WELL Health Technologies Corp
TSX:WELL
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WELL Health Technologies Corp
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Good afternoon, ladies and gentlemen, and welcome to the WELL Health Technologies Corp. Fiscal 2019 and Fourth Quarter Conference Call. [Operator Instructions] This call is being recorded on Tuesday, March 31, 2020. I would now like to turn the conference over to Pardeep Sangha, VP, Corporate Strategy and Investor Relations. Please go ahead.
Thank you, operator, and welcome, everyone, to WELL Health's 2019 Annual and Fourth Quarter Financial Results Conference Call. Joining me on the call today are Hamed Shahbazi, Chairman and CEO; and Eva Fong, the company's CFO. I trust that everyone has received a copy of our financial results press release that was issued earlier today. Listeners are encouraged to download a copy of our audited annual financial statements and management discussion and analysis from sedar.com. Please note that last year, on December 11, 2018, the company's Board of Directors approved a resolution to change WELL's year-end from October 31 to December 31. Hence, the audited annual consolidated financial statements over the 12-month period ended December 31, 2019, while the comparative period is for the 14-month period ended December 31, 2018. Portion of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws. These statements are made under the safe harbor provisions of those laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to the significant business, economic and competitive uncertainties and contingencies. These forward-looking statements include, but are not limited to, statements related to WELL's projected operating performance, financial results and condition, WELL's projected growth and growth strategy, cash flow and use of cash, business objectives and outlook, ability to complete potential acquisitions and acquisition strategy, cost reduction and shared services benefits and other matters that may constitute forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors, many of which are outside of WELL's control that may cause the actual results, performance or achievements of WELL to differ materially from the anticipated results performance or achievements implied by such forward-looking statements. These factors are further aligned in today's press release and in our management discussion and analysis. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. We don't undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions or circumstances on which any such statement is based, except if it's required by law. And with that, let me turn the call over to Mr. Hamed Shahbazi, Chairman and CEO. Hamed?
Hamed's line has disconnected. We are going to reconnect him. Hamed is now back online.
Thank you, Pardeep. Good day to everybody. Apologies for the latency there. This is my first call under quarantine and I had a nice little cell phone drop. And these are certainly very anxious and trying times for many as the COVID-19 pandemic has had a tremendous impact on our personal lives as well as the global economy. We hope that you are doing well and staying healthy and truly appreciate everyone for joining us on the call today. On today's call, I will first provide brief highlights for fiscal 2019, followed by our CFO, Eva Fong, who will provide a more detailed financial summary of our fiscal 2019 results. I will then come back and comment on the impact of COVID-19 as well as provide a general outlook for the business. Overall, 2019 was a terrific year for WELL. A year that we're very proud of, during which we continue to make significant progress in both our clinical and digital businesses. As you can see from our press release issued this morning, we achieved extraordinary financial results in 2019. We more than tripled our revenues on a year-over-year basis compared to the 14-month period ended December 31, 2018. Please remember that we're not making exact comparisons when referencing year-over-year results due to the fact that back in 2018, we changed our fiscal year-end to a calendar year-end, otherwise our revenue growth on a percentage basis would have even been greater than we've reported. During 2019, WELL established itself as the third largest electronic medical record service provider in Canada. We completed 4 acquisitions of OSCAR EMR service providers, including NerdEMR, OSCARprn, KAI Innovations and OSCARwest. In addition, we announced the acquisition of Trinity Healthcare Technologies, which we subsequently closed in 2020. Also, subsequent to the year-end, we announced our sixth acquisition of an EMR service provider, MedBASE. All of our EMR acquisitions are based on OSCAR, which is an open source EMR platform. OSCAR stands for Open Source Clinical Application Resource, and it represents roughly 15% to 20% of the EMR marketplace in Canada from an outpatient clinic perspective. We're very excited about our success in consolidating the many OSCAR service providers in Canada. As a result, the company now earn SaaS revenue from thousands of customers across Canada without any customer concentration. WELL digital services EMR footprint was 946 primary health care medical clinics by the end of 2019. With the subsequent closing of Trinity in early 2020, and the proposed acquisition of MedBASE Software, the company expects its EMR