Mednow Inc (TSX-V:MNOW, OTCQB:MDNWF) has announced the completion of its all-cash acquisition of Mednow Pharmacy Inc (Mednow East) for C$65,578 as well as the conversion of approximately C$1,374,422 in debt the latter owes to Mednow into a non-interest bearing, on-demand convertible promissory note.
The acquisition will allow the healthcare technology company to provide free same-day pharmaceutical delivery services in the Greater Toronto Area (GTA) and surrounding areas, and free next-day delivery in the rest of Ontario.
"We are continuing to execute our plan for a national presence across Canada and we are thrilled to be consolidating Mednow East under our platform,” said Karim Nassar CEO of Mednow, in a statement.
“As we add service to our digital-first healthcare platform, we are also simultaneously working to expand our geographical reach to become a household name in Canadian healthcare," he added.
READ: Mednow providing healthcare technology that offers virtual access with exceptional care
Mednow East, which operates an online pharmacy that delivers prescriptions in the Canadian province of Ontario, employs Mednow’s marketing and technology platform for lead generation, prescription fulfillment and customer services pursuant to a previous Pharmacy Agreement between the companies.
Mednow noted that Mednow East’s revenue and expenses will be consolidated with those of Mednow and the Pharmacy Agreement between the two parties will be terminated.
On the conversion of debt, the company said the note can be satisfied by the payment of cash or the issuance of 2,095 Class A Special Shares of Mednow East at a deemed price of $655.78 per share.
The company added that as Amir Ali Reyhany-Bozorg and Felipe Campusano are directors of Mednow and Karim Nassar is the CEO, and each are also shareholders of Mednow East, the acquisition is a related party transaction under Multilateral Instrument 61-101 - Protection of Minority Securityholders in Special Transactions (MI 61-101).
Mednow is exempt from the formal valuation and minority shareholder approval requirements imposed by MI 61-101 pursuant to the exemptions in section 5.5(a) and 5.7(a) of MI 61-101, as neither the fair market value of the shares of Mednow East, nor the consideration paid therefor, exceeds 25% of the company's market capitalization, it noted.
Toronto-based Mednow provides pharmaceutical and telemedicine services as well as doctor home visits through an interdisciplinary approach to healthcare that is focused on the patient experience. It currently operates in the provinces of British Columbia, Ontario, and Nova Scotia, with plans to launch its Winnipeg, Manitoba, and Montreal, Quebec fulfillment centres in 2022.
Contact the author at jon.hopkins@proactiveinvestors.com