Cloud DX Announces Amendments to Private Placement of Secured Convertible Debentures, $2.5 Million Private Placement of Convertible Debenture Units, and Debt Settlement Agreement

KITCHENER, ON / ACCESSWIRE / December 7, 2023 / Cloud DX Inc. ("Cloud DX" or the "Company") (TSXV:CDX)(OTCQX:CDXFF), announces that it expects to exchange $3,546,000 of principal amount of 18% secured convertible debentures (the "Initial Debentures") issued on September 8, 2023 (the "September Financing"), pursuant to a debenture indenture (the "Initial Debenture Indenture") among the Company and Odyssey Trust Company (the "Trustee"), with 3,546 convertible debenture units of the Company (the "Debenture Units") expected to be issued pursuant to an amended and restated convertible debenture indenture (the "A&R Debenture Indenture") between the Company and the Trustee dated on or about the week of December 11^th, 2023 and an amended and restated warrant indenture (the "Warrant Indenture") between the Company and Odyssey Trust Company, as warrant agent, dated on or about the week of December 11^th, 2023 (the "Exchange").

The Initial Debentures convert into units, consisting of one common share in the capital of the Company (the "Common Shares") and one common share purchase warrant (the "September Warrants"). Each Debenture Unit will consist of: (i) one $1,000 18% secured convertible debenture of the Company (the "Convertible Debentures"), and (ii) 10,000 common share purchase warrants (the "Series 1 Warrants"). The Convertible Debentures will mature and be repayable on September 8, 2026 (the "Maturity Date"). At any time prior to the Maturity Date, the holder will be entitled to convert each Convertible Debenture into Common Shares at a price of $0.10 per Common Share. Each Series 1 Warrant will be exercisable to acquire an additional Common Share at a price of $0.15 per Common Share until September 8, 2026, subject to accelerated expiry. If, at any time, the closing price of the Common Shares listed on the TSX Venture Exchange (the "TSXV") is greater than $0.30 per Common Share for twenty (20) consecutive trading days, the Company may provide written notice (a "Warrant Acceleration Notice") to the holders of the Series 1 Warrants that the expiry of the exercisable Series 1 Warrants shall be accelerated to a date that is not less than fifteen (15) days from the date of the Warrant Acceleration Notice (the "Acceleration Right").

The Convertible Debentures shall be secured against all present and after-acquired personal property of the Company and its subsidiaries, pursuant to general security agreements among the Company, its subsidiaries and the Trustee (collectively, the "GSAs") and shall rank pari passu with all current holders of secured debentures of the Company, whether of the same issue or previous issue, as per the terms of the GSAs, an intercreditor agreement among the Company, its subsidiaries and the Trustee (the "Intercreditor Agreement") and debenture indentures between the Company and the Trustee.

The Exchange remains subject to receipt of final approval of the TSXV.

Private Placement

The Company is also pleased to announce its intention to complete a non-brokered private placement offering of up to an additional $2,500,000 in principal amount of convertible debenture units (the "Series 2 Debenture Units") on the same terms as set out in the A&R Debenture Indenture (the "Series 2 Financing"). Each Series 2 Debenture Unit shall consist of: (i) one $1,000 18% secured convertible debenture (the "Series 2 Debentures") and (ii) 10,000 common share purchase warrants (the "Series 2 Warrants"). The Series 2 Debentures will mature and be repayable on the date that is thirty-six (36) months from the date of issuance (the "Series 2 Maturity Date"). At any time prior to the Series 2 Maturity Date, the holder will be entitled to convert each Series 2 Debenture into Common Shares at a price of $0.10 per Common Share. Each Series 2 Warrant is exercisable to acquire an additional Common Share at a price of $0.15 per Common Share for a period of three (3) years from the closing of the Series 2 Financing, subject to acceleration pursuant to the Acceleration Right.

The Company anticipates using the net proceeds of the Series 2 Financing for inventory and working capital. In connection with the Series 2 Financing, the Company will pay a commission of 8% cash on the gross proceeds raised from subscribers introduced to the Company by finders, and will issue up to such number of finder's warrants (each a "Finder's Warrant") as is equal to 8% of the number of Common Shares issuable upon conversion of the Convertible Debentures purchased by subscribers introduced to the Company by such finders. Each Finder's Warrant will entitle the holder thereof to acquire one Common Share at a price of $0.15 per Common Share for a period of three (3) years from the closing date.

