Dr. David Gane reports

LED ANNOUNCES CLOSING OF APTERYX, INC. ACQUISITION AND RELATED FINANCINGS

LED Medical Diagnostics Inc. has closed its previously announced acquisition of Apteryx Inc. for an aggregate purchase price of $10.25-million (U.S.) and has also closed the related financings for gross proceeds totalling approximately $14.4-million (Canadian).

"Today is a key moment toward a bright future for both LED and Apteryx," stated LED chief executive officer Dr. David Gane. "We are very excited to add such a talented team that brings a vast amount of experience and leadership to the LED family. With this transaction, collectively, we have created a leading North American dental imaging company that possesses some of the industry's best technologies, a significant customer base, strong growing and recurring revenue streams with very high margins, and a platform for continued growth. Furthermore, we have recapitalized the business, providing LED with sufficient financial resources to capture additional revenue opportunities on an accelerated basis in the years to come."

Kevin Crucs, founder and chief executive officer of Apteryx, concluded: "I am so proud of the company that the entire Apteryx team has built over the years. By combining our resources under one shared vision, both LED and Apteryx will have a significant and lasting impact in the dental industry through integrated, open source, best-in-class solutions."

Key benefits of the transaction:

• Expected to be significantly accretive to revenue, EBITDA (earnings before interest, taxes, depreciation and amortization) and net income for the 2017 fiscal year;
• Diversifies LED's revenue base and revenue timing, adding significant recurring revenue opportunities;
• Apteryx has a proven and consistent history of profitable operations and attractive financial operating margins;
• Establishes LED as a leader in imaging software to dental practices across the United States;
• Provides LED with a range of software applications to augment its hardware offerings establishing the company as an end-to-end dental imaging solution provider in a growing market;
• Provides LED the addition of significant customer user base of dental professionals as well as partnership opportunities with Apteryx's existing OEM (original equipment manufacturer) distribution partners for new and existing LED imaging products;
• The addition of a software development team which will help expand development of new products;
• Provides LED critical mass to support significant growth operationally and financially;
• Mr. Crucs is joining LED in a senior leadership role and is taking a portion of the acquisition proceeds in LED stock;
• LED management team is very familiar with Apteryx's management team and products. LED is currently a customer of Apteryx products and services;
• Significant expansion of LED's IP portfolio with addition of 28 patents.

Details of the acquisition

LED has closed the acquisition of 100 per cent of the capital stock of Apteryx for aggregate consideration of $10.25-million (U.S.). At closing, LED paid $6,987,000 (U.S.) in cash and issued approximately 33.9 million common shares of LED to the seller at seven Canadian cents, representing $1.8-million (U.S.) of value. An additional $1.2-million (U.S.) of the purchase price will be paid in cash in tranches over the next 18 months. The final payment of $450,000 (U.S.) will be paid in common shares of LED or in cash at LED's option, 24 months from closing. The common shares issued to the seller at closing are subject to an escrow agreement, with staged releases over 24 months. Mr. Crucs will be joining the senior management team of LED and will continue to lead the Apteryx business as a significant shareholder of LED. Apteryx will operate as a stand-alone subsidiary of LED Medical Diagnostics.

Detail of the concurrent financings

LED has also closed the following series of financings for gross proceeds of approximately $14.4-million (Canadian).

• A brokered private placement of equity units of LED for gross proceeds of approximately $11.5-million (Canadian). The equity units were priced at six Canadian cents per equity unit, each consisting of one common share and one-half of one common share purchase warrant, with each whole warrant being exercisable for a period of 24 months into one common share of LED at a price of 10 Canadian cents per common share;
• A brokered private placement of 88 debenture units of LED for gross proceeds of $880,000 (Canadian). Each debenture unit consists of $10,000 (Canadian) principal value of 12 per cent senior secured debentures maturing 24 months from the closing date and 21,250 common shares of LED;
• A non-brokered private placement of equity units for gross proceeds of approximately $1.8-million (Canadian);
• A non-brokered private placement of 27 debenture units for gross proceeds of $270,000 (Canadian);
• Certain insiders of LED, including directors and officers, acquired a total of approximately 9.2 million equity units in the offering.

A portion of the net proceeds was used to finance the cash portion of the purchase price of Apteryx and the remainder will be used for working capital and general corporate purposes.

Bloom Burton Securities Inc. acted as sole agent and financial adviser to LED for the acquisition of Apteryx, the brokered equity offering and the brokered debenture offering. In connection with the brokered equity offering, the agent received a cash commission of 7 per cent of the gross proceeds of the offering and non-transferable broker warrants equal to 7 per cent of the aggregate number of equity units sold under the offering. Each equity broker warrant is exercisable at six Canadian cents for a period of 24 months into one equity unit (as defined herein). In connection with the brokered debenture offering, the agent received a cash commission of 4 per cent of the gross proceeds of the offering and non-transferable broker warrants equal to 4 per cent of the principal amount raised in the debenture financing divided by 10 cents. Each debenture broker warrant is exercisable for a period of 24 months into one common share of LED at a price of 10 Canadian cents per common share.

The acquisition and related financings have been approved by the TSX Venture Exchange. The equity financing is subject to final approval by the TSX Venture Exchange.

About Apteryx Inc.

Apteryx was founded in 1995 to create and develop software applications and systems that are leading products in their respective industry segments. Apteryx's products include XrayVision and XVlite, an imaging suite of applications that digitize X-rays and other images for dental practitioners; XrayVision DCV DICOM software for the institutional dental market; XVWeb, a cloud-based PACS and DICOM server; and other Windows-based applications and utilities.

About LED Medical Diagnostics Inc.

Founded in 2003 and headquartered in Vancouver, B.C., Canada, LED Medical Diagnostics, through its wholly owned subsidiaries LED Dental Inc. and LED Dental Ltd., provide dentists and oral health specialists with advanced diagnostic imaging products and software, in addition to the award-winning VELscope Vx tissue fluorescence visualization technology. Backed by an experienced leadership team and dedicated to a higher level of service and support, LED Dental is committed to providing dental practitioners with the best technology available by identifying and adding leading products to its growing portfolio.