Chrysalis Capital IX Corporation Provides Details on Qualifying Transaction With Inspira Financial Inc. and Concurrent Financing

TORONTO, ONTARIO--(Marketwired - April 29, 2015) -


Chrysalis Capital IX Corporation (TSX VENTURE:NYN.P) ("Chrysalis IX"), a "capital pool company" pursuant to the policies of the TSX Venture Exchange (the "TSXV") announces further details of its proposed merger (the "Amalgamation") with Inspira Financial Inc. ("Inspira") pursuant to a letter agreement dated October 20, 2014, previously announced on October 20, 2014.

Inspira is a private Canadian corporation, incorporated on May 14, 2014, focused on rolling up the highly fragmented market of small companies in the emerging, large and growing market for alternative financial services offered to healthcare providers and their patients across the United States.

Businesses such as medical bill collection agencies and medical equipment leasing companies offer services and products to alleviate working capital problems being experienced by physician offices in the U.S. driven by cuts in reimbursement and increased patient financial responsibility of a medical bill.

Inspira plans to acquire these types of business and increase revenue through cross selling a full range of alternative financial services. As an initial offering, Inspira currently provides revolving lines of credit ("RLOC") to healthcare providers ranging from US$500,000 to US$5,000,000 via its wholly-owned subsidiaries, Healthcare Receivable Lenders, Inc. ( and Inspira Financial Company (

Despite the growth opportunities found in a rapidly aging population and rebounding economy, smaller healthcare providers, defined as those with less than $50 million in annual revenues, face a challenging finance market; traditional banks continue to reduce their risk profiles, term lenders require personal guarantees and first security over all assets, factoring lenders charge 25%+ annual interest and equipment providers have all but eliminated financing programs.

By targeting the 800,000+ healthcare providers in the United States, Inspira believes it can generate double-digit returns on government (Medicare/Medicaid) and large healthcare insurance receivables.

Upon completion of the Amalgamation, Inspira plans to continue adding clients to its RLOC service both through acquisition and cross selling, as well as direct marketing. Post-acquisition, Inspira plans to enhance operational efficiencies through the implementation of proprietary technology, leveraging management's FinTech and operations expertise, in an effort to significantly increase its loan book and reduce client acquisition costs.

One of Inspira's long-term opportunities is to expand its service offering to patient consumer financing, a multibillion dollar market that is virtually untouched by today's lending industry. From a patient's perspective, recent changes to the United States healthcare system, including the Affordable Care Act, has resulted in a more than quadrupling of the out of pocket deductible portion of medical procedures and services due from the patient, putting enormous pressure on the patient's ability to pay and the healthcare provider's ability to collect. Inspira believes the relationships it gains via its RLOC service; combined with proprietary technology built to perfect its security interests will create a distinct advantage to market alternative financial services directly to patients on a very targeted basis.

There are currently over 200 shareholders of Inspira. No person owns or controls, directly or indirectly, more than 10% of the outstanding shares of Inspira.

On the basis of the unaudited financial statements of Inspira for the period from May 14, 2014 (date of incorporation) to February 28, 2015, Inspira had total assets of $9,597,360 and shareholders' equity of $9,597,360, and having paid down its warehousing obligation, it has no debt.

Pursuant to the Amalgamation, Chrysalis IX and Inspira will combine their businesses by means of a three-cornered amalgamation.

The Amalgamation will effectively provide for the acquisition of all of the outstanding equity interests of Inspira by Chrysalis IX, indirectly through a private wholly owned subsidiary of Chrysalis IX (the "Amalgamation Entity"), in a transaction in which the shareholders of Inspira will receive shares of Chrysalis IX (the "Resulting Issuer Shares"). As a result of the Amalgamation of Amalgamation Entity and Inspira (the "Amalgamated Corporation"), Chrysalis IX (the "Resulting Issuer") will become the sole beneficial owner of all of the outstanding shares of Amalgamated Corporation. The securities of Inspira (the "Inspira Shares") will be exchanged for securities of Chrysalis IX on a one for one basis. In addition, prior to or concurrently with the Amalgamation, Chrysalis IX intends on consolidating (the "Consolidation") its 10,841,000 common shares (and convertible securities) on a one for 1.765 basis, and continuing (the "Continuation") into British Columbia in order to amalgamate with the Amalgamated Corporation.

Following the completion of the Amalgamation, Concurrent Financing (defined below), Consolidation and Continuation (collectively, the "Transactions"), the Resulting Issuer will be governed by the laws of the Province of British Columbia, and it is expected that approximately 294,690,110 Resulting Issuer Shares will be outstanding, and approximately 183,956,844 Resulting Issuer Shares will be reserved for issuance pursuant to convertible securities of the Resulting Issuer.

