• Q2 Revenue totaled $18.4 million, 80% higher than the same period in 2021
  • First half 2022 revenue grew 108% to $38.6 million compared to the first half of last year

TORONTO, ON – August 29, 2022 – Think Research Corporation (TSX.V:THNK) (OTCQB: THKKF) (“Think” or the “Company”), a healthcare technology company focused on transforming healthcare through knowledge-based digital health software solutions, today reported financial results for the second quarter and Year-to-Date period ending June 30, 2022. Additional information concerning the Company, including our unaudited consolidated interim financial statements and related Management’s Discussion and Analysis (“MD&A”) for the periods ended June 30, 2022, can be found under the Company’s profile on SEDAR at www.sedar.com and on our website. With over 13,000 enterprise healthcare facilities under license, Think solutions enable more than 300,000 doctors, nurses and pharmacist users to leverage our essential data service to help ensure everyone gets the best possible care.

 “We are very pleased to report significant revenue increases for both Q2 and the first half of 2022 relative to the same periods in 2021, despite experiencing some revenue delays related to deferrals within our clinical research program associated with delays in our sponsoring drug program,” said Sachin Aggarwal, Think’s CEO. “We expect these studies to come back on track during the second half of the year. Further, Think is increasingly winning larger deals and we are confident that our current trajectory is aligned with the Company’s near and longer-term growth and profitability expectations.”

Key Financial Highlights: 

