Patient Home Monitoring (PHM) Announces Execution of Letter of Intent (LOI) for Acquisition of Profitable Company; Update on Growing M&A Pipeline

LOS ANGELES, CALIFORNIA--(Marketwired - Oct. 1, 2014) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.

Patient Home Monitoring Corp. ("PHM") (TSX VENTURE:PHM), a profitable company focused on rolling-up annuity-based healthcare service companies in the U.S., has executed a non-binding Letter of Intent (LOI) to acquire a profitable healthcare service company ("Target") treating patients with chronic conditions. The Target serves specialty high margin markets that expand PHM's current offerings to patients with multiple chronic illnesses. PHM also provided further details about the current growing M&A pipeline.

Acquisition Target

The LOI was executed with an acquisition Target that has unaudited annualized EBITDA in excess of $400,000. The purchase price is proposed to be less than 2.6 times EBITDA. These figures are subject to final due diligence.

PHM has agreed acquire the stock of the Target for $650,000 in cash and 1,075,000 in common shares of PHM. The cash payment will be broken down to $500,000 at close and $150,000 four months after close. As part of the transaction the owners will take 1,075,000 common shares of PHM, which will become free trading one year after the close. The key leaders and current shareholders of the business have agreed to stay on with PHM after the transaction as managers. They plan to leverage their existing revenue lines by cross selling their services to current PHM operations.

The Target is located in eastern Texas, and focuses on servicing patients with two chronic conditions: patients suffering from wounds that require continual care and patients with mobility restrictions that require high margin power mobility equipment. The company has been profitable and in operation for 15 years.

"Once we execute a final purchase agreement with this Target, I expect that we will integrate these two high margin services across the entire patient database to continue to increase organic growth through cross selling," said Andy Folmer, President for Patient Home Monitoring. "Additionally, there are opportunities to expand into the pulmonology and Coumadin service lines in Texas. The acquisition would be the first location in the state of Texas and continues to expand PHM's physical presence across the United States. We can also use this small acquisition as a launching pad to grow throughout Texas, our second largest state by population, either by organic growth or by additional acquisitions. While this acquisition is smaller in size than our last purchase, it is priced well, provides great margins, and, most importantly, opens a new line of business to our existing operations."

Update to the M&A Pipeline

"We continue to build our pipeline of qualified acquisition targets," said Michael Dalsin, Investment Banker for Patient Home Monitoring and Chairman. "We have a pipeline of several companies with which we are in active negotiations, and we are executing several NDAs with new potential targets on a weekly basis. With many excellent acquisition targets to choose from, we have been disciplined about acquisition pricing to protect our shareholders and the current managers who have already accepted stock for PHM to acquire their companies. At the moment, we have 7 initial term sheets outstanding and 3 LOIs awaiting execution. We have plenty of capital to close several deals without equity financing. I expect we will have in excess of $22 million in cash after our warrants are exercised."

Warrants

The expiry date of warrants issued on December 23, 2013 pursuant to its brokered financing of common share units through Beacon Securities Limited, has been accelerated to December 23, 2014 pursuant to the terms of the Warrant Certificates.

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.

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.

FOR FURTHER INFORMATION PLEASE CONTACT:
Patient Home Monitoring Corp.
Edward Brann
Investment Banker
(949) 407-6208
ebrann@myphm.com
www.phmhometesting.com