Lorian Capital Corp.
TSX VENTURE : LRN.P

April 26, 2007 16:11 ET

Lorian Capital Corp. Signs Letter of Intent to Acquire Medworxx Inc.

TORONTO, ONTARIO--(CCNMatthews - April 26, 2007) - Lorian Capital Corp. ("Lorian")(TSX VENTURE:LRN.P), a capital pool company listed on the TSX Venture Exchange (the "TSXV"), announced today that it has signed a letter of intent, dated as of April 19, 2007, pursuant to which it intends to purchase all of the issued and outstanding securities of Medworxx Inc. ("Medworxx"), a company incorporated under the laws of Canada, in exchange for securities to be issued by Lorian (the "Acquisition"). The Acquisition is proposed to constitute the Qualifying Transaction for Lorian, pursuant to Policy 2.4 of the TSXV, and is subject to the approval of the TSXV. The proposed transaction constitutes an arm's length transaction.

The closing of the Qualifying Transaction is expected to occur on or about July 15, 2007, at which point Lorian intends to list on the TSXV as a Tier 2 issuer. The resulting issuer will be involved in the technology sector.

ABOUT MEDWORXX

Medworxx Inc. is a Toronto-based software company focused exclusively on solutions for the North American healthcare marketplace. Its software comprises an integrated suite of solutions, including portal (with single sign on), content management, learning management, policies and procedures, utilization management, and emergency readiness solutions.

Medworxx was formed in May 2004 under the laws of Ontario, with 3 employees, and has since grown to 31 employees. Medworxx's executive team consists of experienced sales, marketing, software development, healthcare, and finance personnel. Medworxx currently has a customer base of approximately 75 healthcare organizations representing more than 200 hospitals and 200,000 end users who are distributed approximately 70% in Canada and 30% in the United States. Medworxx' customers use its software platform to increase competency, reduce redundancy, reduce costs, and simplify distribution of knowledge to staff and patients, creating a net effect of increased efficiency and improved patient safety and care. Medworxx has successfully completed three acquisitions to date, integrating customers, products, and operations in the process.

MARKET

Medworxx' target customers include hospitals across North America. Its software solutions are targeted at clinicians providing care to patients as well as the patients that need to communicate with their hospital or healthcare organization.

Management of Medworxx believes the company is uniquely positioned, through its singular focus on healthcare and targeted provision of an integrated suite of products, to:

- support integration to existing hospital systems;

- distribute and co-sell with larger software vendors;

- support accepted healthcare industry standards;

- provide deep domain healthcare expertise; and

- deliver and support healthcare-specific templates and workflow.

The Medworxx sales and services team is healthcare focused, and includes clinicians as well as individuals with direct healthcare IT experience.

PRODUCTS:

Medworxx provides a fully integrated and strategic software platform that hospitals use to communicate, aggregate, and analyze knowledge. Specifically, this includes:

Medworxx Content Management System (CMS)

The Medworxx CMS empowers hospitals to create and aggregate disparate, critical knowledge within their own unique Internet or Intranet environment. It is a powerful and flexible web-based content management system designed specifically for healthcare that places control over the creation of content, workflow processes, and site design in the hands of the healthcare organization.

Medworxx Learning Management System (LMS)

Medworxx' Learning Management System supports knowledge creation within a hospital's teaching and evaluation environment. Hospitals can deliver online or classroom training, report on associated training, and track compliance with the Medworxx LMS.

Medworxx Clinical Utilization Management

The Medworxx Clinical Utilization Management system puts knowledge to work, monitoring patient stay, highlighting care delays, assessing discharge readiness, and providing consistency in the care process and an understanding of when the patient should be discharged with no compromise to patient safety.

Medworxx Policies & Procedures Management

Medworxx Policies & Procedures Management oversees hospital knowledge with the automation of compliance processes, policies, and procedures, from development of a policy to its timely review, revision, and publishing.

Medworxx Document Management

Medworxx Document Management organizes knowledge helping hospitals to create, store, retrieve, and transform knowledge. The Medworxx system enables indexing, archiving and retrieving information easily and efficiently, important for compliance and to maximize productivity.