footprint to exceed 1,500 clinics and over 8,000 registered physicians and other health care practitioners across the country. We are also delighted to have formed the WELL EMR Group, which is the company's single entity encompassing its EMR acquisitions and assets. The WELL EMR Group is the nation's largest provider of OSCAR EMR services. Last year, the WELL EMR Group actively collaborated with McMaster University Department of Family Medicine to launch the OSCAR Pro Edition, which is a more secure and interoperable version of OSCAR . And in our opinion, the best EMR for outpatient clinics in the country, with an unprecedented level of integration and innovation available for doctors and clinic administrators. During fiscal 2019, WELL also completed 2 transactions where we became the majority owner of 2 clinically-oriented businesses. A 51% majority stake in SleepWorks Medical in October 2019 and a 51% majority stake ownership in Spring Medical Centre in December 2019. We're very excited about broadening our noninsured clinical service offerings to include SleepWorks Medical, a provider of sleep-related services to patients who suffer from sleep disorders. SleepWorks has provided diagnostic services to over 10,000 patients since adoption. As we've noted previously, we believe sleep is a very exciting area for us and a category we'd like to expand significantly as there's a mountain of growing evidence that lack of sleep can lead to major health issues, including diabetes, cardiovascular disease, obesity and depression. Although sleep medical center is only 1 clinic in Burnaby, BC, we believe it's a significant acquisition for us. Spring Medical is really executing on the model of integrated health, which we believe is the future of on-site clinical care. WELL extended the year with an approval to graduate from the TSX Venture Exchange to the TSX Exchange. Subsequently, on January 10, 2020, the company delisted from the TSX Venture Exchange and started trading on the main board of the Toronto Stock Exchange. With that, I will turn the call over to our CFO, Eva Fong who will go into more financial details for the quarter, and then I will provide some additional remarks on COVID-19 and the business outlook before we open it up to questions. Eva?
Thank you, Hamed. I'm pleased to report that we had a very strong year in 2019 with growth across many metrics. WELL generated $32.8 million of revenue during the 12 months ended December 31, 2019, compared to $10.6 million generated during the 14 months ended December 31, 2018, representing more than a tripling of our revenues. This increase in revenue is mainly due to the company's acquisitions over the past year. We define gross profit as revenue less the cost of clinical and digital services. Gross profit increased 250% to $11 million for the 12 months ended December 31, 2019 compared to $3.1 million for the 14 months ended December 31, 2018, as a result of the increase in revenue in the period. Gross margin percentage increased to 33.5% for the 12 months ended December 31, 2019, compared to 29.7% for the 14 months ended December 31, 2018, which is mainly due to the addition of higher-margin digital services revenue. G&A expenses increased to $12 million for the 12 months ended December 31, 2019, compared to $4.8 million for the 14 months ended December 31, 2018. Increases were mainly due to an increase in wages and benefits as a result of acquisitions as well as an increase in headcount in the company's headquarters. Net loss from continuing operations was $7.8 million or a loss of $0.08 per share for the 12 months ended December 31, 2019, compared to a net loss from continuing operations to $2.6 million or a loss of $0.04 per share for the 14 months ended December 31, 2018. The company believes that adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations, which the company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives. Adjusted EBITDA is a non-GAAP measure and should not be construed as an alternative to net income or loss determined in accordance with IFRS. For more information on how we define adjusted EBITDA, please refer to the definition set out in today's press release and in our MD&A. Adjusted EBITDA loss for the 12 months ended December 31, 2019, was $1.7 million compared to adjusted EBITDA loss of $1.2 million in the 14 months ended December 31, 2018. Throughout the year, WELL maintained a strong balance sheet and funded its acquisitions with several financings. In March 2019, the company completed a $2.7 million nonbrokered private placement followed by a $10.5 million convertible debenture financing in June 2019 and a $15 million brokered private placement of special warrants in August 2019. Subsequent to quarter end, the company announced the normal course issuer bid, or NCIB, of up to 4 -- 5.9 million common shares commencing on March 25, 2020, over the next 12 months. The company's previous NCIB terminated with the graduation to the TSX Exchange. So far, the company has not made any share purchases in conjunction with the NCIB. As of December 31, 2019, the company had 115,571,194 issued and outstanding common shares. As of March 27, 2020, the company had 118,898,359 issued and outstanding common shares, which includes the conversion of the convertible debenture from the June 19, 2019 financing. That is my financial update, and I turn the call back over to Hamed.
