Nova Leap Health Corp. Posts Financial Results for First Quarter 2020 - Seite 2

The safety and well-being of Nova Leap’s employees and clients remains our priority. Management is monitoring and following the guidelines set out by the World Health Organization (“WHO”), the Centers for Disease Control and Prevention (“CDC”), Health Canada, the Province of NS, the states, counties and municipalities in which we operate. The decisions we make as an organization are led with safety in mind. To date, we have secured adequate Personal Protective Equipment (“PPE”) and have access to further supplies, as required.

I believe that our strategy of diversifying by geography and operating a decentralized organization has put us in a place to continue to succeed. Most of our agencies operate in jurisdictions on the lower end of the COVID-19 impact spectrum.  Further, while continuous improvement is an ongoing focus, we tend to have little waste in our organization. 

Nova Leap closed Q1 with the highest reported cash balance in the Company’s history and full access to its unutilized revolving operating line. In this lower interest rate environment, Nova Leap does benefit from a reduced cost of borrowing. In addition, we have not experienced an increase in uncollectible accounts.

As the COVID-19 pandemic has evolved, many governments around the world have introduced economic measures to protect companies, employees, and the economy. Nova Leap’s Canadian operations qualified for the Canada Emergency Wage Subsidy (“CEWS”) in its first period of eligibility as it experienced a 15% decrease in qualifying period revenues compared to the baseline revenue period. Companies that qualify for one period automatically qualify for the following period. As a result, we anticipate that the CEWS will cover 75% of eligible employee wages for an initial two-month period. As the Company’s largest expense is employee compensation, we expect the CEWS to mitigate the decrease in revenue and provide a subsidy of approximately CAD$197,000. We will continue to examine programs in the U.S. and Canada for potential eligibility.

I expect that we will continue with our growth plans. We continue to examine M&A opportunities, we expanded into Ohio last month and we are planning to open three more locations by the end of this year.”

This news release should be read in conjunction with the unaudited condensed interim consolidated financial statements for the three months ended March 31, 2020, notes to the financial statements, and management's discussion and analysis, which have been filed on SEDAR.