• Sun. Jun 16th, 2024
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LevelJump Healthcare: A Deep Dive

LevelJump Healthcare Corp. (TSXV: JUMP) (OTCQB: JMPHF) (FSE: 75J) is an emerging growth story and we believe the business is flying under the radar. The company provides telehealth solutions to client hospitals and imaging centers through its teleradiology division. The firm also offers in person radiology services through its IHF’s (Independent Healthcare Facilities) and we consider this to be a major growth driver for the business. 

LevelJump focuses primarily on providing critical care services for urgent and emergency patients and is working to establish integral relationships in the communities it operates in. We believe the management team is executing on a calculated growth strategy and are favorable on the risk-reward profile that is associated with the business. 

Executing on a Multi-Faceted Growth Strategy 

We believe LevelJump is executing on a multi-faceted growth strategy that is centered around recording strong organic growth and making accretive acquisitions. We are favorable on the organic and inorganic growth strategy that is associated with the business and want our readers to be aware of the opportunity. 

To provide more information on the business, we want to provide detail on LevelJump’s organic and inorganic growth strategy:

Organic

  1. Teleradiology business – plans to acquire new clients and expand services to existing clients
  2. Increase IHF revenue per location – will utilize marketing efforts, physician engagement, and adding additional modalities to achieve this
  3. Build telehospital and urgent care Canada

Inorganic 

  1. Acquire healthcare providers with existing revenues and positive cashflow
  2. Acquire companies that offer products and services that complement existing businesses

An Emerging Growth Story

Currently, LevelJump operates 3 IHFs which provide x-ray, ultrasound and mammography scans directly to patients. The company is in the process of constructing a new multi-modality IHF in central Toronto (expected to open in the second quarter of 2023) and we are bullish on the growth prospects that are associated with the project. 

LevelJump provides all of its services through its wholly-owned subsidiary, Canadian Teleradiology Services (CTS). Through this business unit, the company has established itself as a leader in teleradiology in Canada. The service is a doctor-to-doctor telehealth solution and we are bullish on this aspect of the business. 

Currently, CTS provides services to more than three dozen Canadian hospitals and clinics. The business provides solutions that assist understaffed hospitals, overworked radiology groups, and shortages in emergency care. 

Over the next year, LevelJump plans to expand the business and we consider this to be an important part of the story. From telehospital services to urgent care Canada, the management team has an attractive expansion strategy and we believe the market is not assigning any value to this part of the business.

Negotiated More Favorable Terms for an Acquisition 

Last month, LevelJump reported that it completed its preliminary due diligence and agreed to amending agreements with the sellers for the proposed Alberta IHF acquisition. The deal was initially announced in November 2022 and we are favorable on the updated terms of the transaction. 

Based on the new agreement, LevelJump will be paying less for the acquisition as the purchase price has been reduced to $5.76 million. The company plans to acquire the asset for a combination of cash and stock and we expected the transaction to immediately prove to be accretive. 

The acquisition is expected to close in May (based on satisfying several conditions) and we are bullish on the growth prospects that are associated with the deal. According to public information, IHF is generating approx. $4.75 million of revenue and we expect this number to increase post-acquisition. 

We are bullish on the transaction due to the services that are provided by IHF (i.e., x-ray, ultrasound, fluoroscopy, and bone mineral density scans). We expect the companies to find synergies between the business units and believe the growth opportunity for the combined company is much more significant.

Issues a Dividend For Certain Preferred Shareholders

A week after LevelJump issued an update on the pending acquisition, the company announced that it had declared its first dividend on its Class A Series 1 8% Cumulative Redeemable Convertible Non-Voting Preferred Shares. 

The dividend issued by LevelJump was $0.02 per share and we find this to be an important development. By providing a dividend, the company was able to start returning value to its investors and we believe this is an important aspect of the story. 

We have analyzed a number of telehealth companies and only few have been able to return value to shareholders. We believe that LevelJump is led by a management team that cares about its investors and consider this to be a very important trait of the company.

