MARKHAM, ON, Feb. 20, 2015 /CNW/ - Nightingale Informatix
Corporation (TSX-V: NGH) ("Nightingale" or the "Company"), a
cloud-based provider of electronic health record (EHR) software and
related services, announced it has agreed to complete a
non-brokered private placement of a subordinated convertible
secured note (the "Note") in the principal amount of $2.1 million ("Principal Amount"). The Note
will be purchased by Optimum Marketing & Merchandising Services
Ltd. (the "Lender"), a company controlled by a director of the
Company. The proceeds of the Note are intended to be used by the
Company for working capital and general corporate purposes.
The Note will have a maturity date of December 31, 2016, and will bear interest at a
fixed rate of 12% per annum, calculated and payable monthly in
arrears on the last day of each month. The Note will be
secured by all of the Company's present and subsequently acquired
property and assets and shall be subordinated to certain defined
senior indebtedness. In connection with the Note, the Lender
will also be issued 7,776,000 warrants to purchase Common Shares of
the Company with an exercise price of $0.085 per Common Share ("Warrants"). The
Warrants will expire on December 31,
2016. The completion of the issue of the Note and Warrants
remains subject to the approval of the TSX Venture Exchange.
The Note shall also contain a feature that allows the Lender a
one-time option to convert all or part of the Principal Amount into
a standby commitment for a rights offering or participation in a
similar equity offering by the Company, raising minimum aggregate
gross proceeds of $4 million (the
"Offering") that is undertaken by the Company within 150 days from
the date of the advance (the "Offering Deadline"), at a conversion
rate equal to the greater of: i) $0.085 per share; or ii) the price per share at
which the equity offering is completed with arms length
parties. The Company agrees to provide the Lender with not
less than ten (10) days prior written notice of the Offering (an
"Offering Notice"), which notice shall contain the material terms
thereof and shall provide for a closing of the Offering on or
before that date that is 60 days from the date of the Offering
Notice. In the event that the Company fails to present the Lender
with the Offering Notice by the Offering Deadline (or in the event
that the Offering fails to close for any reason, on or before that
date which is 60 days following the Offering Deadline), the Note
shall thereafter become convertible by the Lender at its option, in
whole or in part, at the conversion rate of $0.085 per share for the balance of the
term. In the event that the Lender receives an Offering
Notice and fails for any reason to unconditionally agree to
participate therein by the Offering Deadline, the Note will
thereafter be non-convertible. For greater certainty, the
participation of the Lender in the Offering may form part of the
$4 million minimum gross proceeds
being raised or may be in addition thereto.
In the event that the Company completes the Offering, the
unconverted portion of the Note must be repaid from the proceeds of
the Offering at a price equal to the face value thereof plus
accrued and unpaid interest.
The Note may be repayable by the Company, at its sole option, at
any time prior to the Offering Deadline, in whole or in part,
without notice, at a price equal to 110% of the face value being
repaid, subject to (a) funds for repayment being generated from the
Company's revenues; and (b) the consent of the Company's senior
lenders.
The Company also announced that the secured term loan with
Beedie Capital Partners ("BCP"), previously announced on
September 22, 2014, was being assumed
by 1604697 Ontario Inc., a company controlled by a related party to
a director of the Company. There was no other impact of this
transaction to the Company.
The issuance of the Note constitutes a "related party
transaction" within the meaning of Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special Transactions
("MI 61-101") and Policy 5.9 of the TSXV Corporate Finance Manual,
because the Lender is a company controlled by a director and
significant shareholder of the Company ("Invested Director").
Accordingly, the Board of Directors of the Company, excluding the
Invested Director, approved the issuance of the Note. MI
61-101 requires a formal valuation and minority shareholder
approval for a related party transaction unless an exemption is
available. An exemption from the valuation requirement is available
to the Company, as no securities of the Company are listed on a
specified exchange. An exemption from the minority
shareholder approval is available to the Company, since, at the
time the transaction was agreed to, neither the fair market value
of the securities to be distributed in the transaction, nor the
consideration to be received for those securities, exceeded
$2,500,000. The Company expects to
release a material change report including details with respect to
the related party transaction less than 21 days prior to the
issuance of the Note, which the Company deemed reasonable in the
circumstances so as to be able to avail itself of the financing
opportunity and complete the Note issuance in an expeditious
manner.
About Nightingale
For more than a decade, Nightingale
(TSX-V: NGH) has been delivering innovative cloud-based Electronic
Health Record (EHR) and Practice Management solutions to healthcare
organizations across the United
States and Canada. Our goal
is to uncomplicate the day-to-day challenges of healthcare
providers. We achieve this by creating software that is truly
intuitive—minimizing training and maximizing adoption. We believe
so strongly in building easy-to-use software that we structured our
entire product team around user-centric design. Our clients are
benefiting from this focus through a well-supported and robust
solution that presents a holistic view of a person's well-being in
a simple, clean interface, so that the best health decisions can be
made. Nightingale – One Patient.
One Record.
www.nightingalemd.com
Forward Looking Statement
This press release contains "forward-looking statements"
respecting the issuance and cancellation of securities of the
Corporation within the meaning of applicable Canadian securities
legislation. Generally, forward-looking statements can be
identified by the use of forward- looking terminology such as
"plans", "expects" or "does not expect", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or state that certain actions, events or results "may"
,"could", "would", "might", "occur" or "be achieved".
Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of Nightingale to be
materially different from those expressed or implied by such
forward-looking statements, including but not limited to: the
closing of the offering of the Note and issuance of the Warrants,
the ability of Nightingale to service the interest on the Note and
to repay the principal on the Note; the expected use of proceeds
from the Note; the issuance of the Note being exempt from formal
valuation and minority approval requirements pursuant to applicable
securities laws; risks associated with obtaining the required
approval of the Exchange and other approvals; the likelihood of a
future equity offering being completed by the Company within 150
days of the Note's issuance, the dilution arising from this
transaction, risks related to the speculative nature of the medical
software industry, which is affected by numerous factors beyond
Nightingale's control; the ability of Nightingale to successfully
secure customer contracts and the timing of securing such
contracts; the ability of Nightingale to complete and successfully
integrate its acquisitions on an accretive basis, Nightingale's
access to debt and capital facilities, including compliance with
current debt arrangements; the existence of present and possible
future government regulation; the significant competition that
exists in the medical software industry; the early stage of
Nightingale's business, and risks associated with early stage
companies, including uncertainty of revenues, markets and
profitability and the need to raise additional funding. All
material assumptions used in making forward-looking statements are
based on management's knowledge of current business conditions and
expectations of future business conditions and trends. Certain
material factors or assumptions applied by management in making
forward-looking statements, include without limitation, factors and
assumptions regarding future trends in healthcare spending,
economic conditions affecting Nightingale and North American
economies; Nightingale's ability to continue to fund its business,
rates of customer defaults, relationships with, and payments to
lenders, as well as Nightingale's operating cost structure.
Although Nightingale has attempted to identify important
factors that could cause actual results to differ materially from
those contained in forward-looking statements, there may be other
factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will prove
to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
statements. Nightingale does not undertake to update any
forward-looking statements that are incorporated by reference
herein, except in accordance with applicable securities laws.
Further information on Nightingale Informatix Corporation is
available at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Nightingale Informatix Corporation