Thank you, Eva. As I indicated before, the COVID-19 pandemic has introduced many uncertainties in our lives and dramatically disrupted and dislocated economic markets globally. Notwithstanding this, we feel the company is well positioned to weather the current environment. WELL has a strong balance sheet, a resilient clinical business, a robust pipeline of growth opportunities, a solid base of recurring revenue in its Digital EMR business, and we are actively ramping up our VirtualClinic+ telehealth service. As a result of the COVID-19 pandemic, WELL has executed on its business continuity plan, which includes ramping up physicians on its VirtualClinic+ telehealth platform so that we may continue to provide care to our patients and instituting a mandatory work-from-home policy for all of our nonclinic divisions and offices. Our clinics remain open as they're considered an essential service. Thus far, WELL's publicly insured clinical revenue is proving to be highly resilient and continues to generally track in line as compared to the same time 1 year ago. In the clinics, we have seen our family practice business remains steady, consisting of regular rostered patients. There's also been a decline in our walk-in traffic since it's a by-product of our walk-by traffic. However, this has been largely replaced by telehealth visits, which had been delivered by a phone and/or a VirtualClinic+. Our telehealth-related billings are growing considerably. WELL has successfully deployed its VirtualClinic+ telehealth program to all of its 20 corporate-owned clinics in BC and onboarded most of the doctors that work in these WELL clinics. Our bricks-and-mortar business has transitioned to a clicks-and-mortar business. Furthermore, our clinical revenue from telehealth services has also benefited from the BC government's recent announcement to increase its funding for telehealth services, including phone and video to match in-personal consultations and temporarily suspended doctors daily volume limits. This has really helped our business continuity program and allowed us to stay in line. Furthermore, we are now aggressively rolling out VirtualClinic+ to our OSCAR EMR network of approximately 1,500 clinics across Canada. Thus far, WELL has already in a matter of days and weeks, onboarded hundreds of health care providers from its OSCAR EMR network onto the program. We also applaud the Ontario government who has made a temporary order to provide coverage for medical consultations provisioned by telephone or video. Our WELL EMR Group continues to excel. Our digital services revenue is high-margin SaaS-based revenue that continues to perform, and we continue to see double-digit growth for this business. We have found that the high interest in telehealth is actually accelerating paper-based clinics to go digital. As such, we've seen an acceleration in sign-ups for our OSCAR EMR services. Meanwhile, the integration of the Trinity acquisition is tracking well, and our WELL EMR Group continues migrating EMR clinic customers to WELL's cloud-based version of OSCAR McMaster Professional Edition. WELL EMR Group is committed to working closely with McMaster University and its other stakeholders to support the OSCAR community and expanding its OSCAR EMR services to additional clinics. I'm also pleased to report that our SleepWorks unit has also implemented its business continuity program and is continuing to provide sleep reviews and consultations remotely. Their business has continued to track well, in fact ahead on the sales of CPAP and BiPAP machines as compared to last year. Please note that SleepWorks Medical sells CPAP machines generally for sleep apnea purposes, which help with respiratory purposes. Last week, on March 22, in its letter to health care providers entitled Ventilator Supply Mitigation Strategies, the FDA noted that if the number of ventilators in your facility is running low, consider alternative devices capable of delivering breath or pressure support to satisfy medically necessary treatment practices for patients requiring such ventilatory support. It goes on to say, examples of alternative uses of respiratory devices used to address shortages might include continuous positive airway pressure, i.e. CPAP, auto CPAP and bi-level positive airway pressure, BiPAP or BPAP machines, typically used for treatment of sleep apnea either in the home or facility setting, which may be used to support patients with respiratory insufficiency, provided appropriate monitoring as available and patient condition. We note that this past week, SleepWorks obtained its first order from a Vancouver area hospital and is now -- for these type of machines and is now contacting hospitals across the region to determine if there's an opportunity to be helpful. We know that SleepWorks is providing preferential pricing and terms given the circumstances. In summary, COVID-19 is expected to have a minimal impact on fiscal -- WELL's fiscal Q1 operating results ending March 31, 2020. We expect Q1 revenue to benefit from the closing of the Trinity acquisition, in addition to having a full quarter effect from the OSCARwest and Spring Medical Centre results. The company's goals for 2020 are: one, achieving revenue growth in its clinical and digital portfolios; two, continuing to follow a disciplined acquisition strategy, which includes the acquisition of or investment in accretive tech-enabled health clinics, OSCAR-based EMR service providers and other digital health-related technology companies, which shall include telehealth providers. In closing, I would like to thank you all for joining us on this call today. And thank our shareholders for their continued support. I would like to especially thank WELL senior management team and all our employees and contractors for their absolutely tremendous effort over the past year and especially over the past few weeks during this current COVID pandemic, all hands have been on deck. These are challenging times in which we've had to adjust our way of life. We've had to observe social distancing rules, and many of us are working from home, but we are working together, and we're making progress. Finally, I want to express my utmost gratitude to our physicians and clinical staff as they are the frontline workers who've been keeping the clinics open and providing absolutely unbelievable care through this COVID pandemic. When 7 p.m. comes around every night, I share with a deep-rooted awareness of just how amazing these people are. This has been a very difficult period unlike any other that we've experienced in our lifetimes. And we are forever grateful for the health care workers, who are the real heroes that tirelessly look after our health and safety. We're very proud to be associated with you and have you on our team. Thank you. And with that, we will open the call to questions. Operator?
