Thank you for joining us today. I'd like to introduce Salona Global Medical Device Corpo ration 's General Counsel, Joseph Martinez . Please go ahead, sir.
Welcome to the first quarter earnings call for Salona Global Medical Device Corpo ration, listed on the TSXV under the ticker SGMD. I would like to remind everyone that today's discussion will include forward-looking information and forward-looking statements, future-oriented financial information, and non-GAAP measures regarding future events and our future financial performance. These statements reflect our views as of today only and should not be considered as representing our views for any subsequent date. Except as required by law, we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after today, many of which are beyond our control.
These statements are also subject to material risks and uncertainties that could cause actual results to differ materially from expectations reflected in the forward-looking statements. A discussion of these risk factors is fully disclosed or referred to in the company's earnings release issued this morning and in Salona Global's disclosure documents filed on EDGAR and SEDAR. During this call, we may also refer to certain non-GAAP financial measures. For a reconciliation of GAAP to non-GAAP measures, please also refer to our earnings release and our EDGAR and SEDAR filings. Finally, as a reminder, all of the dollar amounts referred to in this presentation are in Canadian dollars. Ladies and gentlemen, allow me to introduce Salona Global Medical Device Corpo ration' s Chief Executive Officer, Luke Faulstick.
Thank you, Joe, and good afternoon to everyone. We want to cover several items today, including our reviewed first quarter financials for the 3 months ended March 31, 2023, where we will detail our continued progress toward enterprise profitability, our plan for M&A and revenue growth going forward, our progress and plan for organic growth, and finally, our balance sheet and short-term debt situation. All of these items are tied together through a number of challenges we have faced in the last few quarters, which has in turn impacted our share price negatively. As a review, we closed the acquisition of DaMar Plastics at the end of September 2022. At that time, our share price was over 2 times higher than it is today. On the heels of that acquisition, we announced the Biodex acquisition 2 months later in early December.
Clearly, the Biodex acquisition is transformational as it adds an internationally recognized brand with a wide portfolio of products and projected revenue of over $25 million annually to combine with our current run rate of $42 million. Our intention was to quickly close that deal and move on with our business plan for cross-selling into the established Biodex sales channel, as well as offering Biodex equipment to our existing customer base, while also adding small tuck-in acquisitions, streamlining our operations to achieve enterprise profitability, and launching additional products. There were various delays in closing due to deal complexities, but we have closed as of April third. In order to improve profitability over the most recent quarters, we shifted our focus in the contract services businesses to pricing and operational efficiency as to produce higher gross margins in favor of revenue growth.
This contributed to the flattening of our revenue quarter-over-quarter. As you can see in the financial results, we were able to achieve a 38% gross margin, a significant improvement over the previous quarters. Our growth plans are keyed on Biodex and our entrance into the human performance and rehabilitation markets. Biodex has a stellar reputation and is a recognized leader in this market, both in the U.S. and internationally. After closing the Biodex acquisition on April 3rd, we are spending much of our collective effort in the second quarter finalizing the integration and ensuring the business is positioned for success. As we complete this initiative, we will continue to execute on the five engines of growth that will drive our continued revenue and profitability gains. Adding to the overhang on our stock price is the increase in short duration debt we have in place.
This is largely from cash obligations to sellers of the companies we have acquired. We are working on several fronts to extend that duration and satisfy those debts. This is key for us, and we are focused on this issue. We have asked our lead M&A advisor and large shareholder, Michael Dalsin, the former chairman of PHM, to be more aggressive in helping us solve this issue. Our team is focused on profits, and we are committed to generating profits from what is now projected to be a business with more than $70 million in annualized revenue. Dennis Nelson , our CFO, will outline our progress on enterprise profitability this quarter in more detail later in the call. That brings us to our growth plans for this quarter and beyond.
We started as an M&A-focused business with CAD 15 million in revenue nearly two years ago. We are now projecting at more than CAD 70 million in annualized revenue. That is largely from acquisitions. Further acquisitions are much easier when our stock price is increasing. That is not a luxury we have at the moment. To fuel our growth in the short term, we intend to focus on building our distribution business by targeting the acquisitions of companies like Arrowhead Medical, which we closed yesterday. These accretive tuck-in deals, ranging from CAD 2 million-CAD 5 million in sales, are straightforward and may be purchased in an all-stock deal. We are developing a systematic approach to source and close these deals quickly with the assistance of our M&A advisors.
Our first 18 months as a company serves as proof that we can acquire companies, grow them post-acquisition, and find a commensurate market multiple. We understand the last six months have been challenging for our shareholders. We have a path out of that difficulty. We are working a plan to extend the duration of our debt. We have a plan to make further small tuck-in acquisitions. We are working on plans to transform Biodex and Mio-Guard products into more technically advanced product lines. I will now turn the call over to our Executive Chairman, Les Cross, who will further detail our vision for this transformation. Les?
