Cloud DX Announces Debt Settlement and Voluntary Pooling Agreements

Rhea-AI Summary

A group of investors, including board directors, converts $4.2 million in debt to shares at a premium price of $0.154/share. 97% of shares, totaling 26,411,896, are pooled and escrowed for 24 months. Shareholders can't sell unless price exceeds $0.50/share for 10 consecutive days.

Debenture holders convert early, at a premium to market, and agree to pool and escrow shares.

Summary of News:

• A group of investors has agreed to convert approximately $4.2 million in total debt to shares, ahead of maturity dates.
• Average conversion price is $0.154/share, a premium to the current market price.
• 97% of shares converted, totaling 26,411,896 shares are added to a voluntary pool and investors agree not to sell for 24 months unless share price exceeds $0.50/share for 10 consecutive days.
• Demonstrating their strong support for the Company, participating debenture holders include 3 Board Directors, and 14 arms-length investors.

KITCHENER, ON / ACCESSWIRE / March 19, 2024 / Cloud DX Inc. ("Cloud DX" or the "Company") (TSXV:CDX)(OTCQB:CDXFF) is pleased to announce that, demonstrating their support for the Company and all its shareholders, certain convertible debenture holders (the "Creditors") have agreed to convert an aggregate principal amount of $3,187,000 CAD, prior to the applicable maturity date, into common shares in the capital of the Company (the "Common Shares"). As consideration for such early conversion of the convertible debentures, the Company has agreed to accelerate an aggregate of $180,585 CAD of interest from the applicable maturity date to the date on which the convertible debentures are converted.

The Company has entered into shares for debt agreements dated March 6, 2024 (the "Debt Settlement Agreements") with the Creditors to settle an aggregate of $1,007,070 CAD (the "Outstanding Debt") of interest owing to the Creditors pursuant to convertible debentures issued to the Creditors by the Company on October 1, 2021, March 18, 2022, July 6, 2022 and November 28, 2022 (the "Convertible Debentures"), due on October 1, 2024, January 27, 2025, July 6, 2024 and May 28, 2024, respectively, (the "Maturity Dates"). The Outstanding Debt shall be fully paid and satisfied upon the Company issuing to the Creditors 6,553,409 Common Shares at a deemed price per share of $0.15 (for Debentures maturing October 1, 2024, January 27, 2025 and July 6, 2024) and $0.16 (for Debentures maturing May 28, 2024).

Since B&M Miller Equity Holdings Inc. a company controlled by Brad Miller, a director of the Company, Gaurav Puri, a director of the Company, and Constantine Zachos, a director of the Company, each entered into the Debt Settlement Agreements, it is considered to be a "related party transaction" under Multilateral Instrument 61-101- Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The transaction will be exempt from the formal valuation and minority shareholder approval requirements pursuant to sections 5.5(a) and 5.7(1)(a) MI 61-101 as neither the fair market value of the securities issued to the related parties (as defined in MI 61-101), nor the consideration provided therefor, exceed 25% of the Company's market capitalization.

Voluntary Pooling Agreements

The Company is also pleased to announce that it has entered into pooling agreements (the "Pooling Agreements") dated on or about March 6, 2024 (the "Effective Date") under which - representing a strong vote of confidence in the Company and its performance - certain shareholders (each a "Pooling Shareholder") have agreed to subject an aggregate of 26,411,896 Common Shares issued to them in connection with the conversion of the Convertible Debentures and pursuant to the Debt Settlement Agreements to voluntary pooling until the date that is the earlier of (i) twenty four (24) months from the Effective Date and (i) the first business day following the date on which the closing price for the Common Shares on the TSX Venture Exchange (the "TSXV") (or such other recognized stock exchange in Canada on which the Common Shares are then listed) is equal to or greater than $0.50 for a period of 10 consecutive trading days.

The Debt Settlement Agreements and the issuance of the Common Shares thereunder are subject to the approval of the TSXV. All securities issued pursuant to the Debt Settlement Agreement will be subject to a hold period of four months plus one day from the date of issuance thereof in accordance with applicable TSXV policies and Canadian securities laws.

About Cloud DX

Accelerating digital healthcare, Cloud DX is on a mission to make healthcare better for everyone. Our Connected Health TM remote patient monitoring platform is used by healthcare enterprises and care teams across North America to virtually manage chronic disease, enable aging in place, and deliver hospital-quality post-surgical care in the home. Our partners achieve better healthcare and patient outcomes, reduce the need for hospitalization or re-admission, and reduce healthcare delivery costs through more efficient use of resources. Cloud DX is the co-winner of the Qualcomm Tricorder XPRIZE, 2022 Top Innovator by Canadian Business, a 2021 Edison Award winner, a Fast Company "World Changing Idea" finalist, and one of "Canada's Ten Most Prominent Telehealth Providers." Cloud DX is an exclusive partner to Medtronic Canada, Teladoc Health Canada, and Sanrai International.

For more information on Cloud DX (TSXV:CDX), please visit www.clouddx.com and see the Cloud DX Investor Site at

Social Links:

Twitter: https://twitter.com/CloudDX
Facebook https://www.facebook.com/clouddxinc/
LinkedIn https://www.linkedin.com/company/cloud-dx/
Instagram https://www.instagram.com/cloud.dx/

For media inquiries please contact:

Cloud DX Marketing
888-543-0944
marketing@clouddx.com

For investor inquiries please contact:

Jay Bedard
Cloud DX Investor Relations
647-881-8418
jay.bedard@clouddx.com

Officer responsible for this press release:

Simon Selkrig
Chief Financial Officer
888-543-0944
simon.selkrig@clouddx.com

Forward-Looking Information

This news release contains forward-looking statements and information within the meaning of applicable securities legislation. Often, but not always, forward-looking statements and information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or 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. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements or information contained in this news release. In particular, this news release includes certain forward-looking statements concerning receipt of TSXV approvals.

Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. In making the forward-looking statements in this news release, the Company has applied several material assumptions, including without limitation, information concerning the receipt of approvals from the TSXV.

Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information.

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.

SOURCE: Cloud DX Inc.

View the original press release on accesswire.com

FAQ

What is the total amount of debt converted to shares by debenture holders?

Debenture holders have converted approximately $4.2 million in total debt to shares.

What is the average conversion price per share for the debt conversion?

The average conversion price per share is $0.154, which is at a premium to the current market price.

How many shares were added to the voluntary pool?

A total of 26,411,896 shares were added to a voluntary pool and escrowed for 24 months.

Under what conditions can shareholders sell their pooled shares?

Shareholders can only sell their pooled shares if the share price exceeds $0.50 for 10 consecutive days.

Who are some of the participating debenture holders in the conversion?

Participating debenture holders include 3 Board Directors and 14 arms-length investors.