  • Q2 revenue of $18.4 million increased 80% or $8.2 million over the $10.2 million reported in Q2 2021, while revenue for the first six months of 2022 was $38.6 million, $20.0 million or 108% higher than the corresponding period in 2021.
  • Revenue from each of Think’s primary segments:
    • Software and Data Solutions revenue was $6.9 million (37.4% of revenue) in Q2, compared to $8.5 million (42.0% of revenue) in Q1 FY2022, as the prior quarter benefited from elevated one-time services revenue associated with the implementation of new programs. 
    • Clinical Research Operations revenue totaled $7.3 million in the second quarter, compared to $8.0 million in the first quarter due primarily to delays in study timelines resulting from scheduling changes made by study sponsors. Subsequent to the quarter-end, Think was able to recognize parts of the delayed revenue and anticipates that this segment will experience a recovery in revenue in the latter part of the second half. 
    • Clinical Services revenue grew to $4.3 million (23.3% of revenue) in Q2 2022 compared to $3.7 million (18.2% of revenue) in Q1 2022 as normal operations resumed following an easing of the government shut-downs associated with COVID-19 which caused restricted operations in the previous quarter. 
  • Adjusted EBITDA reflected a loss of $1.6 million compared to a loss of $1.3 million in Q2 2021 and a loss of $0.3 million in Q1 2022. The quarter -over-quarter decline in Adjusted EBITDA was a direct result of a sequential decrease in revenue associated with delays in clinical research programs and one-time professional services revenue in the software and data segment that was recognized in Q1. See “Cautionary Note Regarding Non-IFRS Financial Measures” for further information.
  • Adjusted EBITDA Margin (as defined herein) was negative 9% in Q2 compared to negative 13% in Q2 2021. See “Cautionary Note Regarding Non-IFRS Financial Measures” for further information. During the first six months of 2022, Adjusted EBITDA margin was negative 5% compared to negative 16% for the first six months of 2021, with the improvement attributable to realized cost synergies and overall revenue scale relative to last year.
  • During the second quarter and first half of FY2022, the Company generated gross profit of $9.4 million and $18.5 million, an increase of 66% and 68%, respectively, over the $5.7 million and $11.0 million in the comparable periods the prior year. The rise in gross profit was primarily related to the increase in revenue, which in turn stemmed primarily from acquisitions supplemented by organic revenue growth.   
  • For the six months ended June 30, 2022 the Company generated gross margin of 48.0% compared to 59.3% for the same period in the prior year. The main factor driving gross margin lower in the current year compared to 2021 was the change in revenue mix arising from acquisitions completed in 2021 generally and BioPharma in particular, along with realized cost synergies. 
  • Think continued to focus on reducing cash operating expenses through realized cost synergies, which had an annualized value of $5.8 million in FY2021 and an additional $3.6 million in the first half of FY2022, and which management believes will enable Think to realize significant expense leverage over larger revenue streams going forward.    
  • General and administration expenses increased to $8.0 million and $14.2 million for the second quarter and year to date 2022, increasing 66% and 49%, respectively, over the same periods in 2021. These increases reflect higher overall personnel costs related to the acquisitions described above, including higher salaries and wages to support the continued growth of the business with these higher costs partially offset by recognized synergies.    
  • Research and development expenses increased by $0.7 million for the second quarter and $0.8 million for the first half of FY2022 over the same periods in 2021, due primarily to Think’s investment in software during Q2 related to the Company’s ‘Digital Front Door’ software solutions, which in turn was driven by new license sales to large organizations in Canada, representing increases of 42% and 24% over the same periods in 2021, respectively.    
  • Sales and marketing expenses totaled $2.4 million and $4.7 million in the second quarter and first half of 2022, reflecting increases of approximately 7% and 16%, respectively, primarily due to acquisitions completed during prior periods, branding activities to continue to elevate the Think brand, along with higher salaries and wages tied to supporting ongoing business growth, partially offset by cost synergies realized year to date.    
  • Depreciation and amortization increased by 189% and 226% for the three and six months ending June 30, 2022 over the same respective periods in FY2021, primarily due to depreciation and amortization expense associated with acquired businesses. 
  • Acquisition, restructuring and other costs totaled $0.7 million in Q2 of FY2022, a 6% decline over Q2 FY2021, but increased 13% to $1.8 million for the first half of FY2022 over the same period in 2021. The first half 2022 increase is due primarily to the implementation costs associated with Think’s plan to streamline staffing resources as part of its efforts to capture synergies from the operations of acquired companies.   
  • Net loss increased by $1.9 million for the three-month period ended June 30, 2022 compared to the same period the prior year, and by $3.0 million in the first half of 2022 compared to the same period in 2021, with increases in both periods primarily due to the higher costs associated with the continued growth in Think’s business.     
  • The Company’s cash balance at June 30, 2022 was $6.1 million, slightly lower than $6.3 million as at December 31, 2021, reflecting the impact of a $10 million draw on its new credit facility with Beedie Investments Ltd. (“Beedie”), described in more detail below, and the repayment of $2.4 million of its operating line in the first half of the year, resulting in a net increase of cash from loans and borrowings.   Think also made payments of $1.6 million on lease liabilities and $1.6 million for finance costs in the first half of 2022. The Company also invested $1.9 million in intangible assets, $0.3 million in property and equipment, and paid $0.4 million of cash consideration related to a performance milestone related to an acquisition that was completed in the prior year.
  • Based on the Company’s unaudited financial results for the current fiscal year to date, management is updating its FY2022 revenue target to an annualized fourth-quarter run rate of between $84 million and $90 million, or $21M to $22.5M for the three months ending December 31, 2022. Management is also adjusting its annualized fourth-quarter run rate Adjusted EBITDA1 target to between $6 million and $9 million, or $1.5 million to $2.3 million for the three months ending December 31, 2022.