Led by a Management Team with a Proven Track Record

When analyzing any company, we first look at the management team to decide if the business is worth looking into. With regard to LevelJump, we believe the company is led by a management team that is focused on execution and value creation. 

LevelJump CEO Mitch Geisler has played the most important role in the growth of the business and has overseen operations since 2010. We are bullish on how the business has evolved under Mr. Geisler’s leadership and believe he is bringing the company on a path to profitability. He has a proven track record of success and is a seasoned entrepreneur in multiple sectors including healthcare, mining and hospitality.

LevelJump CFO Rob Landau has been with the business for more than 10 years and became its CFO in 2019. While working for the company, he has advised on its operational growth and accounting matters. From corporate accounting to capital raising, Mr. Landau provides LevelJump with a wide range of expertise and we consider him to be a key member of the team. 

An Undervalued Growth Story 

During the last year, LevelJump has been nothing short of an execution story and we believe the business is undervalued at current levels. Some of the most important highlights from the last year include:

  1. Generated more than $9 million of revenue (not including $2.1 million share of real time revenue)
  2. The company acquired three x-ray and ultrasound centers (IHFs) in Ontario and an x-ray and ultrasound IHF license in central Toronto (plans to open a new clinic in second quarter of 2023)
  3. Grown the business by adding two new teleradiology contracts
  4. Currently developing new operations both in-patient and online for urgent care
  5. Acquired 25.6% of Real Time Medical, a Teleradiology business in Canada

At current levels, LevelJump is trading for less than 1x revenue and we expect this to change over the next year. As the management team continues to execute, we believe the stock will attract more attention and want our readers to be aware of it. 

Over the next year, we expect LevelJump to announce a series of positive developments and believe the business is well positioned for growth. For more than a decade, the company has reported strong growth and has an established operating history with long lasting client relationships.

We consider LevelJump to be a company that has significant potential growth catalysts and believe the market is undervaluing the business. From the growing IHF footprint to the new radiology contracts, the company is well positioned to capitalize on a burgeoning market and we are favorable on how the management team is executing. 

Company Relationship Disclosure

OTB is responsible for the OTB opinions provided in this disclosure except all sources or information provided by other parties were not verified or authenticated and OTB does not undertake to confirm or substantiate or be responsible for such information provided by other parties.

Any Content posted regarding a Profiled Issuer is not a solicitation or recommendation to buy, sell or hold securities. We cannot and do not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. All information should be independently verified. We are not responsible for errors or omissions in our publications, and any opinions expressed are subject to change, without notice. We do not, nor are we under any obligation to undertake due diligence or investigation or authenticate and verify whatsoever regarding Profiled Issuers or any Content posted in relation thereto and we do not receive any verification from the Profiled Issuer regarding the Content we disseminate. Similarly, while we endeavor to facilitate the provision of quality information, we are not responsible for any loss or damages caused or alleged to have been caused by its use nor verify or authenticate or update such information.

Pursuant to an agreement between Spotlight Media and LevelJump Healthcare we have been hired for a period of 30 days beginning April 10, 2023 and ending May 10, 2023 to publicly disseminate information about LevelJump Healthcare including on the Website and other media including Facebook and Twitter. We are being paid $3,500 per month by LevelJump Healthcare and were paid “ZERO” shares of unrestricted or restricted common shares. We plan to sell the “ZERO” shares of LevelJump Healthcare that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of LevelJump Healthcare in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.

This article contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are “forward-looking statements”. Forward-looking statements can be identified by the use of words such as “expects”, “does not expect”, “is expected”, “believes”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of these words, expressions or statements, that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, state, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate and expand the Company’s facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company’s limited operating and profitability track record; dependence on management; the Company’s need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the impact of the Russia-Ukraine conflict on the global economy; the continued impact of the COVID-19 pandemic; and the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company’s efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. 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 forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws

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