DOC CloudMD Software & Services Inc

CloudMD Software & Services Inc. (TSXV: DOC, Frankfurt: 6PH) (the “Company” or “CloudMD”), is pleased to announce the notice of special meeting (the “Meeting”) of the holders (“Shareholders”) of common shares of CloudMD (“Shares”) and of the holders (the “Optionholders”, and collectively with the Shareholders, the “Securityholders”) of stock options of the Company and management information circular (the “Circular”) are now available on CloudMD’s website at https://investors.cloudmd.ca/events--presentations/special-meeting/, as well as under CloudMD’s profile on SEDAR+ (www.sedarplus.ca). The mailing of the Circular and other materials related to the Meeting has also commenced.

The Arrangement and Meeting Details

At the Meeting, Securityholders will be asked, among other things, to consider and, if deemed advisable, pass a special resolution (the “Arrangement Resolution”) approving the Arrangement (as defined below). On May 14, 2024, the Company entered into an arrangement agreement (the “Arrangement Agreement”) with 1480775 B.C. Ltd., an affiliate of CPS Capital LP (a private equity investment firm) (the “Purchaser”), in respect of a proposed plan of arrangement (the “Arrangement”) under the Business Corporations Act (British Columbia). The purpose of the Arrangement is to, among other things, permit the acquisition by the Purchaser of all of the issued and outstanding Shares. If the Arrangement becomes effective, each Shareholder will receive cash consideration of $0.04 for each Share held (the “Consideration”).

CloudMD will hold the Meeting on June 27, 2024, at 10:00 a.m. (Toronto time) via audio webcast (at https://web.lumiconnect.com/416813823) with the ability to participate in the virtual meeting as explained further in the Circular.

Reasons for the Arrangement

• Process – The Arrangement with the Purchaser is the culmination of a lengthy process that included a strategic review that was initiated in August 2022 and overseen by a special committee and the strategic and liquidity review that the special committee (the “Special Committee”) of the board of directors of the Company (the “Board”) has been engaged in since July 2023, with the assistance of INFOR Financial Inc. (“INFOR”). During that time, the Company, through its advisors, canvassed a significant number of other potential parties, none of which were prepared to make an executable binding offer to acquire the Company or provide capital to support the Company’s path to positive cash flow. The Arrangement provides the capital to support the Company’s business with specific consideration to all of the Company’s stakeholders and was the best alternative available to ensure the ongoing viability of the Company. Failure to complete the Arrangement could materially and negatively impact the trading price of the Shares and if the Arrangement is not completed, the Company does not expect that there will be an alternative that would provide any value to the Securityholders.
• Business and Industry Risks – The Board and the Special Committee concluded that the Consideration provides certainty of value to Securityholders, which Securityholders may consider as more favourable than continuing with the Company’s current business plan, in light of the risks and uncertainties affecting the Company and its business. These risks and uncertainties include: the current business, operations, assets, financial performance and condition, operating results and prospects of the Company, the outstanding indebtedness under the Company’s credit facilities and their near-term maturity, its limited cash resources, the current industry and economic conditions and trends.
• Fairness Opinion – The fairness opinion from INFOR (the “Fairness Opinion”) that, subject to and based on the considerations, qualifications, assumptions and limitations described therein, the Consideration is fair, from a financial point of view, to the Shareholders.
• Form of Consideration – The form of consideration payable to Securityholders, being cash, provides certainty of value and immediate liquidity.
• Credibility of the Guarantors – The obligations of the Purchaser, including its obligation to pay the Consideration and the outstanding indebtedness under the Company’s credit facilities, are guaranteed by affiliates of CPS Capital (the “Guarantors”). Given the Guarantors’ commitment, credit worthiness and record of completing transactions, the Guarantors are expected to be better able to withstand costs, payments, fees and other expenses, in part as a result of their financial position and access to capital.

Board Recommendation

The Board, based in part on the unanimous recommendation of the Special Committee and the Fairness Opinion, has unanimously determined that the Arrangement is fair to Securityholders and is in the best interests of the Company, and unanimously recommends that the Securityholders vote FOR the Arrangement Resolution. The determination of the Special Committee and the Board is based on various factors as described above and more fully in the Circular.

Securityholders are encouraged to read the Circular and vote your securities as soon as possible. The proxy voting deadline is Tuesday, June 25, 2024 at 10:00 a.m. (Toronto time).

Securityholder Questions

Securityholders who have any questions or require assistance with voting may contact Laurel Hill Advisory Group, CloudMD’s proxy solicitation agent and shareholder communications advisor:

Laurel Hill Advisory GroupToll Free: 1.877.452.7184 (for securityholders in North America)International: +1.416.304.0211 (for securityholders outside Canada and the US)By Email: assistance@laurelhill.com

About CloudMD

CloudMD is an innovative North American healthcare service provider focused on empowering healthier living by combining leading edge technology with an exceptional national network of healthcare professionals. Every day, our employees and health care providers live our values of delivering excellence, collaboration, connected communication and accountability to solve complex health problems. CloudMD’s industry leading workplace health and wellbeing solution, Kii, supports members and their families with a personalized and connected healthcare experience across mental, physical and occupation health. Kii delivers superior clinical health outcomes, consistent high engagement, and measurable ROI for payers such as employers, educational institutions, associations, government, and insurers. CloudMD is also a market leader in workplace absence management through data-driven prevention, intervention and return to work programs.

In addition, the Company sells health and productivity tools to hospitals, clinics, and other healthcare service providers to empower them to deliver better care. Visit www.cloudmd.ca to learn more about the Company’s comprehensive healthcare offerings.

“Karen Adams”Chief Executive Officer

FOR ADDITIONAL INFORMATION, CONTACT:

Investor RelationsInvestors@cloudmd.ca1-647-484-1405

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

Forward Looking Statements

This news release contains “forward-looking statements” and “forward-looking information” within the meaning of Canadian securities laws, including statements relating to the Arrangement, including in respect of the impact of the Arrangement, the anticipated Meeting date and completion of mailing of the Circular, timing for completion of the Arrangement and receiving the required regulatory and court approvals, CloudMD’s expectations regarding liquidity and continuity of the Company’s business and operations, and the availability of the bridge loan and line of credit and continued forbearance through the period until closing of the Arrangement. All information that is not clearly historical in nature may constitute forward‐looking statements. In some cases, forward‐looking statements may be identified by the use of terms such as “forecast”, “projected”, “assumption” and other similar expressions or future or conditional terms such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “would”, and “should”. Forward-looking statements contained in this news release are based on certain factors and assumptions made by management of CloudMD based on their current expectations, estimates, projections, assumptions and beliefs regarding their business and CloudMD does not provide any assurance that actual results will meet management’s expectations. While management considers these assumptions to be reasonable based on information currently available to them, they may prove to be incorrect. Such forward‐looking statements are not guarantees of future events or performance and by their nature involve known and unknown risks, uncertainties and other factors, including those risks described in the Company’s MD&A (which is filed under the Company’s issuer profile on SEDAR+ and can be accessed at www.sedarplus.ca), that may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward‐looking statements. Although CloudMD has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward‐looking statements, other factors may cause actions, events or results to be different than anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such forward‐looking statements. Accordingly, readers should not place undue reliance on forward‐looking information. CloudMD does not undertake to update any forward-looking information, whether as a result of new information or future events or otherwise, except as may be required by applicable securities laws.