Daniel Matlow, President & CEO - TSXV VHI CONFIDENTIAL NOT FOR REDISTRIBUTION MARCH 2018 - March 28 2018
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Daniel Matlow, President & CEO
TSXV VHI
CONFIDENTIAL • NOT FOR REDISTRIBUTION • MARCH 2018 TSXV VHI
Reader’s Advisory (1 of 2) This corporate presentation dated October 2017 (the “Presentation”) has been prepared by management of Vitalhub Corp. (the “Corporation”), and is based on public information and the Corporation’s confidential information. This Presentation is for information purposes only and is being made available on a confidential basis solely to enable the prospective “accredited” and other qualified investors authorized by the Corporation to evaluate the securities of the Corporation (the “Securities”). This Presentation does not constitute an offer to sell to any person, or a general offer to the public of, or the general solicitation from the public of offers to subscribe or purchase, any of the Securities. Any unauthorized use of this Presentation is strictly prohibited. Distribution or copying of this Presentation, in whole or in part in any medium, to any person other than the prospective investor is prohibited without the prior written consent of the Corporation. The information contained in these slides, the Presentation made to you verbally and any other information provided to you (in writing or otherwise) in connection with the Corporation and its business (the “Presentation Materials”) is subject to updating, completion, revision, verification and amendment without notice which may result in material changes. The Presentation Materials are not intended to provide financial, tax, legal or accounting advice and do not purport to contain all the information that a prospective investor may require. Each prospective investor should perform and rely on its own investigation and analysis of the Corporation and the terms of any offering of the Securities, including the merits and risks involved, and are advised to seek their own professional advice on the legal, financial and taxation consequences of making an investment in the Corporation. The Securities are highly speculative. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed upon the Presentation Materials, and any representation to the contrary is an offence. Neither the Corporation nor any agent of the Corporation makes any representation or warranty, express or implied, and assumes no responsibility for the accuracy or completeness of the information contained in the Presentation Materials or any other oral or written communication transmitted to prospective investors, and nothing contained in this summary is, or shall be relied upon as, a promise or representation by the Corporation or any agent of the Corporation as to the past or future performance of the Corporation. The Corporation does not undertake to provide any additional further information or to enter into negotiations regarding the investment opportunity to which these Presentation Materials relate. The Corporation retains the right, at any time, to terminate any discussions or negotiations with prospective investors. In the event of such termination the Corporation will not be under any obligation to disclose the reasons for such termination nor will they have any liability to any recipient hereof for any costs whatsoever incurred in the consideration of the information contained in these Presentation Materials. 2 TSX.V V H I
Reader’s Advisory (2 of 2) This presentation contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or “recurring” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward looking statements contained in this Presentation may include, but are not limited to statements with respect to the successful execution of the Corporation's business strategy (including its business model. M&A strategy and mission), the use and benefits of its products and services, the Corporation’s favourable position in the market on a go-forward basis, demographic and market size/trends, forecasts of revenue and financial projections/growth potential/opportunities, the completion of proposed acquisitions of target companies, the use of proceeds from the sale of the Corporation’s Securities, competitive analysis, proposed synergies, projected milestones, go-forward management of the Corporation, and other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance, expected regulatory filings, review and approval dates, construction and start-up timelines and schedules, and statements related to the continued overall advancement of the Corporation’s projects. Forward-looking statements involve known and unknown risks, uncertainties and other factors, such as competition, technological changes, the changing needs of hospitals, the financial condition of Vitalhub’s current and potential customers, foreign currency exchange rates, as well as general economic conditions, which may cause the actual results, performance or achievements of Vitalhub to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this presentation. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward looking statements contained in this presentation are made as of the date hereof or the dates specifically referenced in this presentation, where applicable. Except as required by law, the Corporation undertakes no obligation to update publicly or to revise any forward looking statements that are contained or incorporated in this presentation. All forward looking statements contained in this presentation are expressly qualified by this cautionary statement. Neither the 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 presentation. 3 TSX.V V H I
VitalHub Corp. – Company Overview
Mental Health
Long-Term Care
• High-growth strategy through the introduction of WellLinc Blockchain Solution using the Hyperledger
Platform, combined with a reliable/profitable M&A “hedge” strategy
• Focused on the Mental Health and Long-Term Care space, to further extend organization's applications
across the continuum of care
• New RTO completed in December 2016 (ticker VHI.V)
• SaaS-based, high-margin products that can be sold organically across the digital health marketplace, and
cross-sold into acquired-companies’ install bases
• Management team and Board of Directors with proven success operating a publicly traded, Canadian-
based Healthcare IT company
• Offshore research and development (“R&D”) strategy that cuts costs, increases margins, and produces
synergized businesses and products offerings
4 TSX.V V H I
VitalHub Inc. – Company Principals
Dan Matlow Vijit Coomara Peter Catford
(CEO and Founder, Medworxx) (Co-Founder and CTO, B Sharp) (Co-Founder and CEO of HInext Inc.)
