Nightingale announcement

MARKHAM, ON, Feb. 20, 2015 /CNW/ - Nightingale Informatix Corporation (TSX-V: NGH) ("Nightingale" or the "Company"), a cloud-based provider of electronic health record (EHR) software and related services, announced it has agreed to complete a non-brokered private placement of a subordinated convertible secured note (the "Note") in the principal amount of $2.1 million ("Principal Amount").  The Note will be purchased by Optimum Marketing & Merchandising Services Ltd. (the "Lender"), a company controlled by a director of the Company. The proceeds of the Note are intended to be used by the Company for working capital and general corporate purposes.

The Note will have a maturity date of December 31, 2016, and will bear interest at a fixed rate of 12% per annum, calculated and payable monthly in arrears on the last day of each month.  The Note will be secured by all of the Company's present and subsequently acquired property and assets and shall be subordinated to certain defined senior indebtedness.  In connection with the Note, the Lender will also be issued 7,776,000 warrants to purchase Common Shares of the Company with an exercise price of $0.085 per Common Share ("Warrants").  The Warrants will expire on December 31, 2016.  The completion of the issue of the Note and Warrants remains subject to the approval of the TSX Venture Exchange.

The Note shall also contain a feature that allows the Lender a one-time option to convert all or part of the Principal Amount into a standby commitment for a rights offering or participation in a similar equity offering by the Company, raising minimum aggregate gross proceeds of $4 million (the "Offering") that is undertaken by the Company within 150 days from the date of the advance (the "Offering Deadline"), at a conversion rate equal to the greater of: i) $0.085 per share; or ii) the price per share at which the equity offering is completed with arms length parties.  The Company agrees to provide the Lender with not less than ten (10) days prior written notice of the Offering (an "Offering Notice"), which notice shall contain the material terms thereof and shall provide for a closing of the Offering on or before that date that is 60 days from the date of the Offering Notice. In the event that the Company fails to present the Lender with the Offering Notice by the Offering Deadline (or in the event that the Offering fails to close for any reason, on or before that date which is 60 days following the Offering Deadline), the Note shall thereafter become convertible by the Lender at its option, in whole or in part, at the conversion rate of $0.085 per share for the balance of the term.  In the event that the Lender receives an Offering Notice and fails for any reason to unconditionally agree to participate therein by the Offering Deadline, the Note will thereafter be non-convertible.  For greater certainty, the participation of the Lender in the Offering may form part of the $4 million minimum gross proceeds being raised or may be in addition thereto.

In the event that the Company completes the Offering, the unconverted portion of the Note must be repaid from the proceeds of the Offering at a price equal to the face value thereof plus accrued and unpaid interest.

The Note may be repayable by the Company, at its sole option, at any time prior to the Offering Deadline, in whole or in part, without notice, at a price equal to 110% of the face value being repaid, subject to (a) funds for repayment being generated from the Company's revenues; and (b) the consent of the Company's senior lenders.

The Company also announced that the secured term loan with Beedie Capital Partners ("BCP"), previously announced on September 22, 2014, was being assumed by 1604697 Ontario Inc., a company controlled by a related party to a director of the Company.  There was no other impact of this transaction to the Company.

The issuance of the Note constitutes a "related party transaction" within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101") and Policy 5.9 of the TSXV Corporate Finance Manual, because the Lender is a company controlled by a director and significant shareholder of the Company ("Invested Director"). Accordingly, the Board of Directors of the Company, excluding the Invested Director, approved the issuance of the Note.  MI 61-101 requires a formal valuation and minority shareholder approval for a related party transaction unless an exemption is available. An exemption from the valuation requirement is available to the Company, as no securities of the Company are listed on a specified exchange.  An exemption from the minority shareholder approval is available to the Company, since, at the time the transaction was agreed to, neither the fair market value of the securities to be distributed in the transaction, nor the consideration to be received for those securities, exceeded $2,500,000. The Company expects to release a material change report including details with respect to the related party transaction less than 21 days prior to the issuance of the Note, which the Company deemed reasonable in the circumstances so as to be able to avail itself of the financing opportunity and complete the Note issuance in an expeditious manner.

About Nightingale
For more than a decade, Nightingale (TSX-V: NGH) has been delivering innovative cloud-based Electronic Health Record (EHR) and Practice Management solutions to healthcare organizations across the United States and Canada. Our goal is to uncomplicate the day-to-day challenges of healthcare providers. We achieve this by creating software that is truly intuitive—minimizing training and maximizing adoption. We believe so strongly in building easy-to-use software that we structured our entire product team around user-centric design. Our clients are benefiting from this focus through a well-supported and robust solution that presents a holistic view of a person's well-being in a simple, clean interface, so that the best health decisions can be made. Nightingale – One Patient. One Record.

Forward Looking Statement
This press release contains "forward-looking statements" respecting the issuance and cancellation of securities of the Corporation 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: the closing of the offering of the Note and issuance of the Warrants, the ability of Nightingale to service the interest on the Note and to repay the principal on the Note; the expected use of proceeds from the Note; the issuance of the Note being exempt from formal valuation and minority approval requirements pursuant to applicable securities laws; risks associated with obtaining the required approval of the Exchange and other approvals; the likelihood of a future equity offering being completed by the Company within 150 days of the Note's issuance, the dilution arising from this transaction, 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

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 Corporation

For further information: David Toews, CFO, Nightingale Informatix Corporation, Tel: 905-943-2600,; Sam Chebib, CEO, Nightingale Informatix Corporation, Tel: 905-943-2611,


Organization Profile

Nightingale Informatix Corporation

More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890