Rule 462(b) of the Rules and Regulations is herein called the Rule 462(b) Registration Statement and, after such filing, the term Registration Statement shall include the Rule 462(b) Registration Statement. Each prospectus used prior to the effectiveness of the Registration Statement (such time, the Effective Time), and each prospectus that omitted the Rule 430A Information that was used after such effectiveness and prior to the execution and delivery of this Agreement is herein called a
preliminary prospectus. The prospectus, in the form first furnished to the Underwriters for use in connection with the offering of the Shares, is herein called the Prospectus. For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system or any successor system (EDGAR).
All references in this Agreement to financial statements and schedules and other information which is described, contained, included or stated in the Registration Statement or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements, pro forma financial information and schedules and other information which is incorporated by reference in or otherwise deemed by the Rules and Regulations to be a part of or included in the Registration Statement or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement or the Prospectus shall be deemed to mean and include the subsequent filing of any document under the Securities Exchange Act of 1934, as amended (the Exchange Act), that is deemed to be incorporated therein by reference or otherwise deemed by the Rules and Regulations to be a part thereof.
2. Representations and Warranties of the Company Regarding the Offering.
(a) The Company represents and warrants to, and agrees with, the Representative, as of the date hereof and as of any Closing Date (as defined in Section 4(c) below), as follows:
(i) Compliance with Registration Requirements. The Registration Statement has been declared effective by the Commission under the Securities Act. The Company has complied to the Commissions satisfaction with all requests of the Commission for additional or supplemental information related to the Registration Statement or the Prospectus. No stop order suspending the effectiveness of the Registration Statement is in effect and no proceedings for such purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated or threatened by the Commission.
(ii) No Material Misstatements or Omissions. At the Effective Time, at the date hereof and, at any Closing Date, the Registration Statement and any post-effective amendment, at the time of filing thereof, conformed in all material respects with the requirements of the Securities Act and the Rules and Regulations and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Time of Sale Disclosure Package (as defined below), as of [_______] (Eastern time) on the date hereof (the Applicable Time), and on any Closing Date, if any, and the Prospectus, as amended or supplemented, as of its date, on the time of filing pursuant to Rule 424(b) under the Securities Act and at any Closing Date, and any individual Written Testing-the-Waters Communication (as defined below), when considered together with the Time of Sale Disclosure Package, did not, does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties set forth in the two immediately preceding sentences shall not
2
apply to statements in or omissions from the Registration Statement, the Time of Sale Disclosure Package, or any Prospectus in reliance upon, and in conformity with, the written information furnished by any Underwriter, which the Company acknowledges is limited to the information contained in the [___] paragraphs under the caption Underwriting in each of the preliminary prospectus and the Prospectus. No order preventing or suspending the effectiveness or use of the Registration Statement or any Prospectus is in effect and no proceedings for such purpose have been instituted or are pending, or, to the knowledge of the Company, are contemplated or threatened by the Commission.
(iii) Marketing Materials. The Company has not distributed any prospectus or other offering material in connection with the offering and sale of the Shares other than the Time of Sale Disclosure Package and the roadshow or investor presentations delivered to and approved by the Representative for use in connection with the marketing of the offering of the Shares (the Marketing Materials).
(iv) Emerging Growth Company. The Company is an emerging growth company, as defined in Section 2(a) of the Securities Act (an Emerging Growth Company).
(v) Testing-the-Waters Communications. The Company (i) has not alone engaged in any Testing-the-Waters Communication (as defined below), other than Testing-the-Waters Communications with the written consent of the Representative, and (ii) has not authorized anyone other than the Underwriters to engage in Testing-the-Waters Communications. The Company confirms that the Underwriters have been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has not distributed any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act (Written Testing-the-Waters Communications). Testing-the-Waters Communication means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act. The Company has filed publicly on EDGAR, at least 15 calendar days prior to any road show (as defined in Rule 433 und the Securities Act), any confidentially submitted registration statement and registration statement amendments relating to the offer and sale of the Shares. Each Written Testing-the-Waters Communication, did not, as of the Applicable Time, and at all times through the completion of the public offer and sale of the Shares will not, include any information that conflicted or conflicts with the information contained in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus.
(vi) Accurate Disclosure. (A) The Company has provided a copy to the Underwriters of each Issuer Free Writing Prospectus (as defined below) used in the sale of the Shares, if any. The Company has filed all Issuer Free Writing Prospectuses required to be so filed with the Commission, and no order preventing or suspending the effectiveness or use of any Issuer Free Writing Prospectus is in effect and no proceedings for such purpose have been instituted or are pending, or, to the knowledge of the Company, are contemplated or threatened by the Commission. When taken together with the rest of the Time of Sale Disclosure Package or the Prospectus, no Issuer Free Writing Prospectus, as of any Closing Date, does or will include (1) any untrue statement of a material fact or omission to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (2) information that conflicted with the information contained in the Registration
3
Statement or the Prospectus. The representations and warranties set forth in the immediately preceding sentence shall not apply to statements in or omissions from the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus in reliance upon, and in conformity with, the Underwriters Information. As used in this paragraph and elsewhere in this Agreement:
A. Time of Sale Disclosure Package means the Prospectus most recently filed with the Commission before the time of this Agreement, including any preliminary prospectus supplement deemed to be a part thereof, each Issuer Free Writing Prospectus, and the description of the transaction provided by the Underwriters included on Schedule II hereto.
B. Issuer Free Writing Prospectus means any issuer free writing prospectus, as defined in Rule 433 under the Securities Act, relating to the Shares that (A) is required to be filed with the Commission by the Company, or (B) is exempt from filing pursuant to Rule 433(d)(5)(i) or (d)(8) under the Securities Act, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Companys records pursuant to Rule 433(g) under the Securities Act.
(B) At the time of filing of the Registration Statement and on the date hereof, the Company was not and is not an ineligible issuer, as defined in Rule 405 under the Securities Act or an excluded issuer as defined in Rule 164 under the Securities Act. The Company agrees to notify the Representative promptly upon the Company becoming an ineligible issuer.
(C) Each Issuer Free Writing Prospectus listed on Schedule III hereto satisfied, as of its issue date and at all subsequent times through the Prospectus Delivery Period (as defined below), all other conditions as may be applicable to its use as set forth in Rules 164 and 433 under the Securities Act, including any legend, record-keeping or other requirements.
(vii) Financial Statements. The financial statements of the Company and its subsidiaries, together with the related notes and schedules, included or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act, and the Rules and Regulations of the Commission thereunder, and fairly present, in all material respects, the financial condition of the Company and its subsidiaries as of the dates indicated and the results of operations and changes in cash flows for the periods therein specified. The supporting schedules included in or incorporated in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus present fairly, in all material respects, the information required to be stated therein. Such financial statements and supporting schedules have been prepared in accordance with generally accepted accounting principles as applied in the United States or India (as applicable) (GAAP) applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto. No other financial statements, pro forma financial information or schedules are required under the Securities Act, the Exchange Act, or the Rules and Regulations to be included in the Registration Statement, the Time of Sale Disclosure Package or the Prospectus.
4
(viii) XBRL. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus fairly presents the information called for in all material respects and has been prepared in accordance with the Commissions rules and guidelines applicable thereto.
(ix) Independent Accountants. Plante & Moran, PLLC, D. K. Chhajer & Co. and Macias Gini & OConnell LLP, each of which has expressed its opinion with respect to the financial statements included or incorporated by reference as part of the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, is an independent public accounting firm with respect to the Company and its subsidiaries within the meaning of the Securities Act and the Rules and Regulations.
(x) Accounting Controls. The Company and its subsidiaries maintain systems of internal control over financial reporting (as defined under Rules 13a-15 and 15d-15 under the Exchange Act) that are designed to comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, and are designed to ensure that (A) transactions are executed in accordance with managements general or specific authorizations; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (C) access to assets is permitted only in accordance with managements general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Since the date of the latest audited financial statements included in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, there has been no change in the Companys internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.
(xi) Forward-Looking Statements. The Company had a reasonable basis for, and has made in good faith, each forward-looking statement (within the meaning of Section 27A of the Securities Act or Section 21E of the Exchange Act) included or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package, the Prospectus or the Marketing Materials.
(xii) Statistical and Marketing-Related Data. Nothing has come to the attention of the Company that has caused the Company to believe that the statistical or market-related data included in the Registration Statement, the Time of Sale Disclosure Package or the Prospectus, or included in the Marketing Materials, are not based on or derived from sources that the Company reasonably believes to be reliable and accurate. The Company has obtained the written consent of its customers for the use of any applicable case study data included in the Registration Statement, Time of Sale Disclosure Package or the Prospectus, to the extent required.
5
(xiii) Trading Market. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is approved for listing on the New York Stock Exchange (the NYSE). As of any Closing Date, the Shares will have been duly authorized for listing on the NYSE.
(xiv) Absence of Manipulation. The Company has not taken and will not take, directly or indirectly, any action that is designed to or that has constituted or that would reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares, and has taken no action which would directly or indirectly violate Regulation M.
(xv) Investment Company Act. The Company is not and, after giving effect to the offering and sale of the Shares and the application of the net proceeds thereof, will not be an investment company, as such term is defined in the Investment Company Act of 1940, as amended.
(xvi) Lock-Up Agreements. Schedule IV hereto contains a complete and accurate list of the Companys officers, directors and each beneficial owner of the Companys outstanding shares of Common Stock (or securities convertible or exercisable into shares of Common Stock) that the Company has caused to deliver to the Representative an executed Lock-Up Agreement (collectively, the Lock-Up Parties), in the form attached hereto as Exhibit A (the Lock-Up Agreement), prior to the execution of this Agreement.
(xvii) Disclosure of Agreements. The agreements and documents described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the Rules and Regulations to be described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company or any of its subsidiaries is a party or by which it is or may be bound or affected and that is referred to in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus has been duly authorized and validly executed by the Company or its subsidiaries and is in full force and effect in all material respects and is enforceable against the Company or its subsidiaries and, to the Companys knowledge, the other parties thereto, in accordance with its terms, except (A) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally, (B) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (C) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. None of such agreements or instruments has been assigned by the Company or its subsidiaries, and neither the Company, its subsidiaries nor, to the Companys knowledge, any other party is in default thereunder and, to the Companys knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. Performance by the Company or its subsidiaries of the material provisions of such agreements or instruments has not, and to the Companys knowledge, will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental authority, agency or court, domestic or foreign, having jurisdiction over the Company or its subsidiaries or any of its assets or businesses, including, without limitation, those relating to Environmental Laws (as defined below).
6
(b) Any certificate by any officer of the Company and delivered to the Representative or to the Representatives counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
3. Representations and Warranties of the Company Regarding the Company.
(a) The Company represents and warrants to and agrees with, the Representative, as of the date hereof and as of any Closing Date, as follows:
(i) Good Standing. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus and to enter into and perform its obligations under this Agreement. Each subsidiary of the Company has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its organization and has the requisite power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus. Each of the Company and its subsidiaries is duly qualified as a foreign corporation or foreign partnership to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the aggregate, reasonably be expected to result in a material adverse effect upon the business, properties, operations, financial position, results of operations or prospects of the Company and its subsidiaries, taken as a whole, or in its ability to perform its obligations under this Agreement (Material Adverse Effect). Except as described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, all of the issued and outstanding capital stock or other equity interests of the Companys subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and are owned by the Company free and clear of any security interest, mortgage, pledge, lien, encumbrance or adverse claim. The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed on Schedule V hereto.