• 30 years experience in technology field with focus • 30 years experience in development and tech • 30+ of experience in healthcare information
on Health IT • Extremely technically savvy, developing innovative systems development
• Track record of building and growing enterprise and disruptive technology solutions • Developed EHR software system installed in
software companies • Managed technological and architectural software 85 organizations across N.A.
• Strong sales, marketing, and investor relations skills dev. of multiple projects across N.A. and Europe • Adjunct Faculty UofT; informatics in the
• Proven ability to grow internationally • Oversaw establishment of dev. hub in Sri Lanka Masters of Health Admin program (MHSc)
• Deep knowledge of the Healthcare IT marketplace • Past Chair of Ontario’s Health Informatics
Standards Council (OHISC)
Brian Goffenberg CA, CPA Robert Lazar Niels Tofting Andre Vandenberk
(CFO, Medworxx) (Co-Founder & CEO, B Sharp) (VP Sales, Logibec) (CTO, Medworxx)
• 30 years experience, multiple CFO • 28 years experience • 20 years of software experience • Deep understanding of Healthcare IT
roles including Philips Lifeline • Expertise driving company performance • Developed and managed high- • Technology visionary
(Canada), DWL, etc. through post-sales management performing sales teams Success • 20 years experience in Product
• Strong public market experience • Proven track record building both client supporting diverse vertical markets Development
• Proven results-driven track record and business partnership relationships • Experience leading international • Strong ability to communicate
• Extensive financial governance • IT consulting for $6B distributor and business development and growth business value to an IT audience
skills and experience retailer
5 TSX.V V H I
Medworxx History
• International Healthcare IT company that was publicly traded on the TSX.V
• Unique Patient Flow solutions originating from use at Canadian hospitals
• Solutions are used by over 70% of hospitals across Canada
• Grew internationally to over $8 million in revenue across five countries
• Share price grew from 5 cents in 2008 to 60 cents in 2015 (CAGR 30% beds under license)
• Sold to Aptean, a subsidiary of Vista Equity Partners, in October 2015 for a valuation
of $20 million
6 TSX.V V H I
VitalHub Inc. – Board of Directors
Dan Matlow Mohan Plakkot Chris Schnarr
• President and CEO Vitalhub Inc. • Partner and Chief Strategist at Valsef Capital, a • Managing Director of Lorian Group Inc.
• 30 years experience private investment company focusing on public • 25 years public company and board experience
• Former Founder and CEO of Medworxx Inc. software companies across a range of roles and industries
Proven Healthcare IT executive • Experience in fortune 500 financial software • Currently Director, Chair of the Audit
and services company Committee, and member of the Governance
• Strong sales, marketing, and investor
relations skills • MBA in Strategy and Finance, with experience and Compensation Committees of Canopy
• Proven ability to grow internationally in structuring M&A transactions for internet Growth Corporation and Intrinsic 4D Inc.
assets
Roger Dent Barry Tissenbaum Steve Garrington
• Chief Executive and Director of • Retired fmr. Senior Partner with Ernst & Young • Former Director of 3 public companies listed
Quinsam Capital Corporation • Currently serves on the Noranda Income Fund on Canadian, Australian, and UK exchanges
• Director of Acuity Ads Holdings Inc. Board, and is Chairman of the Audit Committee • Executive Vice President InterSystems Inc.