Business Highlights

  • During the quarter, the Company entered into a credit agreement (the “Beedie Credit Agreement”) on April 22, 2022, pursuant to which Beedie issued to the Company a secured non-revolving convertible term loan of up to the principal amount of $25 million (the “Convertible Loan”), maturing on the fourth anniversary of the closing date of the Convertible Loan. As referenced above, an initial advance of $10 million was taken by Think on May 10, 2022. Prior to repayment of the Initial Advance, Beedie has the option to convert all or any portion of the principal amount of the Initial Advance into equity at a price of $1.443 per share, subject to certain conditions. Further details regarding the Beedie Credit Agreement are available in Think’s press release dated May 10, 2022 or in the Company’s Q2 2022 MD&A. 
  • Following the Initial Advance, the Company may from time to time borrow the remaining unadvanced portion of the Convertible Loan by one or more subsequent advances (each a “Subsequent Advance”) during the term of the Convertible Loan. Subsequent Advances may only be used by the Company to complete acquisitions of complementary businesses approved by Beedie, or as otherwise agreed to by Beedie. Subsequent advances will also be convertible into Common Shares of the Company subject to the terms of the Beedie Credit Agreement. 
  • MDBriefCase was chosen by a global pharmaceutical company to deliver high-quality educational content and programs to healthcare practitioners regarding its drug and vaccine therapies throughout 2022 and 2023 with a contract value of approximately $4.1million, with revenues to be earned based on the achievement of various contractual milestones. 
  • On June 28, 2022, Think announced a contract with a major U.S.-based pharmacy to deliver business intelligence and support solutions to more than 1,700 pharmacies servicing 5.5 million patients throughout the United States. This contract is a direct result of the acquisition of Pharmapod Ltd. in the second half of fiscal 2021. 

Selected Financial Information

In thousands of Canadian DollarsThree months ended June 30, 2022Three months ended June 30, 2021Increase
Revenue                        18,442                     10,224 80%
Net Income                        (7,484)                    (5,583)34%
EBITDA                        (4,024)                    (3,814)6%
Adjusted EBITDA                        (1,579)                    (1,348)17%
Adjusted EBITDA margin (% of revenue)(9%)(13%) 
Basic and diluted EPS                                (0.13)                          (0.13) 
In thousands of Canadian DollarsSix months ended June 30, 2022Six months ended June 30, 2021Increase
Revenue                        38,646                     18,591 108%
Net Income                        (13,682)                  (10,624)29%
EBITDA                        (6,423)                    (7,609)-16%
Adjusted EBITDA                        (1,869)                    (2,990)-38%
Adjusted EBITDA margin (% of revenue)(5%)(16%) 
Basic and diluted EPS                                (0.23)                          (0.26)

Note – Includes non-IFRS financial measures and non-IFRS ratios. See the “Cautionary Note Regarding Non-IFRS Financial Measures” section of this press release for the relevant definition of each non-IFRS financial measure and non-IFRS ratio and a reconciliation of each non-IFRS financial measure to net loss, the most directly comparable IFRS measure.

Business Outlook

Think plans to grow revenue with improving margins by becoming an increasingly essential data solutions provider for healthcare practitioners everywhere with the goal of delivering the best outcomes for patients.

To fulfill this objective, Think’s operational focus is threefold:

  1. Expand the user base of current licenses by promoting adoption and usage. Currently, more than 300,000 clinicians, including doctors, nurses and pharmacists, use Think’s solutions. As the Company adds more users, it becomes more essential – and more integrated – to health systems and licensees, resulting in ‘sticky’ revenue that creates obstacles to change.
  2. Increase per user revenue by increasing the number of content services and data solutions that are adopted and used by a licensed user regularly.
  3. Monetize licensed users directly, in addition to those acquired through facilities licenses. For example, an opportunity exists to access users through Think’s direct-to-user clinical education offerings.  

The objective of this operational focus, both in the short and long- term, is to generate organic revenue growth with improved margins, realize positive Adjusted EBITDA and enhance the Company’s financial flexibility supporting long-term sustainability.       

The Company has obtained an advance waiver through September 30, 2022 in respect of the financial covenants set out in the Beedie Credit Agreement (the “Credit Agreement”). The Company has not committed an event of default under the Credit Agreement. The Company is in the process of obtaining the consent of Scotiabank to the Covenant Waiver, pursuant to the terms of the Scotia Credit Facility.  A copy of the Credit Agreement is available under the Company’s profile on SEDAR at www.sedar.com.

Conference Call Notification

Think will be holding a conference call via webcast on August 29, 2022, at 9:00 a.m. EST, hosted by CEO Sachin Aggarwal and interim CFO John Hayes, with a Q&A session to follow. To register for the conference call, please click here.

