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Vitalhub Corp
Symbol VHI
Shares Issued 165,306,799
Close 2019-10-18 C$ 0.16
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Vitalhub to acquire Oculys Health Informatics

2019-10-21 12:00 ET - News Release

Mr. Dan Matlow reports

VITALHUB CORP. ANNOUNCES AGREEMENT TO ACQUIRE OCULYS HEALTH INFORMATICS INC.

Vitalhub Corp. has entered into an agreement to acquire all of the issued and outstanding shares of Oculys Health Informatics Inc.

Total consideration to be paid by Vitalhub, after a closing net equity adjustment, is expected to be approximately $4,227,000. The purchase price comprises a $2.2-million issuance of common shares of Vitalhub and a cash payment equal to the difference between the purchase price and the share component, which Vitalhub estimates will be approximately $2,027,000.

The cash component includes $1,585,805 to be paid to certain creditors of Oculys, with the remainder paid to shareholders of Oculys. The share component shall comprise 12,222,222 common shares issued at a price of 18 cents per share. The corporation has also agreed to certain additional cash payments to the shareholders of Oculys pursuant to an earn-out clause triggered on achievement of certain business milestones of Oculys in the proceeding two-year period.

Of the cash component, $330,000 will be subject to escrow, to be released 12 months postclosing, subject only to reduction in the event the funds in escrow are required for an indemnity claim made by Vitalhub, or any purchase price adjustment, in accordance with the agreement. In addition, 75 per cent of the share component shall be held by the applicable escrow agent and released to the vendors in five equal and consecutive semi-annual instalments over a 30-month period following the closing date of the acquisition.

Epic Capital Management Inc., a boutique investment and strategic consulting firm, acted as adviser to Oculys with respect to the acquisition. On closing, Epic will be paid a total work fee of $247,500, which is satisfied by a $99,000 cash payment and the issuance of 825,000 common shares at the share purchase price for an aggregate value of $148,500. The work fee is paid by the shareholders of Oculys out of the cash component paid and share component issued thereto, respectively, on the closing of the acquisition and does not represent an additional cost, payment or share issuance from Vitalhub.

The company currently has 165,362,659 common shares issued and outstanding. Upon delivery of the share purchase price, the company will have a total 177,584,881 issued and outstanding common shares. Vitalhub anticipates that the acquisition will close in approximately two weeks and is subject to customary closing conditions.

Oculys provides a real-time and predictive operational management system for hospitals. The company currently has 18 hospital customers located across Ontario and Manitoba. Oculys develops practical operational visibility solutions for health care professionals aimed at solving the challenges facing health care leaders, clinicians and the patients they serve, ultimately reducing costs and improving the delivery of care. Oculys's revenue for the year ended March 31, 2019, was $2,066,540, with $1,559,177 being recurring in nature, and EBITDA (earnings before interest, taxes, depreciation and amortization) of negative $427,243. Since March 31, 2019, Oculys has increased its recurring revenue, as well as reduced its operating losses, and the company expects to maintain and improve on these results.

"Through this acquisition, not only have we increased our recurring revenue base, we have created a synergistic opportunity for both customers of the Oak Group and Oculys to benefit from each other's products and services," said Dan Matlow, chief executive officer of Vitalhub. "We look forward to levering Oculys's operational flow solutions as we continue to advance our growth strategy."

"Since inception, Oculys has become the leading provider in the Ontario and Manitoba marketplace for real-time and predictive operational management solutions," said Franck Hivert, chief executive officer of Oculys Health. "By being part of Vitalhub's robust and growing suite of health IT solutions, Oculys will have the opportunity to meaningfully extend its product reach across Canada and with significant support internationally."

"We believe Vitalhub is uniquely positioned to accelerate the growth of Oculys's best-in-class operational flow and analytics-driven command centre solutions," said Scott Kaplanis, venture partner at Epic Capital.

About Vitalhub Corp.

Vitalhub develops and supports mission-critical information systems in the social service, mental health (child, youth and adult), long-term care, community health service, home health, and hospital sectors.

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