• Former Portfolio Manager with Matrix • Served on boards of many private and public • 30 years of Healthcare IT Experience with
Fund Management companies providing strategic accounting a vast amount of International experience
• Former Director of research for CIBC governance
World Markets
7 TSX.V V H I
VitalHub Timeline
2014 2016 2017 JAN 2018 CURRENT
VitalHub grew out Purchased by key Acquired B-Sharp Acquired H.I. Next Inc., Introduction of
of a collaboration former members of the Technologies, 24- large US install base, As WellLinc, VitalHub’s
between Mount Medworxx management person offshore of Jan 2018 it has since proprietary electronic
Sinai Hospital in team in May of 2016 development team, been generating CAD health record (“EHR")
Toronto and MaRS currently generating 3.1M in annual revenue, interoperability
Innovation Closing of qualifying CAD $1.4M in $2.4M in recurring solution powered by
transaction and recurring revenue revenue blockchain technology,
public offering and built on the
Hyperledger Platform
FEB 2018 - Acquired Clarity Health, Ontario Mental
Health-based assessments, $200k in recurring revenue
8 TSX.V V H I
The digital healthcare marketplace has
Blockchain Solutions experienced transformative growth over
to Healthcare the past 15 years, redefining the delivery
of care. This comes with extreme
Challenges pressure to regulate costs while
providing high-quality care to patients.
The problem is that growing Blockchain applications can benefit the
demand for healthcare services and healthcare ecosystem as a whole,
integrated-care delivery creates an alleviating several major challenges to the
unaddressed need for information industry; supporting seamless information
technology solutions that remove sharing that can eliminate the duplication,
middlemen, reduce costs, and errors and inconsistencies that arise with
promote privacy and security. traditional, centralized data storage.
9 (Source: Dash, Majumdar, and Gunjikar, “Blockchain: A Healthcare Industry View”, Capgemini 2017.) TSX.V V H I
Blockchain Technology for Healthcare Industry
M&A – Buying Assessment-
Based Assets Explosive
Growth
Blockchain – Future
Healthcare Solutions Expectation:
$1M+ Projects
LEGEND
Phase I: Proof of Concept/ Early
Pilot Projects Profitability
Phase II: Production Use
Phase III: Full-Scale Production
($1M+ Gov’t & Int’l Projects)
10 TSX.V V H IHealthcare – Explosive Blockchain Opportunity
Barriers limiting the effective Siloed Healthcare Unlocking Siloed Healthcare
use and accessibility of siloed Information Information Securely with a
healthcare databases Decentralized Encrypted Ledger
11 TSX.V V H IValidation – Blockchain Technology in Healthcare “Blockchain solutions for financial services have received the maximum investments. Healthcare has the most aggressive plans to deploy Blockchain-based applications across multiple use cases during 2017.” (Source: "Blockchain Technology in Global Healthcare, 2017–2025", Frost & Sullivan, June 2017.) “Blockchain technologies hold the promise to unite the disparate processes in healthcare, increase data flow and liquidity, reduce costs, and improve patient experience and outcomes.” (Source: “The Potential for Blockchain Technology in Health IT”, HIMSS, March 1 2017) “[…] We believe Blockchain has a huge potential to become the next big technology- innovation engine. Blockchain applications for patient-data portability, interoperability, care- delivery management, and administration can provide the answers to make challenges facing the industry.” (Source: “Blockchain: A Healthcare Industry View”, (Source: Dash, Majumdar, and Gunjikar, “Blockchain: A Healthcare Industry View”, Capgemini 2017.) 12 TSX.V V H I
Use Case 1 – Healthcare Data Exchange & Interoperability
At its core, Blockchain would offer the potential of a shared platform that decentralizes health data
ensuring access control, authenticity, and integrity of protected health information.
Interoperability Gaps: Lack of interoperability costs 150,000 lives and $18.6 billion per year.
Challenges
Current
Need for Longitudinal Health Records: 46% of US clinicians do not have a complete view of their patients’
health history/ records. Further, individuals cannot view a unified medical record or pass it on to clinicians.
High Error Rates with Centralized Health IT Systems: Error rates for successfully identification or integration of
a file are 25% for hospitals and health systems; and as high as 50%–60% outside hospitals.
Key Blockchain Features
Access to historic and real-time patient data on Blockchain, cryptographically secure
and irrevocable or immutable.
Identity management with predefined user access rules peer-to-peer network;
multi-party collaboration health bank for remunerative commons.
Storage of genomics and user- generated data securely with access control.
13 (Source: "Blockchain Technology in Global Healthcare, 2017–2025", Frost & Sullivan, June 2017.) TSX.V V H IWellLinc – Blockchain Interoperability Solution
WellLinc is a decentralized blockchain solution that enables interoperable, secure
sharing, storage, and tracking of mental health records between multiple
stakeholders and jurisdictions across multiple technology platforms
Physicians
Standardized
Assessments
Community
Health Centers Hospitals
14 TSX.V V H IUse Case 1 – Healthcare Data Exchange & Interoperability
(i) Blockchain-enabled health IT systems that can provide technological solutions to many
challenges, including health data interoperability, integrity and security, portable user-
owned data and other areas.