[Operator Instructions] Your first question comes from Ammar Shah.
First question from me. When we're talking about the sort of 1,500 clinics, the network that you guys have. How many, like, full-time equivalent doctors does that represent in terms of the number that you actually think will or could use telehealth and be onboarded in that platform?
Ammar, thanks for the question. I hope you're well. So the 1,500 clinics reflect more than 8,000 physicians that are registered on the platform. That's not necessarily, as you noted, the full-time equivalent that we built, but it does represent the opportunity for telehealth, given that -- in our view, this is not a situation where we're limited to full-time equivalent physicians. This could actually activate physicians that only -- only partially work at certain clinics because if they jump on our platform and make telehealth part of their regimen, it's possible that they could make that a bigger part of their overall business continuity plan.
Right. That's good color. And then when we're -- when you think about the provinces outside of BC and Ontario, when does that come into the picture in terms of the addressable opportunity?
Yes. So I'm very pleased to mention that VirtualClinic+ is available Canada-wide for any Canadian to log on and to have a consultation with the physician. We are not limited to BC or Ontario. The reason why we talk a lot about BC and Ontario is because we have a substantial number of clinics and doctors that we support in those 2 provinces. And so obviously, a big part of our customer acquisition strategy is to leverage our EMR business and being able to add supply of doctors. But note that the patients that these doctors support could come from anywhere. So we really are a national telehealth company now.
Great. And then just one final one for me before I turn it back. So obviously, the impact from COVID-19 has had some cash flow concerns for smaller operators. So I'm just curious, has that at all helped you or shifted the dynamics on the M&A front, particularly when we're talking about some of your smaller potential targets?
I think the beauty of having such a stringent and disciplined view on capital allocation is that it really should not change in these times. I think what you're going to find generally is WELL's philosophy to be very well suited to these environments because we -- we always saw the world through a specific type of framework that involved in making highly accretive capital allocation decisions. In this environment, I think our criteria becomes more geared towards tech-enabled assets. And so people have asked me a lot, are you still interested in clinics? We are, but not every clinic. Our criteria for clinics evolves dramatically as a result of this event. And so we're interested in clinics that may have a greater propensity for digital operations. Maybe they have less paper operations, maybe they have different types of competencies or focus in terms of their doctors. So I think that our M&A philosophy will evolve, but it will stay quite true to our principles.
Your next question comes from Justin Keywood, Stifel.
Just on the telehealth opportunity, I'm wondering if you could explain the dynamic with the WELL's VirtualClinic+ platform and the $6 million investment in Insig Corporation. Are these 2 separate opportunities within telehealth? Or how should we look at that?
Yes, it's a great question, Justin. So VirtualClinic+ is a program that we developed with Insig for several months now. Actually, well preceding the COVID-19 matters. We started working with them maybe even about a year ago, where we wanted to design a program that was truly unique and comprehensive in that it was able to support family practice physicians and their ability to just limit care, telehealth care to their own set rostered patients, their attached patients and it allowed those family practice physicians to be able to essentially on demand, be able to add themselves to a demand pool, almost uberizing themselves so that they could then serve a general demand pool of patients that are unattached. There's about 5 million patients across the country that don't have a relationship with a steady family physician. And so VirtualClinic+ is the embodiment of that program. So it's a unique program with some unique IP that sits on top of the Insig platform. Given sort of the nature -- and we've been discussing corporate development opportunities with Insig for several months as well. And we just felt that at this time, it made a lot of sense to get behind them. And especially as we were going to ramp up our program and drive awareness of our program, that we thought that, that would benefit them. And so we thought why not benefit from some of that increase in equity in price as we grow the program because we're likely to be quite an influential factor for them. And so assuming the conversion of that convertible note, we would essentially be the largest shareholder of Insig. And we're very pleased about that because they're a very innovative company. They're supporting some substantial programs out there, including for companies like Rexall. So yes, I mean you can essentially regard VirtualClinic+ as a program with some of its own IP that rests on the Insig platform.
