Nova Leap Health Corp. Update on Proposed Purchase of Rhode Island Home Care Business Assets and Resumption of Trading
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HALIFAX, June 30, 2017– NOVA LEAP HEALTH CORP. (TSXV: NLH) (“Nova Leap” or the “Company”), a company focused on the home health care industry, continues to work through the remaining conditions to close its proposed acquisition of All About Home Care (“AAHC”) in Rhode Island, including the home health care license transfer. Nova Leap has submitted a “Change in Effective Control” application (“the Application”) to the Rhode Island Department of Health Centre for Health System Policy and Regulation (“Department of Health”). The Application is under review and management anticipates a decision by the Department of Health by the end of August, 2017. Nova Leap was previously successful with a license application in the State of New Hampshire during the acquisition of the business of Northern Family Home Care.
Nova Leap has incorporated a subsidiary, Nova Leap Health RI, Inc. to acquire the business assets of AAHC, including customer contracts and intellectual property. Upon closing, Nova Leap Health RI, Inc. will assume the office lease and create new employment agreements with the existing employee group.
Revenues of AAHC for the years ended 2016 and 2015 were US$2.091 million (audited) and US$2.057 (unaudited), respectively. Gross profit for the years ended December 31, 2016 and 2015 were US$886,361 (audited) and US$847,451 (unaudited), resulting in net income of US$252,890 (audited) and US$258,350 (unaudited) for each respective year.
Nova Leap has signed a Letter of Agreement with Bank of Montreal for a non-revolving demand loan of US$600,000 which will be used to finance the acquisition of AAHC, subject to certain closing conditions, including the successful transfer of the home health care license.
“We are pleased with the progress to date in meeting the conditions for closing and look forward to closing the acquisition. While the license application is under review, we continue to pursue other acquisition and expansion opportunities as part of our growth strategy”, noted Chris Dobbin, President and CEO of Nova Leap.
Upon announcement of the Fundamental Acquisition on April 21, 2017, Nova Leap’s stock was halted pursuant to TSX Venture Exchange (“Exchange”) Policy 5.3. The Exchange has now completed its review of all documents associated with the Fundamental Acquisition pursuant to Policy 5.3 section 5.6(d), and as a result of this review the trading halt will be lifted shortly.
Nova Leap continues to work towards closing its previously announced non-brokered private placement. Nova Leap announces that it will close up to $1.2 million in this private placement instead of the up to $1.0 million as previously announced. The private placement is not a part and parcel financing of the proposed acquisition of AAHC. The non-brokered private placement is expected to close on or before July 15, 2017.
About Nova Leap
The Home Care Providers industry is becoming one of the fastest growing healthcare industries in Canada and the United States. Home care saves patients billions of dollars every year by treating them in their own homes instead of in hospitals. An aging population, the prevalence of chronic disease, growing physician acceptance of home care, medical advancements and a movement toward cost-efficient treatment options from public and private payers have all fostered industry growth. Nova Leap is focused on a highly fragmented market of small privately-held companies providing patients one on one care in their homes. Nova Leap’s post acquisition organic growth strategy is to increase annual revenue per location through a combination of increased employee investment, including training, focused sales and marketing efforts, billing rate increases, expansion of geographical coverage, and improved referral sources.
FORWARD LOOKING INFORMATION:
Certain information in this press release may contain forward-looking statements. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Company. Additional information identifying risks and uncertainties is contained in the Company’s filings with the Canadian securities regulators, which filings are available at www.sedar.com.
For further information:
Christopher Dobbin, CPA, CA, Director, President and CEO Nova Leap Health Corp., T: 902 401 9480 F: 902 482 5177 firstname.lastname@example.org
John Boidman, Vice President Renmark Financial Communications Inc. T: 416 644-2020 or 514 939-3989 email@example.com
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.