Great. Thank you, Luke. As Luke said, I want to talk about the future of our company. This future is centered around Biodex and Mio-Guard products. Clearly, we believe once we resolve the issues that Luke has outlined with our stock price, we will be able to acquire larger medical device companies. Let's focus on what we have today. We have our contract service businesses that drive current revenue and gross profit. We will continue to drive these areas as we focus on building our own branded products, Biodex and Mio-Guard, which have a higher gross profit margin potential. In our current product suite, we have several products that we can further enable to collect and provide data. Our Simbex unit has extensive experience in developing these type of products. This should have a huge opportunity as a product differentiator and as additional recurring revenue stream.
The data from these devices is valuable to the physical therapy clinics and helps improve patients' outcomes. In fact, now that we have Biodex, we can turn our attention to some very exciting drivers for growth, data collection and artificial intelligence for predicting patient progress. While this is not a short-term deliverable, it is part of our long-term strategic plan. This is a plan of a broader trend in medical device, where companies are looking to make these devices intelligent and sell that data as part of that process. As we move down this path with the next generation of products, we think this will give us significant competitive advantages in the marketplace. The Biodex deal also gives us the ability to attract additional senior board members as we plan our U.S. listing.
As you know, we have engaged Maxim Group to advise us on this listing. We are moving forward with this plan. We have learned a lot through the Biodex deal. We are now well-positioned to show the market what we can do to take this company to the next level. We have a bit of work to do in the meantime around our debt, of course, as Luke mentioned. We remain committed to that plan. The delayed closing Biodex is behind us. We feel confident that we can solve the debt duration very soon. At this point, we expect our stock price multiples to start behaving in a more consistent manner with our peer companies. Thank you for your time today.
I will now turn the call over to Dennis Nelson , our CFO, who will discuss the key financial results with you for the past quarter. Dennis ?
Thank you, Les. As a reminder, the results for the first quarter do not include the Biodex or Arrowhead acquisitions that closed after the quarter ending. We anticipate these two businesses will add an estimated combined CAD 30 million in annualized revenue. Revenue for the 3 months ended March 31, 2023 increased 23% to CAD 10.7 million, as compared to CAD 8.7 million for the same period in the prior year. Growth over the previously reported quarter was modest. For the quarter ending June 30, 2023, we expect to add revenues of over CAD 6 million from the recent acquisitions. Because of the delays around closing the Biodex deal, we expect to generate positive enterprise profits in the third quarter beginning July, which will translate to a growing cash balance thereafter.
The order book continues to grow with the addition of Biodex and Arrowhead and currently stands at a record CAD 25 million. Gross profit of CAD 4.1 million represents an increase of 27% or CAD 900,000 over the CAD 3.2 million reported for the same period in the prior year. As a percentage of revenue, gross profit reached 38.3% for the first quarter as compared to 37.2% in the same period in the prior year and compared to 33.1% in the most recently reported quarter ending November 30, 2022. We generated over CAD 600,000 in adjusted EBITDA for the quarter before transaction costs, which represents an increase of CAD 800,000 over the most recently reported quarter ending November 30, 2022.
As for profit, we were very close to enterprise profitability in the first quarter, generating CAD 183,000 in adjusted EBITDA with transactional costs included and including significant G&A costs related to the year-end audit. Our interest costs for the quarter were CAD 278,000, which was our only other recurring cash expense, not including adjusted EBITDA. This translates to a deficit in enterprise profitability of just CAD 95,000 for the quarter, which is a substantial improvement over the most recently reported quarter. To reinforce what Luke said earlier, our team is focused on profitability. We are committed to generating profits from what is now projected to be a business with more than CAD 70 million in annualized revenue.
We ended the quarter with CAD 2.3 million in cash and cash equivalents, in addition to the CAD 1.4 million in restricted cash that was reserved for the closing payment on the Biodex acquisition. The line of credit balance increased CAD 8.1 million at March 31st, 2023, compared to CAD 5.2 million at December 31st, 2022, principally due to the expansion of the debt facility to cover eligible assets at additional subsidiaries. Accounts receivable at March 31st, 2023, of CAD 7.4 million compares to CAD 6.4 million at December 31st, 2022, with the increase reflecting the timing differences among the different customers.
Inventory at March thirty-first, 2023, of CAD 6.7 million compares to CAD 8.1 million at December thirty-first, 2022, and represents a reduction of CAD 1.4 million, or 17%, as the company continues to focus on margin improvement and operational efficiency. I will now turn the call back to Luke for closing comments.
Thank you, Dennis. In closing, I'd like to thank the whole Salona Global team for all the hard work in Q1, which has set us up for future strong quarters. I would also like to welcome all the Arrowhead and Biodex employees to our team. Thank you for joining us today and allowing us to update you on the progress of the business. We look forward to updating you next quarter on our financial results and the progress of our strategy. Thank you for your continued support. This ends the call.
This does conclude today's program. Thank you for your participation. You may disconnect at any time.