VitalHub Announces Closing of Strategic Private Placement with Industry Leaders

Toronto, Ontario–(Newsfile Corp. – January 18, 2019) – VitalHub Corp. (TSXV: VHI) (the “Company”) is pleased to announce that it has completed a non-brokered private placement (the “Offering”) of units (“Units”) with the former founders and management team of Aastra Technologies Limited (the “Investors”). The Offering was completed at a price $0.16 per Unit for gross proceeds of $3.3 million and a total of 20,625,000 Units issued.

The Investors are comprised of Aastra Technologies Limited (“Aastra”) founder, former Chairman and co-CEO Francis Shen; Aastra former President, co-CEO and COO Tony Shen; former Aastra CFO and current CFO of The Descartes Systems Group Inc., Allan Brett; and former Aastra General Counsel and current VP – M&A and General Counsel of Sangoma Technologies Corp., John Tobia. Francis Shen and Tony Shen invested by way of holding companies, Connection 25 Inc. and TMWE Inc., respectively (together, the “Principal Investors”).

Aastra was established in 1983 by Francis Shen and a partner, and was joined by Francis’s brother Tony Shen in the late 1980’s. Aastra initially serviced the aerospace and defense market, and quickly transitioned in the early 1990s to the rapidly growing telecom industry. Together, the Shen brothers quickly expanded Aastra through new product innovation, and later successfully employed an aggressive M&A consolidation strategy and global market expansion. They quickly grew the company to over 2,000 employees and more than $700 million in annual revenue. Aastra was listed on the Toronto Stock Exchange from 2000 until 2014, when it was acquired by Mitel Networks Corporation in a transaction that returned over $500 million to its shareholders. In addition, in prior years, Aastra returned over $200 million in dividends and stock buybacks.

Francis Shen will be joining the Company’s Board of Directors (“Board”), and Tony Shen will serve as a Board Observer. The Company will also constitute a new committee of the Board to consider M&A strategy and initiatives, which Francis Shen will be chairing (the “M&A Committee”). The M&A committee will work with a non-Board advisory group that will include the Investors, VitalHub CEO Dan Matlow, and VitalHub CFO Brian Goffenberg. The Company has also agreed to an additional board nominee for Francis Shen should all of the Two-Year Warrants be exercised in full.

Use of proceeds from the Offering will be for acquisition purposes only, to advance the Company’s M&A strategy.

“M&A is an integral part of our growth and business plan,” said Dan Matlow, CEO of VitalHub. “It is very exciting to have a group of experienced technology executives invest in and endorse our vision and team. We are looking forward to working closely with them as we continue to execute on our strategy.”

“We have had the opportunity to examine and review VitalHub’s business, and we strongly believe in their approach and the opportunity that exists to bring the Company to scale,” said Francis Shen, founder, and former Chairman and co-CEO of Aastra Technologies Limited. “We believe we can assist and add value in growing the Company to become something special for all shareholders.”

Each Unit consists of one common share of the Company (the “Common Shares”), one half of one common share purchase warrant (each whole warrant, a “Two-Year Warrant”) with each such Two-Year Warrant being exercisable for one Common Share of the Company at an exercise price of $0.29 (the “Two-Year Exercise Price”), for a period of 24 months from the date of issuance, and one half of one common share purchase warrant (each whole warrant, a “Three-Year Warrant”) with each such Three-Year Warrant being exercisable for one Common Share of the Company at an exercise price of $0.39 (the “Three-Year Exercise Price”), for a period of 36 months from the date of issuance (the Two-Year Warrants and Three-Year Warrants together, the “Warrants”).

Pursuant to the Offering, the Company issued a total of 20,625,000 Common Shares, 10,312,500 Two-Year Warrants and 10,312,500 Three-Year Warrants. Connection 25 Inc. and TMWE Inc. purchased, 12,812,500 and 6,250,000 Units respectively. Connection 25 Inc. now holds 8.27% of the total Common Shares of the Company (undiluted), and 15.28% of the Company (fully-diluted). TMWE Inc. now holds 4.03% of the total Common Shares of the Company (undiluted), and 7.76% of the Company (fully-diluted). Because of this, the Principal Investors and the Company have agreed to treat the Principal Investors as acting jointly and have added terms to the subscription agreements and Warrants held thereby which prevent the Principal Investors from exercising that number of Warrants such that their aggregate total Common Shares held would be equal to or greater than 20% of the total issued and outstanding Common Shares of the Company. In addition, the Company has agreed that 367,907 Warrants, being that number of Warrants which, if exercised, would result in the Principal Shareholders holding greater than 19.99% of the total issued and outstanding Common Shares of the Company, shall be subject to cashless exercise provisions in the event that the Principal Investors wish to exercise such Warrants but are otherwise unable, the Company will exchange the Warrants for cash payment equal to the difference of the closing price of the Company’s Common Shares on the date prior to the notice of exercise delivered to the Company by the Principal Investor and the exercise price of the subject Warrant.

All securities issued in connection with the Offering are subject to a four month hold period expiring May 20, 2019.

About VitalHub:

VitalHub develops and supports mission-critical information systems in the Social Service, Mental Health (Child, Youth and Adult), Long Term Care, Community Health Service, Home Health and Hospital sectors. VitalHub technologies include Blockchain, Mobile, and Web-Based Assessment, Client Management and Electronic Health Record solutions.

The Company has a robust two-pronged growth strategy, targeting organic growth opportunities within its product suite, and pursuing an aggressive M&A plan. Currently, VitalHub serves 200+ clients across North America. VitalHub is based in Toronto, Canada, with an offshore innovation hub in Sri Lanka. The Company is publicly traded on the TSX Venture Exchange under the symbol “VHI”.

Cautionary Statement:

The TSX Venture Exchange has in no way passed upon the merits of the transactions and has neither approved nor disapproved the contents of this press release. 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 press release.

This press release includes forward-looking statements regarding the Company and its business, which may include, but is not limited to, statements with respect to the appointment of a new directors. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “is expected”, “expects”, “scheduled”, “intends”, “contemplates”, “anticipates”, “believes”, “proposes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Such statements are based on the current expectations of the management of each entity, and are based on assumptions and subject to risks and uncertainties. Although the management of each entity believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this release, including the Company’s M&A strategy and proposed board appointment(s), may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the companies, including risks regarding failure to obtain approvals, market conditions, economic factors, trends in the technologies industry, the equity markets generally and risks associated with growth and competition. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Contact Information:

Dan Matlow
Chief Executive Officer, Director
(416) 727-9061
dan.matlow@vitalhub.com