Inspira Financial Inc.

July 14, 2015 09:00 ET

Inspira Financial Inc. Begins Trading on TSX Venture Exchange Under Symbol "LND"

WALNUT CREEK, CALIFORNIA--(Marketwired - July 14, 2015) - Inspira Financial Inc. (TSX VENTURE:LND) ("Inspira") has commenced trading on the TSX Venture Exchange today, July 14, 2015, under the trading symbol LND. Inspira operates in the fragmented marketplace of small companies in the large and growing market for alternative financial services offered to healthcare providers and their patients across the United States. Inspira is led by seasoned management with experience in both the U.S. healthcare industry and healthcare services asset management. The details of the transaction can be viewed on SEDAR.

Current Operations

Inspira's suite of financial services addresses the needs of small healthcare providers across the U.S. in a market of nearly $1 trillion (according to CMS data). Inspira offers revolving lines of credit ("RLOC") and loans ranging from $250,000 to $12.5 million and is able to generate yields of up to 20% annually. To further enhance growth, Inspira will seek acquisitions of small companies in the growing market for alternative financial services offered to healthcare providers and their patients. Post acquisition, Inspira plans to enhance operational efficiencies and increase revenues through cross-selling a comprehensive suite of alternative finance solutions.

Financial and Business Highlights at Listing:

  • $35 million loan book in approximately 9 months of operation
  • $28 million currently drawn from lending facility at a cost of 5% annual interest to Inspira
  • Operationally profitable and cash flow positive
  • $22.5 million of cash on the balance sheet
  • $24.5 million in potential cash from warrants outstanding
  • Up to a $500 million loan book achievable with no further equity financings, assuming fully- diluted capitalization and 80% leverage
  • Created a proprietary online tool for credit line applications, due diligence and loan management
  • Established several origination channels and has received over 250 applications for loans and lines of credit in 9 months

"As a public company, we've significantly strengthened our financial position and enter the market at an opportune time," said David Costine, CEO of Inspira. "Inefficiencies resulting from a fragmented market of small loan providers sets the stage for significant growth. At a 5-to-1 debt to equity ratio, we have raised enough equity to build our loan book over $500 million and expect strong returns on this equity."

About Inspira Financial and the Fast Growing Market

The healthcare market in the U.S. is a rapidly expanding industry, with spending expected to exceed $4.5 trillion by 2020. Within this industry, over 1 million businesses have annual revenues in the $1 million to $50 million range. The emerging reimbursement trend towards more usage-based procedures, along with the fact that healthcare providers are being forced to increase patient volumes to maintain or grow profit levels, creates a need for increased efficiency and greater front-end investment in technology and larger staff sizes. These factors, as well as the realities that insurance providers are taking longer to pay than before and that patients are now bearing increased financial responsibility for medical bills, contribute to significant financial pressure and net working capital challenges for the average, smaller sized healthcare practice in the U.S.

Overall, traditional banks continue to reduce their risk profiles, term lenders require personal guarantees and first security over all assets, factoring lenders charge 25%+ annual interest and equipment providers have all but eliminated financing programs. The increasingly limited number of options for obtaining revolving lines of credit and loans for smaller healthcare providers creates a supply shortage in the market. This imbalance represents an opportunity for alternative lending companies catering to this demographic to capitalize upon. By targeting the 800,000+ healthcare providers in the U.S., Inspira believes it can generate high returns on government (Medicare/Medicaid) and large healthcare insurance receivables. Inspira plans to acquire debt and increase profitability through cross selling of financial services.

Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws, including Inspira's ability to generate yields of up to 20% annually, achieve a $500 million loan book, close acquisitions, enhance operational efficiencies and increase revenues through cross-selling. Implicit in this information, particularly in respect of the future outlook of Inspira and anticipated events or results, are assumptions based on beliefs of Inspira's senior management as well as information currently available to it. While these assumptions were considered reasonable by Inspira at the time of preparation, they may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties, including the availability of funds and resources to pursue acquisitions, 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, default risk and ability to collect from the borrows, granting of permits and licenses in a highly regulated business, competition, low profit market segments as well as general economic, market and business conditions, and could differ materially from what is currently expected.

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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