NORTH VANCOUVER, BC, June 11, 2012 /CNW/ - Open EC Technologies, Inc.
("Open EC" or the "Company") (TSX-V: OCE) is pleased to announce that
it has entered into a letter agreement with QHR Technologies Inc.
("QHR") (TSX-V: QHR) pursuant to which QHR proposes to acquire all of
the issued and outstanding securities of Open EC in a business
combination effected by way of a Plan of Arrangement (the
For Open EC this transaction, once completed, provides a strategic
partner to accelerate our market share and earnings growth of our US
HealthCare IT business with substantially improved access to capital
and human resources. In addition, this plan of arrangement provides
the Open EC shareholders with a choice of liquidity or to participate
in ongoing equity growth potential with an exchange of Open EC shares
for QHR Shares.
For QHR this transaction, once completed, provides QHR with a strategic
opportunity to enter the US Healthcare market for their Electronic
Medical Record (EMR) software through Open EC, who has depth of
experience and a growing US Healthcare customer base in areas of
medical billing, EDI & EMR data transfers to and from Healthcare
Providers, Insurance Payors and Broker/Agencies throughout the United
Transaction Structure Summary
Open EC Shareholder option to take either Cash or QHR Shares
Cash option of $0.04 for each Open EC Share
Share Exchange option of 12 Open EC Shares for 1 QHR Shares, with a 12
month hold on the shares
Options & Warrants have a conversion rate as noted below to QHR Shares,
with an 18 month hold
$250,000 Working Capital Loan to Open EC on signing of this announced
Repayment of Open EC debt and an additional $500,000 of working capital
Signing of the Definitive Agreement by July 15, 2012
Closing of the Plan of Arrangement by October 31, 2012
Martyn Armstrong, CEO of Open EC states, "This strategic transaction
with QHR will provide the Open EC shareholders a cash liquidity
opportunity, or an opportunity to continue as shareholders in QHR. We
believe the Open EC business growth opportunity will see a substantial
benefit within the QHR group with improved balance sheet, access to
working capital, human resources, sales and marketing for our US
HealthCare expansion. With improved business development support to
build the Open EC business, combined with QHR's market leading position
in the Canadian Electronic Medical Records (EMR) software sector, our
shareholders who elect a share exchange will be in the position to
participate in the business growth of both QHR and Open EC. With the
combined markets, solutions and management, both companies should
benefit in growth in both the Canadian and US Healthcare IT Market."
Mr. Al Hildebrandt, CEO and President of QHR states, "QHR has been
watching and analyzing the US Healthcare market for some time now, but
we knew that it would be best for QHR if we could find a partner or an
acquisition target who knew the complexities of the financial portion
of Healthcare very well and already had a good portion of recurring
revenue to fund the existing US business and augment that with QHR's
own experiences and product offering. We are delighted to have found
such a partner company and to find many new advanced software products
and technology skills available to us in the highly qualified staff
working at Open EC, especially for the development of the SaaS
In the proposed Plan of Arrangement, holders of Open EC common shares
("Open EC Shares") can elect to exchange their Open EC Shares for
common shares of QHR ("QHR Shares") at a ratio of twelve (12) Open EC
Shares for each QHR Share or cash at a price of $0.04 per Open EC
Share. Where no affirmative election is made, the Open EC shareholder
will be deemed to have made the election to receive cash.
Holders of share purchase warrants and options which have not expired on
the closing date may exchange their securities for QHR Shares at
various rates depending on the class or series (some warrants will be
exchanged at a ratio of three & three quarters to one, others at a
ratio of nine to one and options will be exchanged at a ratio of ten to
one). QHR Shares issued in exchange for Open EC Shares will be subject
to a resale restriction for twelve months after the completion date,
while QHR Shares issued in exchange for Open EC warrants and options
will be subject to an eighteen month resale restriction.
