Open EC Technologies, Inc. Announces Letter Agreement with QHR Technologies Inc. for Business Combination
June 11 2012 - 8:30AM
PR Newswire (Canada)
NORTH VANCOUVER, BC, June 11, 2012 /CNW/ - Open EC Technologies,
Inc. ("Open EC" or the "Company") is pleased to announce that it
has entered into a letter agreement with QHR Technologies Inc.
("QHR") pursuant to which QHR proposes to acquire all of the issued
and outstanding securities of Open EC in a business combination
effected by way of a Plan of Arrangement (the "Arrangement"). For
Open EC this transaction, once completed, provides a strategic
partner to accelerate our market share and earnings growth of our
US HealthCare IT business with substantially improved access to
capital and human resources. In addition, this plan of
arrangement provides the Open EC shareholders with a choice of
liquidity or to participate in ongoing equity growth potential with
an exchange of Open EC shares for QHR Shares. For QHR this
transaction, once completed, provides QHR with a strategic
opportunity to enter the US Healthcare market for their Electronic
Medical Record (EMR) software through Open EC, who has depth of
experience and a growing US Healthcare customer base in areas of
medical billing, EDI & EMR data transfers to and from
Healthcare Providers, Insurance Payors and Broker/Agencies
throughout the United States. Transaction Structure Summary -- Open
EC Shareholder option to take either Cash or QHR Shares -- Cash
option of $0.04 for each Open EC Share -- Share Exchange option of
12 Open EC Shares for 1 QHR Shares, with a 12 month hold on the
shares -- Options & Warrants have a conversion rate as noted
below to QHR Shares, with an 18 month hold -- $250,000 Working
Capital Loan to Open EC on signing of this announced agreement --
Repayment of Open EC debt and an additional $500,000 of working
capital for 2013 -- Signing of the Definitive Agreement by July 15,
2012 -- Closing of the Plan of Arrangement by October 31, 2012
Transaction Benefits Martyn Armstrong, CEO of Open EC states, "This
strategic transaction with QHR will provide the Open EC
shareholders a cash liquidity opportunity, or an opportunity to
continue as shareholders in QHR. We believe the Open EC
business growth opportunity will see a substantial benefit within
the QHR group with improved balance sheet, access to working
capital, human resources, sales and marketing for our US HealthCare
expansion. With improved business development support
to build the Open EC business, combined with QHR's market leading
position in the Canadian Electronic Medical Records (EMR) software
sector, our shareholders who elect a share exchange will be in the
position to participate in the business growth of both QHR and Open
EC. With the combined markets, solutions and management, both
companies should benefit in growth in both the Canadian and US
Healthcare IT Market." Mr. Al Hildebrandt, CEO and President of QHR
states, "QHR has been watching and analyzing the US Healthcare
market for some time now, but we knew that it would be best for QHR
if we could find a partner or an acquisition target who knew the
complexities of the financial portion of Healthcare very well and
already had a good portion of recurring revenue to fund the
existing US business and augment that with QHR's own experiences
and product offering. We are delighted to have found such a
partner company and to find many new advanced software products and
technology skills available to us in the highly qualified staff
working at Open EC, especially for the development of the SaaS
Healthcare market." Transaction Details In the proposed Plan of
Arrangement, holders of Open EC common shares ("Open EC Shares")
can elect to exchange their Open EC Shares for common shares of QHR
("QHR Shares") at a ratio of twelve (12) Open EC Shares for each
QHR Share or cash at a price of $0.04 per Open EC Share.