(ii) Authorization. The Company has the power and authority to enter into this Agreement and to authorize, issue and sell the Shares as contemplated by this Agreement. This Agreement has been duly authorized, executed and delivered by the Company, and when executed and delivered by the Company, will constitute the valid, legal and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as rights to indemnity hereunder may be limited by federal or state securities laws and except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally and subject to general principles of equity.
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(iii) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required. Neither the Company nor any of its subsidiaries is in breach or violation of its charter or by-laws (or any equivalent organizational or governing documents) or is in default (or, with the giving of notice or lapse of time, would be in default) (Default) under any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject (each, an Existing Instrument), except for such Defaults as would not, individually or in the aggregate, result in a Material Adverse Effect. The Companys execution, delivery and performance of this Agreement and consummation of the transactions contemplated hereby and by the Registration Statement, the Time of Sale Disclosure Package and the Prospectus (A) have been duly authorized by all necessary corporate action and will not result in any violation of the provisions of the charter or by-laws of the Company or any subsidiary, (B) will not conflict with or constitute a breach of, or Default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, or require the consent of any other party to, any Existing Instrument, except for such conflicts, breaches, Defaults, liens, charges or encumbrances as would not, individually or in the aggregate, result in a Material Adverse Effect and (C) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company or any subsidiary.
(iv) Consents. No consents, approvals, orders, authorizations or filings are required on the part of the Company in connection with the execution, delivery or performance of this Agreement, and issue and sale of the Shares, except (A) the registration under the Securities Act of the Shares, which has been effected, (B) the necessary filings and approvals from the NYSE to list the Shares, (C) such consents, approvals, authorizations, registrations or qualifications as may be required under state or foreign securities or Blue Sky laws and the rules of the Financial Industry Regulatory Authority, Inc. (FINRA) in connection with the purchase of the Shares and distribution of the Shares by the several Underwriters, (D) such consents and approvals as have been obtained and are in full force and effect, and (E) such consents, approvals, orders, authorizations and filings the failure of which to make or obtain is not reasonably likely to result in a Material Adverse Effect.
(v) SEC Reports. The Company is subject to and in compliance in all material respects with the reporting requirements of Section 13 or Section 15(d) of the Exchange Act, and has timely filed all reports required to be filed pursuant to Sections 13(a), 13(e), 14 and 15(d) of the Exchange Act (the SEC Reports) during the preceding twelve (12) months.
(vi) Capitalization. The Company has an authorized capitalization as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus. All of the issued and outstanding shares of capital stock of the Company are duly authorized and validly issued, fully paid and nonassessable, have been issued in compliance in all material respects with all applicable securities laws and conform in all material respects to the description thereof in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus. All of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and, except as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims, except to the extent that such liens, encumbrances, equities or claims would not reasonably be expected to
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have a Material Adverse Effect. Except for the issuances of options or restricted stock in the ordinary course of business, since the respective dates as of which information is provided in the Registration Statement, the Time of Sale Disclosure Package or the Prospectus, the Company has not entered into or granted any convertible or exchangeable securities, options, warrants, agreements, contracts or other rights in existence to purchase or acquire from the Company any shares of the capital stock of the Company. The Shares, when issued and paid for as provided herein, will be duly authorized and validly issued, fully paid and nonassessable, will be issued in compliance with all applicable securities laws, and will be free of preemptive, registration or similar rights and will conform in all material respects to the description of the capital stock of the Company contained in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus.
(vii) No Registration Rights. Except as described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, there are no contracts, agreements or understandings between the Company and any person granting such person the right (other than rights which have been waived in writing or otherwise satisfied) to require the Company to file a registration statement under the Securities Act with respect to any equity or debt securities of the Company owned or to be owned by such person or to require the Company to include such securities with the Shares registered pursuant to the Registration Statement or with any securities being registered pursuant to any other registration statement filed by the Company under the Securities Act, except for such rights as have been duly waived.
(viii) No Preemptive Rights. Except as otherwise stated in the Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus, there are no preemptive rights or other rights to subscribe for or to purchase, or any restriction upon the voting or transfer of, any shares of Common Stock pursuant to the Companys certificate of incorporation, by-laws or any agreement or other instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound.
(ix) Stock Options. The Company has not issued any options under the Companys stock option plan. The Company has assumed options previously issued by one of its subsidiaries when the Company acquired such subsidiary. The exercise price of each assumed option issued under such subsidiarys stock option plan has been no less than the fair market value of a share of common stock as determined on the date of grant of such option. All grants of options were validly issued and properly approved by the board of directors of such subsidiary (or a duly authorized committee thereof) in material compliance with all applicable laws and regulations, and the assumed options have been recorded in the Companys financial statements in accordance with GAAP and, to the Companys knowledge, no such grants involved back dating, forward dating or similar practice with respect to the effective date of grant.
(x) Taxes. Except as would not reasonably be expected to result in a Material Adverse Effect, each of the Company and its subsidiaries has (A) filed all foreign, federal, state and local tax returns (as hereinafter defined) required to be filed with taxing authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof and (B) paid all taxes (as hereinafter defined) shown as due and payable on such returns that were filed and has paid all taxes imposed on or assessed against the Company or such respective subsidiary. The provisions for taxes payable, if any, shown on the financial statements included in the Registration
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Statement, the Time of Sale Disclosure Package and the Prospectus are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. To the knowledge of the Company, no issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes asserted as due from the Company or its subsidiaries, and no waivers of statutes of limitation with respect to the returns or collection of taxes have been given by or requested from the Company or its subsidiaries. The term taxes mean all federal, state, local, foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments, or charges of any kind whatever, together with any interest and any penalties, additions to tax, or additional amounts with respect thereto. The term returns means all returns, declarations, reports, statements, and other documents required to be filed in respect to taxes.
(xi) No Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Time of Sale Disclosure Package or the Prospectus, (A) there has been no material adverse change, or any development that could reasonably be expected to result in a Material Adverse Effect, in the condition, financial or otherwise, or in the earnings, business, operations or prospects, whether or not arising from transactions in the ordinary course of business, of the Company and its subsidiaries, considered as one entity; (B) the Company and its subsidiaries, considered as one entity, have not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course of business nor entered into any material transaction or agreement not in the ordinary course of business; (C) there has been no dividend or distribution of any kind declared, paid or made by the Company or, except for regular quarterly dividends publicly announced by the Company or dividends paid to the Company or other subsidiaries, by any of its subsidiaries on any class of capital stock or repurchase or redemption by the Company or any of its subsidiaries of any class of capital stock; (D) there has not been any material change in the Companys long-term or short-term debt; and (E) there has not been the occurrence of any Material Adverse Effect.
(xii) Ownership Interest. Except as otherwise stated in the Registration Statement, in the Time of Sale Disclosure Package, the Preliminary Prospectus and the Prospectus, the Company does not own, directly or indirectly, any capital stock or other ownership interest in any partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or other entity.
(xiii) No Material Actions or Proceedings. Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package or the Prospectus, there are no legal or governmental actions, suits or proceedings pending or, to the Companys knowledge, threatened (A) against or affecting the Company or any of its subsidiaries, (B) which has as the subject thereof any officer or director of, or property owned or leased by, the Company or any of its subsidiaries or (C) relating to environmental or discrimination matters, where in any such case (1) there is a reasonable possibility that such action, suit or proceeding might be determined adversely to the Company or such subsidiary and (2) any such action, suit or proceeding, if so determined adversely, would result in a Material Adverse Effect or adversely affect the consummation of the transactions contemplated by this Agreement. No material labor dispute with the employees of the Company or any of its subsidiaries exists or, to the Companys knowledge, is threatened or imminent.
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(xiv) Permits. The Company and each of its subsidiaries holds, and is in compliance with, all franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders (Permits) of any governmental or self-regulatory agency, authority or body (including, without limitation, those administered by the Food and Drug Administration of the U.S. Department of Health and Human Services (the FDA) or by any foreign, federal, state or local governmental or regulatory authority performing functions similar to those performed by the FDA) required for the conduct of its business, and all such Permits are in full force and effect, in each case except where the failure to hold, or comply with, any of them is not reasonably likely to result in a Material Adverse Effect. The Company has not received notification of any material revocation, modification, suspension, termination or invalidation (or proceedings related thereto) of any such Permit. All such Permits are free and clear of any material restriction or condition that are in addition to, or materially different, from those normally applicable to similar licenses, certificates, authorizations and permits. The Company has not received notification of any material revocation, modification, suspension, termination or invalidation (or proceedings related thereto) of any such Permit.