(ii) Blockchain could enable data exchange systems that are cryptographically secured and
irrevocable, enabling seamless access to historic and real-time patient data, while
eliminating the burden and cost of data reconciliation.
(iii) The recent collaboration between Guardtime, the data-centric
security company, and the Estonian eHealth Foundation to
secure the health records of one million Estonian citizens
using its proprietary Keyless Signature Infrastructure (KSI)
is a classic example of Blockchain technology.
15 (Source: "Does Blockchain Have A Place In Healthcare?" Forbes, www.forbes.com, May 8, 2017.) TSX.V V H IDistribution Strategy
System Integrators
Vendors/Consulting Partners
Direct Sales
Management team has successfully
sold internationally through system
integrators, and has proven large
project implementation skills.
VitalHub’s entire platform is being built
on Hyperledger Technology Set.
16 TSX.V V H IBlockchain Pricing Strategy
Recurring Revenue Stream
$ • BaaS-based, long-term annual-use Blockchain as a Service (BaaS)
contracts (i.e. 5-years)
• Annual fees based on usage and
amount of data
• High-margin products
Expectation:
Blockchain projects
will be large in nature
$
One Time Consulting Fees Large government and
• One-time and ongoing international projects
(large in nature)
• Implementation and Training
• Best practice and advisory
consulting fees
17 TSX.V V H IM&A Strategy
VitalHub’s strategy is to rapidly increase growth and profitability by combining like software
companies focused in the Healthcare IT area
Global mHealth market
projection 22% CAGR
Reduce R&D Spend Consolidate G&A Optimize S&M Cross-Selling Products Build Mobile Solutions Sell Organically
Reduction of R&D Consolidation of Implementation Upselling VitalHub Create mobile versions Develop and sell
costs by moving dev finance and of effective sales mHealth platform of legacy apps mobile new VitalHub
offshore with a administration and marketing into install base and upsell into existing products into large
significantly reduced into a central processes install bases growth markets
wage structure functional area
18 TSX.V V H IM&A Strategy
Have identified 15 companies Target companies are synergistic with annual
Combination of cash and stock
revenues of $1M-$7M, profitable with limited
primarily in Canada, UK and Australia using the public markets
growth, and have not adopted a mobile strategy
that are looking for exits
20% 20%-30% 1.0-2.5x
Reduce costs by 20% through Target 20%-30% EBITDA with cross-selling Purchase companies between
synergistic reductions and utilization and synergistic cost reductions including 1.0x-2.5x revenue multiple
of cost effective offshore resources effective offshore development work
19 VitalHub mHealth solution will be sold to target install bases TSX.V V H ITarget Companies – Acquisition Characteristics Target Companies possess these qualities • Recurring revenue above 60% of total revenue • Breakeven or profitable • Owner operated businesses with limited outside investment • Large component of expense is on research and development vs. sales and marketing • Little commercialization or sales and marketing expertise • Significant customer base with minimal retention issues • Limited or no expansion beyond geographical boundaries creating a large growth barrier • Ability to upsell to existing install bases of target companies by bringing their product into a mobile environment 20 TSX.V V H I
VitalHub – Acquisition #1
1. Mobile health enterprise software 4. Over $7M invested in R&D since inception
solutions vendor 5. Roots within MaRS and Mount Sinai
2. Current revenues of $560k hospital in Toronto
per annum 6. Recent Sales and Marketing initiatives
3. $490k annual recurring revenue driving growing pipeline
21 TSX.V V H IVitalHub – The Integrated Mobility Solution VitalHub acts as a bridge, aggregating, consolidating, and porting data from siloed legacy health systems into an easy to use mobile format. VitalHub is an innovative solution that provides hospitals and vendors with an enabling technology that integrates and optimizes information across existing digital health systems. Strong mobility IP allows the data of siloed legacy health systems to be made easily available for mobile consumption, simplifying availability and access for clinicians. 22 TSX.V V H I
VitalHub’s mHealth Solution
VH Chart
Real-time patient VH Physician Onboarding
information at the Communicate with all your
point of need on any physicians using mobile
mobile device devices for easy physician
onboard and ongoing
VH Engage VitalHub packages information target communication
Communication tools and data, making it more
enabling hospitals to accessible for mobile use
interact with patients
and families VH Task Manager
Assign, schedule
and monitor employee
VH Family Portal tasks in all healthcare
Providing family members settings using
with real-time information on mobile devices
the health and mental status
of their loved ones
23 TSX.V V H IAcquisition #2: B Sharp Technologies (Oct 2017)
• 20 year old Canadian company
• $2.3 million (CAD) annual revenue 40 Canadian
• $1.5 million (CAD) recurring revenue Hospital
• CEO and CTO possess strong app Customers
development and operational skills
and will join management team
• Domain and healthcare development expertise
Five Products with an Emphasis on Mental Health
• Cardiac Electronic Health Records
• Mental Health EHR solution
• Long term Care EHR solution
• Pharmacy Solution
• AIDS EHR
Source: Information provided by B Sharp Technologies and has not been independently verified by the Corporation.
