CardioComm Solutions, Inc.
TSX VENTURE : CCG

CardioComm Solutions, Inc.

October 17, 2007 19:17 ET

CardioComm Solutions Inc. Announces Corporate Reorganization

VICTORIA, BRITISH COLUMBIA--(Marketwire - Oct. 17, 2007) - CardioComm Solutions Inc. (TSX VENTURE:CCG) ("CardioComm" or the "Company") is pleased to announce that it will be undergoing a corporate reorganization which will enable the Company to pursue its business goals in an efficient and effective manner and to seek additional business opportunities. As part of the reorganization, the Company's common shares will be consolidated and the Company's name and trading symbol will change; the Company's authorized share structure will be altered; certain debt of the Company will be converted into equity; the Company will conduct an equity financing; and the Company will be adopting a new share compensation plan. In addition, CardioComm is pleased to announce that it has completed its previously announced acquisition of CardioView, Inc. and has entered into a software development agreement with MD Primer Inc. Each of these matters is described in further detail below.

Several of the items of business require approval of the shareholders of the Company. The Company will be holding a special general meeting of the shareholders which will be held at 2:30 p.m. on Thursday, November 15, 2007 at The Union Club of B.C., 805 Gordon St. in Victoria, British Columbia. The Company will be mailing a notice of the special general meeting, a management proxy circular and a form of proxy to the shareholders on or about October 20, 2007.

Share Consolidation

Currently, there are 63,067,376 common shares of the Company issued and outstanding (93,872,376 shares on a fully diluted basis). Management of the Company believes that it is in the best interests of the Company and it is necessary and desirable for the Company to consolidate its outstanding common shares. Without a share consolidation, it will be difficult for management to pursue certain business initiatives and to conduct further equity financings. In particular, it is a condition of the proposed equity financing of the Company described below that the Company complete a consolidation of its outstanding common shares. Management believes that the proposed consolidation will make the Company attractive to new investors as well as to existing shareholders and will provide a foundation from which to advance the Company's business plan and to seek additional business opportunities.

For the reasons expressed above, management intends to consolidate the outstanding shares of the Company on a one-for-five (1:5) basis. After the proposed consolidation there will be 12,613,475 common shares outstanding, subject to adjustment to reflect rounding down of fractional shares and before the closing of the other matters referenced below.

The proposed share consolidation is subject to the approval of the TSX Venture Exchange. One requirement of the TSX Venture Exchange with respect to the consolidation is that the Company must change its name. Accordingly, the Company will be seeking shareholder approval of a change of the Company's name to "CardioComm Solutions, Inc.", and the Company's trading symbol will be "EKG" following the consolidation. Please see the management proxy circular for more detail with respect to the proposed share consolidation and name change.

Alteration of Authorized Share Structure

In 2004, the Company Act (British Columbia) was repealed and replaced by the Business Corporations Act (British Columbia). Under the Business Corporations Act a company may specify an unlimited number of shares of each class that it is authorized to issue, which is allowed under most modern incorporation statutes, including the federal Canada Business Corporations Act. At present, the Company's authorized share structure consists of 100,000,000 common shares without par value. At the special general meeting of shareholders, the Company will be seeking shareholder approval to alter its authorized share structure by increasing the maximum number of common shares that it is authorized to issue from 100,000,000 common shares without par value to an unlimited number of common shares without par value. Management of the Company believes that this alteration will cause the Company's share structure to be similar to that of other similar companies existing under modern incorporation statutes.

Shares for Debt

As part of its corporate reorganization, the Company has negotiated outstanding debt of the Company in the aggregate amount of $1,601,826.14 to be settled in exchange for the issuance of an aggregate of 5,576,633 common shares of the Company (post-consolidation) to four creditors of the Company. 4,153,361 of the shares will be issued at a deemed issue price of $0.30 per share, while 1,432,272 of the shares will be issued at $0.25 because the debt being settled for those shares is secured by the assets of the Company. Consummation of the shares for debt transaction is subject to the approval of the TSX Venture Exchange.

Equity Financing

The Company has agreed to a private placement equity investment with Anglo German Progressive Fund I (the "Fund") under which the Fund will purchase units of the Company (each unit consisting of one common share and one common share purchase warrant exercisable for two years for an additional common share) for an aggregate purchase price of $1,400,000 in four tranches as follows: $350,000 at a price of $0.175 per unit for 2,000,000 units in October 2007; $350,000 at a price of $0.20 per unit for 1,750,000 units on December 1, 2007; $350,000 on March 14, 2008 at a price per unit equal to the "Discounted Market Price" of the common shares of the Company on that date; and $350,000 on June 16, 2008 at a price per unit equal to the "Discounted Market Price" of the common shares of the Company on that date. Under the policies of the TSX Venture Exchange, the "Discounted Market Price" of the Company's shares is the market price of the shares on the date of determination less: a discount of up to 25% of the market price if the market price is $0.50 or less; or a discount of up to 20% of the market price if the market price is $0.51 to $2.00. In each of the third and fourth tranches, the units will be issued at the maximum allowable discount to the market price. The first tranche of the financing will originally take the form of a convertible note, which will convert into units upon the completion of the Company's share consolidation described above.