The current shareholders of Chrysalis IX will hold approximately 2.1% of the Resulting Issuer Shares, the current shareholders of Inspira will hold approximately 70.2% of the Resulting Issuer Shares, current holders of the previously issued Inspira subscription receipts will hold approximately 7.4% of the Resulting Issuer Shares, and subscribers in the Concurrent Financing will hold approximately 20.4% of the Resulting Issuer Shares.

Closing of the Transactions remain subject to several conditions precedent, including execution of a definitive agreement, the preparation and filing of an Filing Statement, holding a meeting of Chrysalis IX shareholders to approve the Consolidation and Continuation, holding a meeting of Inspira shareholders to approve the Amalgamation, and obtaining TSXV approval for the Transactions.

The Amalgamation is expected to constitute the Qualifying Transaction of Chrysalis IX as defined by the policies of the TSXV, and upon the closing thereof, the Resulting Issuer is anticipated to be listed as a Tier 1 Industrial issuer on the TSXV.

The Amalgamation will not constitute a "Non-Arm's Length Qualifying Transaction" (as such term is defined by the TSXV). In addition, the Amalgamation is not a "related party transaction" as such term is defined by Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions and is not subject to Policy 5.9 of the TSXV. As a result, no meeting of the shareholders of the Chrysalis IX is required pursuant to Policy 2.4 of the TSXV or securities laws.

In conjunction with the Amalgamation, Inspira anticipates completing as non-brokered private placement (the "Concurrent Financing") through the issuance of common share units (the "Units") at $0.15 per Unit for aggregate gross proceeds of $9,000,000. Each Unit shall consist of (i) one common share in the capital of Inspira, and (ii) one-half of one transferable share purchase warrant (a "Warrant" or "Warrants"), with each whole Warrant entitling the holder thereof to acquire one common share of Inspira at a price of $0.30 per share until twelve (12) months following a "liquidity event" (which includes the Amalgamation). In connection with the Concurrent Financing, agents/finders will be entitled to a cash commission equal to 7% of the aggregate gross proceeds raised and finders warrants exercisable for common shares of Inspira equal to 7% of the number of Units issued, at an exercise price of $0.15 per share until twenty-four (24) months from the closing of the Concurrent Financing. Pursuant to the Amalgamation each common share of Inspira, Warrant and finders warrant issued pursuant to the Concurrent Financing, will be exchanged for similar securities of the Resulting Issuer on a one for one basis.

Michael Dalsin - Investment Banker

Mr. Dalsin is currently the Chairman of Patient Home Monitoring Corp. (TSX VENTURE:PHM), a profitable, acquisition oriented healthcare company operating in the US. He also serves Chairman and current Chief Executive Officer of Convalo Health International, Corp. (TSX VENTURE:CXV), an acquisition-oriented company focused on rolling up the US addiction rehabilitation market. Mr. Dalsin was previously a Managing Director of Stanmore Capital Partners, Inc., a healthcare services specialized investment firm since 2002. Prior to Stanmore, Mr. Dalsin worked in international investment banking and deal-making in London, Hong Kong and New York. He has participated as a lead banker and negotiator for a number of medium-sized market international roll-ups. He holds an economics degree from the University of Wisconsin- Madison.

Roger Greene - Investment Banker

Mr. Greene is currently a Vice Chairman of Patient Home Monitoring Corp. (TSX VENTURE:PHM) and Vice Chairman of Convalo Health International, Corp. (TSX VENTURE:CXV). Mr. Greene was previously a Managing Director of Stanmore Capital Partners, Inc. since 2002. He holds a degree in economics from Harvard College and a law degree from Harvard Law School. Mr. Greene worked with the various funds in the Robert M. Bass Group in Texas as a principal and as general counsel. He participated in a number of their opportunity funds, including Brazos Fund, which purchased $2 billion in assets in the United States and Canada, and Lone Star Fund, which has acquired and managed several billions of dollars in assets in North America, Asia and Europe. For Brazos, Mr. Greene was responsible for negotiations on a $300 million purchase of assets from a thrift in Canada, a roll-up of assets of over $100 million that resulted from the merger of two insurance companies and the securitization of hundreds of millions of dollars of loans.

Dave Costine - Chief Executive Officer

Mr. Costine is a non-executive director of Patient Home Monitoring Corp. (TSX VENTURE:PHM) and a non- executive director of Convalo Health International, Corp. (TSX VENTURE:CXV). From 1988 until 2003 he was the managing general partner of Corporate Venture Partners LP, an institutional investment fund he founded in 1988. Investors included the New York State Teachers Pension Fund, New York State Employees Pension Fund, Chase Manhattan Bank, Niagara Mohawk Power Corp., Corning Inc. and Cornell University. Mr. Costine was also an investment banker with Newcourt Securities, the US division of Rothschild, Inc. He has served as an executive and on the boards of many early state companies, four of which became public on US senior exchanges, including Nasdaq and NYSE. He is currently on the board of trustees of the Cornell University Foundation. He has an engineering degree from Cornell and a MBA from Harvard Business School.