Conference call dial-in:

Toronto:  416-764-8659

North American Toll-Free: 1-888-664-6392

Conference ID:61386443

About Think Research Corporation

Think Research Corporation is an industry leader in delivering knowledge-based digital health software solutions. The Company’s focused mission is to organize the world’s health knowledge so everyone gets the best care. Its evidence-based healthcare technology solutions support the clinical decision-making process, and standardize care, to facilitate better health care outcomes. The Company gathers, develops, and delivers knowledge-based solutions globally to customers which typically includes enterprise clients, hospitals, health regions, health care professionals, and / or governments. The Company has gathered a significant amount of data by building its repository of knowledge through its network and group of companies (including acquired companies).

Think licenses its solutions to over 13,000 facilities for over 300,000 primary care, acute care, and long-term care doctors, nurses and pharmacists that rely on the content and data provided by Think to support their practices.  Millions of patients and residents annually receive better care due to the essential data that Think produces, manages and delivers.

In addition, the company collects and manages pharmaceutical and clinical trial data via the BioPharma entity that Think acquired on September 10, 2021.  BioPharma is a leading provider of bioequivalence and Phase 1 clinical research services to pharmaceutical companies globally. Think’s other services include a network of digital-first primary care clinics and medical clinics providing elective surgery.

Caution Regarding Forward-Looking Statements

This press release contains “forward-looking information” within the meaning of applicable securities laws. Forward-looking information may be identified by statements including words such as: “anticipate,” “intend,” “plan,” “budget,” “believe,” “project,” “estimate,” “expect,” “scheduled,” “forecast,” “strategy,” “future,” “likely,” “may,” “to be,” “could,”, “would,” “should,” “will” and similar references to future periods or the negative or comparable terminology, as well as terms usually used in the future and the conditional. Statements including forward-looking information may include, without limitation, statements regarding the Company’s Revenue and Adjusted EBITDA in 2022, the expected term and value of contracts entered into in fiscal year 2021 and 2022, the funding of the Initial Advance and the availability of Subsequent Advances, the Company’s strategies and growth objectives, and statements made in the “Outlook” section of this press release.

Forward-looking information reflects management’s current beliefs and is based on assumptions that may prove to be incorrect, including but not limited to the Company’s business objectives, results of operations, financial results and trading activity in the Common Shares. The Company considers these assumptions to be reasonable in the circumstances. However, there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. By its nature, forward-looking information involves known and unknown risks, uncertainties, changes in circumstances and other factors that are difficult to predict and many of which are outside of the Company’s control which may cause the Company’s actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. The Company’s actual results may differ materially from those indicated in the forward-looking information. Important factors that could cause actual results to differ materially from those indicated in the forward-looking information include, among others, the risk factors described under the heading “Caution Regarding Forward Looking Information” in the Company’s Management’s Discussion & Analysis for the year ended December 31, 2021, which is available on the Company’s profile at www.sedar.com. The Company has assumed that the risk factors referred to above will not cause such forward-looking statements and information to differ materially from actual results or events. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements.

Other than as specifically required by applicable Canadian law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, whether as a result of new information, future events or results, or otherwise.

This press release contains financial outlook information within the meaning of applicable securities laws. The financial outlook included in this MD&A includes, but is not limited to: the Company’s target revenue and Adjusted EBITDA for the fourth quarter of 2022, the expected revenues to be realized from contracts entered into in fiscal year 2021 and 2022, the Company’s objective to grow revenue with improving margins and with positive Adjusted EBITDA. The financial outlook set out in this press release is subject to the same assumptions, risk factors, limitations and qualifications set out in these cautionary statements. The financial outlook contained in this press release was approved by management as of the date of the Company’s MD&A for the period ended June 30, 2022, and was provided for the purpose of providing an outlook of the Company’s activities and results and may not be appropriate for other purposes. Management believes that the financial outlook has been prepared on a reasonable basis, reflecting reasonable assumptions, estimates and judgments; however, actual results of the Company’s operations may vary from those described herein. The Company disclaims any intention or obligation to update or revise any financial outlook contained in this press release, whether as a result of new information, future events or results or otherwise, unless required pursuant to applicable Canadian law. Readers are cautioned that the financial outlook contained in this press release should not be used for purposes other than for which it is disclosed herein.