That's very interesting. Are you able to expand a bit on the relationship with Rexall? Or is that still early in development?
Well, it's a relationship that Insig has built through their own brand called Tia Health. So another program that sits on the core Insig platform that's called Tia Health. And Tia, if you go to Rexall's homepage, you'll see Tia is partnered with them. And so if you originate a physician consultation through Rexall site with Tia, you're essentially interacting with the Insig platform. So again, the beauty of this opportunity here is not only are we getting behind a very significant platform that underpins us and enables us. But there are also other phenomenal programs like Rexall's that Insig is powering through their Tia platform. So we think that overall, this is quite a momentous event in Canadian health care because you have a young emerging telehealth company that is already doing very well in the marketplace, now getting a fantastic shot in the arm with WELL bringing, obviously, a substantial capabilities and scale to their business. So it only made sense for us to come on board. And I think we got a very reasonable opportunity to share in that equity. We're very pleased to have allocated that capital and to come on to their cap table.
That's helpful color. And then just one more. On the daily volume limit for patient visits, you mentioned this being lifted. Is there a cap now? Or was that cap just removed? And does this apply in British Columbia or is that across Canada?
Yes, the daily volume limits were probably most stringent in BC. And given that we have obviously 20 clinics in BC that every day live by those kind of volume guardrails. This was quite a big deal because I think what the Ministry of Health saw here was that doctors are going to be in short supply and they wanted to be able to allow doctors who still did want to practice in clinic to be able to over index on their number of visits. Typically, they would not be able to be reimbursed for health care consultations beyond 50 per day. And I might add that the telehealth consultations in BC were never capped. So there were never volume restrictions on that. And so now we have -- this has really helped us because there are a number of our physicians that are doing more telehealth, but there's still quite a few that are in person. And on occasion, they will now visit with more patients than they would -- could before. So over-indexing their ability to generate income and support patients.
Your next question comes from David Kwan, PI Financial.
Question on, obviously, with everything that's going on with COVID, you talked about the insurance side of your business. I was curious on the uninsured side, kind of what you've seen probably over the last couple of weeks here, just with more people moving to telehealth and kind of staying away from clinic. Have you seen that impact on your uninsured side? And what are your expectations going forward?
David, we haven't seen much of a difference. It continues to be in line. A lot of the uninsured is medicolegals, and this is work that physicians can do remotely quite easily. I'd also indicate -- I'd also point towards SleepWorks as an important line of business in our noninsured category. And so far, SleepWorks has been doing quite well. So we're generally very pleased with the resiliency of the business and even see opportunities for growth here. We're obviously cautious because we're in a very fluid environment. And we know that things could change moment by moment, but very pleased at where we sit today.
That's helpful, Hamed. And have you seen any impact at the clinic level whether it be staffing? I've seen around town some places have been closing their walk-in clinic business. Just curious how you guys are dealing with it at the clinic level?
Yes. So in my prepared remarks, I spoke to the concept of walk-by traffic. So as you can imagine, our clinics are often situated in consumer areas where there's a lot of walk-by traffic. And of course, walk-in traffic into our facilities at times can be a function of that walk-by traffic. And so while we -- while because of physical distancing requirements, a lot of that walk-by traffic and walk-in traffic has reduced. A lot of our clinics have family practice businesses, meaning that you have family physicians that have rosters of patients that they regularly consult with and check in on all kinds of matters, including chronic disease. And so a lot of those calls are just sort of being forklifted to telehealth, whether through phone calls or VirtualClinic+. And we have not -- had not been in a position where we needed to shut down anything and we understand some folks have. But keep in mind that you're talking about a lot of single owner-operator clinics across the country. Some of those owner-operator clinics maybe older physicians that may feel that they're more susceptible, some of it may be -- they just don't have the sophistication to put forth the business continuity plan. I mean there's lots of things that you see out there. And so I think different folks are dealing with this type of matter in different ways. I know in some cases, we've actually benefited from a clinic closure that's close by to one of our clinics. And we've seen some of their traffic come our way. Our physicians are being very innovative in the way that they screen and support patients. I mean in fact, what's interesting is we actually saw an uptick in walk-in traffic just in the last couple of days. We think that that's because patients are now becoming more aware of what is considered an essential service and what is not. And telehealth is great, but it still has its limitations. There are times where a physician does need to examine you. And a lot of times, what's happening is the physician will speak with a patient and determine that they do need to come in. And so -- but they are essentially screened and triaged upfront. So I mean the future forward kind of view of looking at this is, is telehealth is going to be a very important part of service delivery in health care, but it will be supported by in-clinic operations. It has to be, because, again, telehealth will have its limitations and physicians do sometimes need to see you and examine you closely.
