CardioComm Solutions Announces Royalty-Based Financing Deal
Executive Summary
- CardioComm Solutions entered a royalty‑based financing agreement valued at $1,036,958.49, providing $432,000 of new capital to complete and commercialize its flagship GEMS FLEX & 14‑day Holter/Event LTCM ECG software platform.
- The Lenders (Xemxija Holdings, Etienne Grima, and ITV Ventures) will receive 33% of annualized gross revenue minus $700k as royalty, with a repayment target of 200% of loan amounts by Oct 1 2031; failure triggers a higher royalty rate.
- As consideration, the Company will issue 829,566 bonus common shares and 16,591,335 bonus share purchase warrants (exercise price $0.05, expiry Oct 1 2030) to the Lenders, subject to a four‑month hold period.
Key Details
- Financing Structure:
- Total agreement value: $1,036,958.49.
- New cash infusion: $432,000 ( $350,000 from Xemxija, $82,000 from ITV Ventures).
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Existing interest‑bearing loans converted: $524,958.49 (Xemxija) and $80,000 (Etienne).
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Royalty Terms:
- Royalty calculated as 33 % of annualized gross revenue minus $700,000 for each fiscal year, payable after each third quarter ending Sep 30 2026 onward.
- Pro‑rata distribution among Lenders based on loan amounts.
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If calculated royalty is negative, no payment is made.
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Repayment Conditions:
- Obligation ends when cumulative royalties paid equal 200 % of aggregate loan amounts by Oct 1 2031 (the “5‑Year Repayment”).
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If not met, royalty rate increases to 300 % of aggregate loan amounts.
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Equity & Warrant Issuance:
- Bonus Shares: 829,566 total – 699,966 to Xemxija, 65,600 to ITV Ventures, 64,000 to Etienne.
- Bonus Warrants: 16,591,335 total – 13,999,335 to Xemxija, 1,312,000 to ITV Ventures, 1,280,000 to Etienne.
- Warrant exercise price: $0.05 per share, exercisable until Oct 1 2030.
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Hold period for shares and warrants: four months + one day.
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Security:
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General security agreement granting Lenders a security interest in all present and after‑acquired personal property of CardioComm.
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Regulatory & Compliance:
- Transaction qualifies as a related‑party transaction under MI 61‑101; exempt from formal valuation and minority shareholder approval due to financial hardship exemption.
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Subject to TSX Venture Exchange approval.
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Purpose of Funds:
- Finalize flagship product for market release.
- Conduct structured user‑feedback reviews.
- Launch and market the product to targeted healthcare markets.
- Provide post‑launch customer support and installation services.
Notable Quotes
“The financing transaction reflects the Lenders' continued confidence in our business strategy and their commitment to ensuring the successful introduction of this transformational software platform to the marketplace.” – Etienne Grima, CEO
All non‑material boilerplate, forward‑looking statements, and company background have been omitted for brevity.