CloudMD Secures Footprint in Ontario with Binding Term Sheet to Acquire Majority Interest in Medical Clinic
West Mississauga Medical clinic generated revenue of C$1.8 million in 2019
Vancouver, BC, June 16, 2020 - CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF, Frankfurt: 6PH) (the “Company” or “CloudMD”), a telemedicine company revolutionizing the delivery of healthcare to patients, is excited to announce that is has entered into a binding term sheet (the “Agreement”) to acquire a majority interest (51%) in West Mississauga Medical Ltd. (“West Mississauga Medical”), a comprehensive family medicine and specialist medical clinic with 8 family doctors and 4 specialists serving over 100,000 patients.
West Mississauga Medical is a well-established medical clinic located on the border of Brampton, Mississauga and Milton in a high growth area. The clinic has served the community for over 16 years and remained open throughout the COVID-19 pandemic seeing patients via telemedicine and in-person. The acquisition is part of CloudMD’s national growth strategy which includes having well established brick and mortar clinic partners in major provinces. These clinics ultimately provide a strong, centralized patient base and footprint across the country. West Mississauga Medical will be integrated into the CloudMD EMR platform and its network of doctors and specialists will immediately start servicing CloudMD’s registered users and patients in Ontario. The acquisition will be immediately accretive to CloudMD as West Mississauga Medical generated more than $1.8 million in revenues with earnings before interest, taxes, depreciation, and amortization (EBITDA) margins exceeding 11% over the last fiscal year ending December 2019.
Dr. Essam Hamza, CEO of CloudMD commented, “We are very excited with this partnership and it represents a major milestone as our Company expands nationally. We want to bring access to healthcare to all Canadians while maintaining continuity of care. We are of the view that a platform of strategic, well-established clinics allows us to best leverage our capital for the purpose of on-boarding patients for the digital delivery of healthcare. Dr. Goyal and his team at West Mississauga Medical are pioneers and we are proud to have them join our team. We look forward to his leadership on the ground in Ontario.”
Dr. Sohal Goyal, Medical Director of West Mississauga Medical commented, “This partnership allows us to continue our tradition of providing comprehensive care to our patients. Partnering with CloudMD gives us the opportunity to expand our virtual office and enhance the provision of medical care to patients across Ontario. Integrated medical care with a virtual footprint is the future of medicine and we are excited to be part of the CloudMD family of medical clinics and the first in Ontario. Dr. Hamza and the entire team at CloudMD are a patient centred company primed for growth in the dynamic field of virtual medicine and our core values are aligned.”
Terms of Agreement
In consideration for the purchase of 51% of the outstanding securities of West Mississauga Medical, CloudMD has agreed to pay Shareholders aggregate consideration of C$200,000 payable as up to C$140,000 in cash and C$60,000 in shares of the Company. All shares issued pursuant to the acquisition are priced at the ten-day volume weighted trading price of the Company shares for the 10 trading days prior to the execution of the definitive agreement.
The acquisition is subject to customary closing conditions, including the execution of a definitive acquisition agreement and receipt of TSX Venture exchange approval. The Company anticipates a definitive agreement on or before July 31, 2020.
The Company also announces it has engaged Winning Media, LLC. (“Winning Media”) to provide targeted digital media and corporate brand recognition initiatives. Winning Media is a Houston, TX based marketing agency that specializes in digital and corporate brand marketing services to enhance corporate visibility and retail investor awareness. CloudMD has agreed to pay the agency US$74,000 for a six-week term. The agency will handle specific functions of digital distribution of public information relating to the Company. Winning Media and its principals do not have any direct or indirect equity interest in the Company and will not receive any securities of the Company as compensation for their services.
About CloudMD Software & Services
CloudMD is digitizing the delivery of healthcare by providing patients access to all points of their care from their phone, tablet or desktop computer. The Company offers SAAS based health technology solutions to medical clinics across Canada and has developed proprietary technology that delivers quality healthcare through the combination of connected primary care clinics, telemedicine, and artificial intelligence (AI). CloudMD currently provides service to a combined ecosystem of 376 clinics, over 3000 licensed practitioners and almost 3 million patient charts across its servers.
ON BEHALF OF THE BOARD OF DIRECTORS
“Dr. Essam Hamza, MD”
Chief Executive Officer
FOR ADDITIONAL INFORMATION CONTACT:
CloudMD Software & Services Inc.
Forward Looking Statements
This news release contains forward-looking statements that are based on CloudMD’s expectations, estimates and projections regarding its business and the economic environment in which it operates, including with respect to its business plans and its intended use of the proceeds of the Offering. Although CloudMD believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements and readers should not place undue reliance on such statements. These forward-looking statements speak only as of the date on which they are made, and CloudMD undertakes no obligation to update them publicly to reflect new information or the occurrence of future events or circumstances, unless otherwise required to do so by law.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.