(xv) Compliance with Applicable Laws. Except as described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, the Company and its subsidiaries: (A) are and at all times have been in compliance with, except where the failure to comply would not result in a Material Adverse Effect, (1) all laws, regulations and requirements of applicable governmental authorities and applicable regulatory organizations governing, regulating, restricting or relating or pertaining to the provision, administration, marketing or advertising, ordering or referring of, or the billing, coding or payment for healthcare items or services, the corporate practice of medicine, pharmacy, laboratory operations, professional licensure, pharmacology and the securing, administering and dispensing of drugs, devices, medicines and controlled substances, medical documentation, diagnostic testing, and clinical orders, medical record retention, unprofessional conduct, fee-splitting, referrals, billing and submission of false or fraudulent claims, claims processing, quality, safety, medical necessity, health information privacy and security, patient confidentiality and informed consent, the hiring of employees or acquisition of services or supplies from Persons excluded from participation in any federal, state, or local healthcare programs (Governmental Healthcare Programs), standards of care, quality assurance, including to the extent applicable to the Company or its subsidiaries all (i) laws governing the operation and administration of Medicare, Medicaid, Medicaid waiver, TRICARE or other Governmental Healthcare Programs; (ii) the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301 et seq.; the Public Health Service Act, 42 U.S.C. § 201 et seq.; the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b), the federal Stark Law (42 U.S.C. § 1395nn), the federal civil False Claims Act (31 U.S.C. §§ 3729 et seq.), the federal Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a), the federal Exclusion Laws (42 U.S.C. § 1320a-7), the federal Health Care Fraud Law (18 U.S.C. § 1347), the federal Program Fraud Civil Remedies Act (31 U.S.C. § 3801 et seq.), the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. § 3801, et seq.), the Beneficiary Inducement Statute (42 U.S.C. § 1320a-7a(a)(5)); the Eliminating Kickbacks in Recovery Act of 2018 (18 U.S.C. § 220); and other state and federal laws relating to self-referral, anti-kickback, illegal remuneration, fraud and abuse or the defrauding of or making or presenting of any false claim, false statement or misrepresentation of material facts to any Governmental
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Healthcare Programs or other insurance company, managed care organization, health or medical plan or program or other third-party payor, whether private, commercial or governmental, or any fiscal intermediary, contractor other person administering or overseeing any of the foregoing; (iii) any and all federal and state laws regarding the prescribing of prescription drugs and controlled substances, including, but not limited to the Ryan Haight Act Online Pharmacy Consumer Protection Act of 2008 and the Controlled Substances Act (21 U.S.C. § 801, et seq.); (iv) the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other data privacy and security laws; (v) laws governing the licensure, certification or registration of providers, suppliers, and clinical personnel, and laws governing or regulating the practice of medicine or other licensed professions, the ownership and operation of professional service entities, billing and fee arrangements with professional service entities; (vi) laws governing the development, testing (including clinical trials), manufacture, distribution, marketing, sale, dispensing, or provision of, payment for, or arrangement of payment for, devices, drugs, or other regulated health care products or services; licensure, certification, qualification or authority to transact business in connection with the manufacture, distribution, marketing, sales, or provision of, payment for, or arrangement for, devices, drugs, or other regulated health care products or services; and (vii) all applicable rules and regulations promulgated under, and other laws that address the subject matter of, any of the foregoing or the provision of health care and behavioral health care services via telemedicine (collectively, Healthcare Laws); (2) all laws and orders of any governmental authority applicable to the operation of the business of the Company and its subsidiaries; (3) all laws relating to the operation of pharmacies, the compounding and repackaging of drug products, the storage, shipping, and wholesale distribution and the dispensing of prescription drugs or controlled substances to the extent applicable to the business of the Company and its subsidiaries; and (4) all laws relating to the manufacture, compounding, labeling, packaging, advertising, misbranding, or adulteration of prescription drugs or controlled substances to the extent applicable to the business of the Company and its subsidiaries (collectively, Applicable Laws); ((B) have not received any Form 483 from the FDA, notice of adverse finding, warning letter, or other written correspondence or notice from the FDA, European Medicines Agency (EMA), or any other federal, state, local or foreign governmental or regulatory authority alleging or asserting material noncompliance with any Applicable Laws or with any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws (Authorizations), which would, individually or in the aggregate, result in a Material Adverse Effect; (C) possess all material Authorizations and such Authorizations are valid and in full force and effect and neither the Company nor its subsidiaries is in material violation of any term of any such Authorizations; (D) have not received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from the FDA, the EMA, or any other federal, state, local or foreign governmental or regulatory authority or third party alleging that any Company product, operation or activity of the Company or its subsidiaries is in material violation of any Applicable Laws or Authorizations and have no knowledge that the FDA, the EMA, or any other any federal, state, local or foreign governmental or regulatory authority or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding against the Company; (E) have not received written notice that the FDA, the EMA, or any other federal, state, local or foreign governmental or regulatory authority has taken, is taking or intends to take action to limit, suspend, materially modify or revoke any material Authorizations and have no knowledge that the FDA, the EMA, or any other federal, state, local or foreign
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governmental or regulatory authority is considering such action; and (F) have filed, obtained, maintained or submitted all reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations except where the failure to file such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments would not result in a Material Adverse Effect, and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were materially complete and correct on the date filed (or were corrected or supplemented by a subsequent submission). To the Companys knowledge, each of the agents, independent contractors, health care provider consultants and distributors of the Company and its subsidiaries, and any other persons acting on behalf of the Company or its subsidiaries, are in material compliance with all Healthcare Laws relative to the business of the Company and/or its subsidiaries. The Company and its subsidiaries maintain internal policies and procedures designed to ensure that they shall remain in material compliance with all Applicable Laws, rules and regulations applicable to the Company, and such internal policies and procedures are reviewed periodically.
(xvi) Information Privacy and Security Compliance. Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, (i)(x) to the knowledge of the Company, there has been no security breach or other compromise of or relating to any of the Companys or any subsidiarys information technology and computer systems, networks, hardware, software, data (including the data of their respective customers, employees, suppliers, vendors and any third-party data maintained by or on behalf of them), equipment or technology (collectively, IT Systems and Data) requiring notice to any third party under applicable state or federal law and (y) the Company and its subsidiaries have not been notified of, and have no knowledge of any event or condition that would reasonably be expected to result in, any security breach or other compromise to their IT Systems and Data requiring notice to any third party under applicable state or federal law; (ii) the Company and its subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except as would not, in the case of this clause (ii), individually or in the aggregate, have a Material Adverse Effect; and (iii) the Company and its subsidiaries have used commercially reasonable efforts to implement backup and disaster recovery technology consistent with industry standards and practices.
(xvii) Tax Law Compliance. Subject to any permitted extensions, the Company and its consolidated subsidiaries have filed all necessary federal, state and foreign income, property and franchise tax returns (or have properly requested extensions thereof) and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them except as may be being contested in good faith and by appropriate proceedings or where failure to file would not, individually or in the aggregate, reasonably be expected to result in a material liability to the Company and its subsidiaries. The Company has made adequate charges, accruals and reserves in the applicable financial statements referred to in Section 2(a)(vii) above in respect of all federal, state and foreign income, property and franchise taxes for all periods as to which the tax liability of the Company or any of its consolidated subsidiaries has not been finally determined.
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(xviii) Good Title. The Company and each of its subsidiaries have good and marketable title to all property (whether real or personal) described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus as being owned by them that are material to the business of the Company, in each case free and clear of all liens, claims, security interests, other encumbrances or defects, except those that are disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus and those that are not reasonably likely to result in a Material Adverse Effect. The real property, improvements, equipment and personal property held under lease by the Company and its subsidiaries is held by them, to their knowledge, under valid, subsisting and enforceable leases with only such exceptions described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus or are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property by the Company or its subsidiaries.
(xix) Intellectual Property. For convenience, any or all of patents, patent applications, licenses, inventions, copyrights, know how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names and/or other intellectual property may be referred to herein as Intellectual Property. To the Companys knowledge, except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, the Company and its subsidiaries own or possess the valid right to use all (A) valid and enforceable patents, patent applications, trademarks, trademark registrations, service marks, service mark registrations, Internet domain name registrations, copyrights, copyright registrations, licenses and trade secret rights (Intellectual Property Rights), (B) inventions, software, works of authorships, trademarks, service marks, trade names, databases, formulae, know how, Internet domain names and other intellectual property (including trade secrets and other unpatented and/or unpatentable proprietary confidential information, systems, or procedures) (collectively, Intellectual Property Assets) necessary to conduct their respective businesses as currently conducted, except to the extent that the failure to own, possess, license or have other rights to use such Intellectual Property Rights or Intellectual Property Assets would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, and (C) no third party has any ownership right in or to any Intellectual Property that is owned by the Company, other than any co-owner of any patent who is listed on the records of the U.S. Patent and Trademark Office (the USPTO) and any co-owner of any patent application who is named in such patent application, and, to the Companys knowledge, no third party has any ownership right in or to any Intellectual Property in any field of use that is exclusively licensed to the Company, other than any licensor to the Company of such Intellectual Property. The Company and its subsidiaries have not received any opinion from their legal counsel concluding that any activities of their respective businesses infringe, misappropriate, or otherwise violate, valid and enforceable Intellectual Property Rights of any other person, and have not received written notice of any challenge, which is to their knowledge still pending, by any other person to the rights of the Company and its subsidiaries with respect to any Intellectual Property Rights or Intellectual Property Assets owned or used by the Company or its subsidiaries. To the knowledge of the Company, the Company and its subsidiaries respective businesses as now conducted do not constitute infringement of, misappropriation of, or other violation of, any valid and enforceable Intellectual Property Rights of any other person. All licenses for the use of the Intellectual Property Rights described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus to which the
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Company is a party are, to the Companys knowledge, valid, binding upon, and enforceable by or against the parties thereto in accordance with their terms. The Company has complied in all material respects with, and is not in material breach nor has received any written notice of any asserted or threatened claim of breach of, any license agreement pursuant to which Intellectual Property Rights have been licensed to or by the Company (the Intellectual Property Licensed Agreements), and the Company has no knowledge of any material breach by any other person to any Intellectual Property License Agreement. Except as described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, no claim has been made in writing against the Company alleging the infringement by the Company of any patent, trademark, service mark, trade name, copyright, trade secret, license in or other intellectual property right or franchise right of any person. The Company has taken reasonable steps to protect, maintain and safeguard its Intellectual Property Rights, including the execution of appropriate nondisclosure and confidentiality agreements. The consummation of the transactions contemplated by this Agreement will not result in the loss or impairment of or payment of any additional amounts with respect to, nor require the consent of any other person in respect of, the Companys right to own, use, or hold for use any of the Intellectual Property Rights as owned, used or held by the Company for use in the conduct of the business as currently conducted.
(xx) Employment Matters. There is (A) no unfair labor practice complaint pending against the Company or any of its subsidiaries nor, to the Companys knowledge, threatened, before the National Labor Relations Board, any state or local labor relation board or any foreign labor relations board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Company or any of its subsidiaries, or, to the Companys knowledge, threatened against it or any of its subsidiaries and (B) no material labor disturbance by the employees of the Company or any of its subsidiaries exists or, to the Companys knowledge, is imminent, and the Company is not aware of any existing or imminent material labor disturbance by the employees of any of its, or its subsidiaries, principal suppliers, manufacturers, customers or contractors that could reasonably be expected, singularly or in the aggregate, to have a Material Adverse Effect. The Company is not aware that any key employee or significant group of employees of the Company or any subsidiary plans to terminate employment with the Company or any such subsidiary.
(xxi) ERISA Compliance. No prohibited transaction (as defined in Section 406 of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (ERISA), or Section 4975 of the Internal Revenue Code of 1986, as amended from time to time (the Code)) or accumulated funding deficiency (as defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than events with respect to which the thirty (30)-day notice requirement under Section 4043 of ERISA has been waived) has occurred or could reasonably be expected to occur with respect to any employee benefit plan (as defined under ERISA) established or maintained by the Company or any of its subsidiaries which would reasonably be expected to, singularly or in the aggregate, have a Material Adverse Effect. Each employee benefit plan established or maintained by the Company or any of its subsidiaries is in compliance in all material respects with applicable law, including ERISA and the Code. Neither the Company nor any of its subsidiaries has incurred or reasonably expects to incur any material liability under (A) Title IV of ERISA with respect to the termination of, or withdrawal from, any employee benefit plan or (B) Sections 412, 4971, 4975 or 4980B of the Code. Each employee benefit plan established or maintained by the Company or its subsidiaries that is intended to be qualified under Section 401(a) of the Code is so qualified, and, to the Companys knowledge, nothing has occurred, whether by action or by failure to act, which could, singularly or in the aggregate, cause the loss of such qualification.
