Toronto, Ontario--(Newsfile Corp. - December 21, 2016) - CardioComm Solutions, Inc. (TSXV: EKG) ("CardioComm Solutions"
or the "Company") today announced that the Company is:
-
Conducting a non-brokered debt financing under which it intends to raise up to $600,000;
-
Intending to close the first $500,000 tranche of its $650,000 private placement initiative announced December 17, 2016;
and
-
Intending to issue 1,150,687 shares to settle a debt to a professional service provider in the amount of $69,041.20.
Under the terms of the debt financing, the Company intends to borrow an aggregate of $600,000 from four lenders. The lenders
will be paid interest at the rate of 10% per year, payable in quarterly installments, and will secure their loans against the
Company's assets. As a bonus for the loans, the Company has offered the lenders common shares (the "Shares") that have a value of
20% of the loaned amounts. Accordingly, an aggregate of 2 million bonus shares will be issued to the lenders at a price of $0.06
per share. The aggregated loan may be retired without penalty at the Company's discretion at any time after December 31, 2017. The
loan will be due to be retired December 31, 2018.
Under the first tranche of the private placement financing, the Company intends to issue 10,000,000 units at a price of $0.05
per unit for gross proceeds of $500,000. Each unit will consist of one share and one common share purchase warrant. Each warrant
will be exercisable for one share at a price of $0.075 for a period of twenty-four months from the date of issuance. The Company
may pay finders' fees in cash of up to 8% on some or all of the amounts raised under the first tranche. The Company may also issue
finder's warrants equal to up to 8% of the number of units issued. Each finder's warrant will be exercisable for one share at a
price of $0.075 for a period of twenty-four months from the date of issuance.
In connection with the equity financing, Etienne Grima, Chief Executive Officer of the Company, has agreed to sell an aggregate
of up to 1,000,000 common shares from his personal shareholdings to a private investor at a price of $0.05 per share for proceeds
of $50,000. Mr. Grima intends to use all of the proceeds from the sale of these shares to purchase units under the financing. In
addition, Mr. Simi Grosman, a member of the Company's Board of Directors ("BOD"), will also participate in the private placement
through the purchase of 300,000 units.
The issuance of units to Mr. Grima and Mr. Grosman under the private placement is considered to be a related party transaction,
subject to TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 — Protection of Minority Security Holders in
Special Transactions. The Company intends to rely on exemptions from the formal valuation and minority shareholder approval
requirements provided under sections 5.5(a) and 5.7(a) of Multilateral Instrument 61-101 on the basis that the value of securities
to be purchased by the insiders under the private placement will not exceed 25% of the fair market value of the Company's market
capitalization.
Under the shares for debt transaction, the Company intends to issue 1,150,687 shares at a price of $0.06 per share to settle a
debt to a service provider in the amount of $69,041.20.
The Company has previously disclosed on multiple occasions its obligation to retire its existing line of credit ("LOC"), held by
MD Primer Inc. ("MDP"). On October 16, 2016, MDP informed the Company that the $900,000 LOC, which matures on December 31, 2016,
would not be renewed.
Since October 16, 2016, the Company has disclosed successes on several fronts, including:
-
Reporting the Company's strongest 9-month fiscal performance in 17 years;
-
Appointing a new Chairman of the BOD ;
-
Appointing a new member of the BOD with extensive M&A experience in the healthcare sector;
-
Introducing wearable ECG monitors into the sports sector;
-
Confirming the launch of a US-based sales force in 2017 to introduce the HeartCheck™ and GEMS™ WIN technologies into the US
market;
-
Receiving the "Best in Medical Software Development" Award from CorporateLiveWire; and
-
Contracting with an IR firm to support continued growth in 2017 and beyond.
The Company confirms that the combination of debt and equity generated funds described herein will be used to retire MDP's LOC,
and that the Company will use any additional funds generated for working capital. Upon closing the financing initiatives and
repaying MDP's LOC, CardioComm Solutions will have reduced its overall debt burden and established a two-year window to manage the
pay-down of the $600,000 debt. The Company confirms that securities to be issued as described herein will be subject to a
four-month hold period. The closing of the debt financing, the private placement financing and the shares for debt transaction are
all subject to the approval of the TSX Venture Exchange.
CardioComm has earned the ISO 13485 certification, is HPB approved, HIPAA compliant and holds clearances for the sale of its
HeartCheck™ technologies from the European Union (CE Mark), Australia (TGA), the USA (FDA), China (CFDA) and Canada (Health
Canada).
To learn more about CardioComm Solutions' products and plans, please see the Company's websites at www.theheartcheck.com and www.cardiocommsolutions.com.
About CardioComm Solutions
CardioComm Solutions' patented and proprietary technology is used in products for recording, viewing, analyzing and storing
electrocardiograms (ECGs) for diagnosis and management of cardiac patients. Products are sold worldwide through a combination of an
external distribution network and a North American-based sales team. The Company has earned the ISO 13485 certification, is HPB
approved, HIPAA compliant, and has received FDA market clearance for its software devices. CardioComm Solutions is headquartered in
Toronto, Ontario, Canada.
FOR FURTHER INFORMATION PLEASE CONTACT:
Etienne Grima, Chief Executive Officer
1-877-977-9425
investor.relations@cardiocommsolutions.com
www.cardiocommsolutions.com
Forward-looking statements
This release may contain certain forward-looking statements with respect to the financial condition, results of operations and
business of CardioComm Solutions and certain of the plans and objectives of CardioComm Solutions with respect to these items. By
their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances
that will occur in the future and there are many factors that could cause actual results and developments to differ materially from
those expressed or implied by these forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of this release.
