WELL Health Technologies Corp T.WELL

TD Notes

[retiredcf]

Expecting Immaterial Impact from SVB Collapse

Event

While regulators are backstopping SVB, we consider our coverage's exposure to the bank. Most of our coverage has no direct ties with SVB and those that do have minimal exposure. If any challenges arise from this event, there could be M&A opportunities for many Canadian technology companies given their strong balance sheets.

Impact: NEUTRAL

Likely immaterial impact to our coverage. Few companies in our coverage have direct business with SVB, but those that do are not expected to be materially impacted.

• Shopify - Very minor impact expected. A small portion of funds and U.S.-based operations tied to SVB.

• Lightspeed - Single-digit millions exposure of its $838mm in net cash. SVB was used for some payroll operations.

• BlackBerry - A few legacy accounts, with a small balance, from acquisitions.

• WELL Health - Circle Medical (58% owned) has some exposure. Immaterial to WELL.

• Coveo - (Very) small and immaterial exposure.

• D2L - Small and immaterial exposure.

  Secondary effects likely manageable. The indirect impact to our covered companies is much more difficult to assess.

• Customers - Given SVB's focus on the tech sector, we believe companies that have a large technology customer base are at a higher risk, especially ones focused on the SMB/mid-market (we assume most Enterprise customers have low/no direct SVB-related risk). Companies may increase bad debt expenses to reflect increased credit risk.

• Channel partners - Challenges at channel partners could be disruptive in the near-term; however, we assume their customers would switch to a competitor or go direct.

• Suppliers - We are currently unaware of any (smaller) software/hardware vendor or strategic partner (e.g., manufacturing) utilized by our covered companies that has been materially impacted by SVB's collapse.

  Potential silver lining for Canadian tech. Companies with a strong balance sheet and minimal exposure to SVB could acquire some attractive technology/businesses if challenges drive lower valuations. Those that we would highlight with a greater likelihood for acquisitions given their strategy and/or recent management comments are Altus, CGI, Converge, Coveo, Descartes, Dialogue, Docebo, Enghouse, Kinaxis, and Softchoice.

[Tankard001]

Thanks for this.  As always, straight talk and updates from you.   Interested in your thoughts now on BABY (Else Nutrition) as you had left during downturn.  Prod facilities being built now and critical approvals have happened and will be occurring for next stage.  Any thoughts there appreciated.

[retiredcf]

Don't normally do this as it's the wrong BB but the most important thing for any company is the quality of their management. While what you say is true, I got burned twice by this management on horrendous financings. As the old saying goes, fool me once, shame on you, fool me twice, shame on me. GLTA