Where no affirmative election is made, the Open EC shareholder will
be deemed to have made the election to receive cash. Holders of
share purchase warrants and options which have not expired on the
closing date may exchange their securities for QHR Shares at
various rates depending on the class or series (some warrants will
be exchanged at a ratio of three & three quarters to one,
others at a ratio of nine to one and options will be exchanged at a
ratio of ten to one). QHR Shares issued in exchange for Open
EC Shares will be subject to a resale restriction for twelve months
after the completion date, while QHR Shares issued in exchange for
Open EC warrants and options will be subject to an eighteen month
resale restriction. The Arrangement will provide for the repayment
of Open EC's existing secured debt over a period of time beginning
on the completion date of the Arrangement and ending April 1, 2013
and a commitment to provide working capital of $500,000 to the Open
EC business unit for calendar year 2013. In addition, within
five business days of the date of the letter agreement, QHR has
agreed to provide a secured bridge loan to Open EC in the amount of
$250,000. The Board of Directors of both companies have approved
the letter agreement and the Arrangement but the Arrangement is
subject to the negotiation and execution of a definitive agreement
with comprehensive terms, as well as approval by the Supreme Court
of British Columbia, the TSX Venture Exchange and the affirmative
vote of 66 and 2/3 percent of the Open EC shareholders. The
letter agreement requires that all of the officers and directors of
Open EC will sign voting agreements pursuant to which they will
agree to vote their securities in favour of the Arrangement. The
companies have agreed to work towards completing due diligence and
the signing of a definitive agreement by July 15, 2012. The
Transaction is expected to be completed by October 31, 2012,
following all necessary approvals. The Transaction remains subject
to entering into the definitive agreement and the satisfaction of
customary closing conditions, including any necessary regulatory
approvals. There is no assurance that the Transaction will be
completed, or if completed, that the terms may change. About QHR
Technologies Inc. QHR operates two business units in distinct
markets: The Electronic Medical Records ("EMR") division offers a
suite of medical software modules that provides computer-based
medical records for family physicians, medical specialists, and
surgeons, as well as administrative modules for billing and patient
scheduling, that is a key component of the move throughout Canada
to provide electronic healthcare records for all Canadians. The EMR
division also provides on-site and off-site (ASP) hosting
capabilities. The Enterprise Management Software ("EMS") division
specializes in workforce management software, which consists of
integrated payroll, staff scheduling and human resource software,
and in customized financial management software built on the
Microsoft Dynamics GP platform. These products are targeted at
complex healthcare, social services and public safety environments.
Additional product and solution information for QHR Technologies is
available on the web at www.QHRtechnologies.com. The
QHR Technologies' common shares trade on the TSX Venture Exchange
under the symbol: "QHR" About Open EC Technologies, Inc. Open EC
Technologies is an e-Business Information Technology company with
our corporate head office, marketing and development in Vancouver,
BC, main HealthCare IT Solutions Operations office in San Antonio,
Texas and Medical Practise Billing Operations office in Spring
Hill, Florida. The company has software development and data
center hosting operations in Maine, with Sales and Executive
Management staff in Atlanta Georgia. The
Company's focus is to provide software solutions and transaction
processing services to assist Physicians, Hospitals, Health Plans,
Insurance Brokers and State Governments to exchange information for
HIPAA EDI Health Plan Enrolment, Health Insurance Eligibility,
Health Insurance Claims, Claim Payments and HealthCare Provider
Collaboration of supporting patient referral and industry
compliance/reporting documentation. Additional product and solution
information is available on the web at www.SoftCareHealthcare.com,
www.iPlexus.net and www.softcare.com and additional public company
information is available on the web at www.openec.com. The
Company's common shares trade on the TSX Venture Exchange under the
symbol: OCE. ON BEHALF OF THE BOARD "Martyn A. Armstrong" Martyn A.
Armstrong President and CEO The TSX Venture Exchange does not
accept responsibility for the adequacy or accuracy of this
release. This news release may contain forward-looking
statements within the meaning of The Private Securities Litigation
Reform Act of 1995. Forward-looking statements address future
events and conditions and therefore, involve inherent risks and
uncertainties. Actual results may differ materially from
those currently anticipated in such statements. Open EC
Technologies, Inc. CONTACT: Further information about the Open EC
can be found on SEDAR(www.sedar.com) or by contacting Mr. Martyn A.
Armstrong, President &CEO of Open EC. (Tel:1-604-983-8083
email: marmstrong@openec.com)Further information about QHR
Technologies can be found on SEDAR(www.sedar.com) or by contacting
Mr. Al Hildebrandt, President & CEO ofQHR. (Tel:1-250-979-1701
email: ahildebrandt@QHRtechnologies.com)
Copyright
Open EC Technologies (TSXV:OCE)
Historical Stock Chart
From Sep 2024 to Oct 2024
Open EC Technologies (TSXV:OCE)
Historical Stock Chart
From Oct 2023 to Oct 2024