GRAND RAPIDS, MICHIGAN–(Marketwired – Feb. 21, 2017) –
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Agility Health, Inc. (TSX VENTURE:AHI) (“Agility Health” or, the “Company“), a leading provider of physical rehabilitation and software services that benefit patients, healthcare providers and employers, announced today that its principal operating subsidiary, Agility Health, LLC (“Agility LLC“) has settled litigation involving FPCG LLC (“FPCG“), a former investment advisor of Agility LLC which had claimed that a commission was owed to it by Agility LLC. Pursuant to the settlement, Agility LLC has agreed to pay FPCG a total of US$1,089,928.10.
As partial settlement of the amount payable to FPCG, the Canadian dollar equivalent of US$914,928.10 is to be released from an escrow account (the “Escrowed Funds“) established by Steve Davidson, CEO of the Company and one of its largest shareholders, and Kenneth Scholten, the President of the Company and also one of its largest shareholders, as sureties for a bond that Agility LLC was required to file in connection with its appeal of the original judgment in favour of FPCG. Agility LLC has agreed to pay the balance of the amount owing to FPCG, being US$175,000, over a 20-month period with interest on the outstanding balance accruing at a rate of 10% per annum.
Pursuant to the previously announced agreement among the Company, Mr. Davidson and Mr. Scholten (the “Forbes Surety Agreement“), the Company will issue to each of Mr. Davidson and Mr. Scholten, subject to the approval of the TSX Venture Exchange (the “TSXV“), an unsecured convertible debenture (the “Escrow Debenture“) in the principal amount of CDN$602,342.91, representing one half of the Canadian dollar equivalent of the Escrowed Funds. The principal amount of the Escrow Debentures outstanding from time to time will accrue interest at the rate of 14% per annum, the Company’s weighted average cost of capital for the period from February 11, 2016 to today’s date. The outstanding principal amount of the Escrow Debentures and any accrued but unpaid interest thereon shall be convertible at the option of the holder into voting common shares of the Company (“Voting Common Shares“) at a conversion price equal to CDN $0.149 per share, the volume weighted average price per Voting Common Share on the TSX Venture Exchange over the thirty (30) trading days preceding today’s date (the “Conversion Price“). Additionally, the Company will issue to each of Mr. Davidson and Mr. Scholten, subject to the approval of the TSXV, an unsecured convertible debenture (the “Interest Debenture“) in the principal amount of CDN$102,252.36, which amount represents the interest that has accrued on the funds originally deposited in escrow by Mr. Davidson and Mr. Scholten at a rate of 14% per annum for the period from February 11, 2016 to today’s date. The principal amount of the Interest Debentures will accrue interest at the rate of 2.03% per annum. The outstanding principal amount of the Interest Debentures and any accrued but unpaid interest thereon shall be convertible at the option of the holder into Voting Common Shares of the Company at the Conversion Price. The Escrow Debentures and the Interest Debentures will mature on January 1, 2019.
Certain of the transaction described in this news release constitute “related party transactions” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Shareholders in Special Transactions (“MI 61-101”). For these transactions, the Company is relying on the exemption from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(a) of MI 61-101 on the basis that neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction exceeds 25% of the market capitalization of the Company.
About Agility Health
Through its subsidiary and principal operating entity, Agility Health, LLC, Agility Health operates a multi-state network of outpatient rehabilitation clinics and provides contracted services to hospitals, nursing homes and other institutional clients, providing care and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers, and a variety of other injuries and conditions. In addition, Agility Health provides a number of ancillary services related to physical rehabilitation, including practice management software systems and custom orthotics. As of January 1, 2017, Agility Health operates 84 outpatient or onsite rehabilitation locations in 14 states. Agility Health’s contract therapy services business provides rehabilitative services to 36 hospitals and inpatient rehabilitation units and 37 nursing homes, long-term care facilities and other service locations in 11 states. For more information, please visit investors.agilityhealth.com.
Forward-Looking Information
This press release contains forward-looking statements regarding Agility Health and its business. Such statements are based on the current expectations and views of future events of Agility Health’s management. In some cases, the forward-looking statements can be identified by words or phrases such as “may”, “will”, “expect”, “plan”, “anticipate”, “intend”, “potential”, “estimate”, “believe” or the negative of these terms, or other similar expressions intended to identify forward-looking statements. The forward-looking events and circumstances discussed in this release, including the issuance of the Escrow Debentures and the Interest Debentures, may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the Company. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumption and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Agility Health undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future events, or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Steven N. Davidson
Chairman and Chief Executive Officer
(613) 356-5000
Ray Matthews and Associates
Ray Matthews
(604) 818-7778
Ray@raymatthews.ca