The rumours first made the rounds last week, but late on Monday it became official - MindBeacon filed its preliminary prospectus as it seeks to list on the TSX Index. No pricing, financials or timeline was give, but the company is seeking to raise $50M through its IPO at a price of between $7-$8 per share under the symbol MBCN.
MindBeacon's filing comes a couple of months after Carebook's (TSX:CRBK) disappointing IPO. At the time, we felt as though Carebook was overpriced, and did not offer a clear path to growth. The company listed its shares at $2.50 and opened at $2.85 and it quickly dropped. Carebook is now trading at $1.52 per share.
The timing of MindBeacon's IPO is of interest as it has filed at a time when many in the telehealth industry are trading at monthly lows. The Covid-19 vaccine has tempered industry growth expectations and has sent most into correction territory. We are firm believers that the the long-term prospects of the industry remain, and the reaction to the vaccine is simply a short-term headwind. WIll this impact MindBeacon's pricing? Too soon to tell.
One of the attractive aspects of MindBeacon, is that it is a mental health pureplay. Mental Health is one of the greatest challenges of 21st century healthcare, and there is a need for new and inventive treatments. Cognitive Based Therapy (CBT) is largely considered one of the best mental health strategies. In fact, MindBeacon refers to it as the "gold standard in evidence-based psychotherapy".
The company generates revenue from both online and in-person clinics. It's Beacon telehealth platform provides virtual care via video or voice call, and the pandemic has simply accelerated demand for this method of delivery. The company offers both asynchronous and synchronous services and breaks down its revenue in these two areas. What does this mean? They are learning modality styles and I found this graph to help explain:
In essence, asynchronous is when a user goes at their own pace and does not require live support. Synchronous involves live support from one of MindBeacon's regulated health professionals.
According to the company, the company's platform leads to better results for clients which can entice health care providers to improve their therapeutic alliance with the clients - which is one of the strongest predictors of treatment success.
From their prospectus, MindBeacon is seeing rapid growth of their Asynchronous offerings. In 2019, revenue totaled $4.748M of which $1.13M (23.8%) was related to Asynchronous services. Over the last twelve months (LTM) which is through the end of Q3 of 2020, revenue totaled $7.823M and Asynchronous revenue accounted for 56% ($4.401M) of revenue. Growth is mainly being driven by strong demand following the pandemic. The company is seeing strong account creating and in October, it added more 6,557 new accounts - more than double that of the number of new accounts opened in September (3,018).
Growth of Asynchronous revenue is a positive, as it is has the potential to be higher margins than Synchronous services as the latter requires live access to a health professional which adds to their costs. The company has growth from 166 employees at the end of 2019, to 300 as of filing, so it is seeing strong demand and exponential growth for its products. It generates most of its revenue from BTB (39%) and government (45%) while only 16% comes directly from clients. It counts Ernst & Young and Royal Bank among its business customers and receives referrals from CAMH, Manulife and Greenshield. It also has a strong relationship with the Government of Ontario.
At the moment, the company's operations are based in Ontario, but it plans to expand into other provinces and is currently in discussions with other provincial and municipal governments. Eventually it will look to the U.S. and Europe as potential international opportunities.
Overall, it seems like an attractive company and its value proposition is well described in the company's prospectus (which is not always the case). If you are interested in this IPO, we strongly suggest you take the time to read the preliminary prospectus.
Since there is no pricing, we cannot provide our thoughts as to the value until the final prospectus is released. It is however, one worth watching.
MindBeacon Holdings Inc. Files Preliminary Prospectus for Initial Public Offering
/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./
TORONTO, Dec. 7, 2020 /CNW/ - MindBeacon Holdings Inc. ("MindBeacon") announced today that it has filed a preliminary base PREP prospectus with the securities regulatory authorities in each of the provinces and territories of Canada (the "Preliminary Prospectus") for a proposed initial public offering of common shares (the "Offering"). The price of the common shares to be sold has not yet been determined.
The Offering is being led by TD Securities Inc. and Credit Suisse Securities (Canada), Inc. as joint bookrunners, Canaccord Genuity Corp. as co-lead underwriter and Bloom Burton Securities Inc., Beacon Securities Limited and Echelon Wealth Partners Inc. as underwriters.
The Preliminary Prospectus contains important information relating to MindBeacon, the common shares and the Offering and is still subject to completion or amendment. Copies of the Preliminary Prospectus are available on SEDAR at www.sedar.com. There will not be any sale or any acceptance of an offer to buy the common shares until a receipt for the final base PREP prospectus has been issued.
No securities regulatory authority has either approved or disapproved the contents of this news release. This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities of MindBeacon in any jurisdiction in which such offer, solicitation or sale would be unlawful.
The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and may not be offered, sold or delivered, directly or indirectly, in the United States (as defined in Regulation S under the U.S. Securities Act). Accordingly, the securities may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws.
Established in 2015 through a partnership with CBT Associates, a psychologist-led private clinic specializing in evidence-based mental health therapy including CBT, MindBeacon is developing a comprehensive continuum of mental healthcare through our online BEACON platform ("BEACON") and in-clinic care. BEACON launched in 2017 as one of the first commercially available, digitally-native platforms offering therapist-assisted internet-based CBT in Canada. MindBeacon is using data to develop mental healthcare programs that are designed to address mental healthcare needs with effective, affordable and accessible therapy. With a protocol-driven therapeutic approach and the ability to deliver therapy through a team of regulated mental health professionals, BEACON is growing and is changing the therapy landscape. MindBeacon aims to provide a comprehensive and accessible service offering to support clients throughout their care journeys.
This news release may contain forward-looking statements which reflect management's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected herein. MindBeacon disclaims any obligation to update these forward-looking statements except as required under applicable securities laws.
SOURCE MindBeacon Holdings Inc.
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