Nightingale Informatix completes $2.75 million Convertible Debenture Private Placement
Nightingale Informatix completes $2.75 million Convertible Debenture Private Placement
Not for Distribution in the United States or to United States Newswire Services
Markham, ON, September 13, 2012 – Nightingale Informatix Corporation (TSX-V: NGH) (“Nightingale” or the “Company”), an application service provider (ASP) of electronic medical record (EMR) software and related services announced that the Company has completed a non-brokered, private placement of $2.75 million aggregate principal amount of 12% Series B unsecured subordinated convertible debentures for gross proceeds of $2.75 million (the “Debentures”). The proceeds of the funding will provide additional working capital, enabling the Company to better capitalize on the increasing commercial opportunities in the North American Electronic Medical Records market. The transaction is subject to the receipt of all necessary approvals of the TSX Venture Exchange.
“This transaction better positions us to execute on our strategic initiatives,” said Sam Chebib, Chief Executive Officer, Nightingale. “We are encouraged by the positive trends and the increasing demand we are seeing in the North American EMR market. With a stronger cash balance, we can act quickly to capitalize on the growing number of opportunities in front of us.”
The Debentures mature on January 15, 2016 (“Maturity”). The Debentures bear interest at 12% which shall be calculated and payable in cash monthly, in arrears, on the last business day of each month, commencing on September 12, 2012. Following the first anniversary of issuance of the Debentures, Nightingale shall have the right to redeem the Debentures (a “Redemption”) at any time, in whole or in part, on not more than 60 days and not less than 30 days prior notice at a price equal to their principal amount plus accrued and unpaid interest. The Debentures shall be convertible (a “Conversion”) at the holder’s option into fully-paid common shares (“Debenture Shares”) at any time prior to Maturity or Redemption at a conversion price of $0.35 per Debenture Share. The conversion price represented a 40% premium to the 30 day volume weighted average trading price, established at the market close September 12, 2012. The Debentures, which shall not be listed on any market, have a four-month statutory hold period.
Pursuant to Multilateral Instrument 61-101 ("MI 61-101"), the Convertible Debenture offering is a "related party transaction" as Brian Schachter and George Christodoulou, Directors of the Company, an immediate family member of Sam Chebib, the Chief Executive Officer of the Company, Michael Ford, the Chief Financial Officer of the Company, and Trevor Henderson the Executive VP of Operations of the Company participated in the Debenture offering. Brian Schachter, George Christodoulou, Sam Chebib, Michael Ford, and Trevor Henderson currently hold or control 14,769,447, 4,707,408, 11,018,183, nil, and 15,000 common shares of the Company respectively, representing approximately 19.4%, 6.2%, 14.4%, 0%, and 0% of the issued and outstanding common shares, respectively. Assuming the full conversion of any existing Nightingale convertible debenture holdings and the Debentures acquired in this offering, Brian Schachter, George Christodoulou, Sam Chebib, Michael Ford, and Trevor Henderson will hold or control 19,055,161, 5,421,694, 13,303,897, 285,714, and 300,714 common shares representing 23.6%, 7.0%, 16.9%, 0.4%, and 0.4% of the issued and outstanding common shares calculated on a diluted basis, respectively. None of the aforementioned directors voted in connection with the approval of the Debenture offering.
The Company is exempt from the formal valuation requirement of MI 61-101 in connection with issuing the Debentures in reliance on section 5.5(b) of MI 61-101 as no securities of the Company are listed or quoted for trading on the Toronto Stock Exchange, the New York Stock Exchange, the American Stock Exchange, the NASDAQ Stock market or a stock exchange outside of Canada and the United States. Additionally, the Company is exempt from obtaining minority shareholder approval in connection with issuing the Debentures in reliance on section 5.7(1) (a) as the fair market value of the Debenture Offering does not, as far as it involves the aforementioned parties, exceed 25% of the market capitalization of the Company.
Nightingale is one of the fastest growing health care service and software companies in North America and is recognized as an industry leader in Web-based clinician and community based electronic medical records (EMR) serving the needs of small primary care practices, multi-physician outpatient clinics, and large scale regional health organizations and networks. Coupled with integrated practice management, transcription and revenue cycle management, Nightingale’s comprehensive service offering allows customers to enhance patient care, increase revenue opportunities and optimize operations. Nightingale is continuously innovating and enhancing its services to meet the needs of its growing and diverse customer base. Nightingale – Healthcare connected. www.nightingalemd.com
For further information, contact:
Michael Ford, CFO
Nightingale Informatix Corporation
Forward Looking Statement
This press release contains "forward-looking statements" respecting the issuance and cancellation of securities of the Company 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", "is expected", "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" or "will be taken", "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: 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 integrate its acquisitions and any liabilities arising as a result of such acquisitions, access to capital and agreements with its lenders; the existence of present and possible future government regulation; access to debt or equity financing and agreements with its Lenders; the significant and increasing competition that exists in the medical software industry; the early stage of Nightingale's business; and therefore it is subject to the 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. Although management believes the assumptions used to make such statements are reasonable at this time, our assumptions may not to be as anticipated, estimated or intended. Certain material factors or assumptions applied by management in making forward-looking statements, include without limitation, factors and assumptions regarding Nightingale's continued ability to fund its business, rates of customer defaults, relationships with, and payments to, lenders, demand for Nightingale's products, 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.