Medworxx Portal

The Medworxx Portal aggregates knowledge with a highly targeted, communicative technology aimed at providing a single point of access connecting relevant information with targeted audiences such as physicians, patients, and hospital employees.

Medworxx Single Sign On (SSO)

Medworxx SSO creates easy access to knowledge eliminating complex passwords in a shared workstation environment that frustrate staff and delay patient care.

Medworxx Bed-Occupancy Management

The Medworxx Bed-Occupancy Management application provides a real-time clinical status of patients, beds and resources with a view to establishing efficiencies in bed management as well as managing specific bed equipment requirements, and availability of acute, rehabilitation, continuing care or long-stay beds.

Medworxx Emergency Readiness Solution (commercially available in the fourth quarter of 2007)

The Medworxx Emergency Readiness solution is a web-based solution for hospitals that addresses the JCAHO mandated all-hazards approach to emergency management. The solution is built upon the Medworxx technology platform in use within 75 healthcare organizations and over 200 hospitals throughout North America. It aggregates and disseminates information to the right people, in real time. The solution meets and exceeds JCAHO, NIMS, and ICS compliance requirements. It manages the entire emergency process from mitigation to preparation, response, and recovery.

FINANCIAL INFORMATION:

As at December 31, 2006, pursuant to un-audited internal financial statements, in Canadian dollars, Medworxx has current assets of $1,448,103, including cash of $591,030, current liabilities of $1,583,211, long-term debt of $625,000, and net fixed assets of $1,026,893. The long-term debt is a convertible debenture (the "Debenture"). For the year ended December 31, 2006, Medworxx revenue was $2,699,671, and total expenses were $3,839,456, for a net loss of $1,139,785. These figures do not include any provision for anticipated Scientific Research and Experimental Development tax receivables, which Medworxx estimates will be between $150,000 and $300,000. Complete Medworxx financial statements, including prior years' audits, will be provided with the Filing Statement to be prepared and filed in conjunction with the Qualifying Transaction.

INSIDERS OF THE RESULTING ISSUER

Upon completion of the Acquisition, it is anticipated that the following individuals will constitute Insiders of the resulting issuer:
Dan Matlow, President, Chief Executive Officer and Director. As president and CEO of Medworxx, Dan's focus is on increasing new license sales and services revenues, and directing the overall operations of the business. Dan brings 20 years of software vendor management experience to Medworxx, with extensive experience in software development, marketing, consulting, and sales. Dan began his career at On-Line Software Inc. where he headed up the Canadian operation of a software business. He then went on to found and led an education services organization, SDLC Technologies Inc. SDLC developed and marketed instructor-led IT education courses in the United States and Canada.

Prior to taking the leadership role at Medworxx, Dan led the sales function of Open Text's healthcare division as Vice President of Sales. He was SVP of Sales for Corechange, a Boston-based healthcare information technology industry startup, which was subsequently acquired by Open Text in early 2003. Prior to Corechange, Dan served as President & CEO for an enterprise training and education company that delivered a broad range of instructor-led technical training to Fortune 1000 enterprises in the North America. Dan holds a B.A. from York University in Toronto, Canada.

Domenic Crudo, Executive Vice President & Chief Financial Officer. As Chief Financial Officer, Domenic is responsible for directing the financial management/strategy, legal, and administrative affairs of the company. Domenic is a Chartered Accountant that brings over 20 years of financial, accounting and tax experience to his role at Medworxx. He is one of the three founders of Medworxx. Prior to joining Medworxx, Domenic was the Chief Financial Officer for Accutel Conferencing Systems Inc., a provider of audio, video and web conferencing services in North America.

He began his career in public accounting before joining the Ministry of Finance and has held executive level finance positions at SDLC Technologies, Checkpoint Security Systems, a multinational publicly traded company, and I.T. Xchange, an international distributor of personal computer and server technology. Domenic holds a Bachelor of Commerce and Finance from the University of Toronto, as well as the designation of Chartered Accountant through the Canadian Institute of Chartered Accountants.