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(xxii) Environmental Matters. Except as otherwise described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, and except as would not, individually or in the aggregate, result in a Material Adverse Effect (A) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign law or regulation relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum and petroleum products (collectively, Materials of Environmental Concern), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern (collectively, Environmental Laws), which violation includes, but is not limited to, noncompliance with any permits or other governmental authorizations required for the operation of the business of the Company or its subsidiaries under applicable Environmental Laws, or noncompliance with the terms and conditions thereof, nor has the Company or any of its subsidiaries received any written communication, whether from a governmental authority, citizens group, employee or otherwise, that alleges that the Company or any of its subsidiaries is in violation of any Environmental Law; (B) there is no claim, action or cause of action filed with a court or governmental authority, no investigation with respect to which the Company has received written notice, and no written notice by any person or entity alleging potential liability for investigatory costs, cleanup costs, governmental responses costs, natural resources damages, property damages, personal injuries, attorneys fees or penalties arising out of, based on or resulting from the presence, or release into the environment, of any Material of Environmental Concern at any location owned, leased or operated by the Company or any of its subsidiaries, now or in the past (collectively, Environmental Claims), pending or, to the Companys knowledge, threatened against the Company or any of its subsidiaries or any person or entity whose liability for any Environmental Claim the Company or any of its subsidiaries has retained or assumed either contractually or by operation of law; and (C) to the Companys knowledge, there are no past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release, emission, discharge, presence or disposal of any Material of Environmental Concern, that reasonably would result in a violation of any Environmental Law or form the basis of a potential Environmental Claim against the Company or any of its subsidiaries or against any person or entity whose liability for any Environmental Claim the Company or any of its subsidiaries has retained or assumed either contractually or by operation of law.
(xxiii) SOX Compliance. The Company has taken all necessary actions to ensure that, at the Effective Time of the Registration Statement, it will be in compliance in all material respects with all provisions of the Sarbanes-Oxley Act of 2002 and all rules and regulations promulgated thereunder or implementing provisions thereof (collectively, the Sarbanes-Oxley Act) that are then in effect and with which the Company is required to be in compliance with as of the Effective Time of the Registration Statement (taking into account all exemptions and phase-in periods provided under the Jumpstart Our Business Startups Act and otherwise under applicable law).
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(xxiv) Accounting Controls and Disclosure Controls. Except as disclosed in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, the Company maintains internal control over financial reporting (as defined under Rule 13-a15 and 15d-15 under the Rules and Regulations of the Commission under the Exchange Act (the Exchange Act Regulations)) and a system of internal accounting controls designed to provide reasonable assurances that (A) transactions are executed in accordance with managements general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (C) access to assets is permitted only in accordance with managements general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences, in each case, to the extent applicable to an Emerging Growth Company and a smaller reporting company as defined in Section 12b-2 of the Exchange Act. Except as described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, since the end of the Companys most recent audited fiscal year, there has been (X) no material weakness in the Companys internal control over financial reporting (whether or not remediated) and (Y) no change in the Companys internal control over financial reporting that has materially adversely affected, or is reasonably likely to materially adversely affect, the Companys internal control over financial reporting.
(xxv) Money Laundering Laws. The operations of the Company and its subsidiaries are and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the Money Laundering Laws); and no action, suit or proceeding by or before any Governmental Entity involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened. Governmental Entity shall be defined as any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency (whether foreign or domestic) having jurisdiction over the Company or any of its subsidiaries or any of their respective properties, assets or operations.
(xxvi) Foreign Corrupt Practices Act. Neither the Company nor any of its subsidiaries, nor any director or officer of the Company or any of its subsidiaries, nor, to the knowledge of the Company, any employee, representative, agent, affiliate of the Company or any of its subsidiaries, or any other person acting on behalf of the Company or any of its subsidiaries, is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the FCPA), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any foreign official (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the Company and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintained policies and procedures designed to ensure and promote continued compliance therewith.
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(xxvii) OFAC. Neither the Company nor any of its subsidiaries or any director or officer of the Company or any of its subsidiaries, nor, to the knowledge of the Company, any employee, representative, agent or affiliate of the Company or any of its subsidiaries or any other person acting on behalf of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (OFAC); and the Company will not directly or indirectly use the proceeds of the offering of the Shares contemplated hereby, or lend, contribute or otherwise make available such proceeds to any person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
(xxviii) Liquidity. There are no transactions, arrangements or other relationships between and/or among the Company, any of its affiliates (as such term is defined in Rule 405 of the Rules and Regulations) and any unconsolidated entity, including, but not limited to, any structured finance, special purpose or limited purpose entity that would reasonably be expected to materially affect the Companys liquidity or the availability of or requirements for its capital resources required to be described in the Time of Sale Disclosure Package and the Prospectus which have not been described as required.
(xxix) Audit Committee. The Companys Board of Directors has validly appointed, or is in the process of appointing, in compliance with the transition periods permitted pursuant to Section 303A.00 of the NYSE Listed Company Manual, an audit committee whose composition satisfies the requirements of Section 303A.07(a) of the NYSE Listed Company Manual. The Board of Directors and/or the audit committee has adopted a charter that satisfies the requirements of Section 303A.07(b) of the NYSE Listed Company Manual.
(xxx) Related Party Transactions. There are no business relationships, outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any of their respective family members, except as disclosed in the Registration Statement or the Time of Sale Disclosure Package and the Prospectus. All material transactions by the Company with office holders or control persons of the Company have been duly approved by the board of directors of the Company, or duly appointed committees or officers thereof, if and to the extent required under U.S. law.
(xxxi) Insurance. The Company and each of its subsidiaries carries or is entitled to the benefits of insurance, with financially sound and reputable insurers, in such amounts and covering such risks as are commercially reasonable and customary and generally maintained by companies of established repute engaged in the same or similar business, and all such insurance is in full force and effect. The Company has no reason to believe that it and its subsidiaries will not be able (A) to renew its existing insurance coverage as and when such policies expire or (B) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Effect. The Company has not been denied any insurance coverage which it has sought or for which it has applied.
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(xxxii) Continued Business. No supplier, customer, distributor or sales agent of the Company or any subsidiary has notified the Company or any subsidiary that it intends to discontinue or decrease the rate of business done with the Company or any subsidiary, except where such discontinuation or decrease has not resulted in and could not reasonably be expected to result in a Material Adverse Effect.
(xxxiii) No Outstanding Loans or Other Indebtedness. Except as described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, there are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees or indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any of the immediate family members of any of them.
(xxxiv) Transactions Affecting Disclosure to FINRA.
A. No Finders Fee. There are no claims, payments, issuances, arrangements or understandings for services in the nature of a finders, consulting or origination fee with respect to the introduction of the Company to any Underwriter or the sale of the Shares hereunder or, except as contemplated in this Agreement, any other arrangements, agreements, understandings, payments or issuances with respect to the Company that may affect the Underwriters compensation, as determined by FINRA. The Company is not a party to any contract, agreement or understanding with any person that would give rise to a valid claim against the Company or the Underwriters for a brokerage commission, finders fee or like payment in connection with the offering and sale of the Shares or any transaction contemplated by this Agreement, the Registration Statement, the Time of Sale Disclosure Package or the Prospectus.
B. Payments Within Twelve (12) Months. Except as disclosed to the Representative in writing, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (1) any person, as a finders fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (2) any FINRA member; or (3) any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve (12) months prior to the Effective Time of the Registration Statement, other than the payment to the Underwriters in connection with the public offering contemplated hereunder.
C. Use of Proceeds. None of the net proceeds of the public offering contemplated hereunder will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein.
D. No FINRA Affiliations. Except as disclosed to the Representative in writing, there is no: (1) officer or director of the Company or its subsidiaries, (2) beneficial owner of 5% or more of any class of the Companys securities or (3) beneficial owner of the Companys unregistered equity securities which were acquired during the 180-day period immediately preceding the filing of the Registration Statement that is an affiliate or associated person of a FINRA member participating in the public offering contemplated hereunder (as determined in accordance with the rules and regulations of FINRA). The Company will advise the Representative if it becomes aware that any of the persons referred to in clauses (1), (2) or (3) of the immediately preceding sentence is or becomes an affiliate or associated person of a FINRA member participating in the public offering contemplated hereunder.
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(xxxv) No Financial Advisor. Other than the Underwriters, no person has the right to act as an underwriter or as a financial advisor to the Company in connection with the transactions contemplated hereby.
(xxxvi) Investment Company. The Company is not, and, after giving effect to the offering and sale of the Shares and the application of the net proceeds thereof will not be an investment company, as such term is defined in the Investment Company Act of 1940, as amended.
(xxxvii) Public Filings. The Registration Statement (and any further documents to be filed with the Commission in connection with the offering) contains all exhibits and schedules as required by the Securities Act. Each of the Registration Statement and any post-effective amendment thereto, if any, at the time it became effective, complied in all material respects with the Securities Act and the applicable rules and regulations under the Securities Act and did not and, as amended or supplemented, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus complies in all material respects with the Securities Act and the applicable rules and regulations. The Prospectus, as amended or supplemented, did not and will not contain as of the date thereof any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The SEC Reports, when they respectively were filed with the Commission, conformed in all material respects to the requirements of the Securities Act and the Exchange Act, as applicable, and the applicable rules and regulations, and none of such documents, when they respectively were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein (with respect to the SEC Reports incorporated by reference in the Prospectus), in light of the circumstances under which they were made not misleading; and any further documents so filed and incorporated by reference in the Prospectus when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the applicable rules and regulations, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made not misleading. No post-effective amendment to the Registration Statement reflecting any facts or events arising after the date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein is required to be filed with the Commission. There are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that (A) have not been filed as required pursuant to the Securities Act or (B) will not be filed within the requisite time period. There are no contracts or other documents required to be described in the Prospectus, or to be filed as exhibits or schedules to the Registration Statement, which have not been described or filed as required.
(xxxviii) No Prior Offering Integration. The Company has not, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Shares to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any trading market on which any of the securities of the Company are listed or designated.
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(xxxix) No Off-Balance Sheet Arrangements. Except as set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, there are no material off-balance sheet arrangements (as defined in Item 303 of Regulation S-K) that have or are reasonably likely to have a material current or future effect on the Companys financial condition, revenues or expenses, changes in financial condition, results of operations, liquidity, capital expenditures or capital resources.
(xl) Certain Statements. The statements set forth in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus under the caption Description of Securities, insofar as they purport to constitute a summary of (A) the terms of the Companys outstanding securities, (B) the terms of the Shares, and (C) the terms of the documents referred to therein, are accurate and fair in all material respects.
4. Purchase, Sale and Delivery of Shares.
(a) On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell the Firm Shares to the Underwriters, and the Underwriters, severally and not jointly, agree to purchase the number of Firm Shares set forth opposite the name of such Underwriter under the column Number of Firm Shares on Schedule I to this Agreement. The purchase price for one Firm Share shall be $[_____] (the Share Purchase Price).
(b) On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company grants to the several Underwriters an option to purchase, severally and not jointly, all or any part of the Option Shares at the Share Purchase Price. The number of Option Shares to be purchased by each Underwriter shall be the same percentage (adjusted by the Representative to eliminate fractions) of the total number of Option Shares to be purchased by the Underwriters as such Underwriter is purchasing of the Firm Shares. Such option may be exercised in whole or in part at any time on or before 12:00 noon, New York City time, on the business day before the Firm Shares Closing Date (as defined below), and from time to time thereafter within 30 days after the date of this Agreement, in each case upon written, facsimile or electronic notice, or verbal or telephonic notice confirmed by written, facsimile or electronic notice, by the Representative to the Company no later than 12:00 noon, New York City time, on the business day before the Firm Shares Closing Date or at least two business days before any Option Shares Closing Date (as defined below), as the case may be, setting forth the number of Option Shares to be purchased and the date of such purchase.
