Inspira Financial Inc. Appoints New CEO and CFO; Updates Market on a Proposed Transaction; Releases Third Quarter Financials
BOCA RATON, FLORIDA–(Marketwired – January 30, 2018) –
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Inspira Financial Inc. (TSX VENTURE:LND) (“Inspira”), a company focused on providing revolving lines of credit, as well as billing and collection services, to the highly fragmented U.S. mental health and addiction services market, announced the release of its third quarter fiscal results and appointed a new Chief Executive Officer and a new Chief Financial Officer to the executive team.
Inspira appointed David Forstadt as Chief Executive Officer. Mr. Forstadt has been with Inspira for more than a year, is a Doctoral candidate in Clinical Psychology, and holds two Masters Degrees in Community Mental Health Counseling and Psychology. He has 15 years of experience in the field of Behavioral Health specializing in Addiction and Dual Disorder Populations. David has used his clinical background in the realm of revenue cycle management to consult and develop progressive, evidenced based methods for optimizing insurance reimbursement.
“I’m pleased to have the opportunity to work to grow this business,” said Dave Forstadt, CEO. “This quarter we have been able to increase revenue without adding new clients as we continue to optimize our processes to provide best in class service. We have a great team in place, and we have made significant strides in the development of our software over the last several quarters. I plan on focusing on bringing on new clients and continuing our software development which creates a scalable platform for bringing on new clients at good margins.”
Inspira also appointed Peder Sahlin as the Chief Financial Officer. Peder is a certified public accountant, and holds a masters in accounting. He was previously the CFO for Regulus Alliance, a hospitality and commercial real estate enterprise, and previously held the CFO position at Avalanche Group and Premier Capital Investors.
“While we have offers for the acquisition of the billing division today, Dave has persuaded the Board to revisit the sale of this division after his opportunity to significantly grow this business,” said Edward Brann, now a non-executive Director. “We will create a separation between our cash and loan book operations, on the one hand, and our billing division on the other. The loan division, which has more than $10M in cash and assets will operate distinctly with the aim of finding a larger transaction as the Board will look for ways to drive shareholder value from our cash and assets separately from the billing division.”
While Inspira continues to consider its alternatives, other than the LOI announced in the October 31, 2017 news release, there can be no assurance that a viable transaction, including a larger transaction for the loan division, will result or successfully conclude in a timely manner, or at all. Additional information will be released by Inspira as it occurs.
“We want to thank Natalia for all of her hard work, especially with her work in collecting cash from our outstanding loan balances,” continued Edward Brann, Director. “She’s been a great asset, and has assisted in making this a smooth transition.”
Inspira’s financial statements for the three and nine months ended November 30, 2017 and accompanying Management’s Discussion & Analysis (MD&A) have been filed on SEDAR and are available at www.sedar.com.
About Inspira Financial
The mental health and substance abuse market in the U.S. is a rapidly expanding industry, with current spending exceeding $35 billion. Within this industry, thousands of businesses have annual revenues in the $1 million to $50 million range. Due to the significant increase in addiction treatment as a result of the Parity Act, the large and permanently elevated volumes of claims has led Payors to impose upon facilities in the mental health sector similarly complex reimbursement requirements as those imposed in the physical healthcare sector. Substance abuse facilities tend to use several software applications and a non-automated billing company to document services provided and bill insurance companies. This cumbersome process slows down the tracking, billing and collection process as the customer’s billings increase, and were not designed to handle the volume, or level of detail, now required by Payors for prompt payment. As a result, across the mental health and substance abuse industry there are collection delays and consequently a need for capital.
Certain statements contained in this press release constitute “forward-looking information” as such term is defined in applicable Canadian securities legislation. The words “may”, “would”, “could”, “should”, “potential”, “will”, “seek”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions as they relate to Inspira, including: bringing on new clients; continuing software development which creates a scalable platform for bringing on new clients at good margins; Inspira finding other possible parties to complete a transaction with, the results of discussions with potential acquirers and any potential acquisition structure; are intended to identify forward-looking information. All figures are in Canadian dollars. All statements other than statements of historical fact may be forward-looking information. There can be no
assurances that a transaction will be undertaken or what the terms or timing of such transaction, including an acquisition for the billing or loan divisions, will be acceptable to the Company or its shareholders. Such statements reflect Inspira’s current views and intentions with respect to future events, and current information available to Inspira, and are subject to certain risks, uncertainties and assumptions, including: finding partners to complete a transaction; successfully negotiating a definitive agreement with a party to a transaction; the conditions to a transaction being satisfied or waived; and applicable board, shareholder, stock exchange, court and regulatory, approval of any proposed transaction. Material factors or assumptions were applied in providing forward-looking information. Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking information to vary from those described herein should one or more of these risks or uncertainties materialize. These factors include changes in law, competition, the ability to implement business strategies and pursue business opportunities, state of the capital markets, the availability of funds and resources to pursue operations, dependence on debt markets and interest rates, demand for the lending products Inspira offers at interest rates higher than at which Inspira can borrow, a novel business model, granting of permits and licenses in a highly regulated business, difficulty integrating newly acquired businesses (including the billing company), risks of performance by the target, new technologies, risk of billing irregularities by borrowers, low profit market segments, as well as general economic, market and business conditions, as well as those risk factors discussed or referred to in Inspira’s disclosure documents filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com. Should any factor affect Inspira in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, Inspira does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release and Inspira undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.
All amounts herein are in Canadian dollars and are based on Inspira’s interim consolidated financial statements and accompanying MD&A for the period ended November 30, 2017 and related notes prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise noted.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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