The Corporation or its agents undertake no obligation to comment on analysis, expectations or statements made by
24 third parties in relation to B Sharp Technologies, its security or their respective financial or operating results. TSX.V V H IB Sharp Technologies: Offshore Development Team
Twenty-four member offshore development team Colombo, Sri Lanka
located in Sri Lanka
Strong offshore base to develop and
grow Blockchain solutions
Characteristics
• In operation since 2008
• Team of 24 developers
• Average salary of $18k (CAD) per year
• Average tenure of 4 years
• Total cost of operation is $600k (CAD) per year 24 Member Offshore
Development Team
Source: Information provided by B Sharp Technologies and has not been independently verified by the Corporation.
The Corporation or its agents undertake no obligation to comment on analysis, expectations or statements made by
25 third parties in relation to B Sharp Technologies, its security or their respective financial or operating results. TSX.V V H IAcquisition #3: H.I. Next Inc. (Jan 2018)
• 19 year old company with large U.S. install U.S. business primary growth area
• 80 Behavioral Health Institution Customers
• $3.1 million (CAD) annual revenue
• $2.4 million (CAD) recurring revenue
• Mental Health EHR sold both in Canada and the U.S.
• CEO is the former CIO of CAMH with large
knowledge base especially in the mental health area
• Strong U.S. partner driving sales
• Opportunity to significantly lower R&D costs
• Mental health and clinical domain expertise 40 U.S. Behavioral Health
Source: Information provided by H.I. Next Inc., and has not been independently verified by the
Corporation. The Corporation or its agents undertake no obligation to comment on analysis, expectations
Institution Customers
or statements made by third parties in relation to H.I. Next Inc., its security or their respective financial or
operating results.
+40 in Canada
26 TSX.V V H IM&A Synergies Result in EBITDA Growth
Upsell VitalHub
Mobility Solution to
Target Companies’
Install Bases
27 TSX.V V H IEstimated Capital Structure Post M&A
Shares %
Current Shareholding 124,885,709 100.0%
Public 78,835,166 61.5%
Management control 48,050,543 38.5%
Total 124,885,709 100.0%
Approximately 21% of the public float is held by institutions.
28 TSX.V V H IPost M&A – Estimated P&L (Pre-Blockchain)
% Revenue % OPEX % Revenue $
Revenue $ 6,457,968 100% Optimized S&M 100% $ 10,000,000
OPEX $ 6,940,504 107% 100% 65% $ 6,500,000
S&M $ 1,057,846 16% 15% Consolidated G&A 15% $ 1,500,000
G&A $ 1,259,312 20% 18% 15% $ 1,500,000
R&D $ 4,623,346 72% 67% 35% $ 3,500,000
Reduced R&D Spend
Loss $ (482,536) -7% 35% $ 3,500,000
29 TSX.V V H IComparable Companies
$33M $9.35 5.5x $322M $54.20 4.5x $224M $37.02 12.7x
2.4B $739.0 6.5x $66M $16.25 3.2x $333M $66.75 6.3x
30 Revenue* Share Price Revenue multiple TSX.V V H IRecent Transaction – QHR: Canadian EMR Company (TSX.V)
QHR Operations
$30M
$20M
$10M
$M
2013 2014 2015 Sale
Revenue Net (loss) earnings
QHR recently announced its sale to Loblaws
for $170M – 5x multiple of revenue
Note: This transaction is in no way indicative of transactions currently available to or contemplated by the Corporation. The economics for the transaction presented in this slide, including the revenue
multiples and historical trading prices, are not typical and there can be no guarantee that the Corporation will be able to complete a similar transaction or any transaction at all.
