BOCA RATON, FLORIDA--(Marketwired - May 17, 2017) -
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AN OFFER OF THE SECURITIES DESCRIBED HEREIN.
Inspira Financial Inc. (TSX VENTURE:LND) ("Inspira"), a company focused on providing lending, billing and collection solutions
to the highly fragmented U.S. mental health and addiction services market, today provided shareholders with a business update and
confirmed it will pay its ordinary quarterly dividend.
"It was only recently that I took over as CEO and Jaime Gerber assumed the role of Chairman of the Board. It has also been
just over a month since the shareholder vote where we received resounding support for our improved business plan," said Edward
Brann, CEO of Inspira. "Our first steps were to replace the management team and reorganize the Board. With that in place, I want
to update our shareholders on the progress we've made in other areas of the business. I have seen continuous improvement in our
billing and collections processes, supported by our technology platform, as we position ourselves for growth. Additionally, I am
launching a strategic review of our loan book with the aim of reducing loan balances to borrowers who may be higher risk or are
not core to our future marketplace goals."
Quarterly Dividend
The board of directors of Inspira has approved a quarterly dividend of $0.0055 per share on its common shares, payable on June
2, 2017, to shareholders of record at the close of business on May 26, 2017. Such quarterly dividends are only payable as and
when declared by the Board and there is no entitlement to any dividend prior thereto.
This dividend is designated by Inspira to be an eligible dividend for the purpose of the Income Tax Act (Canada) and
any similar provincial or territorial legislation. An enhanced dividend tax credit applies to eligible dividends paid to Canadian
residents.
The Billing and Collection Company
The billing and collection company has been fully integrated and centralized in south Florida. All operational, sales,
marketing and technology development staff have been moved to Florida and are located in the former IBM technology development
center in Boca Raton.
"I am looking forward to sharing our advances in billing and collections with shareholders very soon," concluded Mr. Brann.
"Our integrated marketing efforts started in the beginning of the year when we merged our lending and billing solutions into a
singular product for addiction treatment companies. My goal in the coming quarters is to ensure our shareholders understand both
the tremendous market opportunity and our innovative billing and collection processes, and not just the revenues that we have
generated since the acquisition. I understand that at this point, our shareholders have seen very little product information. I'd
like that to change. We plan to look for ways to better share our product offering, and also provide a better understanding of
the market as it stands today. We believe we have a superior offering compared to the landscape of competitors who provide a
highly manual process with little technology and even less follow through for their clients."
The Strategic Review of Loan Book
Inspira's original business plan, launched several years ago by the previous management team, was focused exclusively on
lending to U.S. healthcare service providers, generally using accounts receivable (A/R) as collateral. Lending was offered to all
sectors of the healthcare market secured by high quality U.S. healthcare receivables.
"Now that we are focusing on billing, collection and lending exclusively to U.S. mental health and addiction service
providers, I want to fully collect any capital that is not in line with this strategy. If we decide we have a surplus of capital
needed to execute on this lucrative market strategy, we will look into the best ways to maximize shareholder value," continued
Mr. Brann. "I share concerns that several shareholders have expressed about the previous strategy. It was generating relatively
low returns on equity, was largely subject to debt markets for its success, and was quite capital intensive. That limited its
scalability, either requiring shareholder dilution or aggressive debt levels to succeed."
"While lending remains a central part of the new strategy, the focus on using billing and collection services along side of
the targeted lending services, provides the opportunity for much stronger returns on equity," continued Mr. Brann. "The billing
and collection company, once fully automated, should need relatively little capital to scale. It should bring in significant
marginal profit for little marginal cost. The key for us going forward is to ensure our lending practices, and loan book as a
whole, match our overall strategy. Going forward, I want Inspira to make individual loans that are relatively small and lower
risk for the express purpose of enhancing our software as a services offering."
IFRS 3 Compliance (Note 13, fiscal third quarter interim financial statements)
As a result of a review by the British Columbia Securities Commission, we are issuing the following press release to clarify
our disclosure in our third quarter interim financial statements. Inspira is currently finalizing the audit of its consolidated
financial statements for the year ended February 28, 2017, due June 28, 2017.Upon completion, Inspira will correct the interim
financial statements to comply fully with IFRS 3. Until that time, Inspira will remain on the BCSC's list of Reporting Issuers in
Default. This determination, relating to just Note 13, does not have any operational impact upon Inspira. The determination will
not alter the revenues, profits, operations or potential growth prospects of Inspira. The primary financial impact upon Inspira
relating to the Note is the account methodology used in the interim period until the final audit is complete and published. The
management team continues to be committed to ensure that all financial statements are in compliance with IFRS.
Forward-Looking Statements
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, Inspira finding ways to
better share its product information, and the billing and collection company needing relatively little capital to scale and
bringing in significant marginal profit for little marginal cost, are intended to identify forward-looking information. All
statements other than statements of historical fact may be forward-looking information. 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: the success of Inspira's sales and marketing efforts effectively growing the
total client base; Inspira's ability to satisfy and keep existing clients; management execution, hiring and maintaining qualified
staff, and understanding and achieving software improvements within reasonable time frames and costs; the demand for addiction
treatment continuing to increase; the new service line being complimentary to existing Inspira clients; Inspira being successful
in its integration of the billing company; Inspira's clients maintaining revenue regardless of overall industry demand; the
successful recruitment of employee talent in Florida; increasing total clients serviced resulting in a positive impact on
revenue; and Inspira being able to use the scale of multiple clients and a larger operation to reduce costs. 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, litigation, 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, risks associated with the declaration and payment of dividends,
including the discretion of Inspira's Board of Directors to declare dividends, as well as general economic, market and business
conditions, as well as those risk factors discussed or referred to in Inspira's annual Management's Discussion and Analysis for
the year ended February 29, 2016, 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. Unless otherwise indicated, all figures are in Canadian dollars.
In addition to the foregoing, further litigation and administrative actions, even if completely without merit, can be
expected to cause Inspira to continue to incur substantial financial expenses to defend its actions. In addition, the litigation
may be expected to draw management resources that would otherwise be used to grow and manage the company, and have the effect of
impairing or slowing the efforts of Inspira to execute on its business plan. Inspira can offer no guidance on whether or how long
such proceedings will continue.
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.