(c) The Firm Shares will be delivered by the Company to the Underwriters against payment of the Share Purchase Price therefor by wire transfer of same day funds payable to the order of the Company at the offices of Oppenheimer & Co. Inc., 85 Broad Street, New York, New York 10004, or such other location as may be mutually acceptable, at [__] [a.m.]/[p.m.] Eastern Time, on the second (or if the Firm Shares are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the third) full business day following the date hereof, or at such other time and date as the Representative and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act. The time and date of delivery of the Firm Shares is referred to herein as the Firm Shares Closing Date. In addition, in the event that any
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or all of the Option Shares are purchased by the Underwriters, payment of the Share Purchase Price, and delivery of the certificates, for such Option Shares shall be made by wire transfer of same day funds payable to the order of the Company at the above-mentioned offices, or at such other place as shall be agreed upon by the Representative and the Company, on each date of delivery as specified in the applicable notice from the Representative to the Company (each such time and date of delivery and payment are called an Option Shares Closing Date). The Firm Shares Closing Date and any Option Shares Closing Date is each referred to herein as a Closing Date. Delivery of the Shares shall be made through the facilities of the Depositary Trust Company designated by the Representative.
5. Covenants.
(a) The Company covenants and agrees with the Representative as follows:
(i) The Company shall prepare the Prospectus in a form approved by the Underwriters and file such Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commissions close of business on the second (2nd) business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by the Rules and Regulations of the Commission.
(ii) During the period beginning on the date hereof and ending on the earlier of (A) such date as determined by the Representative that the Prospectus is no longer required by law to be delivered in connection with sales by an underwriter or dealer or (B) the completion of the distribution of the Shares by the Underwriters (the Prospectus Delivery Period), prior to amending or supplementing the Registration Statement, including any Rule 462 Registration Statement, the Time of Sale Disclosure Package or the Prospectus, the Company shall furnish to the Representative for review and comment a copy of each such proposed amendment or supplement, and the Company shall not file any such proposed amendment or supplement to which the Representative reasonably objects.
(iii) From the date of this Agreement until the end of the Prospectus Delivery Period, the Company shall promptly advise the Representative in writing (A) of the receipt of any comments of, or requests for additional or supplemental information from, the Commission, (B) of the time and date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement to the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, (C) of the time and date that any post-effective amendment to the Registration Statement becomes effective and (D) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending its use or the use of the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, or of any proceedings to remove, suspend or terminate from listing or quotation the Common Stock from any securities exchange upon which it is listed for trading or included or designated for quotation, or of the threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order at any time during the Prospectus Delivery Period, the Company will use its reasonable best efforts to obtain the lifting of such order at the earliest possible moment. Additionally, the Company agrees during the Prospectus Delivery Period that it shall comply with the provisions of Rules 424(b), 430A and 430B, as applicable, under the Securities Act and will use its reasonable best efforts to confirm that any filings made by the Company under Rule 424(b) or Rule 433 were received in a timely manner by the Commission (without reliance on Rule 424(b)(8) or 164(b) of the Securities Act).
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(iv) (A) During the Prospectus Delivery Period, the Company will comply with all requirements imposed upon it by the Securities Act, as now and hereafter amended, and by the Rules and Regulations, as from time to time in force, and by the Exchange Act, as now and hereafter amended, so far as necessary to permit the continuance of sales of or dealings in the Shares as contemplated by the provisions hereof, the Time of Sale Disclosure Package, the Registration Statement and the Prospectus. If during the Prospectus Delivery Period any event occurs as the result of which would cause the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure Package) to include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which such statement was made, not misleading, or if during such period it is necessary or appropriate in the opinion of the Company or its counsel or the Underwriters or their counsel to amend the Registration Statement or supplement the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure Package) to comply with the Securities Act or to file under the Exchange Act any document that would be deemed to be incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, the Company will promptly notify the Underwriters, allow the Underwriters the opportunity to provide reasonable comments on such amendment, Prospectus or document, and will amend the Registration Statement or supplement the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure Package) or file such document (at the expense of the Company) so as to correct such statement or omission or effect such compliance.
(B) During the Prospectus Delivery Period, if at any time following the issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development the result of which is that such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or any Prospectus or included or would include, when taken together with the Time of Sale Disclosure Package, an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company has promptly notified or promptly will notify the Underwriters and has promptly amended or will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
(v) The Company shall take or cause to be taken all necessary action to qualify the Shares for sale under the securities laws of such jurisdictions as the Underwriters reasonably designate and to continue such qualifications in effect so long as required for the distribution of the Shares, except that the Company shall not be required in connection therewith to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified, to execute a general consent to service of process in any state or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise subject.
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(vi) The Company shall deliver to the Underwriters and counsel for the Underwriters copies, without charge, of the Registration Statement, the Prospectus, any Issuer Free Writing Prospectus, and all amendments and supplements to such documents, and signed copies of all consents and certificates of experts, in each case as soon as available and in such quantities as the Underwriters may from time to time reasonably request.
(vii) The Company will make generally available to its security holders as soon as practicable, but in any event not later than 15 months after the end of the Companys current fiscal quarter, an earnings statement (which need not be audited) covering a 12-month period that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.
(viii) The Company shall use commercially reasonable efforts to maintain the listing of the shares of Common Stock on the NYSE or another national exchange for at least three years from the date of this Agreement.
(ix) For a period of two years from any Closing Date, the Company shall use its commercially reasonable efforts to maintain the registration of the Shares under the Exchange Act unless the Company is acquired or goes private under Exchange Act Rule 13e-3 prior to such time.
(x) The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay or cause to be paid (A) all expenses incurred in connection with the delivery to the Underwriters of the Shares (including transfer taxes allocated to the respective transferees, all fees and expenses of the registrar and transfer agent of the Shares (if other than the Company)), (B) all expenses and fees (including, without limitation, fees and expenses of the Companys counsel) in connection with the preparation, printing, filing, delivery, and shipping of the Registration Statement (including the financial statements therein and all amendments, schedules, and exhibits thereto), the Shares, the Time of Sale Disclosure Package, any Prospectus, any Issuer Free Writing Prospectus and any amendment thereof or supplement thereto, (C) all reasonable filing fees and reasonable fees and disbursements of the Representatives counsel incurred in connection with the qualification of the Shares for offering and sale by the Underwriters or by dealers under the securities or blue sky laws of the states and other jurisdictions that the Underwriters shall designate, (D) the fees and expenses of any transfer agent or registrar (E) the reasonable filing fees and reasonable fees and disbursements of Representatives counsel incident to any required review and approval by FINRA, of the terms of the sale of the Shares, (F) all fees and expenses relating to the listing of the Shares on the NYSE, (G) the fees and expenses of the Companys and its subsidiaries accountants, (H) the costs and expenses of any Testing-the-Waters Communications, (I) the costs and expenses of the Company relating to investor presentations on any road show undertaken in connection with the marketing of the Shares, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants (not including the Underwriters and their representatives) engaged in connection with the road show presentations, and travel and lodging expenses of the representatives and officers of the Company and any such consultants (not including the Underwriters and their representatives), and (J) all other costs and expenses incident to the performance of its obligations hereunder that are not otherwise specifically provided for herein. The Company will reimburse the Representative for its reasonable and documented out-of-pocket expenses incurred in connection with the offer and sale of the Shares contemplated hereby, including the fees and disbursements of its counsel, in an aggregate amount not to exceed $100,000 without the Companys prior approval (such approval not to be unreasonably withheld, conditioned or delayed).
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(xi) The Company intends to apply the net proceeds from the sale of the Shares to be sold by it hereunder for the purposes set forth in the Time of Sale Disclosure Package and in the Prospectus.
(xii) The Company has not taken and will not take, directly or indirectly, during the Prospectus Delivery Period, any action designed to or which might reasonably be expected to cause or result in, or that has constituted, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.
(xiii) The Company represents and agrees that, unless it obtains the prior written consent of the Representative, and the Representative represents and agrees that, unless it obtains the prior written consent of the Company, it has not made and will not make any offer relating to the Shares that would constitute an Issuer Free Writing Prospectus; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the free writing prospectuses included in Schedule III. Any such free writing prospectus set forth on Schedule III and consented to by the Company and the Representative is hereinafter referred to as a Permitted Free Writing Prospectus. The Company represents that it has treated, or agrees that it will treat, each Permitted Free Writing Prospectus as an issuer free writing prospectus, as defined in Rule 433, and has complied or will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record-keeping.
(xiv) The Company hereby agrees that, without the prior written consent of the Representative, it will not, during the period ending 90 days after the date hereof (Lock-Up Period), (A) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or file (or participate in the filing of) a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any Common Stock or any other securities of the Company that are substantially similar to Common Stock, or any securities convertible into or exchangeable or exercisable for, or any warrants or other rights to purchase, the foregoing, (B) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Common Stock or any other securities of the Company that are substantially similar to Common Stock, or any securities convertible into or exchangeable or exercisable for, or any warrants or other rights to purchase, the foregoing, whether any such transaction is to be settled by delivery of Common Stock or such other securities, in cash or otherwise or (C) publicly announce an intention to effect any transaction specified in clause (A) or (B). The restrictions contained in the preceding sentence shall not apply to (W) the Shares to be sold hereunder, (X) the issuance of Common Stock upon the exercise of options or warrants disclosed as outstanding in the Registration Statement (excluding exhibits thereto), the Time of Sale Disclosure Package or the Prospectus, (Y) the issuance of employee stock options not exercisable during the Lock-Up Period and the grant of restricted stock awards or restricted stock units pursuant to equity incentive plans described in the Registration Statement (excluding exhibits thereto) and the Prospectus or (Z) the filing of registration statements on Form S-8 with respect to the shares of Common Stock reserved for issuance under the Companys equity incentive plans as in effect from time to time.
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(xv) Prior to the Firm Shares Closing Date, the Company will issue no press release or other communications directly or indirectly and hold no press conference with respect to the Company, the condition, financial or otherwise, or the earnings, business affairs or business prospects of any of them, or the offering of the Shares without the prior written consent of the Representative unless in the judgment of the Company and its counsel, and after notification to the Representative, such press release or communication is required by law.
(xvi) The Company hereby agrees to engage and maintain, at its expense, a registrar and transfer agent for the Shares.
(xvii) The Company will promptly notify the Representative if the Company ceases to be an Emerging Growth Company at any time prior to the later of (A) the end of the Prospectus Delivery Period and (B) the expiration of the Lock-Up Period described above.
(xviii) The Company agrees that if the gross proceeds of the public offering contemplated hereunder equal or exceed $50,000,000, the Representative shall have an irrevocable right of first refusal for a period of nine months from the commencement of sales of the offering and sale of the Shares to act as bookrunning underwriter, lead initial purchaser, lead placement agent, or lead selling agent, as the case may be, on any financing for the Company.