31 TSX.V V H IVitalHub Inc. – Summary
Mental Health
Long-Term Care
• TSX.V listed Healthcare IT company creating innovative Blockchain technology platform
• Proven management team and board with strong track record, ability to execute, and
public markets experience
• Focused M&A strategy positioned for rapid growth, with 15 potential acquisition
targets identified (profitable “hedge” strategy, providing real downside protection)
• Offshore R&D strategy that cuts costs, increases margins, improves efficiency; and enables
the scalability, growth, and development of Blockchain solutions
32 TSX.V V H IStatutory rights for subscribers resident in Ontario and Saskatchewan: (1/2)
Section 130.1 of the Securities Act (Ontario) (the “Ontario Act”) and Section 138 of the Securities Act
(Saskatchewan) (the “Saskatchewan Act”) provides that every purchaser of securities pursuant to an offering memorandum shall have a statutory right
of action for damages or rescission against the issuer and any selling security holder in the event that the offering memorandum contains any untrue
statement of a material fact or omits to contain a material fact that is required or that is necessary in order to make any statement herein or therein not
misleading in the light of the circumstances in which it was made (a “Misrepresentation”). A purchaser who purchases securities offered by the offering
memorandum during the period of distribution has, without regard to whether the purchaser relied upon the Misrepresentation, a right of action for
damages or, alternatively, while still the owner of the securities, for rescission against the issuer and any selling security holder provided that:
a) if the purchaser exercises its right of rescission, it shall cease to have a right of action for damages as against the issuer and the selling security
holders, if any;
b) the issuer and the selling security holders, if any, will not be liable if they prove that the purchaser purchased the securities with knowledge of the
Misrepresentation;
c) the issuer and the selling security holders, if any, will not be liable for all or any portion of damages that it proves do not represent the depreciation
in value of the securities as a result of the Misrepresentation relied upon; and
d) in no case shall the amount recoverable exceed the price at which the securities were offered.
Section 138 of the Ontario Act, and Section 147 of the Saskatchewan Act provide that no action shall be commenced to enforce these rights more
than:
a) in the case of an action for rescission, 180 days from the day of the transaction that gave rise to the cause of action; or
b) in the case of an action for damages, the earlier of:
I. 180 days from the day that the purchaser first had knowledge of the facts giving rise to the cause of action; or
II. three years from the day of the transaction that gave rise to the cause of action.
33 TSX.V V H IStatutory rights for subscribers resident in Ontario and Saskatchewan: (2/2) The rights referred to in section 130.1 of the Securities Act (Ontario) do not apply in respect of an offering memorandum delivered to a prospective purchaser in connection with a distribution made in reliance on the exemption from the prospectus requirement in section 2.3 of National Instrument 45-106 (the “accredited investor” exemption) if the prospective purchaser is: a) a Canadian financial institution or a Schedule Ill bank, b) the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada), or c) a subsidiary of any person referred to in paragraphs (a) and (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary. Pursuant to Section 80.1(3) of the Saskatchewan Act, a purchaser who has received an amended offering memorandum delivered in accordance with subsection 80.1(3) of the Saskatchewan Act has a right to withdraw from the agreement to purchase the securities by delivering a notice to the person who or company that is selling the securities, indicating the purchaser’s intention not to be bound by the purchase agreement, provided such notice is delivered by the purchaser within two business days of receiving the amended offering memorandum. Similar rights of rescission are available to subscribers resident in Alberta pursuant to the provisions of Section 204 of the Securities Act (Alberta). Subscribers in Alberta are advised to consult the Securities Act (Alberta) for the specific language pertaining to their rights. 34 TSX.V V H I
Appendix I: Future Adoption of Blockchain in Healthcare
Which solution/improvement has the most potential to drive Blockchain adoption
across the Healthcare industry?
Interoperability of Electronic Health
42.9%
Public Data Use cases (Provider Directory)
7.1%
Claims
17.9% Other
28.6%
Eligibility
3.5%
35 (Source: January 2017 Hyperledger Healthcare Working Group Survey, N=28 TSX.V V H IAppendix II: 6 Big Themes for Blockchain Technology in Healthcare
Cybersecurity
Health Data Interoperability Healthcare Business Models Distributed network consensus
Provide ubiquitous security Transform the digital health with cryptography techniques
infrastructure for seamless economy to create new business provides an additional layer of
health data exchange without and monetization models trust to minimize cybersecurity
reconciliation or trusted for health asset threats for healthcare IT
3rd party. exchange. systems.