Additional information about the risks and uncertainties of the Company’s business and material factors or assumptions on which information contained in forward‐looking statements is based is provided in its disclosure materials, including the Company’s MD&A for the year ended December 31, 2021, which is available under the Company’s profile on SEDAR at www.sedar.com.

Cautionary Note Regarding Non-IFRS Financial Measures

This press release makes reference to certain non-GAAP financial measures and non-GAAP ratios. These measures and ratios are not recognized measures under International Financial Reporting Standards (“IFRS”), do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures and ratios are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Non-IFRS measures and ratios have limitations as analytical tools and should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS and should be read in conjunction with the consolidated financial statements for the periods indicated. The Company uses non-IFRS financial measures and ratios, including “EBITDA”, “Adjusted EBITDA” and “Adjusted EBITDA Margin” to provide investors with supplemental measures of its operating performance and to eliminate items that have less bearing on operating performance or operating conditions and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. Specifically, the Company believes that Adjusted EBITDA and Adjusted EBITDA Margin, when viewed with the Company’s results under IFRS and the accompanying reconciliations, provides useful information about the Company’s business by removing potential distortions that may arise from transactions that are not operational in nature. By eliminating potential differences in results of operations between periods caused by factors such as restructuring, impairment and other charges, the Company believes that Adjusted EBITDA and Adjusted EBITDA Margin can provide a useful additional basis for comparing the current performance of the underlying operations being evaluated. The Company’s agreements with lenders include certain financial performance covenants which include EBITDA (as defined in the Company’s credit agreement with its senior lender and with Beedie Capital) as a component of the covenant calculations and require the Company to maintain certain levels of EBITDA on a consolidated basis. The Company believes that securities analysts, investors and other interested parties frequently use non-IFRS financial measures and ratios in the evaluation of issuers. The Company’s management also uses non-IFRS financial measures and ratios in order to facilitate operating performance comparisons from period to period.

Non-GAAP financial measures and non-GAAP ratios used in this press release include:

EBITDA” means net income (loss) before amortization and depreciation expenses, finance and interest costs, and provision for income taxes.

Adjusted EBITDA” adjusts EBITDA for non-cash stock-based compensation expense, gains or losses arising from redemption of securities issued by the Company, asset impairment charges, gains or losses from disposals of property and equipment, foreign exchange gains or losses,  impairment charges on property and equipment, business acquisition costs, and restructuring charges.

Adjusted EBITDA Margin” means Adjusted EBITDA divided by revenue of the Company for the applicable period.

A reconciliation of EBITDA and Adjusted EBITDA to IFRS net income (loss) is presented under “Select Information and Reconciliation of Non-IFRS Measures” in the MD&A and press release below 

 Three months ended June 30, 2022 Three months ended June 30, 2021 Six months ended June 30, 2022 Six months ended June 30, 2021 
Net loss(7,484)(5,583)                  (13,682)(10,624)
Depreciation and amortization 3,608 1,248 7,244 2,223 
Finance costs                                  757 516                     1,833 787 
Income tax expense (recovery)(905)(1,818)
EBITDA1                              (4,024)                        (3,814)                    (6,423)                    (7,609)
Acquisition, restructuring and other2                                  710                               756                     1,772                       1,567 
Stock-based compensation3                                1,735                           1,710                     2,782                       3,052 
Adjusted EBITDA                              (1,579)                        (1,348)                    (1,869)                    (2,990)


  1. “EBITDA” and “Adjusted EBITDA” are non-GAAP financial measures, are not standardized measures under IFRS and may not be comparable to similar financial measures disclosed by other issuers. See “Non-IFRS Financial Measures”.
  2. “Acquisition, restructuring and other” expenses relate to costs incurred in connection with business combinations, reorganization of the Company’s capital structure and workforce, and legal, advisory and banking expenses.
  3. “Stock-based compensation” relates to stock-based compensation expense recognized for equity awards issued under the Company’s Omnibus Equity Incentive Plan

For further information: Mark Sakamoto, Executive Vice President, Think Research, 416.388.7119, mark.sakamoto@thinkresearch.com