6. Conditions of the Underwriters Obligations. The obligations of each Underwriter hereunder to purchase the Shares are subject to the accuracy, as of the date hereof and at any Closing Date (as if made at such Closing Date), of and compliance with all representations, warranties and agreements of the Company contained herein, the performance by the Company of its obligations hereunder and the following additional conditions:
(a) If filing of the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, is required under the Securities Act or the Rules and Regulations, the Company shall have filed the Prospectus (or such amendment or supplement) or such Issuer Free Writing Prospectus with the Commission in the manner and within the time period so required (without reliance on Rule 424(b)(8) or 164(b) under the Securities Act); the Registration Statement shall remain effective; no stop order suspending the effectiveness of the Registration Statement or any part thereof, any Rule 462 Registration Statement, or any amendment thereof, nor suspending or preventing the use of the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus shall have been issued; no proceedings for the issuance of such an order shall have been initiated or threatened by the Commission; any request of the Commission or the Representative for additional information (to be included in the Registration Statement, the Time of Sale Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus or otherwise) shall have been complied with to the Underwriters satisfaction.
(b) The Shares shall be qualified and approved for listing on the NYSE.
(c) FINRA shall have raised no objection to the fairness and reasonableness of the underwriting terms and arrangements.
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(d) The Representative shall not have reasonably determined, and advised the Company, that the Registration Statement, the Time of Sale Disclosure Package or the Prospectus, or any amendment thereof or supplement thereto, or any Issuer Free Writing Prospectus, contains an untrue statement of fact which, in the Representatives reasonable opinion, is material, or omits to state a fact which, in the Representatives reasonable opinion, is material and is required to be stated therein or necessary to make the statements therein not misleading.
(e) Between the date hereof and any Closing Date (A) no downgrading shall have occurred in the rating accorded any of the Companys securities by any nationally recognized statistical organization, as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act, and (B) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Companys securities.
(f) On the applicable Closing Date, there shall have been furnished to the Representative the opinion and negative assurance letters of DLA Piper LLP (US), corporate counsel for the Company, dated as of the applicable Closing Date and addressed to the Representative, in form and substance reasonably satisfactory to the Representative.
(g) On the applicable Closing Date, there shall been furnished to the Representative a negative assurance letter from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel to the Underwriters, dated as of the applicable Closing Date and addressed to the Representative, in form and substance reasonable satisfactory to the Representative.
(h) The Representative shall have received a letter from each of Plante & Moran, PLLC, D. K. Chhajer & Co. and Macias Gini & OConnell LLP on the date hereof and on the applicable Closing Date addressed to the Representative, confirming that they are independent public accountants within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualifications of accountants under Rule 2-01 of Regulation S-X of the Commission, and confirming, as of the date of each such letter (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Time of Sale Disclosure Package, as of a date not prior to the date hereof or more than five days prior to the date of such letter), the conclusions and findings of said firm, of the type ordinarily included in accountants comfort letters to underwriters, with respect to the financial information, including any financial information contained in Exchange Act Reports filed by the Company or incorporated by reference in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, and other matters required by the Representative.
(i) On the applicable Closing Date, there shall have been furnished to the Representative a certificate, dated the applicable Closing Date and addressed to the Representative, signed by the chief executive officer and the chief financial officer of the Company, in their capacity as officers of the Company, to the effect that:
(i) The representations and warranties of the Company in this Agreement that are qualified by materiality or by reference to any Material Adverse Effect are true and correct in all respects, and all other representations and warranties of the Company in this
27
Agreement are true and correct, in all material respects, as if made at and as of the applicable Closing Date, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the applicable Closing Date;
(ii) No stop order or other order (A) suspending the effectiveness of the Registration Statement or any part thereof or any amendment thereof, (B) suspending the qualification of the Shares for offering or sale, or (C) suspending or preventing the use of the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, has been issued, and no proceeding for that purpose has been instituted or, to their knowledge, is contemplated by the Commission or any state or regulatory body; and
(iii) There has been no occurrence of any event resulting or reasonably likely to result in a Material Adverse Effect during the period from and after the date of this Agreement and prior to any Closing Date.
(j) On or before the date hereof, the Representative shall have received duly executed lock-up agreements, in the form attached hereto as Exhibit A, between the Representative and each of the parties set forth on Schedule IV hereto.
(k) The Common Stock shall be registered under the Exchange Act and shall be listed on the NYSE, and the Company shall not have taken any action designed to terminate, or likely to have the effect of terminating, the registration of the Common Stock under the Exchange Act or delisting or suspending from trading the Common Stock from the NYSE, nor shall the Company have received any information suggesting that the Commission is contemplated terminating such registration or listing.
(l) The Company shall have furnished to the Representative and its counsel such additional documents, certificates and evidence as the Representative or its counsel may have reasonably requested.
(m) On the applicable Closing Date, the Shares shall have been delivered via the Depository Trust Company system to the accounts of the Underwriters.
If any condition specified in this Section 6 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representative by notice to the Company at any time at or prior to any Closing Date and such termination shall be without liability of any party to any other party, except that Section 5(a)(xi), Section 7 and Section 8 shall survive any such termination and remain in full force and effect.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless the Underwriters, their affiliates, directors and officers and employees, and each person, if any, who controls an Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any losses, claims, damages or liabilities to which the Underwriters or such person may become subject, under the Securities Act or otherwise (including in settlement of any litigation if such settlement is effected with the written consent of the Company), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise
28
out of or are based upon (i) an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, including the information deemed to be a part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Rules and Regulations, or arise out of or are based upon the omission from the Registration Statement, or alleged omission to state therein, a material fact required to be stated therein or necessary to make the statements therein not misleading (ii) an untrue statement or alleged untrue statement of a material fact contained in the Time of Sale Disclosure Package, the Prospectus, or any amendment or supplement thereto (including any documents filed under the Exchange Act and deemed to be incorporated by reference into the Registration Statement or the Prospectus), or any Issuer Free Writing Prospectus or the Marketing Materials, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, (iii) in whole or in part, any inaccuracy in the representations and warranties of the Company contained herein, or (iv) in whole or in part, any failure of the Company to perform its obligations hereunder or under law, and will reimburse the Underwriters for any legal or other expenses reasonably incurred by it in connection with evaluating, investigating or defending against such loss, claim, damage, liability or action (or any legal or other expense reasonably incurred in connection with the evaluation, investigation or defense thereof); provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Time of Sale Disclosure Package, the Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Company by the Underwriters specifically for use in the preparation thereof, which written information is described in Section 7(f).
(b) The Underwriters will indemnify, defend and hold harmless the Company, its affiliates, directors, officers and employees, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any losses, claims, damages or liabilities to which the Company may become subject, under the Securities Act or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Underwriter), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Time of Sale Disclosure Package, the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or any issuer information filed or required to be filed pursuant to Rule 433(d) under the Act, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Time of Sale Disclosure Package, the Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus or any issuer information filed or required to be filed pursuant to Rule 433(d) under the Act in reliance upon and in conformity with written information furnished to the Company by the Representative by or behalf of any Underwriters specifically for use in the preparation thereof, and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with defending against any such loss, claim, damage, liability or action.
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(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the failure to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have to any indemnified party except to the extent such indemnifying party has been materially prejudiced by such failure. In case any such action shall be brought against any indemnified party, it shall notify the indemnifying party of the commencement thereof, and the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of the indemnifying partys election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof; provided, however, that if (i) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (ii) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party), or (iii) the indemnifying party has not in fact employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, the indemnified party shall have the right to employ a single counsel to represent it in any claim in respect of which indemnity may be sought under subsection (a) or (b) of this Section 7, in which event the reasonable fees and expenses of such separate counsel shall be borne by the indemnifying party or parties and reimbursed to the indemnified party as incurred.
The indemnifying party under this Section 7 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is a party or could be named and indemnity was or would be sought hereunder by such indemnified party, unless such settlement, compromise or consent (a) includes an unconditional release of such indemnified party from all liability for claims that are the subject matter of such action, suit or proceeding and (b) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering and sale of the Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is
30
appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters and the parties relevant intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this subsection (d) were to be determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the first sentence of this subsection (d). The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending against any action or claim that is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), the Underwriters shall not be required to contribute any amount in excess of the amount of the Underwriters discounts commissions set forth in the table on the cover of the Prospectus. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company under this Section 7 shall be in addition to any liability that the Company may otherwise have and the benefits of such obligations shall extend, upon the same terms and conditions, to each person, if any, who controls the Underwriters within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act; and the obligations of the Underwriters under this Section 7 shall be in addition to any liability that the Underwriters may otherwise have and the benefits of such obligations shall extend, upon the same terms and conditions, to the Company, and officers, directors and each person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.
(f) For purposes of this Agreement, the Underwriters confirm, and the Company acknowledges, that there is no information concerning the Underwriters furnished in writing to the Company by the Underwriters specifically for preparation of or inclusion in the Registration Statement, the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, other than the statements set forth in the [___] paragraphs of the Underwriting section of the Prospectus and Time of Sale Disclosure Package, only insofar as such statements relate to the amount of selling concession and re-allowance or to over-allotment and related activities that may be undertaken by the Underwriters.
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8. Representations and Agreements to Survive Delivery. All representations, warranties, and agreements of the Company herein or in certificates delivered pursuant hereto, including, but not limited to, the agreements of the Underwriters and the Company contained in Section 5(a)(xi) and Section 7 hereof, shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriters or any controlling person thereof, or the Company or any of its officers, directors, or controlling persons, and shall survive delivery of, and payment for, the Shares to and by the Underwriters hereunder.
9. Termination of this Agreement.
(a) The Representative shall have the right to terminate this Agreement by giving notice to the Company as hereinafter specified at any time at or prior to any Closing Date, if in the discretion of the Representative, (i) there has occurred any material adverse change in the securities markets or any event, act or occurrence that has materially disrupted, or in the opinion of the Representative, will in the future materially disrupt, the securities markets or there shall be such a material adverse change in general financial, political or economic conditions or the effect of international conditions on the financial markets in the United States is such as to make it, in the judgment of the Representative, inadvisable or impracticable to market the Shares or enforce contracts for the sale of the Shares (ii) trading in the Companys Common Stock shall have been suspended by the Commission or the NYSE or trading in securities generally on Nasdaq, the NYSE, NYSE American or the OTC Bulletin Board (or successor trading market) shall have been suspended, (iii) minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required, on Nasdaq, the NYSE, NYSE American or the OTC Bulletin Board (or successor trading market), by such exchange or by order of the Commission or any other governmental authority having jurisdiction, (iv) a banking moratorium shall have been declared by federal or state authorities, (v) there shall have occurred any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration by the United States of a national emergency or war, any substantial change or development involving a prospective substantial change in United States or international political, financial or economic conditions or any other calamity or crisis, (vi) the Company suffers any loss by strike, fire, flood, earthquake, accident or other calamity, whether or not covered by insurance, or (vii) in the judgment of the Representative, there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Prospectus, any material adverse change in the assets, properties, condition, financial or otherwise, or in the results of operations, business affairs or business prospects of the Company and its subsidiaries considered as a whole, whether or not arising in the ordinary course of business. Any such termination shall be without liability of any party to any other party except that the provisions of Section 5(a)(xi) and Section 7 hereof shall at all times be effective and shall survive such termination.