“Blockchain technology
potential applications Value-Based Care
in some of the pressing Trusted workflows with
“single source of truth” provide
Healthcare Consumerism Precision Medicine Practice
Patients can permit access to
Ensure co-creation of trust and
needs of the radical new possibilities for
self- sovereignty for a patient-
their anonymized personal
outcome-based care health information for research
Healthcare industry.” delivery and reimbursement
centric Blockchain health
ecosystem.
commons and remunerative
models. models.
36 (Source: "Blockchain Technology in Global Healthcare, 2017–2025", Frost & Sullivan, June 2017.) TSX.V V H IAppendix III: Adoption Timeline – Blockchain Healthcare Use Cases
Blockchain Technology Adoption Timeline Across Major Healthcare Applications/Use Cases, Global, 2016–2025
Immediate (2016–2018) Short-Term future (2018-2021) Long-Term future (2021-2025)
Digital Identity Verification/ IoMT (medical asset management IoMT
Management and device data exchange) (Quantified self, home care)
National Medical/ Health Smart Contracts (health vendors Universal Health Records
Records (authenticity and integrity) RFPs and contract management) and Identities
Drug Supply Chain Provenance (drug Health Token (HSN, research, Genomics and User-generated Data
counterfeiting and theft) wellness incentives) Management
Claims Adjudication & Billing Managing Pharma/Biopharma IP and Assets Transactions Blockchain AI and AR/VR
Management/ RCM on Blockchain Applications
eConsenting Clinical Trials Records Blockchain-based Wellness,
(Research and clinical trials) Integrity and Exchange Personal Coaching
Healthcare Data Storage, Access, Regulatory Audit and Adverse Event Health Policy Voting
and Analytics (on/off Blockchain) Safety Monitoring
Note: Blockchain system adoption across these healthcare use cases demonstrate more convincing opportunities, albeit at Blockchain-based Learning Health
varying degrees of adoption across countries and health systems. Systems and Advocates
Certainty of Adoption High Medium Low
37 (Source: "Blockchain Technology in Global Healthcare, 2017–2025", Frost & Sullivan, June 2017.) TSX.V V H IAppendix IV: Use Case 2 – Claims Adjudication & Billing Management
About 6% of all medical claims are denied due to incomplete or incorrect information. The Blockchain
system could automate the claim process and dispel administration layers to reduce transaction costs
and frauds.
Insurance notarization and medical billing frauds: An estimated 5%–10% of health care costs are fraudulent,
Challenges
resulting from excessive billing or billing for non-performed services. For example, in the United States alone, a
Current
Medicare fraud scheme incurred about $30 million in losses during 2016.
Inefficiencies with BIR activities: An estimated 15%–20% of health care spending and processing costs are
associated with BIR activities. E.g., US BIR costs are projected to reach $315 billion dollars by 2018, up over
100% from 2007.
Key Blockchain Features
Automates claim adjudication and payment processing.
Blockchain network consensus custody log to track each step of trustless exchange with predefined smart contracts.
Peer-to-peer insurance: Peer-evaluated and peer-adjudicated health claims.
Pay for outcomes and incentive-based behavioral health programs, leveraging smart contracting features.
38 (Source: "Blockchain Technology in Global Healthcare, 2017–2025", Frost & Sullivan, June 2017.) TSX.V V H IAppendix IV: Use Case 2 – Claims Adjudication & Billing Management
(i) An estimated 5-10% of healthcare costs are fraudulent, resulting from excessive billing
or billing for non-performed services.
(ii) Blockchain-based systems can provide realistic solutions for minimizing these medical
billing-related frauds; by automating the majority of claim adjudication and payment
processing activities, Blockchain systems could help to eliminate the need for
intermediaries and reduce the administrative costs and time for providers and payers.
(iii) Recently, Gem Health, a provider of Blockchain application platforms
for enterprises, has collaborated with Capital One to develop
Blockchain-based healthcare claims management solutions.
39 (Source: "Does Blockchain Have A Place In Healthcare?" Forbes, www.forbes.com, May 8, 2017.) TSX.V V H IYou can also read
