CloudMD Signs Definitive Agreement to Acquire Re

Function, a Profitable Rehabilitation Clinic Network - Seite 2

Re:Function’s principle Directors, Ralph Cheesman and Mike Smith, both Occupational Therapists, will be joining CloudMD to lead the continued expansion of allied health services across North America, and together will provide a multidisciplinary, team-based approach to treatment.

The acquisition is mutually important in the shared vision to disrupt the current healthcare delivery system and to provide continuity of care across multiple verticals to ensure exceptional patient care. CloudMD will integrate its telemedicine solutions throughout the clinics, layering on additional allied health and specialist functions to the platform. CloudMD’s registered users will now have easier and more unified access to primary care doctors, specialists, and a network of mental, occupational and physical health specialists. The Re:Function team also gives CloudMD’s network of primary care physicians increased options to give patients referrals to extended care.

The acquisition will be immediately accretive to CloudMD as the Re:Function group of clinics generated approximately $5.8 million in revenues with earnings before interest, taxes, depreciation and amortization (EBITDA) margins exceeding 19% over the last fiscal year ending January, 2020.

Terms of Definitive Agreement

In consideration for the purchase of 100% of the outstanding securities of Re:Function, CloudMD has agreed to pay shareholders aggregate consideration of C$8,000,000 payable as follows: (i) C$3,000,000 in cash, subject to a working capital adjustment; (ii) C$3,500,000 in shares of the Company; and (iii) a performance-based earnout of C$1,500,000, which is payable in shares of the Company in annual issuances over a period of three years. All shares issued pursuant to the acquisition are issued at a deemed price of C$0.88 per share and are priced by calculating the ten-day volume weighted average trading price of the Company’s shares for the 10 trading days prior to the execution of the binding term sheet. The shares will be subject to certain contractual restrictions on trading for a period of thirty months from the date of issuance.

The acquisition is subject to customary closing conditions and receipt of TSX Venture Exchange approval.

CloudMD also provides an amendment to a previously announced press release. On June 18, 2020 the Company announced the appointment of Dr. Sohal Goyal as Head of Corporate Development in Ontario. Pursuant to the policies of the TSX Venture Exchange and the terms of the contractor services agreement (the “Agreement”) with Dr. Goyal, the Company will issue $500,000 in common shares of the Company to Dr. Goyal which equates to 699,301 common shares (the “Shares”). The Shares issued are subject to escrow over a 2-year period and will be released on a quarterly basis. The deemed price of the Shares is $0.715, which was calculated by using the volume weighted average closing share price on the last 10 trading days prior to the date of the Agreement. The Company announces that Dr. Goyal will also receive $100,000, payable in common shares, at the end of each 12-month period on an annual basis.