Patient Home Monitoring Corp.

September 03, 2013 09:00 ET

Patient Home Monitoring (PHM) Announces Acquisition of Florida-based Hollywood Healthcare Corp.; Successful Conclusion of Equity Financing with Insider Participation; ...

...New Insider Common Stock Holdings; and Appointment of Interim Chief Financial Officer and Changes in the Board of Directors

SAN FRANCISCO, CALIFORNIA--(Marketwired - Sept. 3, 2013) -


Patient Home Monitoring (PHM) (TSX VENTURE:PHM), a profitable company focused on rolling-up annuity-based healthcare service companies in the US and Canada, today announced (1) the Board of Directors has approved the execution of a definitive Purchase Agreement to acquire the stock of Hollywood Healthcare Corp. (HHC), a company with trailing 12-month revenues of $4.2 million and EBITDA of approximately $750,000; (2) it has concluded its proposed financing of $2,740,000; (3) it has reported new share holdings by insiders; and (4) it has appointed a new interim Chief Financial Officer and has changed its Board of Directors.

Acquisition of HHC

Under the agreement, PHM will acquire HHC for a combination of cash, assumption of debt and 2,771,853 common shares of PHM. The closing is subject to TSX approval. As outlined in the July 4, 2013 announcement, the acquisition is expected to significantly increase revenues and cash flow upon closing. Florida based HHC specializes in supporting pharmacies through sales of diabetes supplies, immunosuppressant specialty pharmaceuticals, and influenza shots. In 2013, the company has experienced strong growth in patient prescriptions.

"This first acquisition provides PHM with a strong partner in the pharmacy channel," explained Michael Dalsin, Chairman of PHM. "While it will contribute revenues and cash flow for the last part of this quarter, the full weight of the acquisition will be seen next quarter. Our strong acquisition pipeline continues to grow and I am looking forward to seeing the result of the cross-selling efforts by our management team after the integration of HHC is complete."

Conclusion of Proposed Financing and New Insider Stock Holdings

PHM has concluded its proposed financing under the terms announced August 9, 2013. The net proceeds of $2,548,200 from the financing will be used to add cash to the balance sheet and to strengthen PHM's ability to close attractive acquisition targets without financing contingencies. PHM is working to identify, qualify and close further acquisitions of profitable, cash flow positive healthcare companies with services and products complimentary to PHM's existing offerings. PHM closed the majority of the financing in August. PHM announced today that it closed $375,949 in equity finance in a second closing under these terms and expects to close an additional $235,000 in a last closing on or before September 6, 2013. Bob Kusher, CEO of PHM, has subscribed to the recent private placement, increasing his stake in PHM.

To more strongly engage key stakeholders Michael Dalsin, Chairman of PHM, and Roger Greene, Executive Director and newly appointed interim CFO of PHM, both will increase their personal holdings in PHM shares. The Stanmore entities, including Stanmore Capital Partners, Inc., Stanmore Fund, LP and Stanmore Capital Holdings, LLC, will no longer have an active role in PHM. As part of this shift, PHM is taking action to conclude its management contract with Stanmore Capital Partners, Inc., and will directly engage Michael Dalsin and Roger Greene as merger and acquisition consultants, subject to necessary approvals. In divesting its stake, Stanmore Capital Holdings, LLC has divested 10,106,248 common shares to buyers in the open market. Additionally, PHM Chairman Michael Dalsin and Roger Greene acquired 4,210,938 common shares from Stanmore Capital Holdings, LLC. Stanmore Capital Holdings, LLC, will continue to hold 2,526,563 shares until the next round of financing, when Messrs. Dalsin and Greene expect to equally own a total of 6,737,501 shares and Stanmore Capital Holdings, LLC will cease to hold any PHM shares.

"This financing puts PHM in a very strong position to close another acquisition of a larger company with a view to significantly increase revenues, profits, and earnings per share," continued Mr. Dalsin. "We have seen great support in the capital markets for the acquisition plan. We now have the balance sheet to execute on that plan. It also is important to note that this financing round included an investment by Bob Kusher, PHM's CEO. His insider participation gives me comfort that he has confidence in the potential of PHM, and his ability to improve revenue and earnings of the company."

Changes in the Board of Directors and Appointment of Interim Chief Financial Officer

Stanmore Capital board appointees Edward Dooling and Gerard Jacobs will retire from the Board and Roger Greene will replace David Ward of Stanmore Capital Partners, as the interim Chief Financial Officer (CFO).

"We have also taken this opportunity to restructure the company to better reflect our roll-up strategy," continued Mr. Dalsin. "First, I want to thank Messrs. Dooling and Jacobs for their long-term contribution to the Board. Second, I want to thank the partners and associates at Stanmore Capital Partners, Inc., especially David Ward, for their work in founding and managing PHM for the last 3 years. Lastly, both Roger Greene and myself have become personally staked in PHM, giving us a more direct equity incentive as we work to assist in the merger and acquisition strategy."

About PHM

PHM is currently a positive cash flow and profitable company servicing patients with chronic heart disease and will act as a platform for acquisitions. PHM is focused on a highly fragmented and developing market of small privately-held companies servicing chronically ill patients with multiple disease states caused mainly by age and obesity. Because of the new and highly fragmented nature of the market, PHM is actively working to identify and evaluate profitable, annuity-based companies to acquire their patient databases and technical expertise at favorable prices. PHM's post acquisition organic growth strategy is to increase annual revenue per patient by offering multiple services to the same patient, consolidating the patient's services and making life easier for the patient. The expected result is growing EPS with each acquisition and growing revenue and profits from the cross selling efforts.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of the future outlook of PHM and anticipated events or results, are assumptions based on beliefs of PHM's senior management as well as information currently available to it. While these assumptions were considered reasonable by PHM at the time of preparation, they may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties, including the availability of funds and resources to pursue operations, decline of reimbursement rates, dependence on few payors, possible new drug discoveries, a novel business model, dependence on key suppliers, granting of permits and licenses in a highly regulated business, competition, low profit market segments as well as general economic, market and business conditions, and could differ materially from what is currently expected.

Contact Information

  • Michael Dalsin
    (323) 253-3055