CALGARY, AB, September 22, 2022/CNW/ – Comprehensive Healthcare Systems Inc. (TSXV: CHS) (the “Company” or “CHS“), an industry leading provider of Healthcare Benefits Administration software and services, today announced that it has entered into a material interest purchase agreement effective September 21, 2022 (the “Acquisition Agreement”), with Benefit Administrators West, LLC (“Benveo”), an Oklahoma limited liability company which is a provider of third party administrator services in the healthcare and benefits industry. Pursuant to the Acquisition Agreement, CHS, through its wholly-owned subsidiary, Comprehensive Healthcare Systems Inc. (Delaware) (“CHS Delaware”), will acquire all of the issued and outstanding equity of Benveo (the “Acquisition”).
CHS believes that together, the companies will be well positioned to deliver on CHS’s Novus 360 platform for benefits administration and drive further digital transformation with automation and artificial intelligence. With extensive expertise in the claims processing spectrum, CHS believes the Acquisition will strengthen its position as the partner of choice for Taft-Hartley Unions and Employers who self-fund their health plans. CHS anticipates that the Acquisition will facilitate CHS’s ability to generate revenue growth through an increased ability to sell to a wider client base and will also help to drive cost efficiencies and better resource utilization.
“I’m pleased to welcome Benveo to the Comprehensive Healthcare family. With this Acquisition, we have the right people, technology, and culture of innovation to support our clients as they work to streamline how their members manage their healthcare,” said Chris Cosgrove, chief executive officer of Comprehensive Healthcare. “I welcome Mark Lewandowski, the founder of Benveo, as Chief Innovation Officer of CHS, and look forward to working with him and the entire Benveo team as we endeavor to be trusted partners for our clients.”
“Employers and Unions continue to look for ways to simplify how they extend benefits to their employees and members,” said Mark Lewandowski. “Through the Acquisition, the companies can now offer a complete range of benefit solutions, powered by CHS’s Novus 360 digital platform. All are directly focused on solving our clients’ benefits administration needs. The team is excited to be part of CHS.”
The Acquisition is an arm’s length transaction and is expected to constitute an “Expedited Acquisition” pursuant to Policy 5.3 – Acquisitions and Disposition of Non-Cash Assets (“Policy 5.3”) of the Corporate Finance Manual of the TSX Venture Exchange (the “TSXV”) and is subject to customary closing conditions including but not limited to, receipt of third party consents and approvals, approval of the TSXV under Policy 5.3, and other conditions set out in the Acquisition Agreement.
Investor Relation Services
CHS also announces that it has retained Paradox Public Relations Inc. (“Paradox”) to provide investor relations services, effective from September 21, 2022. Paradox is a seasoned boutique investor relations firm based in Montreal, Québec, with over 20 years of experience in the industry.
Paradox has been engaged to assist with, among other matters, marketing to the investment community to increase awareness of CHS, marketing to their proprietary investment database and coordinating physical and online road shows and presentations with interested parties including brokers, funds, family offices and high net worth investors. As well, they will provide advice on the Company’s marketing materials and investor relation strategies.
Paradox will provide services for a term of thirty-six months and will be paid C$10,000 per month for its services. In addition, Paradox will be granted 500,000 Options (as defined below) with an exercise price of $0.075, that will vest quarterly in equal tranches over a period of 12 months. Paradox is an arm’s length party to the Company and has no interest, directly or indirectly, in the Company or its securities.
The board of directors has approved the grant of 5.7M stock options of the Company (the “Options”) to certain directors, officers, employees, and consultants; each Option is exercisable for one common share of the Company at a price of $0.075 and expire ranging from 3 to 10 years from the grant date (the “Option Grants”); the Option Grants are subject to the receipt of any necessary regulatory approvals required by the Company.
About Comprehensive Healthcare Systems Inc.
Comprehensive Healthcare Systems Inc. is a corporation incorporated under the laws of the Province of Alberta and is the parent company of Comprehensive Healthcare Systems Inc. (Delaware). The Company is a vertically integrated software as a services (SaaS) company focused on digitizing healthcare with Telehealth and Healthcare Benefits Administration solutions, providing reliable and high-volume transaction capable systems. The Company’s state-of-the-art Novus 360 Healthcare Welfare and Benefits Administration (HWBA) SaaS platform is used by clients for all aspects of healthcare benefits administration (including self-funded employers, hospitals, doctors, and labor unions, through various corporations in which the majority shareholder has controlling ownership), providing healthcare administrative software, licensing and maintenance services.
COMPREHENSIVE HEALTHCARE SYSTEMS INC.
Chief Marketing Officer
This press release contains “forward-looking statements” within the meaning of applicable securities laws. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “budget,” “believe,” “project,” “estimate,” “expect,” “scheduled,” “forecast,” “strategy,” “future,” “likely,” “may,” “to be,” “could,”, “would,” “should,” “will” and similar references to future periods or the negative or comparable terminology, as well as terms usually used in the future and the conditional. Examples of forward-looking statements in this news release include the: (i) closing of the Acquisition, (ii) the receipt of the necessary regulatory, (iii) the Company’s believe that the companies together will be well positioned to deliver on CHS’s Novus 360 platform and strength CHS’s position as the partner of choice for Taft-Hartley Unions; (iv) CHS’s ability to generate revenue growth, drive cost efficiencies, and better allocate resources through the Acquisition; (v) the belief that CHS has the right people, technology, and culture to streamline how members manager their healthcare; (vi) the appointment of Mark Lewandowski as Chief Innovation Officer of CHS; (vii) the offering of a complete range of benefits by the companies; (viii) and third-party approvals, including the approval of the TSXV, with respect to the Acquisition; (ix) the various services to be provided by Paradox to the Company; and (x) the grant of the Options to certain directors, officers, and consultants. These forward-looking statements are based on assumptions as of the date they are provided, including assumptions that the transaction will be consummated, that the conditions of the Acquisition Agreement will be satisfied, that necessary regulatory approval will be obtained, the execution of CHS’s management strategy, the integration of Benveo with CHS, and that the business strategy of Benveo will be executed. However, there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.
Additionally, there are known and unknown risk factors that could cause the Company’s actual results and financial conditions to differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important risk factors that could cause actual results and financial conditions to differ materially from those indicated in the forward-looking statements include, among others: that regulatory approval, including that of the TSXV, is not obtained; that the closing conditions for completion of the Acquisition are not satisfied; general economic, market and business conditions in Canada and globally; market volatility; unanticipated operating delays or halts in business; unforeseen delays in the timelines for any of the transactions or events described in this press release; and the risk of regulatory changes that may impact the business of the Company or Benveo. All forward-looking information is qualified in its entirety by this cautionary statement, and the Company disclaims any obligation to revise or update any such forward-looking statement or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.