No, it definitely makes sense, Hamed. In terms of the telehealth side or VirtualClinic+, can you talk about what you've seen, I'd say, probably in the last week, maybe 2, just how -- I guess the percentage of patient visits that you're seeing now through telehealth versus in-clinic?
Yes. I mean I would tell you that right now, it's hard to come up with hard percentage. I'd tell you that there's a substantial percentage, and I'll tell you why because it really still differs clinic by clinic. We still have clinics that are seeing quite a few patients in person. And we still have clinics -- and we do have clinics that are probably majority telehealth. And again, keep in mind that telehealth is not just VirtualClinic+. If you're an elderly patient, and I'm your doctor and we consult once in a while on your COPD or your diabetes or your cardiovascular disease, I can now just have a phone call with you. And that will -- that will qualify as a full -- as a fully reimbursable event that's billed at the same levels of an in-person consult. And so this is really important because that allows -- that gives us a lot of flexibility in how to support patients during this time. And so that's allowed us to over -- and that's all kind of considered telehealth because it occurs through a remote experience. But we do have clinics that are majority telehealth and some that are minority telehealth at this point in time.
Like, would it be -- I guess, if you include the phone conversations with kind of the actual telehealth over the VirtualClinic+, like is that number, like, north of 10% now, much even higher than that?
Overall, yes, it's hard to say, I would think that it's probably north of 10%. Again, it's not something that we have prepared as part of our remarks, but I can tell you that there are some clinics that are indexing far higher than that and some perhaps at over 50%. And some that are still seeing some very nice clinic traffic. So I don't know. Eva, is there anything you would like to add to that?
No, I think, Hamed, you're covering really well.
Okay. Yes.
And just one last question on kind of the early feedback that you've been getting from users I guess, both good and bad, just the feedback that you're getting on VirtualClinic+.
We've heard tremendous feedback. We've heard really positive feedback, a lot of them from doctors, too. Doctors are really excited about the fact that they can serve patients outside of their immediate circles. We have physicians that for many years, all they've done is support a specific roster of patients and now are sort of through the -- how easy the platform is to interact with. Are you able to just quickly sort of add themselves to the demand pool and maybe, like, kind of dip their toe and start to interact with patients? And they're finding that the platform works very well. One of the really neat things about it is there's no app required. So I know it's not hard to download an app. But imagine, not everyone has an iPhone, not everyone's iTunes account is in order. If you have an Android, obviously, there's different fragmentation problems. There's different -- people have different types of tablets and desktops. And so if you have a browser, you can use VirtualClinic+, pretty much any web browser. And that's what's one of the things that's really unique about the program. Listen, as any kind of program ramps up quickly, you're going to have bugs and glitches and things of that nature. We certainly had some of those as well. But they have been quite minor. And the team at Insig is just doing a phenomenal job supporting us as is our own team.
And how quickly are you planning to roll out updates going forward?
Well, I can tell you, updates are being rolled out extremely frequently. I mean whether they'd be future updates, whether they'd be bug fixes, whether they'd be algorithm changes in terms of how doctors show up and how you match doctors and patients. But yes, it's -- this is a very capable team. That's one of the reasons why invest in the company. And I think above all, too, we're also seeing a phenomenal cultural connection between our team and the Insig team. So I think we've created something truly special here.
And how many do they have -- how many people do they have over at Insig working on this?
They don't have a big team right now and they're quickly trying to hire. I would just -- for now, I would say it's several people that are essentially coding and developing these changes. But I would expect that to expand fairly quickly. On our side, we also have several people dedicated to the program and growing.
[Operator Instructions] Your next question comes from Nick Agostino, Laurentian Bank Securities.
So just first question, I believe that your noninsured business strategy or roll strategy was to include dermatology products in Q2. I'm just wondering, does COVID push out any plans you have on rolling out dermatology or just any other new services that you're planning to roll out?