The financing is subject to the approval of the TSX Venture Exchange. In addition, because upon completion of the financing the Fund will become a control person of the Company, shareholder approval of the financing is required. Accordingly, the Company will be seeking shareholder approval of the financing on the terms described above at the special general meeting of shareholders.

Adoption of Share Compensation Plan

At the meeting of shareholders the Company will seek approval of shareholders to adopt a new 2007 Omnibus Share Compensation Plan, which will provide additional types of awards that can be granted by the Company to eligible recipients. An aggregate of 4,000,000 common shares (post-consolidation) will be reserved for issuance under the plan. Management of the Company believes that adopting the plan will give the Company greater flexibility in providing share-based incentives to and retaining employees, directors and officers and allow the Company to use its cash to develop the Company's business. The adoption of the plan is subject to the approval of the TSX Venture Exchange and approval by the shareholders of the Company at the upcoming special general meeting.

Software Development Agreement with MD Primer Inc.

The Company is also pleased to announce that it has entered into a software development agreement with MD Primer Inc. Under the Agreement (1) the Company will be required to create certain software for MD Primer for total consideration of $250,000; (2) the Company will be granted a non-exclusive license by MD Primer to use the software, subject to the payment of a royalty; and (3) all right, title and interest in the software may be purchased by the Company within two years of the date of the Agreement at the request of either party in exchange for the issuance by the Company of 1,000,000 units (post-consolidation) to MD Primer. Each unit will consist of one common share and one common share purchase warrant (exercisable for an additional share at a price of $0.40 until July 27, 2008, and at a price of $0.45 following that date until July 27, 2009, post-consolidation). The common shares issued to MD Primer by the Company for the software will be subject to escrow and will be released in accordance with the following schedule: 250,000 shares will be released immediately upon issuance of the shares; and an additional 250,000 shares will be released three months, six months and nine months from the date of the issuance of the shares.

MD Primer is wholly owned by Dr. Anatoly Langer, a director of the Company. The TSX Venture Exchange requires the Company to obtain disinterested shareholder approval of the Company entering into the Agreement and of the issuance of securities of the Company to MD Primer under the Agreement, and at the special general meeting of shareholders the Company will ask the shareholders to approve the agreement.

Acquisition of CardioView, Inc.

The Company has also completed its acquisition of CardioView, Inc., which was previously announced on January 31, 2007. Under the acquisition, the Company issued an aggregate of 10,000,000 common shares of the Company to CardioView's shareholders in exchange for all of the issued and outstanding CardioView shares. The details of this acquisition were announced January 31, 2007.

This acquisition will allow CardioComm to significantly increase and expand its product offerings. As CardioView has an established revenue base from research work done in Canada, CardioComm will expand the base and begin marketing the product in the US. The revenue model will become a user pay model similar to GlobalCardio™ 12 lead ECG version.

About CardioView, Inc.

CardioView, Inc. is a medical imaging and information technology company dedicated to improving communication and education in the field of cardiology. The Company is led by a team of cardiologists, imaging scientists, programmers and web designers. Its premier product is a Web-enabled reporting system for interventional cardiologists. The system is in use across Canada. CardioView's patented technology allows cardiologists to rapidly transmit high quality angiographic movies and procedural reports securely over the Web. For the first time, these movies are conveniently available anywhere, anytime for physicians and their patients. CardioView integrates seamlessly with existing systems at cardiac catheterization labs and is customizable for cardiologists, providing a highly affordable way to improve communication. CardioView has a ready solution for cath labs wishing to advance cardiovascular care. In less than five minutes CardioView's patented technology allows cardiologists to create an enhanced diagnostic or PCI case report. Each report includes high quality angiographic movies which, along with diagrams and customizable clinical summaries, may be posted securely on the Web for referring physicians and their patients (if indicated by a cardiologist). The report can be printed for the chart or for your records: no more dictating, typing, drawing or calling.

About CardioComm Solutions Inc.

CardioComm's patented and proprietary technology is used in products for the recording, viewing, analyzing and storing of electrocardiograms (ECGs), for diagnosis and management of cardiac patients. The Company's products are sold worldwide through a combination of its external distribution network and its North American based sales team. CardioComm has achieved its technical goals of improved access and communication through the development of a real-time ECG viewer. CardioComm is the first company to provide a real-time means of viewing ECGs over a network (LAN, WAN or Internet). This tool enables ECGs to be viewed and controlled live, by physicians, over a global virtual healthcare network. This technology is marketed as Global ECG Management System (GEMS™) and GlobalCardio™. CardioComm's software products have been cleared for sale in the United States by the U.S. Food and Drug Administration. The Company has earned the latest ISO 13485 certification.

On behalf of the Board of Directors of CardioComm Solutions Inc.

Brad Harlow, Chairman of the Board

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • CardioComm Solutions Inc. - Investor Information
    Stephen Martin
    1-877-744-1122
    Website: www.CardioComm.com