February 2015

Dear shareholders and prospective shareholders,

Yesterday (March 2), we announced two additional anesthesia transactions. These deals come on the heels of our first acquisition of a large anesthesia services provider which represented the expansion of CRH’s business into GI endoscopic anesthesia services. These most recent additions serve as building blocks to continue to grow anesthesia services revenue and EBITDA.

The two transactions represent contracts to provide anesthesia services to four ambulatory surgery centers in Florida and North Carolina, representing approximately 9,000 patient procedures per year. The transactions will be funded internally through CRH’s cash on hand.

We are excited about these new additions to our portfolio for several reasons:

1. They expand the number of annual anesthesia cases the company is supporting
2. They are expected to increase annual revenue by an estimated US$2.5 million
3. They are immediately accretive to the Company’s EBITDA

Q4 2014 Numbers

On February 13, 2015, we announced our financial and operational results for the quarter and year ended December 31, 2014.
Revenues for the year ended December 31, 2014 were $11,984,170 compared to $7,682,628 for the year ended December 31, 2013.
Revenues from product sales for the year ended December 31, 2014 were $8,598,097 compared to $7,682,628 for the year ended December 31, 2013. The 12% increase in product sales is the result of the continuing successful execution of the Company’s direct-to-physician program that provides physicians with the ability to purchase our hemorrhoid banding technology and take advantage of our treatment protocols, marketing and operational experience.
As of December 31, 2014, the Company had trained 1,916 physicians to use the CRH O’Regan System, representing 701 clinical practices, which compares to 1,650 physicians trained, representing 580 clinical practices, as of December 31, 2013.
In the future, the Company expects revenue from product sales to continue to increase as CRH expands its physician network and increases physician use of CRH’s technology.

Revenues from anesthesia services from December 1, 2014, the effective date of acquisition of GAA, through December 31, 2014 were $3,386,073. Based on GAA’s historical information, December represents approximately 10% of GAA total annual revenue. In the future, CRH Medical expects anesthesia revenue to increase through organic growth and through additional acquisitions.

Operating EBITDA for the year was $4,696,095, an increase of $2,579,532. This is primarily a reflection of GAA’s contribution during the month of December 2014, offset by net increases in product and corporate operating expenses.

For the year ended December 31, 2014, the Company recorded net income of $1,498,153 ($0.031 basic and $0.030 diluted income per share) compared to a net income of $2,492,646 ($0.051 basic and diluted income per share) for the year ended December 31, 2013.

The decrease in net income year over year is largely a reflection of the net finance expense recorded in 2014 and other expenses related to the acquisition of GAA.
On a pro forma basis, assuming CRH operated GAA from January 1, 2014 through December 31, 2014, the Company would have reported total revenue of $43.1 million and operating EBITDA of $22.7 million.

Toronto marketing

We spent two days in February marketing in Toronto with our friends from Acumen Capital, and Cormark Securities. Each group took us around for a day to meet with a number of Bay Street’s top money managers.

Looking ahead, we plan to be active for the remainder of 2015, sharing the story with new prospective investors while continuing to keep the lines of communication open with our current shareholders.

Educating GIs about the O’Regan System

This month, our Medical Directors attended two one-day meetings in Mississippi and Pennsylvania.
We participated in the Mississippi Gastroenterology Society meeting in Jackson where Dr. Mitch Guttenplan presented to physicians about hemorrhoids and treatment with the O’Regan System. Dr. Guttenplan not only educated a large group of gastroenterologists on the disease and anorectal care, he also introduced them to our procedure and its benefits to a GI practice.

We also participated in the Delaware Valley Society for Gastrointestinal Endoscopy’s meeting in Philadelphia. At the meeting, we demonstrated hemorrhoid banding with the O’Regan System at a workshop, and attended a dinner with the GI participants. These types of meetings are valuable because they afford us the opportunity to speak to an attentive audience, often garnering a good level of interest from those attending. This meeting was no exception, with our Associate Medical Director, Dr. Andy Gorchynsky, generating a number of significant new leads.

We look forward to sharing the March edition of the CRH Investor Bulletin with you, and as always, we appreciate your interest and support.

Adam Peeler, Media and Investor Relations
TMX Equicom
416.815.0700 x 225
apeeler@tmxequicom.com

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