Troy Shadian - Non-Executive Director

Mr. Shadian is a partner in Core Capital Investments, a private equity firm which has acquired over $250 million of hospitality sector assets and commercial property since 2003. He is also the president of Real Estate Analytics, LLC, a real estate and finance consulting firm. Since 1999 the firm has provided consulting services on over $4 billion of transactions, most of which was debt. Previously, Mr. Shadian was in the Securitized Products Group within the Fixed Income Division of Morgan Stanley using the firm's capital to make debt investments. He worked as an investment banker for Goldman Sachs & Company and Namura Securities underwriting debt. Mr. Shadian has an MBA from the Anderson School at UCLA and an economics degree from the University of California at Berkeley.

Marc Lavine - Non-Executive Director

Mr. Lavine is currently the Chairman and Chief Executive Officer of Exclamation Investments Corporation (TSX VENTURE:XI), a company focused on entrepreneurial investment and business creation activities. Mr. Lavine has deep experience with technology-driven start-ups and was co-founder of both Cyberplex Inc. (now EQ Inc.), a technology consulting company, and Points International Ltd. (NASDAQ:PCOM)(TSX:PTS), the global leader in loyalty commerce transactions and currency management. Mr. Lavine holds an Honours degree in Business Administration from the Richard Ivey School of Business at the University of Western Ontario.

Andrew Folmer - Chief Financial Officer

Mr. Folmer, a CPA, is the Chief Financial Officer of Patient Home Monitoring Corp. (TSX VENTURE:PHM). Mr Folmer was most recently the Chief Financial Officer of a large student loan company sold to Lehman Brothers in 2007. He has 30 years of experience in finance, including previous work as a CFO, and 15 years of experience in the healthcare industry. In private industry, he has helped build companies in the pharmacy and pharmaceutical businesses. Mr. Folmer has served as a key leader of a $5 million startup that grew and sold to a Fortune 50 company for $100 million, and has also managed day-to-day functions in Treasury, Operations, Sales and Marketing, Human Resources and Information Technology. Mr. Folmer holds a BS degree in Accounting from Elizabethtown College.

Robert Munro - Chief Operating Officer

Mr. Munro has 10 years of experience in financial transactions through his involvement with Chrysalis Capital Group. Previous to that, he gained expertise in managing application development and commercial launch as Director, Data Product Management with Rogers AT&T Wireless Inc. Mr. Munro is also currently a director of Exclamation Investments Inc., a public investment issuer listed on the TSXV. Mr. Munro holds a degree from Huron College, the founding college of the University of Western Ontario, as well as several certificates in Project Management from Ryerson University.

Gary Mintz - Chief Commercial Officer and General Counsel

For the last 10 years, Mr. Mintz served as counsel and commercialization and business development expert to several publicly traded high tech companies, including LinkedIn (NASDAQ:LNKD), and Cisco Systems (NASDAQ:CSCO). Previous to this, Mr. Mintz worked at several venture-backed Silicon Valley technology companies, including Commerce One. Mr. Mintz resides in the Bay Area. Mr. Mintz holds a degree from the Kelley School of Business at Indiana University, as well as a law degree from California Western School of Law.

Robbie Grossman - Corporate Secretary

Mr. Grossman is an experienced securities lawyer at McMillan LLP, and is currently the Assistant Secretary of Patient Home Monitoring Corp. (TSX VENTURE:PHM) and Corporate Secretary of Convalo Health International, Corp. (TSX VENTURE:CXV). Mr. Grossman holds a LL.B. from the University of Windsor and a B.A. (Political Science) from Concordia University. Mr. Grossman was called to the Ontario bar in 2002. He assists public and private companies and securities dealers with corporate finance, M&A and securities matters. He is currently an officer and director of several reporting issuers.

Dennis Wilson - Vice President of Corporate Affairs

Mr. Wilson is currently the Vice-President of Corporate Affairs for Convalo Health International, Corp. (TSX VENTURE:CXV). Mr. Wilson holds a degree from the University of California, Los Angeles in English, with a Minor in Political Science.

Hampton Securities Limited, subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the proposed Qualifying Transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the proposed Qualifying Transaction or the likelihood of completion.

Completion of the proposed transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

The financial data contained herein is unaudited and may be subject to refinement or modification during the audit process. Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information release or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

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.

The securities referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This news release does not constitute an offer for sale of securities for sale, nor a solicitation for offers to buy any securities. Any public offering of securities in the United States must be made by means of a prospectus containing detailed information about the company and management, as well as financial statements.

Contact Information:

Chrysalis Capital IX Corporation

Marc Lavine

1 (877) 272-4073 ext. 2

Inspira Financial Inc.

Robert Munro

1 (844) 877-7562 ext. 3

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