The Arrangement will provide for the repayment of Open EC's existing
secured debt over a period of time beginning on the completion date of
the Arrangement and ending April 1, 2013 and a commitment to provide
working capital of $500,000 to the Open EC business unit for calendar
year 2013. In addition, within five business days of the date of the
letter agreement, QHR has agreed to provide a secured bridge loan to
Open EC in the amount of $250,000.
The Board of Directors of both companies have approved the letter
agreement and the Arrangement but the Arrangement is subject to the
negotiation and execution of a definitive agreement with comprehensive
terms, as well as approval by the Supreme Court of British Columbia,
the TSX Venture Exchange and the affirmative vote of 66 and 2/3 percent
of the Open EC shareholders. The letter agreement requires that all of
the officers and directors of Open EC will sign voting agreements
pursuant to which they will agree to vote their securities in favour of
The companies have agreed to work towards completing due diligence and
the signing of a definitive agreement by July 15, 2012. The
Transaction is expected to be completed by October 31, 2012, following
all necessary approvals. The Transaction remains subject to entering
into the definitive agreement and the satisfaction of customary closing
conditions, including any necessary regulatory approvals. There is no
assurance that the Transaction will be completed, or if completed, that
the terms may change.
About QHR Technologies Inc.
QHR operates two business units in distinct markets:
The Electronic Medical Records ("EMR") division offers a suite of
medical software modules that provides computer-based medical records
for family physicians, medical specialists, and surgeons, as well as
administrative modules for billing and patient scheduling, that is a
key component of the move throughout Canada to provide electronic
healthcare records for all Canadians. The EMR division also provides
on-site and off-site (ASP) hosting capabilities.
The Enterprise Management Software ("EMS") division specializes in
workforce management software, which consists of integrated payroll,
staff scheduling and human resource software, and in customized
financial management software built on the Microsoft Dynamics GP
platform. These products are targeted at complex healthcare, social
services and public safety environments.
Additional product and solution information for QHR Technologies is
available on the web at www.QHRtechnologies.com. The QHR Technologies' common shares trade on the TSX Venture
Exchange under the symbol: "QHR"
About Open EC Technologies, Inc.
Open EC Technologies is an e-Business Information Technology company
with our corporate head office, marketing and development in Vancouver,
BC, main HealthCare IT Solutions Operations office in San Antonio,
Texas and Medical Practise Billing Operations office in Spring Hill,
Florida. The company has software development and data center hosting
operations in Maine, with Sales and Executive Management staff in
The Company's focus is to provide software solutions and transaction
processing services to assist Physicians, Hospitals, Health Plans,
Insurance Brokers and State Governments to exchange information for
HIPAA EDI Health Plan Enrolment, Health Insurance Eligibility, Health
Insurance Claims, Claim Payments and HealthCare Provider Collaboration
of supporting patient referral and industry compliance/reporting
Additional product and solution information is available on the web at www.SoftCareHealthcare.com, www.iPlexus.net and www.softcare.com and additional public company information is available on the web at www.openec.com. The Company's common shares trade on the TSX Venture Exchange under
the symbol: OCE.
ON BEHALF OF THE BOARD
"Martyn A. Armstrong"
Martyn A. Armstrong
President and CEO
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release. This news release may contain
forward-looking statements within the meaning of The Private Securities
Litigation Reform Act of 1995. Forward-looking statements address
future events and conditions and therefore, involve inherent risks and
uncertainties. Actual results may differ materially from those
currently anticipated in such statements.
SOURCE Open EC Technologies, Inc.
For further information:
Further information about the Open EC can be found on SEDAR (www.sedar.com) or by contacting Mr. Martyn A. Armstrong, President & CEO of Open EC. (Tel:1-604-983-8083 email: firstname.lastname@example.org)
Further information about QHR Technologies can be found on SEDAR (www.sedar.com) or by contacting Mr. Al Hildebrandt, President & CEO of QHR. (Tel:1-250-979-1701 email: ahildebrandt@QHRtechnologies.com)