Andre Vandenberk, Executive Vice President & Chief Technology Officer. Andre is responsible for driving product strategy, technical architecture and solution development for Medworxx, helping clients grasp instances where technology can be a source of strategic advantage. One of the three founders of Medworxx, he is a seasoned information systems and technology professional with more than 22 years of experience.

Andre has held a variety of senior management, project management, technology architecture, product development and consulting positions, designing, building and implementing complete solutions for almost every aspect of business. Prior to joining Medworxx, Andre was responsible for healthcare technology at Open Text. From 1980-1984, Andre studied Business Administration and Computer Science at the University of Western Ontario and the University of Alberta.

Susan Gershman, Executive Vice President of Operations & Marketing. As Executive Vice President of Operations & Marketing for Medworxx, Susan's focus is on corporate strategy, execution, and creating measurable results.

Prior to Medworxx, Susan was Chief Marketing Officer for Longview Solutions, where she was responsible for the company's global marketing strategy, as well as for their product sales support and learning organizations. Before joining Longview as Director of Product Marketing, Susan held various positions at J.D. Edwards, Dun & Bradstreet Software, and Price Waterhouse. Susan is a Chartered Accountant and holds a Bachelor of Commerce from the University of Manitoba.

Sandra Hoffer, Vice President, Decision Support & Clinical Processes. Sandi joined Medworxx as a result of its acquisition of Continuum Solutions, where she was a principal in the company, and was responsible for the development of the product that is now the Medworxx Utilization Management solution.

Sandi is a registered nurse with over 29 years of nursing experience and 20 years of senior management experience. Sandi will be responsible for product development of Medworxx' clinical products, as well as providing pre- and post-sales support. Sandi holds a Bachelor of Arts in Social Sciences from the University of Western Ontario and a Registered Nursing Diploma from Fanshawe College in London, Ontario.

Niels Tofting, Vice President, Sales. As vice president of sales, Niels is responsible for managing the sales team and strategy to increase revenue growth. Niels has more than ten years of sales and marketing experience focused in high technology. Prior to joining Medworxx, he was at Open Text and responsible for sales of the enterprise portal technology to the United States and Canada. Niels acted as director of sales at Corechange (acquired by OpenText) and was responsible for new business development, managing Fortune 500 customers and building the healthcare business. Niels holds a Bachelor of Environmental Studies from the University of Waterloo, School of Urban and Regional Planning.

Larry Vanier, Vice President, Decision Support & Healthcare Processes. Larry joined Medworxx from Continuum Solutions, where he was a principal in the company. He has over 25 years of experience in healthcare IT from St. Paul's Hospital in Vancouver, St. Joseph's Heath Centre in London and the St. Thomas-Elgin General Hospital. Larry's private industry experience includes software development and management at Xerox and Cableshare. As hospital information services director he gained knowledge of hospital administration and department management. Larry has led teams in process redevelopment, system requirement identification, procurement and implementation, and has an in depth understanding of hospital administration, department management, and of the functioning of hospitals.

Larry is responsible for the strategy and plan for growing Medworxx' decision support line of business, with a continued emphasis on Utilization Management. Larry holds a Bachelor of Science in Mathematics and Computer Science from the University of Western Ontario and is a Certified Health Executive with the Canadian Council of Health Service Executives.

Bernard Webber, Chairman of the Board, Medworxx. Bernard Webber is the Chairman of JAZZ.FM91. Between 1997 and 2001, Mr. Webber was President and Chief Executive Officer of the Insurance Information Centre of Canada (IICC). The IICC was a national technology and information organization whose member companies provided more than 95% of the private and public property and casualty insurance sold in Canada. From July 1994 to the fall of 1997, he was the President and CEO of the Facility Association (FA), providing automobile insurance coverage for high risk drivers.

Bernie was a member of the Board of Governors of the Information Technology Association of Canada (ITAC) and a member of the Minister's Advisory Committee for the OECD Minister's Conference in Ottawa in October 1998. He was a participant in ITAC's first-ever Trade Mission on Electronic Commerce, which went to Israel in February 1999. He was an official representative on "Team Canada" at the G8 Conference on Privacy & Security of Networks in Paris in May 2000.