Yes. No, it really doesn't. We are still rolling out dermatology services, and a lot of that can be done through virtual health and some of it needs to happen in-person. And so I think that we expect to grow our derm revenue in Q2. And will it be as big as we sort of projected? Maybe, maybe not, but we are very bullish about that business. And again, the beauty of that business is that it can be supported remotely, much of that business can be supported remotely. And of course, again, it continues to be an essential service. So if you -- if you are patient, and we think that you may be a candidate high risk for some kind of melanoma or what have you, there are ways of triaging that remotely. And if we need to have a closer look, we are open for business.
Okay. And then just obviously, you launched the VirtualClinic+, I believe it's on March 2. And then we have the COVID suddenly spread out throughout Canada. I'm just wondering, what was your initial thought process or initial plan, expectations for the take-up of the VirtualClinic versus where we are today, the fact that you've got it all 20 of your clinics with most of the doctors, and you're seeing that external demand. How does the -- where we are today almost a month later versus what you -- where you thought you'd be at this point. Maybe give us some color on how, hate to say it this way, but how COVID has helped on that VC adoption?
Yes, yes. No, it's a great question. So listen, I think we are a methodical company that wanted to roll this. In a perfect world, we'd want to roll out telehealth in a methodical and slow way to make sure that doctors and patients are supported well. And we were always able to support and harmonize supply and demand of those seeking health care services and those that can provide it. I think what has happened is orders of magnitude exceeded our expectations in terms of what we had before pre COVID. I mean we would have never thought that we would be delivering thousands of consults a week through telehealth. So I think that's pretty incredible. And I would just kind of focus on the market at large. I mean in Canada, you probably heard me say this before, Nick, it's one of the reasons why we're in the business is it was anomalously behind in digital health. Like, our penetration in virtual care was less than 1%. Well, you essentially -- and you've heard me talk about that S curve, the adoption curve of all sort of technology, if you will, there's an early adopter phase and then a steep part of the curve and then obviously, maturity. Well, if there was any part of that early adopter curve left in terms of telemedicine in Canada, it has gone. We are now rapidly ascending the steep part of the curve. And had we not been in this business and had we not been kind of working on creating this program and preparing every aspect of our business. We would have missed this. But we are incredibly excited with the fact that we are in a position to really serve patients and doctors and be a part of this rapid expansion of the market in Canada. And we believe that we're very well positioned as well given our balance sheet because we actually rolled out a TV campaign and a multifactor marketing campaign designed to acquire patients and create awareness. We went live on Global TV News yesterday here in the BC market and are rolling out with a substantial digital program as well. So it's -- to be in this position and WELL kind of, I guess, armed or focused and being able to go out and acquire customers and serve them and be able to do it in a sustainable way, we think is tremendous.
And then just one last question for me. Does COVID in any way -- as you mentioned earlier that because of the digital adoption on the VirtualClinic side, you're seeing a little bit more take-up on the EMR side by some of those same doctors. Does COVID in any way restrict your ability when it comes to the professional services or the install component of those new EMR wins?
It doesn't, no. I mean that's the beauty of EMR, like, we can provision you remotely. And I'll just kind of say a word about that. Several weeks ago, Canada Infoway, which is a federal group that focuses on digital health in Canada, came out with a report that indicated that 14% of all outpatient medical clinics in the country were still operating on paper, which is incredible if you think about it, which other industry do you know where double-digit percentage of that industry does not operate on some kind of electronic form at all. That means doctors still using paper to record information when you consult with them. I think with what's happened here because these -- we've seen more sign-ups in the last couple of weeks that we've seen potentially sometimes in months. And so it's -- I think what's happening is if you're a paper-based clinic today, you're really starting to feel the pressure and the anxiety of not being digital, considering that the social distancing is requiring the take-up of telehealth services.
Ladies and gentlemen, your next question comes from Gabriel Leung, Beacon Securities.
Got a couple of things I wanted to ask. First, Hamed, I know it's still early days, but can you provide us some data points around the current take-up rates within your EMR doctors in terms of virtual care platform, sorry, whether it's sort of a daily onboarding or weekly onboarding, you got some numbers around that. And for the doctors, the EMR doctors who have been on-boarded already and are using the platform, what sort of increase have you seen in terms of their MRR?
