PHM Announces Execution of Letter of Intent (LOI) to Acquire a Business With More Than $8 Million in Trailing-12-Month Annual Revenue, Additional Service Offerings and a Large Patient Database

LOS ANGELES, CALIFORNIA--(Marketwired - Dec. 22, 2014) -

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Patient Home Monitoring Corp. (TSX VENTURE:PHM) ("PHM") announced it has executed a non-binding Letter of Intent (LOI) to acquire a company reporting unaudited trailing 12 month revenues in excess of $8,000,000. Besides its large database of patients, this company offers two high growth revenue lines currently not focused on by PHM -- custom mobility and retail stores offering innovative home medical products.

The acquisition of this growing and profitable company is expected to be immediately accretive to the income statement and will increase PHM's earnings-per-share (EPS). As a result of this acquisition, that is expected to close in the first calendar quarter of 2015, PHM's annual revenue run rate is expected to exceed $48,000,000 at the time of close.

Since 1998, the acquisition target company has served tens of thousands of patients in the states of Maine and New Hampshire. PHM expects to generate post acquisition organic growth from four strategies: (1) the acquisition is slated to give PHM additional locations and access to thousands of active patients with multiple chronic illnesses, resulting in cross-selling opportunities with PHM's existing cardiology services, pulmonology services and drug distribution services; (2) PHM plans to cross sell custom mobility services and products to its existing patients; (3) PHM plans to expand this compelling retail concept to existing PHM locations in much larger markets throughout South Carolina, California, Georgia and Florida; and (4) by acquiring patients in the 40-65 year age group through the retail stores, PHM also gains a clear advantage in keeping and serving the needs of these patients as chronic conditions emerge later in life.

The majority of the consideration is proposed to be paid in PHM common shares. Key executives of the acquisition target company have agreed to join PHM in management roles. Closing the acquisitions will be subject to final due diligence and a binding purchase agreement. According to the LOI, PHM expects to close the acquisition with less than $1,000,000 in cash, with the majority of the consideration being paid with approximately 7,000,000 PHM common shares, subject to final due diligence of trailing 12 month Adjusted EBITDA. Shares issued as part of the acquisition are estimated to be less than 5% of the total common shares outstanding while inorganic Adjusted EBITDA growth is expected to exceed 10%, resulting in increasing EPS immediately upon acquisition. When this company is added to PHM's current operations, the expected revenue run rate of all entities, based upon the combined 12-month trailing revenue, will be an increase of nearly 20% of the current PHM annual revenue run rate. After the acquisition, PHM expects continued strong organic Adjusted EBITDA growth from cross selling. "While certainly adding meaningful revenue, the value of this acquisition resides mainly in the compelling prospective revenue and profit growth by cross selling into the large patient database and expanding services offered to our current patients," said Michael Dalsin, Chairman of PHM. "With this deal, we acquire a long standing business with thousands of patients that are eligible for cross selling our cardiology, pulmonary and drug delivery services. It also provides PHM with two additional compelling revenue lines. In custom mobility we will address a large and growing market for patients disabled by diabetes, aging and obesity. With the retail store concept, we penetrate a new and growing market for 40-65 year old patients with brick-and-mortar stores offering innovative home medical products. As those retail customers age, we can leverage that existing relationship to serve their increasing healthcare needs in later years, increasing our market share and further lowering patient acquisition costs. As it stands today, we have eleven additional deals in the pipeline and continue to believe we can close additional earnings accretive acquisitions with our current balance sheet of over $22,500,000 in cash. I am looking forward to a very active 2015 on the acquisition front."

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. PHM is a positive cash flow and profitable company that serves patients with heart disease and other chronic health conditions, this operation is a platform for acquisitions and organic growth. 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.

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.