Nightingale Completes $5.3 million Convertible Debenture Private Placement and Senior Debt Financings
/Not for distribution in the United States/
TORONTO, March 12, 2013 /CNW/ - Nightingale Informatix Corporation (TSXV: NGH) ("Nightingale" or the "Company") announced that it has completed a private placement of $3,265,000 aggregate principal amount of 10% Series C secured subordinated convertible debentures (the "Debentures") at a price of $1,000 per Debenture (the "Debenture Offering"). Raymond James Ltd. ("Raymond James" or the "Agent") acted as an agent on behalf of the Company to complete the Debenture Offering. Certain holders of $925,000 aggregate principal amount of the Company's outstanding 12% Series A Subordinated Convertible Debentures (the "Series A Debentures") have agreed to tender such debentures for early redemption by the Company and direct the proceeds thereof towards the subscription for an equivalent aggregate principal amount of the Debentures.
Nightingale has also completed an increase in its senior loan facility with its existing commercial lending institution with the addition of a US $ 2,000,000 term loan (the "Senior Term Loan").
The Debenture Offering
The Debentures mature on March 14, 2016 and bear interest at the rate of 10% per annum, which shall be calculated and payable in cash monthly, in arrears, on the first business day of each month, commencing on April 1, 2013. 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, without notice or penalty, at a price equal to their principal amount plus accrued and unpaid interest.
The Debentures are convertible at the holder's option into common shares at any time at a conversion price of $0.60 per share. The conversion price represented a 150% premium to the 30 day volume weighted average trading price, established at the market close March 8, 2013. The Debentures are secured on all of the Company's and certain of its subsidiaries' present and after acquired property and assets and shall be subordinated to certain defined senior indebtedness in the aggregate amount of $7.5 million. The Debentures will not be listed and have a four-month statutory hold period.
The Company will use the proceeds of the Debenture Offering to redeem the remainder of the outstanding Series A Debentures and for general corporate purposes. In conjunction with the successful completion of the Debenture Offering, the Agents received a 6% cash commission plus 6% agent's options ("Agent's Options") on the total dollar amount raised, except in certain specified circumstances where the compensation percentage was less. On the closing of the Debenture Offering, $168,150 commission was paid and 280,250 Agent's Options were issued. The Agent's Options will be exercisable for shares for a period of three years from closing at $0.60 per share.
Sam Chebib, a Director and the Chief Executive Officer of the Company, participated in the Debenture Offering by replacing $500,000 aggregate principal amount of Series A Convertible Subordinated Debentures held by him with the equivalent aggregate principal amount of Debentures as described above. Mr. Chebib currently holds or controls 11,018,183 common shares of the Company, representing approximately 14.4% of the outstanding common shares (or approximately 13.68%, assuming the conversion of all outstanding convertible debentures (including the Debentures)).
The Senior Term Loan
The Senior Term Loan bears an interest rate equivalent to the bank prime rate plus 2.25% and is repayable with 36 equal monthly installments of principal plus interest. Nightingale intends to use the proceeds of the financings for general corporate purposes.
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 and transcription, 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.ca
Forward Looking Statement
This press release contains "forward-looking statements" 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: 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 CorporationFor further information:
Chief Financial Officer
Nightingale Informatix Corporation
Vice President, TMX Equicom
Tel: 416-815-0700 ext. 273