Prior to the FA, Mr. Webber was the Deputy Commissioner of the Ontario Insurance Commission from March 1990. Over the span of 26 years he held a number of senior positions within the Ontario Public Service. Immediately before OIC he was Acting Deputy Minister of Consumer and Commercial Relations, and Assistant Deputy Minister of Business Practices with the same Ministry. During his time as Assistant Deputy Minister at Consumer and Commercial Relations, his organization developed the "Polaris" land registration system, which is part of Terranet Corporation.

Sam Marafioti, Director, Medworxx. Sam Marafioti is the Vice President of Corporate Strategy and Development, CIO at Sunnybrook Health Sciences Centre in Toronto. Sam leads the development and implementation of numerous initiatives including electronic health record, connectivity, network infrastructure, corporate technology standards, web services and telehealth, and oversees all major corporate technology acquisitions.

Sam was a member of the Ontario Hospital Association's Information and Communications Technology Advisory Committee in 2000, which evolved into the Ontario Hospital e-Health Council in 2001.

Renah Persofsky, Director, Medworxx. Renah Persofsky is the founder, and former President and Chief Executive Officer of Dexit Incorporated, a Toronto-based company that recently brought an innovative, electronic payment service to the Canadian marketplace.

Prior to starting Dexit, Renah served as an officer of the Bank of Montreal and was the founding President and Chief Executive Officer of Cebra Inc., a wholly owned electronic commerce subsidiary of the bank. Before joining the bank, Renah held executive positions at Bryker Data Systems Limited and MSA/Dun & Bradstreet Software. She was a member of the Minister's Advisory Committee on Electronic Commerce and led a Canada Electronic Commerce trade mission to Israel and represented the Canadian business community at the OECD Summit in Turku, Finland.

Renah is a governor of the Information Technology Association of Canada, a member of the Federal Government Committee for Electronic Commerce and Revenue, and sits on the Sectoral Advisory Group on International Trade (SAGIT), which provides advice to the Federal Minister of Foreign Affairs, and Trade. Renah is an avid Jazz fan and is Vice-Chairperson of Toronto's Jazz FM Radio.

Barry Tissenbaum, Director, Medworxx. Barry Tissenbaum, CA is a Senior Consultant at Equitas Consultants Inc.

Barry is a former senior partner with Ernst & Young LLP in Toronto where he headed their Retail & Consumer Products division as well as working many years in the Entrepreneurial Services Group and served as the Toronto Mid-Town Managing Partner for 5 years. Barry's experience as an accountant and business advisor has seen him provide consulting services to senior management in the areas of strategy, profitability, finance, management, taxation, mergers, acquisitions and divestitures. He has facilitated and participated in numerous strategy focused sessions and served as strategic advisor to many entrepreneurial clients.

Robert Lamoureux, FCA, ICD.D., Director - Lorian. Mr. Lamoureux graduated with a Bachelor of Commerce in 1969, and he joined PricewaterhouseCoopers ("PwC") in Toronto. He qualified as a Chartered Accountant in 1972 and was awarded his FCA in 2006. Bob worked at PwC for 35 years from 1969 to 2004. He became a partner in 1981. During his tenure Bob served as an audit and accounting partner for 19 years, serving numerous public companies. He also spent two years as a business valuator. In 2000, Bob launched PwC's Corporate Governance practice in Canada which he led until he retired in 2004. Bob has also served as a director of the Institute of Corporate Directors and the ICD College. He joined the board of Royal Group Technologies Limited in November 2003, and has served as Chair of the Audit Committee, lead director and Chairman of the board. Bob also served as interim Chief Financial Officer from November 2004 to July 2005. He has also served on the board of SR Telecom.

Chris Schnarr - President, Director - Lorian. Chris Schnarr is a founder and President of Endura Capital, a private insurance-based tax and estate planning firm, with offices in Toronto, Montreal, and Waterloo, providing professional services to high net worth Canadian families. Chris is also a founder and Managing Director of Lorian Group, a private and early-stage public equity investment and management firm based in Toronto. Prior to that, Chris was a founder of Wireless Matrix Corporation in 1993, a publicly traded wireless communications service provider, serving at various times through 2002 as President, Chief Financial Officer, Treasurer, Executive Vice President, and a director. Chris is also Chief Financial Officer and a director of Lifesciences Capital Corp., a capital pool company. Chris has a post-graduate degree in finance (MBA) from University of British Columbia (1990), and a Bachelor of Business Administration with a Minor in Economics from Wilfrid Laurier University (1989).

