TORONTO, Nov. 4, 2013 (GLOBE NEWSWIRE) -- Gemoscan Canada, Inc. ("Gemoscan" or the "Corporation") – (TSX-V:GES) (MUN:1GE) wishes to announce that it has entered into a letter of intent to undertake a two stage transaction resulting in the Corporation acquiring a 100% interest in Physiomed Yorkdale Inc. ("PYI") which operates a paramedical clinic in Toronto Ontario (the "Acquisition").
Pursuant to the first phase of the acquisition, the Corporation will enter into an agreement, with the shareholders of PYI (the "Vendors"), to manage the operation of the PYI business, for the Corporation's own account ("Management Contract"). In consideration for the Management Contract and the acquisition of $164,000, owed to the Vendors of PYI, (the "Debt"), the Corporation will pay the Vendors $164,000 by way of shares of Gemoscan, to be priced on the closing of the acquisition of the Management Contract and the Debt. The entering into of the Management Contract is expected to close by November 30, 2013 (the "Initial Close").
Gemoscan shall further acquire all of the shares of PYI. The purchase price of the shares of PYI will be calculated based on 5 times the audited annualized net cash flow of PYI from the Initial Close to not later than March 31, 2015. The acquisition of the shares of PYI is expected to close, at Gemoscan's discretion, on or before May 31, 2015 (the "Second Close"). The consideration for the shares of PYI is to be paid as 40% cash, 37% pursuant to a vendor take back mortgage (the "VTB") and 23% either in cash or in shares of Gemoscan priced upon the determination of the purchase price. The VTB shall bear interest at the rate of 7% per annum and shall have a term of 24 months from the Second Close. Interest shall be paid monthly but no principal payments are required until the due date.