Extenway Completes Equipment Financing and Concurrent Private Placement of Convertible Debentures for $1.6-Million

MONTREAL, June 26, 2015 /CNW Telbec/ - Extenway Solutions Inc. ("Extenway") (TSXV: EY) is pleased to announce the closing, as of June 26, 2015 (the "Closing Date"), of a secured equipment loan from Knight Therapeutics Inc. ("Knight") to Extenway in the amount of $800,000 (the "Equipment Loan") and a concurrent private placement of secured convertible debentures of Extenway (the "Debentures") in the aggregate principal amount of $800,000 (the "Offering"), for combined gross proceeds to Extenway of $1,600,000.

The proceeds from the Equipment Loan and the Offering will be used to finance the purchase of equipment (the "Equipment") to be used in the installation of Extenway's integrated bedside  terminals in hospitals under existing contracts and for working capital purposes.

"We are thrilled to announce this new financial and strategic partnership with Knight which represents a new beginning for Extenway, said John McAllister, President and CEO of Extenway. "With access to financing from Knight, we can now accelerate the installations in the hospitals for which contracts have already been won and focus on our execution strategy that will create long-term value for our shareholders."

"Even though Knight is a specialty pharmaceutical company engaged in developing, acquiring, licensing, marketing and distributing pharmaceutical products, the uniqueness and predictable cash flows of Extenway's business attracted us to supporting Extenway's growth" commented Jonathan Ross Goodman, President and CEO of Knight.

Recent Developments
On December 15, 2014, Extenway announced the signing of a contract with Mount Sinai Hospital in Toronto, Ontario to install its integrated bedside terminals and provide "infotainment" services to 350 beds in the hospital facility. Including these recently announced terminals, Extenway now has 5,275 bedside terminals installed or selected to be installed in 20 hospitals in the provinces of Quebec and Ontario. In addition, Extenway wishes to announce the following current developments:

Current Tenders
Extenway has responded to a number of calls for tenders in the provinces of Quebec and Ontario to install bedside terminals and provide "infotainment" and medical services to 1,240 beds in various hospitals.

Future Tenders
Extenway plans to respond to additional tenders in the forthcoming twelve months, representing potential contracts for the installation and services of an additional 7,850 bedside terminals.

US Market
Extenway has begun to penetrate the US Market with its distributor, Flowcorn.  Presentations to hospital groups and to Federal government entities are ongoing.

Equipment Loan

The Equipment Loan was completed pursuant to the terms and conditions of a secured loan agreement (the "Loan Agreement") between Extenway, as borrower, and Knight, as lender. The Equipment Loan shall bear interest at a rate of 15% per annum to be paid quarterly and shall decrease to a rate of 13.5% per annum upon satisfaction of certain conditions precedent, including an equity raise requirement. The Equipment Loan shall mature six (6) years from its conclusion, on June 25, 2021. Extenway shall pay to Knight an amount equal to 6.5% of the Equipment Loan per quarter, representing capital and interest, commencing on September 2017 and payable at the end of each remaining quarter thereafter during the term of the Equipment Loan, with the remaining outstanding principal and accrued and unpaid interest being due and payable on maturity.


The Debentures are secured, bear interest at a rate of 10% per annum, and will mature on the earlier of: (i) the closing date of a subsequent equity financing by Extenway for minimum gross proceeds of $4,200,000 (the "Subsequent Equity Financing"); and (ii) five (5) years from the Closing Date (collectively, the "Maturity Date").

The principal amount of the Debentures and, subject to the prior acceptance of the TSX Venture Exchange (the "Exchange"), any accrued interest thereon, shall automatically be converted into common shares of Extenway (each, a "Share") upon closing of the Subsequent Equity Financing.  The conversion price of the capital and interest (subject, for the interest, to the prior approval of the Exchange) shall be equal to the price per Share of the securities to be issued under the Subsequent Equity Financing.  The principal amount may be converted, at the option of the holder, from the date that is twelve (12) months after the Closing Date until the Maturity Date. Subject to customary adjustment provisions, the conversion price of the capital shall be equal to $0.08 per Share, if conversion is effected within twelve (12) months of the Closing Date, or $0.10 per Share, if conversion is effected thereafter.  The conversion price of the interest shall be equal to a price per Share that is not less than the market price of the Shares at the time the accrued interest become payable.

Caisse de dépôt et placement du Québec and John McAllister Holdings Inc. (each, a "Related Party") reiterated their confidence in Extenway and participated in the Offering by subscribing for Debentures in the principal amounts of $600,000 and $100,000, respectively. The participation of each Related Party in the Offering is considered a "related party transaction" under Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions (Québec) ("Regulation 61-101") and the corresponding Policy 5.9 of the Exchange. Extenway relied on Sections 5.5(a) and 5.7(1)(a) of Regulation 61-101, respectively, for exemptions from the formal valuation and minority approval requirements under Regulation 61-101, as neither the fair market value of the Debentures issued to the Related Parties, nor the amount of consideration paid therefor, exceeds 25% of Extenway's market capitalization.

A material change report in respect of the related party transactions was not filed at least 21 days in advance of the Offering, as the terms of the Offering were not settled until shortly before this announcement and Extenway wished to close the Offering on an expedited basis for sound business reasons.

The Debentures and all underlying Shares which may be issued upon the conversion of the Debentures (collectively, the "Securities") are subject to a four-month plus one-day hold period from the Closing Date, ending on October 27, 2015, pursuant to securities legislation and the policies of the Exchange. The Securities have not been nor will they be registered under the United States Securities Act of 1933, as amended, or state securities laws, and may not be offered or sold in the United States or to an account for the benefit of U.S. persons, absent such registration or an exemption from registration.

The Offering remains subject to the final approval of the Exchange. 

Security Interest

Extenway's obligations under the Loan Agreement and the terms of the Debentures are secured by a first ranking security interest and movable hypothec over the Equipment granted in favour of Knight and the Debenture holders, with Knight retaining a 64% fractional security interest in the Equipment and the Debenture holders retaining a 36% fractional security interest in the Equipment.

About Extenway Solutions Inc.

Extenway Solutions is a supplier of client-focused solutions for the healthcare industry. Services offered by Extenway include interactive television, healthcare integrated bedside terminals for patients, internet, entertainment, content integration, advertising, education and the most promising and attractive function, the medical integrated solutions. Extenway allows organizations to optimize management and coordination of human interactions as well as communications, information and coordination. For further information, please visit extenway.com or follow us on Twitter @Extenway.

About Knight Therapeutics Inc.

Knight Therapeutics Inc., headquartered in Montreal, Canada, is a specialty pharmaceutical company focused on acquiring or in-licensing innovative pharmaceutical products for the Canadian and select international markets. Knight's shares trade on TSX under the symbol GUD. For more information about Knight Therapeutics Inc., please visit the Knight's web site at www.gud-knight.com or www.sedar.com.


Certain statements that appear in this news release constitute forward-looking statements. These forward-looking statements relate to future financial conditions, results of operations or business of Extenway. These statements may be current expectations and estimates about the markets in which Extenway operates and management's beliefs and assumptions regarding these markets. These statements involve significant risks and uncertainties which are difficult to predict and assumptions which may prove to be inaccurate. The results or events predicted in forward-looking statements may differ materially from actual results or events. Extenway disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In particular, forward-looking statements do not reflect the potential impact of any merger, acquisitions or other business combinations or divestitures that may be announced or completed after such statements are made.

Neither 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 Extenway Solutions Inc.

For further information: John McAllister, President and CEO, Extenway Solutions Inc., Tel.: 514-694-1916


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