(b) If the Representative elects to terminate this Agreement as provided in this Section, the Company shall be notified promptly by the Representative by telephone, confirmed by letter.
10. Notices. Except as otherwise provided herein, all communications hereunder shall be in writing and, if to Representative, shall be mailed, delivered or telecopied to Oppenheimer & Co. Inc., 85 Broad Street, New York, NY 10004, Attention: Managing Director, with a copy to Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., 666 Third Avenue, New York, NY 10017, telecopy number: (212) 983-3115, Attention: Ivan K. Blumenthal; and if to the Company, shall be mailed, delivered or telecopied to it at 14000 S. Military Trail, Suite 230, Delray, Fl., 33484, telecopy number: (312) 618-1322, Attention: Dr. Ramesh Balakrishnan, with a copy to DLA
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Piper LLP (US), 555 Mission Street, Suite 2400, San Francisco, California 94105, telecopy number: (415) 615-6095, Attention: Jeffrey Selman; or in each case to such other address as the person to be notified may have requested in writing. Any party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose.
11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns and the controlling persons, officers and directors referred to in Section 7. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable remedy or claim under or in respect of this Agreement or any provision herein contained. The term successors and assigns as herein used shall not include any purchaser, as such purchaser, of any of the Shares from the Underwriter.
12. Absence of Fiduciary Relationship. The Company acknowledges and agrees that: (a) the Underwriters have been retained solely to act as underwriter in connection with the sale of the Shares and that no fiduciary, advisory or agency relationship between the Company and the Underwriters has been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether the Underwriters have advised or are advising the Company on other matters; (b) the price and other terms of the Shares set forth in this Agreement were established by the Company following discussions and arms-length negotiations with the Underwriters and the Company is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (c) it has been advised that the Underwriters and their affiliates are engaged in a broad range of transactions that may involve interests that differ from those of the Company and that the Underwriters have no obligation to disclose such interest and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; (d) it has been advised that the Underwriters are acting, in respect of the transactions contemplated by this Agreement, solely for the benefit of the Underwriters, and not on behalf of the Company.
13. Entire Agreement. Other than Section 7 of that certain Engagement Letter entered into by and between the Company and the Representative, which shall remain in effect for a period of six months from the closing, this Agreement represents the entire agreement of the parties and supersedes all prior or contemporaneous written or oral agreements between them concerning the offer and sale of the Shares.
14. Amendments and Waivers. No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. The failure of a party to exercise any right or remedy shall not be deemed or constitute a waiver of such right or remedy in the future. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver be deemed or constitute a continuing waiver unless otherwise expressly provided.
15. Partial Unenforceability. The invalidity or unenforceability of any section, paragraph, clause or provision of this Agreement shall not affect the validity or enforceability of any other section, paragraph, clause or provision.
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16. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
17. Submission to Jurisdiction. The Company irrevocably (a) submits to the jurisdiction of any court of the State of New York for the purpose of any suit, action, or other proceeding arising out of this Agreement, or any of the agreements or transactions contemplated by this Agreement, the Registration Statement and the Prospectus (each a Proceeding), (b) agrees that all claims in respect of any Proceeding may be heard and determined in any such court, (c) waives, to the fullest extent permitted by law, any immunity from jurisdiction of any such court or from any legal process therein, (d) agrees not to commence any Proceeding other than in such courts, and (e) waives, to the fullest extent permitted by law, any claim that such Proceeding is brought in an inconvenient forum. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT, AND THE PROSPECTUS.
18. Counterparts. This Agreement may be executed and delivered (including by facsimile transmission and electronic mail attaching a portable document file (.pdf)) in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original and all such counterparts shall together constitute one and the same instrument.
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Please sign and return to the Company the enclosed duplicates of this Agreement whereupon this Agreement will become a binding agreement between the Company and the Representative in accordance with its terms.
Very truly yours, |
||
UPHEALTH, INC. |
||
By: |
||
Name: |
||
Title: |
Confirmed as of the date first above-mentioned by the Representative. | ||
OPPENHEIMER & CO. INC. as the Representative of the several Underwriters listed on Schedule I | ||
By: | ||
Name: | ||
Title: |
[Signature page to Underwriting Agreement]
SCHEDULE I
Number of Firm Shares |
||
Oppenheimer & Co. Inc. |
[___] | |
Northland Securities, Inc. |
[___] | |
Lake Street Capital Markets, LLC |
[___] | |
[___] | [___] | |
|
||
Total |
[___] | |
|
SCHEDULE II
1. |
The Company is selling [___] shares of Common Stock. |
2. |
The Company has granted an option to the Underwriters, severally and not jointly, to purchase up to an additional [___] shares of Common Stock. |
3. |
The public offering price per share of Common Stock shall be $[___]. |
SCHEDULE III
Free Writing Prospectuses
SCHEDULE IV
List of Lock-Up Parties
Dr. Chirinjeev Kathuria
Dr. Avi S. Katz
Dr. Raluca Dinu
Dr. Mariya Pylypiv
Neil Miotto
Nathan Locke
Jerome Ringo
Agnès Rey-Giraud
Moshe Bar-Siman-Tov
Dr. Ramesh Balakrishnan
Dr. Alfonso W. Gatmaitan
Dr. Syed Sabahat Azim
Jamey Edwards
Martin S. A. Beck
Schedule V
List of Subsidiaries
Cloudbreak Health, LLC |
Carenection, LLC |
Carenection Labs, LLC |
Language Access Network, LLC |
UpHealth Holdings, Inc. |
Thrasys, Inc. |
Comprehensive Care Alliance LLC |
Behavioral Health Services LLC |
BHS Pharmacy LLC |
Psych Care Consultants LLC |
Reimbursement Solutions LLC |
TTC Healthcare, Inc. |
Transformations Treatment Center, Inc. |
Supportive Healthcare, Inc. |
Summit Detox, Inc. |
Pinnacle Testing Inc. |
Wrigley Healthcare Services Inc. |
Freedom Now Inc. |
Integrity Way Inc. |
Transformations Mending Fences LLC |
Olympus Recovery LLC |
Innovations Group, Inc. |
MedQuest Pharmacy, Inc |
Medical Horizons, Inc. |
WorldLink Medical, Inc. |
Pinnacle Labs, Inc. |
Glocal Healthcare Systems Private Limited |
FICUS HEALTH-INFRA PRIVATE LIMITED |
GHSPL Multispeciality Hospital & Trauma Centre Private |
GHSPL AMRO Super Speciality Healthcare LLP |
GHSPL BEGUSARAI Healthcare LLP |
GHSPL BGLP Super Speciality Healthcare LLP |
GHSPL FATEHPUR Super Speciality Healthcare LLP |
GHSPL JEYPORE Healthcare LLP |
GHSPL SAMBHAV KNJ Healthcare LLP |
GHSPL MLD Super Speciality Healthcare LLP |
GHSPL MUZF Super Speciality Healthcare LLP |
GHSPL SAMBHAV RP Healthcare LLP |
GHSPL SAMBHAV BSP Healthcare LLP |
GHSPL JAUNPUR Super Speciality Healthcare LLP |
GHSPL JSPR Healthcare LLP |
GHSPL BEM Healthcare LLP |
GHSPL AMBEDKAR SCAN Super Speciality Healthcare LLP |
GHSPL ARA Super Speciality Healthcare LLP |
GHSPL ASNSL Super Speciality HealthcareLLP |
GHSPL FRBD Super Speciality HealthcareLLP |
GHSPL MDPR Super Speciality Healthcare LLP |
GHSPL SHRNPR Super Speciality HealthcareLLP |
GHSPL SJPR Super Speciality HealthcareLLP |
GHSPL STP Super Speciality HealthcareLLP |
GHSPL SW HealthcareLLP |
GHSPL DGHR Super Speciality HealthcareLLP |
GHSPL DNBD Super Speciality HealthcareLLP |
GHSPL GYA Super Speciality HealthcareLLP |
GHSPL PRN Super Speciality Healthcare LLP |
GHSPL DARBHANGA Super Speciality HealthcareLLP |
GHSPL BALASORE Super Speciality HealthcareLLP |
GHSPL BASTI Super Speciality HealthcareLLP |
GHSPL VARANASI Super Speciality HealthcareLLP |
GHSPL PURI Super Speciality HealthcareLLP |
GHSPL CNTA Super Speciality HealthcareLLP |
GHSPL JHRSD Super Speciality HealthcareLLP |
GHSPL ALIGR Super Speciality HealthcareLLP |
GHSPL BHNGAR Super Speciality Healthcare LLP |
GHSPL MRBD Super Speciality HealthcareLLP |
GHSPL SMBL Super Speciality HealthcareLLP |
GHSPL KNPR Super Speciality HealthcareLLP |
GHSPL Patna Super Speciality HealthcareLLP |
GHSPL Dhubri Super Speciality Healthcare LLP |
EXHIBIT A
Form of Lock-up Agreement
____________, 2021
Oppenheimer & Co. Inc.
as Representative of the Several Underwriters
c/o Oppenheimer & Co. Inc.
85 Broad Street
New York, New York 10004
Re: Public Offering of UpHealth, Inc.
Ladies and Gentlemen:
The undersigned, a holder of common stock, par value $0.001 per share (Common Stock), or rights to acquire Common Stock, of UpHealth, Inc. (the Company), understands that Oppenheimer & Co. Inc. (the Representative), as Representative of the several Underwriters, proposes to enter into an Underwriting Agreement (the Underwriting Agreement) with the Company, providing for the underwritten public offering (the Offering) by the several underwriters named in Schedule I to the Underwriting Agreement (the Underwriters), of Common Stock (the Securities) pursuant to a registration statement on Form S-1.
In consideration of the Underwriters agreement to enter into the Underwriting Agreement and to proceed with the Offering, and for other good and valuable consideration, receipt of which is hereby acknowledged, the undersigned individual, being an executive officer or director of the Company and by signing this Letter Agreement in his or her personal capacity and not on behalf of the Company, hereby agrees for the benefit of the Company, you and the other Underwriters that, without the prior written consent of the Representative on behalf of the Underwriters, the undersigned will not, from the date hereof through the period ending 90 days (the Lock-Up Period) following the date of the Underwriting Agreement, directly or indirectly, unless otherwise provided herein, (1) offer, pledge, assign, encumber, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, any Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock owned either of record or beneficially (as defined in the Securities Exchange Act of 1934, as amended (the Exchange Act)) by the undersigned on the date hereof or hereafter acquired (the Lock-Up Securities) or (2) enter into any swap, hedge or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, or publicly announce an intention to do any of the foregoing. In addition, the undersigned agrees that, without the prior written consent of the Representative, it will not, during the Lock-Up Period, make any demand for or exercise any right with respect to, the registration of any Common Stock or any security convertible into or exercisable or exchangeable for Common Stock.
