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NEW HAVEN, Conn., July 25, 2019 (GLOBE NEWSWIRE) -- Inspira Financial Inc. (“Inspira” or the “Company”) (TSXV:LND), today announced that, in light of significant headwinds in the addiction rehabilitation industry, the Company has decided to discontinue its billing operations. Starting August 1, 2019, the Company will no longer be generating revenue from billing operations.
The Company continues to operate its lending business. While the loans outstanding may not be repaid, the Company continues to work with lenders to make payments and continues to consider requests it receives for additional loans.
The Company has a strong cash position as reflected in its most recent audited financial statements and is looking for methods to increase shareholder value using that cash.
“Over the last twelve months it has become very apparent that the national market for mental health billing services has deteriorated to a point where, at our size, we can no longer generate cash flow,” said Jaime Gerber, interim CEO of Inspira. “Our customers are suffering from lower revenues and lower margins while at the same time, the insurance companies have made mental health claims more standardized and easier to process, reducing our ability to sustain higher billing rates. This combination of emerging events has led to a decision point for the company – either invest our cash in trying to build this business in a declining market or discontinue the services and try to limit the cost of exiting the business. While the billing operation might succeed if the company made a major capital commitment that helped it scale, choosing this path could risk causing the company to fail altogether if it did not grow. Discontinuing operations is the safer choice in this environment. While we have no current indication of interest, we still have a strong technology platform that might attract a buyer or partner, although I am not optimistic as our competitors also seem to be in a weakening position as a result of the declining market for these services. We have a strong balance sheet with cash to deploy as our last audit and next quarterly financials will reflect when posted at the end of this month. I am looking for ways to deploy that cash effectively to create greater shareholder value.”
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 the Company, including: the Company discontinuing its billing division; and the financial outlook for the next quarterly financials; are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Such statements reflect the Company's current views and intentions with respect to future events, and current information available to the Company, and are subject to certain risks, uncertainties and assumptions. 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, without limitation: 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 the Company offers at interest rates higher than at which the Company can borrow; a novel business model; granting of permits and licenses in a highly regulated business; difficulty integrating newly acquired businesses; new technologies; risk of billing irregularities by borrowers; low profit market segments; general economic, market and business conditions; as well as those risk factors discussed or referred to in the Company's disclosure documents filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com. Should any factor affect the Company 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, the Company 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 the Company undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.
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.
Inspira Financial Inc.
Jaime Gerber
Interim CEO/Chairman
1 (844) 877-7562
IR@inspirafin.com
www.inspirafin.com
