VitalHub Corp. (the “Company”) (TSXV: VHI) is pleased to announce
that it has completed a non-brokered private placement (the
“Offering”) of units (“Units”) with the former founders and
management team of Aastra Technologies Limited (the “Investors”).
The Offering was completed at a price $0.16 per Unit for gross
proceeds of $3.3 million and a total of 20,625,000 Units issued.
The Investors are comprised of Aastra Technologies Limited
(“Aastra”) founder, former Chairman and co-CEO Francis Shen; Aastra
former President, co-CEO and COO Tony Shen; former Aastra CFO and
current CFO of The Descartes Systems Group Inc., Allan Brett; and
former Aastra General Counsel and current VP – M&A and General
Counsel of Sangoma Technologies Corp., John Tobia. Francis Shen and
Tony Shen invested by way of holding companies, Connection 25 Inc.
and TMWE Inc., respectively (together, the “Principal
Investors”).
Aastra was established in 1983 by Francis Shen and a partner,
and was joined by Francis’s brother Tony Shen in the late 1980’s.
Aastra initially serviced the aerospace and defense market, and
quickly transitioned in the early 1990s to the rapidly growing
telecom industry. Together, the Shen brothers quickly expanded
Aastra through new product innovation, and later successfully
employed an aggressive M&A consolidation strategy and global
market expansion. They quickly grew the company to over 2,000
employees and more than $700 million in annual revenue. Aastra was
listed on the Toronto Stock Exchange under the ticker "AAH" from
2000 until 2014, when it was acquired by Mitel Networks Corporation
(listed under "MNW") in a transaction that returned over $500
million to its shareholders. In addition, in prior years,
Aastra returned over $200 million in dividends and stock
buybacks.
Francis Shen will be joining the Company’s Board of Directors
(“Board”), and Tony Shen will serve as a Board Observer. The
Company will also constitute a new committee of the Board to
consider M&A strategy and initiatives, which Francis Shen will
be chairing (the “M&A Committee”). The M&A committee will
work with a non-Board advisory group that will include the
Investors, VitalHub CEO Dan Matlow, and VitalHub CFO Brian
Goffenberg. The Company has also agreed to an additional board
nominee for Francis Shen should all of the Two-Year Warrants be
exercised in full.
Use of proceeds from the Offering will be for acquisition
purposes only, to advance the Company’s M&A strategy.
“M&A is an integral part of our growth and business plan,”
said Dan Matlow, CEO of VitalHub. “It is very exciting to have a
group of experienced technology executives invest in and endorse
our vision and team. We are looking forward to working closely with
them as we continue to execute on our strategy.”
“We have had the opportunity to examine and review VitalHub’s
business, and we strongly believe in their approach and the
opportunity that exists to bring the Company to scale,” said
Francis Shen, founder, and former Chairman and co-CEO of Aastra
Technologies Limited. “We believe we can assist and add value in
growing the Company to become something special for all
shareholders.”
Each Unit consists of one common share of the Company (the
“Common Shares”), one half of one common share purchase warrant
(each whole warrant, a “Two-Year Warrant”) with each such Two-Year
Warrant being exercisable for one Common Share of the Company at an
exercise price of $0.29 (the “Two-Year Exercise Price”), for a
period of 24 months from the date of issuance, and one half of one
common share purchase warrant (each whole warrant, a “Three-Year
Warrant”) with each such Three-Year Warrant being exercisable for
one Common Share of the Company at an exercise price of $0.39 (the
“Three-Year Exercise Price”), for a period of 36 months from the
date of issuance (the Two-Year Warrants and Three-Year Warrants
together, the “Warrants”).
Pursuant to the Offering, the Company issued a total of
20,625,000 Common Shares, 10,312,500 Two-Year Warrants and
10,312,500 Three-Year Warrants. Connection 25 Inc. and TMWE Inc.
purchased, 12,812,500 and 6,250,000 Units respectively. Connection
25 Inc. now holds 8.27% of the total Common Shares of the Company
(undiluted), and 15.28% of the Company (fully-diluted). TMWE Inc.
now holds 4.03% of the total Common Shares of the Company
(undiluted), and 7.76% of the Company (fully-diluted). Because of
this, the Principal Investors and the Company have agreed to treat
the Principal Investors as acting jointly and have added terms to
the subscription agreements and Warrants held thereby which prevent
the Principal Investors from exercising that number of Warrants
such that their aggregate total Common Shares held would be equal
to or greater than 20% of the total issued and outstanding Common
Shares of the Company. In addition, the Company has agreed that
367,907 Warrants, being that number of Warrants which, if
exercised, would result in the Principal Shareholders holding
greater than 19.99% of the total issued and outstanding Common
Shares of the Company, shall be subject to cashless exercise
provisions in the event that the Principal Investors wish to
exercise such Warrants but are otherwise unable, the Company will
exchange the Warrants for cash payment equal to the difference of
the closing price of the Company’s Common Shares on the date prior
to the notice of exercise delivered to the Company by the Principal
Investor and the exercise price of the subject Warrant.
All securities issued in connection with the Offering are
subject to a four month hold period expiring May 20, 2019.
About VitalHub:
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. VitalHub technologies include Blockchain, Mobile,
and Web-Based Assessment, Client Management and Electronic Health
Record solutions.
The Company has a robust two-pronged growth strategy, targeting
organic growth opportunities within its product suite, and pursuing
an aggressive M&A plan. Currently, VitalHub serves 200+ clients
across North America. VitalHub is based in Toronto, Canada, with an
offshore innovation hub in Sri Lanka. The Company is publicly
traded on the TSX Venture Exchange under the symbol "VHI".
Cautionary Statement:
The TSX Venture Exchange has in no way passed upon the merits of
the transactions and has neither approved nor disapproved the
contents of this press release. 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 press release.
This press release includes forward-looking statements regarding
the Company and its business, which may include, but is not limited
to, statements with respect to the appointment of a new directors.
Often, but not always, forward-looking statements can be identified
by the use of words such as "plans", "is expected", "expects",
"scheduled", "intends", "contemplates", "anticipates", "believes",
"proposes" or variations (including negative variations) of such
words and phrases, or state that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be
achieved. Such statements are based on the current expectations of
the management of each entity, and are based on assumptions and
subject to risks and uncertainties. Although the management of each
entity believes that the assumptions underlying these statements
are reasonable, they may prove to be incorrect. The forward-looking
events and circumstances discussed in this release, including the
Company’s M&A strategy and proposed board appointment(s), may
not occur by certain specified dates or at all and could differ
materially as a result of known and unknown risk factors and
uncertainties affecting the companies, including risks regarding
failure to obtain approvals, market conditions, economic factors,
trends in the technologies industry, the equity markets generally
and risks associated with growth and competition. Although the
Company has attempted to identify important factors that could
cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other
factors that cause actions, events or results to differ from those
anticipated, estimated or intended. No forward-looking statement
can be guaranteed. Except as required by applicable securities
laws, forward-looking statements speak only as of the date on which
they are made and the Company undertakes no obligation to publicly
update or revise any forward-looking statement, whether as a result
of new information, future events, or otherwise.
Contact Information:Dan MatlowChief Executive
Officer, Director(416) 727-9061dan.matlow@vitalhub.com
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