MARKHAM, ON, Nov. 21, 2013 /CNW/ - Nightingale Informatix Corporation (TSX-V: NGH) ("Nightingale" or the "Corporation") announced its intention to complete a non-brokered private placement of (i) one (1) unsecured convertible note (the "Note") in the principal amount of $2,500,000; and (ii) up to 2,000,000 common shares of the Corporation (the "Common Shares") priced at $0.25 per Common Share (the "Private Placement"). The Note will be purchased by Brian Schachter, the Chairman of the Board of Directors of Nightingale (the "Purchaser"), and is convertible into Common Shares at a price of $0.25 per Common Share (the "Conversion Price") for a total potential issuance of 10,000,000 Common Shares to the Purchaser upon exercise of the Note's conversion provisions (the "Conversion Right"). The Conversion Price reflects a discount of less than 25% from the Common Shares' current "market price" and is within the Discounted Market Price, as that term is defined under s. 1 of Policy 1.1 of the TSX-V Corporate Finance Manual. Should the maximum amount of Common Shares be subscribed for, in addition to the exercise of the Conversion Right, a total of 12,000,000 Common Shares will be issued by the Corporation pursuant to the Private Placement, for gross proceeds of $3,000,000. The proceeds of the Private Placement are intended to be used by the Corporation for general corporate purposes.
The Note will become payable, unless otherwise converted into Common Shares, 90 days from the date of issuance (the "Maturity Date"), and will bear interest at a fixed annual rate of 12% payable in advance for the period ending December 31, 2013. From December 31, 2013 until the Maturity Date, interest will be payable monthly in arrears on the last day of each subsequent month, starting on January 31, 2014.
In connection with the Private Placement, the Corporation will hold a special meeting of shareholders on December 31, 2013 (the "Meeting") to consider, and if deemed appropriate, pass a resolution approving the Private Placement and the ability of the Purchaser to exercise the Conversion Right. The record date for the Meeting will be December 2, 2013. The Purchaser's ability to exercise the Conversion Right is dependent upon the Corporation receiving all necessary approvals from the TSX Venture Exchange (the "Exchange"), which requires the Corporation to obtain approval from its shareholders (other than Brian Schachter or his associates and affiliates) at the Meeting. Such approval is required because the exercise of the Conversion Right would result in Brian Schachter becoming a "control person", as that term is defined under the applicable Exchange policies. Assuming shareholder approval is granted and the Purchaser does not otherwise elect to convert the Note into Common Shares, the Corporation may elect to do so by providing notice to the Purchaser in advance of the Maturity Date.
As the Private Placement constitutes a "related party transaction", shareholder approval must be sought at the Meeting in accordance with the provisions of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions, whereby the voting rights attached to the Common Shares beneficially owned or over which control is exercised by Brian Schachter, as well as his associates and affiliates, will be excluded from determining whether or not the Private Placement has been approved.
In connection with the Private Placement, certain insiders and shareholders holding 50.3% of the issued and outstanding Common Shares (excluding those held by Brian Schachter or his associates and affiliates) have entered into "lock-up agreements" with the Corporation, thereby agreeing to vote their Common Shares in favour of a resolution approving completion of the Private Placement at the meeting.
Following the completion of the Private Placement, the Corporation will offer the holders of its series B secured convertible debentures (the "Series Bs") the ability to exchange such Series Bs into its series C secured convertible debentures (the "Series Cs"). The number of Series Bs that can be converted into Series Cs is limited to an aggregate principal amount of $228,000, which represents the remaining amount available for issuance under the indenture dated March 12, 2013 that governs the terms of the Series Cs (the "Series B Exchange"). No Exchange or shareholder approval is required to complete the Series B Exchange.
As well, the Corporation will offer the holders of any outstanding aggregate principal amount of Series Bs the option to convert such Series Bs into Common Shares at a revised conversion price of $0.25 per Common Share (the "Series B Conversion"), whereas the Series Bs currently convert into Common Shares at $0.35 per Common Share. The Series B Conversion is subject to approval by the Exchange.
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: the ability of Nightingale to complete the Private Placement, the Series C Exchange or the Series B Conversion by the stated timetable or at all; risks associated with obtaining the required Exchange and shareholder approvals of the Private Placement; 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 Corporation
For further information:
For further information about Nightingale, contact:
Chief Financial Officer
Nightingale Informatix Corporation
Senior Account Executive, TMX Equicom
Tel: 416-815-0700 ext. 248