Yes. So Gabe, it's -- we've seen tremendous interest in take up. I mean, we -- just to give you a sense, within a week of making this program available to our EMR physicians and doctors, we had over 100 that had signed on to the platform, which is -- I mean incredible and beyond our wildest expectations. And that continues to grow. And it's too early for us to talk about MRR just because there's different plans, there's different cadences of usage of those plans, there's some COVID pricing that we've instituted to really help people with -- as doctors have been anxious to take some of that pain and stress away to give them a couple of months at a bit lower price. And for us, I think the key for us is being, let's get you on the platform, let's get you business continuity. And again, different businesses have been impacted differently as we talked about. And I think if you're bigger and more sophisticated in the way that you run your business, you likely have better business continuity. So I think in following reports, we can give you more perspective on that, but we absolutely expect an MRR take-up and pick up in our EMR business as a result of the VirtualClinic+ plug-in being sold in as a SaaS add-on.
That's great. And just a follow-up on the VirtualClinic. We know what the game plan is in terms of getting your brick-and-mortar doctors up and running, and we know what's going on with your EMR doctors as well. I'm curious, are you in thinking about partnerships or in any discussions with any partnerships to broaden out the use of VirtualClinic+ similar to, I guess, what Insig is doing with Rexall, with Tia Health?
Yes. Yes, we definitely are. And we are in discussions with other pharmacy chains and other businesses to potentially cross-market or promote or integrate VirtualClinic+. It's definitely an area that we're seeing some interest, actually inbound interest, believe it or not, seeing lots of inbound interest. We've also seen something that I don't think we had really anticipated that nonmedical doctors. So all matters of Allied Health, different sort of broader aspects of health care that have now adapted their business to virtual wanting to jump on the platform. And again, the quality of the platform, which I think is so great, is this kind of uberized quality is that where as a practitioner, you can make your own arrows, you can add yourself as you see fit and you could provide service delivery as you see fit. And obviously, we're not going to add any and every practitioner, but to the extent that in the broad strokes, this is a health care function, and it can be delivered virtually, we would enable them and grow the platform.
Got you. And I'm going to guess that this push on telehealth that's happening now is probably greater than you would have expected several months back. So I'm curious in the past updates, you've always indicated that you were comfortable with, I think, the consensus EBITDA and it's sort of breakeven or slightly positive EBITDA for 2020. I think with the big push of telehealth now, do you -- is your expectation that there might be some more additional spending just to get the platform out there as quickly as possible that might impact that view on EBITDA?
It's probably a bit too early to tell. I mean our business has just been so resilient. In my prepared remarks, I talked about some headwinds as a result of traffic. But again, that's been -- that's had limited effect because so much of our business is family practice. So it has its own sort of built-in traffic. And we've had some tailwinds to counter a lot of those headwinds. And certainly, telehealth is one of them. And so it's possible that we could have more marketing spending, but keep in mind that we are also acquiring margin with that. So it's -- I think in a quarter, we'll be in a really good position to talk about our comfort with guidance -- or sorry, with consensus because we don't give guidance. But listen, I think we still are committed to profitability, and I still think that second half of the year, you're going to see continued focus as we've had in the past. So as of right now, I mean, nothing's business as usual, but we certainly feel that we're not prepared to talk about any kind of changed outlook.
Got you. One last question for me. I know there's only been very limited financial details provided on Insig. But I'm curious if you're comfortable sharing anything that hasn't already been mentioned in the press release, given, I guess, we will see that minority interest figure in your P&L next quarter anyways.
No. I mean, I think we've sort of said a lot of what -- hopefully, given more color around that relationship. Obviously, being a larger shareholder is great because we're obviously basing our program on their platform. So it's great to have a prominent position on their cap table. They've been very supportive. And we just think it's a fantastic way for us to approach telehealth because it's a prudent capital allocator that's very protective of its bottom line. Here, you have a company that has motivated, engaged, switched on and very talented management and team that are rapidly expanding, rapidly and closely supporting our needs. I mean if they weren't doing this, we would have to do this, we would have to hire people. We would have to hire expensive people to do expensive things to support essentially the same margin generation. So in a way, I'm absolutely thrilled about the way this has gone on. And I think that we're well positioned to grow our involvement with Insig. And that could be in the cards in the future.
Ladies and gentlemen, we have reached the allotted time for questions. I will now turn it back to Hamed for closing remarks.
So I just wanted to thank everyone, again, in closing for joining our call. We understand these are challenging times. And I want to thank the analysts for their questions. Above all, I just want to stress to everyone to stay healthy and really do your part to stay indoors and keep social physical distancing requirements. If you do need to see a physician, you're probably on this call because you are a shareholder. So this is your company, you may want to try your service by visiting us at virtualclinics.ca. And again, I hope this is our last conference call in quarantine, and we look forward to speaking to you in the future. Thank you for your support. We are excited to serve doctors and patients during this critical time.
Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.