PHM Announces Execution of Another Letter of Intent (LOI) to Acquire a Business in Oklahoma With $3 Million in Annualized Revenue

LOS ANGELES, CALIFORNIA--(Marketwired - Feb. 5, 2015) -

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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 in Oklahoma reporting unaudited 12 month annual revenues of approximately $3,000,000 and Adjusted EBITDA margins in excess of 15%. PHM plans to close this acquisition concurrently with the LOI signed October 1, 2014 in Texas. These acquisitions will mark PHM's continued expansion into new markets, in this case the lower Midwest region of the country.

The acquisition of these growing and profitable companies is expected to be immediately accretive to the income statement and will increase PHM's earnings-per-share (EPS). PHM's annual run rate will increase from $50,000,000 today to over $56,000,000 when these two LOIs are closed, along with the LOI in Georgia, announced on January 7. This does not include any future organic growth from these companies.

The Oklahoma business is focused on offering home-based pulmonology services for patients with sleep apnea, oxygen needs and other diseases of the lungs. The Texas business is focused on providing wound care to patients with chronic conditions, a new high margin service line, as well as mobility solutions for the aging population. These two companies naturally compliment each other and immediately after the acquisitions, PHM expects strong organic Adjusted EBITDA growth from cross selling.

According to the LOI with the Oklahoma company, PHM expects to close the acquisition with approximately $900,000 in cash and approximately 1,100,000 PHM common shares depending on final due diligence of trailing 12 month Adjusted EBITDA. Closing the acquisitions will be subject to final due diligence and a binding purchase agreement.

"We have three LOIs now outstanding representing about $6 million in annualized revenue," said Michael Dalsin, Chairman of PHM. "We intend to close all three of these companies shortly. All of these deals are great examples of the types of smaller deals, between $2M and $4M in revenue, that PHM is focused on to systematically consolidate certain parts of the home market. There is a mutually beneficial outcome for both PHM shareholders and the owners and managers of the target companies: by offering more services to their existing clients, and passing off low value administration to PHM, the companies can focus on being both bigger and better in their respective regions."

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.