The foregoing paragraph shall not apply to (a) the Lock-Up Securities to be transferred as a bona fide gift or gifts (provided that any donee thereof agrees in writing to be bound by the terms hereof), (b) the transfer of the Lock-Up Securities (1) to any immediate family member (provided that any such recipient agrees in writing to be bound by the terms hereof) or to any trust or other entity formed for estate planning purposes for the direct or indirect benefit of the undersigned or the Immediate Family of the undersigned, (2) if the undersigned is a corporation, partnership, limited liability company, trust or other business entity (A) to another corporation, partnership, limited liability company, trust or other business entity that is a direct or indirect affiliate (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended) of the undersigned or (B) to limited partners, limited liability company members or stockholders of the undersigned (provided that any such transfer in this clause (2) shall not involve a disposition for value), (3) if the undersigned is a trust, to the beneficiary of such trust, (4) by testate succession or intestate succession upon death of the undersigned, (5) by operation of law or by an order of a court or regulatory agency, such as pursuant to a qualified domestic order or in connection with a divorce settlement, (6) pursuant to any contract, instruction or plan that satisfies all of the requirements of Rule 10b5-1 under the Exchange Act established prior to the date of this letter agreement (the Letter Agreement), or (7) to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (1)-(6) above; provided, in the case of clauses (1) through (7), that the transferee agrees in writing with the Representative on behalf of the Underwriters and the Company to be bound by the terms of this Letter Agreement, (c) transfers of the undersigneds Common Stock or Company stock options to the Company, (d) transfers with the prior written consent of the Representative on behalf of the Underwriters, and (e) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Common Stock, provided that such plan does not provide for the transfer of Common Stock during the Lock-Up Period and no public announcement or filing under the Exchange Act regarding the establishment of such plan is required or voluntarily made by or on behalf of the undersigned or the Company. As used herein, Immediate Family means spouse, domestic partner, parent, sibling, child or grandchild of the undersigned or any other person with whom the undersigned has a relationship by blood, marriage or adoption not more remote than first cousin.
Notwithstanding the foregoing, and subject to the conditions in this paragraph, the undersigned may also transfer the Lock-Up Securities without the prior written consent of the Representative if any such transfers are made by the undersigned: (i) to satisfy tax withholding obligations of the undersigned in connection with the vesting or exercise of equity awards outstanding as of the date of the preliminary prospectus by the undersigned pursuant to the Companys equity compensation plans and arrangements; or (ii) pursuant to the conversion or sale of, or an offer to purchase, all or substantially all of the outstanding Common Stock, whether pursuant to a merger, tender offer or otherwise; provided, however, that in the case of any transfer described in clause (i) of this paragraph, it shall be a condition to the transfer that if the undersigned is required to file a report under Section 16(a), the undersigned shall include a statement in such report to the effect that such transfer is being made for tax withholding obligations; and provided further that in the case of any conversion or sale described in clause (ii) of this paragraph, in the event that such transaction is abandoned, the Lock-Up Securities shall remain subject to the
restrictions hereunder. Furthermore, the undersigned may sell Common Stock of the Company purchased by the undersigned on the open market following the Offering if and only if (1) such sales are not required to be reported in any public report or filing with the Securities and Exchange Commission, or otherwise and (2) the undersigned does not otherwise voluntarily effect any public filing or report regarding such sales.
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the Lock-Up Securities described herein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Letter Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does not become effective within ninety (90) days of the date of this Letter Agreement, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Securities to be sold thereunder, the undersigned shall be released from all obligations under this Letter Agreement.
The undersigned, whether or not participating in the Offering, understands that the Underwriters are entering into the Underwriting Agreement and proceeding with the Offering in reliance upon this Letter Agreement.
This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. This Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by all parties hereto.
[Signature page follows.]
This Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof (other than New York General Obligations Law § 5-1401).
Very truly yours, |
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By: |
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Name: |
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Title: |
Exhibit 5.1
DLA Piper LLP (US) | ||||
555 Mission Street, Suite 2400 | ||||
San Francisco, California 94105-2933 |
September 27, 2021
UpHealth, Inc.
14000 S. Military Trail, Suite 203
Delray, Florida 33484
Re: Registration Statement on Form S-1 (Registration No. 333-259143)
Ladies and Gentlemen:
We are acting as counsel to UpHealth, Inc., a Delaware corporation (the Company), in connection with the registration and proposed sale and issuance by the Company of up to 14,483,626 shares (the Shares) of its common stock, par value $0.0001 per share (the Common Stock), including up to 1,889,168 shares of Common Stock that may be issued pursuant to an over-allotment option to be granted to the underwriters pursuant to the underwriting agreement, in the form filed as Exhibit 1.1 to the Registration Statement (defined below), between the Company and the underwriters named therein (the Underwriting Agreement) and identified in the Companys Registration Statement on Form S-1 (File No. 333-259143), originally filed with the Securities and Exchange Commission (the Commission) on August 27, 2021, under the Securities Act of 1933, as amended (the Act) (such Registration Statement, as amended or supplemented, is hereinafter referred to as the Registration Statement).
This opinion is being furnished in accordance with the requirements of Item 16(a) of Form S-1 and Item 601(b)(5)(i) of Regulation S-K, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement, or any prospectus filed pursuant to Rule 424(b) with respect thereto, other than as expressly stated herein with respect to the issuance of the shares Common Stock.
In connection with this opinion, we have reviewed and relied upon the Registration Statement, the Companys charter documents, as amended and restated to date, records of the Companys corporate proceedings in connection with the offering, and such other documents, records, certificates, memoranda and other instruments as we deemed necessary as a basis for this opinion. With respect to the foregoing documents, we have assumed the authenticity and completeness of all records, documents, and instruments submitted to us as originals, the genuineness of all signatures, the legal capacity of natural persons and the completeness and conformity to the originals of all records, documents, and instruments submitted to us as copies. We have also obtained from officers of the Company certificates as to certain factual matters and, insofar as this opinion is based on matters of fact, we have relied on such certificates without independent investigation.
We express no opinion concerning any law other than the Delaware General Corporation Law (including the statutory provisions, all applicable provisions of the Delaware Constitution and the reported judicial decisions interpreting the foregoing) and the federal law of the United States of America.
Based upon and subject to the foregoing qualifications, assumptions and limitations, we are of the opinion that following (i) execution and delivery by the Company of the Underwriting Agreement, (ii) effectiveness of the Registration Statement, (iii) issuance and sale of the Shares pursuant to the terms of the Underwriting Agreement, and (iv) receipt by the Company of the consideration for the Shares specified in the resolutions of the Board of Directors, the Shares will be duly authorized, validly issued, fully paid and non-assessable.
We consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and to the reference to this firm as counsel for the Company that has passed on the validity of the Common Stock appearing under the caption Legal Matters in the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Act, or under the rules and regulations of the Commission promulgated thereunder (including Item 509 of Regulation S-K).
We disclaim any obligation to advise you of facts, circumstances, events or developments that hereafter may be brought to our attention and that may alter, affect or modify the opinion expressed herein after the effective date of the Registration Statement. Our opinion is expressly limited to the matters set forth above, and we render no opinion, whether by implication or otherwise, as to any other matters relating to the Company, the Shares, or the Registration Statement.
Very truly yours,
/s/ DLA Piper LLP (US)
DLA Piper LLP (US)
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our report dated March 18, 2021, with respect to the financial statements of Thrasys, Inc. as of November 20, 2020 and for the period from January 1, 2020 to November 20, 2020, and as of and for the year ended December 31, 2019 contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in this Registration Statement and Prospectus, and to the use of our name as it appears under the caption Experts.
/s/ Plante & Moran, PLLC |
Denver, Colorado |
September 24, 2021 |
Exhibit 23.3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our report dated March 12, 2021, with respect to the financial statements of Innovations Group, Inc. as of and for each of the years ended December 31, 2020 and 2019 contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in this Registration Statement and Prospectus, and to the use of our name as it appears under the caption Experts.
/s/ Plante & Moran, PLLC
Denver, Colorado
September 24, 2021
Exhibit 23.4
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our report dated March 15, 2021, with respect to the financial statements of TTC Healthcare, Inc. and Subsidiaries (Successor) and Transformations Treatment Center, Inc. and Affiliates (Predecessor) as of and for each of the years ended December 31, 2020 and 2019 contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in this Registration Statement and Prospectus, and to the use of our name as it appears under the caption Experts.
/s/ Plante & Moran, PLLC
Denver, Colorado
September 24, 2021
Exhibit 23.5
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our report dated March 12, 2021, with respect to the financial statements of Behavioral Health Services, LLC and Subsidiaries as of November 20, 2020 and for the period from January 1, 2020 to November 20, 2020, and as of and for the year ended December 31, 2019 contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in this Registration Statement and Prospectus, and to the use of our name as it appears under the caption Experts.
/s/ Plante & Moran, PLLC
Denver, Colorado
September 24, 2021
Exhibit 23.6
D.K. CHHAJER & CO.
CHARTERED ACCOUNTANTS |
NILHAT HOUSE 11, R. N. MUKHERJEE ROAD GROUND FL., KOLKATA - 700 001 PHONES: 033-2262 7280 / 2262 7279 TELE-FAX: 033 2230 - 6106 E-mail: dkchhajer@gmail.com kolkata@dkcindia.com |
CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS
We have issued our report dated December 30, 2020, with respect to the consolidated financial statements of Glocal Healthcare Systems Private Limited and its subsidiaries for the years ended March 31, 2020 and 2019 contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in this Registration Statement and Prospectus, and to the use of our name as it appears under the caption Experts.
For D.K. Chhajer & Co.
Chartered Accountants
Firm Registration No. 304138E
(Tapah K. Mukhopadhyay)
Partner
Membership No. 017483
Kolkata, India
September 24, 2021
Exhibit 23.7
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the inclusion in this amended Registration Statement of UpHealth, Inc. on Form S-1 of our report dated December 24, 2020, with respect to our audit of the consolidated financial statements of Cloudbreak Health, LLC and Subsidiaries for the year ended December 31, 2019, which report is contained in the Prospectus, which is part of this Registration Statement.
We also consent to the reference to us under the caption Experts in such prospectus.
/s/ Hall & Company Certified Public Accountants & Consultants, Inc.
Hall & Company Certified Public Accountants & Consultants, Inc.
Irvine, CA
September 27, 2021
Exhibit 23.8
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Cloudbreak Health, LLC
We hereby consent to the inclusion in this amended Registration Statement of UpHealth, Inc. on Form S-1 of our report dated March 19, 2021, with respect to our audit of the consolidated financial statements of Cloudbreak Health, LLC and Subsidiaries for the year ended December 31, 2020. Our report contains an explanatory paragraph referring to the Companys ability to continue as a going concern.
We also consent to the reference to us under the caption Experts in such prospectus.
/s/ Macias Gini & OConnell LLP
Macias Gini & OConnell LLP
Irvine, CA
September 27, 2021
Exhibit 23.9
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our report dated March 21, 2021, with respect to the financial statements of UpHealth Holdings, Inc. as of and for the year ended December 31, 2020 contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in this Registration Statement and Prospectus, and to the use of our name as it appears under the caption Experts.
/s/ Plante & Moran, PLLC
Denver, Colorado
September 24, 2021