Shanghai IDC Healthcare closes RMB 67 million financing

News Release

IDC Announces Financing of Wholly-Owned Subsidiary

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Calgary, Alberta, September 11, 2017 – Imaging Dynamics Company Ltd. (TSXV: IDL) (“IDC” or the “Company”) today announces that its formerly wholly-owned subsidiary, Shanghai IDC Healthcare Co. (the “Subsidiary”) has closed a financing (the “Transaction”) with each of Beijing Sheng Zexin Technology Development Co. Ltd. (“BSZ”), a corporation with its head office in Beijing, China, and Beijing Xiangyuda Technology Co. Ltd (“BXT”, and together with BSZ the “Investors”), a corporation with its head office in Beijing, China, pursuant to which BSZ and BXT will subscribe for 36.5 million common shares (“Shares”) and 30.5 million Shares, respectively, in the capital of the Subsidiary, at a price of 1 Renminbi (“RMB”) per Share, for gross proceeds of RMB 67 million (approximately CAD$12,465,350.00).

The Transaction

The Company expects that the Transaction will: (a) allow the Subsidiary to improve market penetration in China, where relatively recent changes to government policies and regulations require state-owned hospitals, which comprise more than 80% of the medical devices market share in China, to purchase medical devices from locally owned or controlled companies; (b) provide IDC with the capital needed to explore strategic growth opportunities both in and outside of China, as well as provide the Subsidiary with the capital needed to support its Chinese operations in the near term; (c) generally improve the financial situation of both the Subsidiary and the Company and increase the Company’s credit rating through the repayment of debt.

Proceeds from the Transaction will be used for the repayment of debt of the Subsidiary, research and development of new technology and products, and general corporate purposes of the Subsidiary. As a result of the Transaction, BSZ and BXT now hold 36.5% and 30.5%, respectively, of the issued and outstanding Shares of the Subsidiary. Both BSZ and BXT are arm’s length parties. Pursuant to the terms of the Financing Agreements, it is expected that the composition of the Subsidiary’s board of directors will change.

Impact on the Company

Prior to the closing of the Transaction, revenue generated by the Subsidiary constituted approximately 80% of the revenues of the Company on a consolidated basis. It is anticipated that the Transaction will result in a significant and material decrease in IDC’s sales revenue as well as its recognized losses.

The Company also expects that the Transaction will improve the long-term financial health of the Subsidiary and the Company. IDC believes that the Transaction may also result in an increase in the Company’s revenues in the second half of the year 2018 due to the Subsidiary’s improved access to the Chinese medical device market.

The Company anticipates that there may be additional investors who will subscribe for shares of the Subsidiary.

About IDC

IDC is a global medical imaging technology provider and innovative force in the high growth field of digital radiography (DR) technology.

The Company has thousands of installations in 50 countries of its proprietary, award winning direct capture DR technology, which replaces conventional film-based diagnostic imaging and provides a cost-effective solution for medical facilities of all sizes to provide high quality diagnostic X-ray images and improve the level of healthcare for their patients.

Throughout its history, IDC has been recognized by multiple industry organizations and research analysts such as: Frost & Sullivan and Deloitte Technology; for its dedication to innovation, global market growth, and customer focused value proposition.

The Company has its corporate office in Calgary, Canada, a sales and marketing office in Beijing, China, and also operations, research and development centres in Calgary, Canada and Shanghai, China. Visit the IDC web site: www.imagingdynamics.com.

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.
For more information, please contact:
Mr. Liu Yi
Interim Chief Financial Officer
1.403.251.9939 Office
1.866.975.6737 Toll Free
yliu@imagingdynamics.com