PARTICULARS OF THE QUALIFYING TRANSACTION

As set forth in the Letter of Intent, all of the outstanding securities of Medworxx--being 4,157,326 shares, 763,556 options and 450,456 share purchase warrants--will be acquired by Lorian in exchange for the issuance by Lorian to the securityholders of Medworxx of 47,419,355 common shares of Lorian at a deemed issue price of $0.155 per share, 8,712,174 options to purchase Lorian shares, and 5,139,703 Lorian share purchase warrants. The acquisition is being conducted on the basis of 11.41 common shares of Lorian for each share of Medworxx.

Gian DelZotto, Hood Brothers Holdings Inc. ("Hood Holdings') and Messrs. Matlow, Crudo and Vandenberk beneficially own approximately 59.14% of the outstanding common shares of Medworxx. There are an additional 23 shareholders of Medworxx, none of whom own 10% or greater of the outstanding common shares of the company. Mr. DelZotto is a resident of Toronto, Ontario. Hood Holdings is an Ontario corporation, and its principal shareholders are Hood-Creekwood Holdings Inc. and KH Holdings Inc., both Ontario corporations who's principal shareholders are Grant Hood of Oakville, Ontario and Ken Hood of Toronto, Ontario, respectively. The Qualifying Transaction will not constitute a non-arm's length transaction, and there is currently no cross-ownership between Lorian and Medworxx.

Closing the Qualifying Transaction will be subject to the satisfaction of a number of conditions, including among other things: (i) the repayment or conversion of the Debenture; (ii) the termination of a management agreement among the Medworxx shareholders; (iii) completion of a private placement of units at a price of $0.155 per unit for gross proceeds of $1,500,000, each unit consisting of one common share and one half share purchase warrant and each whole share purchase warrant entitling the holder to purchase one common share at $0.25 for two years (the "Private Placement"); (iv) receipt of a sponsor report satisfactory to the TSXV; (v) completion of due diligence; (vi) board approvals; (vii) approval of the shareholders of Medworxx; (viii) regulatory and third party approvals; and (ix) the entering into of a definitive share exchange agreement containing the standard representations, warranties and conditions, well as such other customary closing and delivery conditions.

The proceeds of the Private Placement will be used by the resulting issuer for general working capital purposes. Investpro Securities Inc. ("Investpro") has been retained by Lorian to act as agent in respect of the Private Placement. As compensation, Investpro will receive a corporate finance fee of $10,000 plus GST, a cash commission of approximately 7.5% of the proceeds of the Private Placement, options to purchase common shares of Lorian equal to 10% of the common shares issued in the Private Placement exercisable at $0.155 per common share for a period of 24 months, and reimbursement of reasonable legal fees incurred in connection with the Private Placement.

Investpro, subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

FORWARD LOOKING STATEMENTS

Forward-looking statements can be identified by the use of words such as "plans", "expects" or does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Lorian and Medworxx to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Examples of such statements include: (A) the intention to complete the acquisition, the Private Placement described herein and the Qualifying Transaction; (B) the description of Lorian that assumes completion of the Acquisition; and (C) the intention to grow the business and operations of Lorian or Medworxx. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this press release. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the ability of Lorian to obtain necessary financing; satisfy conditions under any definitive agreement; satisfy the requirements of the TSXV with respect to the Acquisition, the Private Placement described herein and the Qualifying Transaction; the economy generally; consumer interest in Lorian's and Medworxx's services and products; competition; and anticipated and unanticipated costs. While Lorian anticipates that subsequent events and developments may cause its views to change, Lorian specifically disclaims any obligation to update these forward-looking statements except as required by applicable securities laws. These forward-looking statements should not be relied upon as representing Lorian's views as of any date subsequent to the date of this press release. There are many factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect Lorian or Medworxx.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

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