Patient Home Monitoring (PHM) Announces Execution of Letters of Intent with Two Acquisition Targets; Releases Updated Investor Presentation

SAN FRANCISCO, CALIFORNIA--(Marketwired - Nov. 20, 2013) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.

Patient Home Monitoring Corp. (TSX VENTURE:PHM) ("PHM") announced it has executed Letters of Intent (LOIs) to acquire two additional companies servicing patients with chronic illnesses. Based upon their trailing 12-month earnings, the acquisition of these growing and profitable companies will be immediately accretive to the income statement and will substantially increase PHM's earnings-per-share (EPS). PHM also released an updated investor presentation.

PHM has agreed to pay a price of less than four times 2013 Adjusted EBITDA. The majority of the purchase price will be paid in PHM common shares with the remainder in cash. The owners of the businesses have agreed to exchange ownership in their company for PHM shares priced at $0.27 per share. The key executives of both companies have agreed to join PHM in senior management roles to continue to grow the companies, as well as to assist in growing other elements of PHM's business. PHM can close both acquisition opportunities with cash-on-hand from its current balance sheet and plans to issue additional shares as part of the acquisitions. Because the sellers have agreed to a $0.27 share value, shares issued as part of the acquisition are estimated to be less than 10% of the total common shares outstanding. PHM plans to assume a small amount of debt as part of the acquisition price. Closing the acquisitions will be subject to final due diligence and purchase agreements and TSX Venture Exchange review and approval.

When these companies are added to PHM's current operations, the expected financial results of all entities combined 12-month trailing Adjusted EBITDA will be an increase of over 400% in EBITDA growth from the prior reported quarter or in excess of $3,000,000^* subject to final due diligence. In addition, the cross-selling potential is expected to further drive EBITDA growth.

The companies are located in the southeastern United States and service patients with chronic pulmonary disease. They are established companies that have been profitable for many years, and are well positioned to thrive in the changing reimbursement environment. The acquisitions would give PHM additional service lines to increase organic growth through cross-selling opportunities with PHM's existing cardiology services and pulmonology drug distribution services. Combined, these businesses service thousands of patients with multiple chronic illnesses that may benefit specifically from PHM's Coumadin testing services and pulmonology drug distribution services.

The updated investor presentation can be found at http://phmhometesting.com/investor/public/dl/PHM%20Presentation%20-%20Nov%202013.pdf.

"With these acquisitions, PHM's services will now cover drug delivery, essential medical equipment, home monitoring and clinical support services, making us a more complete patient home service business. The result will be healthier patients, lower costs and improved healthcare delivery," said Bob Kusher, CEO of PHM. "We expect strong revenue growth in our service lines to continue as health care providers scale back budgets and are being forced out of providing niche, high value added products and services. I believe the willingness of the key executives who have built these businesses over the course of a decade to take a majority of their payment in PHM common shares is a testament to the opportunity they see in PHM and the transaction structure is advantageous to existing PHM shareholders."

"We are excited to move to the next stage with the acquisition targets," continued Mr. Kusher. "I view this transaction both as an earning accretive deal and an acquisition of talent, as the key executives who have built these businesses over the course of a decade see the opportunity to join forces with PHM as the way to grow revenues and profitability. Their willingness to take a majority of their payment in stock is a testament to the opportunity both they and I see in PHM. The future executives will realize an increased value from this transaction by growing the PHM share price from their starting point of 27 cents. Best of all, this transaction structure aligns incentives for all PHM shareholders."

About PHM

The explosive growth in the number of elderly patients in the US healthcare market is creating pressure to provide more efficient delivery systems. Healthcare providers, such as hospitals, physicians and pharmacies, are seeking partners that can offer a range of products and services that improve outcomes, reduce hospital readmissions, and help control costs.PHM fills this need by delivering a growing number of specialized products and services to achieve these goals.

^* These Adjusted EBITDA figures are unaudited and may change subject to due diligence and closing procedures. They are intended only as an estimate of trailing twelve month Adjusted EBITDA of the combined entities and are not meant to convey forward looking information. Adjusted EBITDA is a Non-IFRS measure the Company uses as an indicator of financial health, and excludes several items which may be useful in the consideration of the financial condition of the Company, including interest expense, taxes, depreciation, amortization, stock based compensation, and owner compensation.

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.

Neither 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.

This press release does not constitute and the subject matter hereof is not, an offer for sale or a solicitation of an offer to buy, in the United States or to any "U.S. Person" (as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "1933 Act")) of any equity or other securities of PHM. The securities of PHM have not been registered under the 1933 Act and may not be offered or sold in the United States (or to a U.S. Person) absent registration under the 1933 Act or an applicable exemption from the registration requirements of the 1933 Act.