CST: 28/08/2016 00:09:28   

Agility Health Announces Issuance of Stock Options to Directors and Proposed Shares for Debt Transaction

152 Days ago

GRAND RAPIDS, MICHIGAN--(Marketwired - Mar 28, 2016) - Agility Health, Inc. (TSX VENTURE:AHI) ("Agility Health" or the "Company"), announced today that it intends to issue 30,000 stock options to each of Mr. Robert Herr, Mr. Pierre Labbé and Mr. Robert Metcalfe, the independent directors of the Company. Each option is exercisable to acquire one voting common share of the Company at an exercise price of $.18 per share and the options will expire on March 27, 2021.

In addition, the Company intends to issue to each of Mr. Steven Davidson, the Company's Chief Executive Officer and a director, and Mr. Kenneth Scholten, the Company's President and a director, subject to the approval of the TSX Venture Exchange, 1,253,298 voting common shares of the Company. This issuance is in satisfaction of US$170,388 of accrued but unpaid dividends owed to each of Mr. Davidson and Mr. Scholten on senior convertible preferred stock in Agility Health Holdings, Inc. previously held by Mr. Davidson and Mr. Scholten and which were converted, through a series of transactions, into voting common shares of Agility Health on October 7, 2013 in connection with the Company's qualifying transaction.

The Company also announces that it has entered into an agreement (the "Forbes Surety Agreement") with Mr. Davidson and Mr. Scholten in connection with the Canadian Dollar equivalent of US$1,079,816.78 (the "Escrowed Amount") that Mr. Davidson and Mr. Scholten collectively deposited into escrow on April 2, 2015 as sureties for a bond that the Company's principal operating subsidiary, Agility Health, LLC, was required to file in connection with its appeal of a judgment in the amount of US$863,853.42 in favor of FPCG, LLC. Pursuant to the Forbes Surety Agreement, the Company has agreed to pay Mr. Davidson and Mr. Scholten interest on the Escrowed Amount from April 2, 2015 through February 10, 2016 at a rate equal to the Company's average weighted cost of capital for such period, which the Company has determined to be 14% per annum. The aggregate amount of interest owed for this period is CDN$173,089.92 and will be paid to Mr. Davidson and Mr. Scholten through the issuance by the Company of 961,610 voting common shares, subject to the approval of the TSX Venture Exchange. Pursuant to the Forbes Surety Agreement, the Company has also agreed to pay Mr. Davidson and Mr. Scholten interest on the Escrowed Amount from February 11, 2016 to the date that the Escrowed Amount is released from escrow at the Company's average weighted cost of capital for such period (the "Debenture Interest"). The payment of the Debenture Interest will be satisfied through the issuance by the Company, subject to the approval of the TSX Venture Exchange, of unsecured convertible debentures (the "Interest Debentures") in the aggregate principal amount of the Debenture Interest owed which will be convertible into voting common shares of the Company at a conversion price equal to the closing price of the Company's voting common shares on the day immediately prior to the issuance of the Interest Debentures. The interest rate on the principal amount outstanding under the Interest Debentures will be the applicable federal rate (annual short-term) in effect at the time of issuance of the Interest Debentures. In the event that any of the Escrowed Amount is released to FPCG LLC, the Company will also issue to Mr. Davidson and Mr. Scholten, subject to the approval of the TSX Venture Exchange, unsecured convertible debentures (the "FPCG Payment Debentures") in the principal amount equal to the Escrowed Amount released to FPCG LLC, which will be convertible into voting common shares of the Company at a conversion price equal to the closing price of the Company's voting common shares on the day immediately prior to the issuance of the FPCG Payment Debentures. The interest rate on the principal amount outstanding under the FPCG Payment Debentures will be equal to the Company's average weighted cost of capital during the period that the FPCG Debentures are outstanding.

Certain of the transaction described in this news release constitute "related party transactions" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Shareholders in Special Transactions ("MI 61-101"). For these transactions, the Company is relying on the exemption from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 on the basis that neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction exceeds 25% of the market capitalization of the Company.

About Agility Health

Through its subsidiary and principal operating entity, Agility Health, LLC, Agility Health operates a multi-state network of outpatient rehabilitation clinics and provides contracted services to hospitals, nursing homes and other institutional clients, providing care and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers, and a variety of other injuries and conditions. In addition, Agility Health provides a number of ancillary services related to physical rehabilitation, including practice management software systems and custom orthotics. As of December 31, 2015, Agility Health operates 87 outpatient or onsite rehabilitation locations in 14 states. Agility Health's contract therapy services business provides rehabilitative services to 33 hospitals and inpatient rehabilitation units, 28 nursing homes, long-term care facilities and other service locations in 8 states. For more information, please visit investors.agilityhealth.com.

Forward-Looking Information

This news release contains certain statements which may constitute "forward-looking information" within the meaning of applicable securities laws. These statements relate to anticipated or assumed events or results and, in some cases, can be identified by words or phrases such as "may", "will", "expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or the negative of these terms. The forward-looking events and circumstances discussed in this news release, including the terms and completion of the shares for debt transaction, may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the Company. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Any forward-looking statement speaks only as of the date of this news release and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Steven N. Davidson
Chairman and Chief Executive Officer
(616) 356-5000
steve.davidson@agilityhealth.com
www.agilityhealth.com
Ray Matthews
Ray Matthews and Associates
(604) 818-7778
ray@raymatthews.ca