Imaging Dynamics Company Announces Financing Of Wholly-Owned Subsidiary
Published: Sep 12, 2017
CALGARY, Alberta, Sept. 11, 2017 (GLOBE NEWSWIRE) -- Imaging Dynamics Company Ltd. (TSXV:IDL) ("IDC" or the "Company") today announces that its formerly wholly-owned subsidiary, Shanghai IDC Healthcare Co. (the "Subsidiary") has closed a financing (the "Transaction") with each of Beijing Sheng Zexin Technology Development Co. Ltd. ("BSZ"), a corporation with its head office in Beijing, China, and Beijing Xiangyuda Technology Co. Ltd ("BXT", and together with BSZ the "Investors"), a corporation with its head office in Beijing, China, pursuant to which BSZ and BXT will subscribe for 36.5 million common shares ("Shares") and 30.5 million Shares, respectively, in the capital of the Subsidiary, at a price of 1 Renminbi ("RMB") per Share, for gross proceeds of RMB 67 million (approximately CAD$12,465,350.00).
The Company expects that the Transaction will: (a) allow the Subsidiary to improve market penetration in China, where relatively recent changes to government policies and regulations require state-owned hospitals, which comprise more than 80% of the medical devices market share in China, to purchase medical devices from locally owned or controlled companies; (b) provide IDC with the capital needed to explore strategic growth opportunities both in and outside of China, as well as provide the Subsidiary with the capital needed to support its Chinese operations in the near term; (c) generally improve the financial situation of both the Subsidiary and the Company and increase the Company's credit rating through the repayment of debt.
Proceeds from the Transaction will be used for the repayment of debt of the Subsidiary, research and development of new technology and products, and general corporate purposes of the Subsidiary. As a result of the Transaction, BSZ and BXT now hold 36.5% and 30.5%, respectively, of the issued and outstanding Shares of the Subsidiary. Both BSZ and BXT are arm's length parties. Pursuant to the terms of the Financing Agreements, it is expected that the composition of the Subsidiary's board of directors will change.
Impact on the Company
Prior to the closing of the Transaction, revenue generated by the Subsidiary constituted approximately 80% of the revenues of the Company on a consolidated basis. It is anticipated that the Transaction will result in a significant and material decrease in IDC's sales revenue as well as its recognized losses.
The Company also expects that the Transaction will improve the long-term financial health of the Subsidiary and the Company. IDC believes that the Transaction may also result in an increase in the Company's revenues in the second half of the year 2018 due to the Subsidiary's improved access to the Chinese medical device market.
The Company anticipates that there may be additional investors who will subscribe for shares of the Subsidiary.
IDC is a global medical imaging technology provider and innovative force in the high growth field of digital radiography (DR) technology.
The Company has thousands of installations in 50 countries of its proprietary, award winning direct capture DR technology, which replaces conventional film-based diagnostic imaging and provides a cost-effective solution for medical facilities of all sizes to provide high quality diagnostic X-ray images and improve the level of healthcare for their patients.
Throughout its history, IDC has been recognized by multiple industry organizations and research analysts such as: Frost & Sullivan and Deloitte Technology; for its dedication to innovation, global market growth, and customer focused value proposition.
The Company has its corporate office in Calgary, Canada, a sales and marketing office in Beijing, China, and also operations, research and development centres in Calgary, Canada and Shanghai, China. Visit the IDC web site: www.imagingdynamics.com.
Cautionary Statement Regarding Forward-Looking Information
This press release contains certain forward-looking statements and forward-looking information that are based on the Company's current internal expectations, estimates, projections, assumptions and beliefs. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intent", "estimate", "anticipate", "plan", "should", "believe" or "continue" or the negative thereof or variations thereon or similar terminology and include statements with respect to the use of proceeds of the Transactions and the performance of IDC and the Subsidiary.
By their very nature, forward-looking statements involve numerous factors, assumptions and estimates. A variety of factors, many of which are beyond the control of the Company, may cause actual results to differ materially from the expectations expressed in the forward-looking statement. These factors include, but are not limited to, changes in commodity prices and foreign exchange as well as the risk that the Company and the Subsidiary will not be successful in penetrating the Chinese medical device market. For a description of the principal risks of the Company, see the heading "Risk Factors" in the Company's Management's Discussion and Analysis for the three and six months ended June 30, 2017, a copy of which is available at www.sedar.com.
These and other factors should be considered carefully, and readers are cautioned not to place undue reliance on these forward-looking statements. Although management reviews the reasonableness of its assumptions and estimates, unusual and unanticipated events may occur which render them inaccurate. Under such circumstances, future performance may differ materially from those expressed or implied by the forward-looking statements. Except where required under applicable securities legislation, the Company does not undertake to update any forward-looking information statement.
Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
For more information, please contact: Mr. Liu Yi Interim Chief Financial Officer 1.403.251.9939 Office 1.866.975.6737 Toll Free