PHM Executes Final Purchase Agreement for Acquisition of West Home Health Care in Virginia, Grows to $55 Million Revenue Run Rate; Update on Colorado LOI; $12.5 Million Asset-Based Loan

LOS ANGELES, CALIFORNIA--(Marketwired - March 10, 2015) -

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Patient Home Monitoring Corp. (PHM) (TSX VENTURE:PHM), a fast growing and profitable company focused on rolling-up annuity-based healthcare service companies in the US and Canada, announced it has executed a binding Purchase Agreement for the acquisition of West Home Health Care ("West"), a profitable Virginia-based company focused on providing home-based healthcare services, including mobility solutions for the home.

Update to the Colorado LOI

For the Letter of Intent announced on March 5, 2015, PHM and the owners of the Colorado business have reached an initial agreement on the composition of their cash and stock consideration. The selling parties have agreed to receive approximately $11 million of their consideration in cash and the remainder in common shares of PHM, comprising less than 5% of PHM's total outstanding shares. When closed, this highly accretive acquisition is expected to increase adjusted EBITDA by more than 35% and revenues, without organic growth, by over 30%.

Asset-Based Line of Credit

PHM has obtained a Letter from a middle market healthcare lender for a $12.5 million revolving line of credit at market interest rates secured by the accounts receivable and fixed assets of the company. Closing of the facility is subject to contingencies on the part of the lender.

When fully drawn and added to PHM's cash position today of over $23.5 million, PHM's cash balance will be over $36 million that will allow PHM to make further acquisitions in 2015 without financing contingencies.

"This line of credit option provides us with additional cash to keep our acquisitions going without interruption," said Michael Dalsin, Chairman of the Board of PHM. "We do have quite a line up of acquisition targets, so adding another $12.5 million in cash allows us to feel confident we can acquire larger targets without any financing contingencies. In terms of debt levels, today we have a run rate of over $10 million in adjusted EBITDA and debt payments of less than $1.5 million per year. By adding this line of credit and increasing our adjusted EBITDA through acquisitions and organic growth, we will continue to have a very conservative amount of debt relative to our balance sheet and cash flow."

Details of the Acquisition of West Home Health Care

The acquisition is expected to immediately increase revenues by more than 10% and adjusted EBITDA by more than 5%, before factoring in organic growth, for a total acquisition price of less than 1% of the total common shares outstanding. The acquisition is expected to have an immediate and positive impact on earnings-per-share (EPS).

For many years, the company has served tens of thousands of patients in Virginia offering home accessibility products and services, including bath safety and patient lifts. As patients become immobile, they require more than a power mobility wheelchair. They also need home modifications to assist with their chronic conditions. This is an additional product line of services for patients with mobility-related conditions and has great cross-sell potential with PHM's patients in South Carolina, Georgia, Florida, Maine and New Hampshire, and when closed, Colorado, Texas and Oklahoma.

PHM also expects to generate post acquisition organic growth by offering pulmonology and cardiology services and products to patients in Virginia.

Acquisition Metrics

West generated more than $5 million in revenue for the 2014 calendar year with approximately $600,000 in Adjusted EBITDA⁽¹⁾ over the same period, based upon management's unaudited due diligence.

When West's unaudited trailing 12-month figures are combined with PHM's annualized revenues from February 2015, PHM is expected to generate:

• Over $55 million in annual run-rate revenue
• Over $10 million in annual run-rate Adjusted EBITDA
• Significant new organic growth cross-selling opportunities designed to generate additional revenue and profit growth

Under the terms of the Definitive Purchase Agreement, PHM will acquire 100% of the stock of West Home Health Care. PHM will issue 2,345,000 shares of common stock of PHM valued at $1.35, or less than 1% of the fully diluted shares. The total consideration is $3,165,750. Closing is subject to TSX approval for issuance of shares to the sellers, who will remain on with PHM to grow revenues in the region.

"This is a highly accretive deal for PHM, expected to increase profits more than 5% for less than 1% of our total shares," said Michael Dalsin, Chairman of PHM. "The team is highly focused on integrating this company into the PHM culture and increasing revenues and profits. We still have several executed LOIs outstanding that we are working to close and our pipeline for future deals is as full as ever. Even with our large potential acquisition in Colorado announced last week, we have plenty of cash to close more deals this calendar year, especially considering this new line of credit option."

About PHM

PHM is an acquisition-oriented, fast-growing and profitable company servicing patients with heart disease and other chronic health conditions. PHM is focused on acquiring companies in 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 identifying and evaluating profitable, annuity-based companies to acquire at favorable prices for their patient databases and technical expertise. 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.

⁽¹⁾ Adjusted EBITDA is defined as EBITDA not including stock based compensation.

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, difficulty integrating newly acquired businesses, low profit market segments as well as general economic, market and business conditions, and could differ materially from what is currently expected. This press release refers non-GAAP and non-IFRS financial measures that do not have standardized meaning prescribed by GAAP or IFRS. PHM's presentation of these financial measures may not be comparable to similarly titled measures used by other companies. These financial measures are intended to provide additional information to investors concerning PHM's performance.