Closing of the Series 2 Financing is expected to occur in one or more tranches, with the first tranche expected to close on or about the week of December 11^th, 2023. The Series 2 Debenture Units and any securities issuable upon conversion thereof are subject to a statutory hold period of four months and one day from the date of issuance of the Series 2 Debenture Units. The Series 2 Financing remains subject to final approval by the TSXV.

The Series 2 Debentures shall be secured against all present and after-acquired personal property of the Company and its subsidiaries, pursuant to the GSAs and shall rank pari passu with all current holders of secured debentures of the Company, whether of the same issue or previous issue, as per the terms of the GSAs, the Intercreditor Agreement and debenture indentures between the Company and the Trustee.

Related Party Transaction and Minority Shareholder Approval

The Company expects Dr. Constantine Zachos, a director of the Company, to subscribe for 67 Series 2 Debenture Units, for total gross proceeds of $67,000 in the Series 2 Financing. Such participation is considered a related party transaction within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61101"). Additionally, certain related parties of the Company subscribed for an aggregate of 1,572

Initial Debentures in the September Financing. In connection with the Exchange, B&M Miller Equity Holdings Inc., a company controlled by Brad Miller, a director of the Company, will receive

426 Debenture Units, Dr. Gaurav Puri, a director of the Company will receive 661 Debenture Units, and Dr. Constantine Zachos (together with Brad Miller and Dr. Gaurav Puri (the "Insiders") will receive 485 Debenture Units (the "Series 1 Participation"). Such participation in the Exchange is considered a related party transaction within the meaning of MI 61-101.

Staff of the Ontario Securities Commission ("OSC Staff") have indicated that, in respect of the Series 1 Participation, the Company was not able to rely on the exemption from the requirement for minority shareholder approval in section 5.7(1)(a) of MI 61-101 as the fair market value of the aggregate value of the Common Shares to be issued to participating Insiders upon conversion of the Initial Debentures and the Common Shares to be issued to participating Insiders upon exercise of the September Warrants represents more than 25% of the Company's market capitalization calculated in accordance with MI 6l-101. As no other exemptions from the minority approval requirement under MI 61-101 were available for the Series 1 Participation in the September Financing, at the request of OSC Staff, the Company expects to seek minority shareholder approval (the "Minority Approval") in respect of the Series 1 Participation and the Exchange at the next annual shareholders meeting.

The Insiders will not be able to transfer nor exercise the Series 1 Warrants to be issued upon completion of the Exchange unless and until Minority Approval is obtained. Furthermore, the Series 1 Warrants will be cancelled in the event Minority Approval is not obtained. The Common Shares held by Insiders shall be excluded from the Minority Approval vote.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the "1933 Act") and may not be offered or sold to, or for the account or benefit of, persons in the United States or "U.S. persons" (as such term is defined in Regulation S under the 1933 Act) absent registration or an applicable exemption from the registration requirements of the 1933 Act any application state securities laws.

Debt Settlement Agreement

The Company also wishes to announce that it has entered into a debt settlement agreement dated December 7, 2023 (the "Debt Settlement Agreement") with an employee of the Company, pursuant to which the Company agreed to settle C$35,000 of debt through the issuance of 340,335 Common Shares at a deemed price of C$0.1028 per Common Share. The Debt Settlement Agreement and the issuance of the Common Shares thereunder are subject to the approval of the TSXV. The Common Shares will be subject to a hold period of four months and one day pursuant to TSXV policies and applicable securities laws.

About Cloud DX

Accelerating digital healthcare, Cloud DX is on a mission to make healthcare better for everyone. Our Connected Health TM remote patient monitoring platform is used by healthcare enterprises and care teams across North America to virtually manage chronic disease, enable aging in place, and deliver hospital-quality post-surgical care in the home. Our partners achieve better healthcare and patient outcomes, reduce the need for hospitalization or re-admission, and reduce healthcare delivery costs through more efficient use of resources. Cloud DX is the co-winner of the Qualcomm Tricorder XPRIZE, 2022 Top Innovator by Canadian Business, a 2021 Edison Award winner, a Fast Company "World Changing Idea" finalist, and one of "Canada's Ten Most Prominent Telehealth Providers." Cloud DX is an exclusive partner to Medtronic Canada, Teladoc Health Canada, and Equitable Life of Canada.

For more information on Cloud DX (TSXV:CDX), please visit www.clouddx.com and see the Cloud DX Investor Site

Social Links:

Twitter: https://twitter.com/CloudDX
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LinkedIn https://www.linkedin.com/company/cloud-dx/
Instagram https://www.instagram.com/cloud.dx/

For media inquiries please contact:

Cloud DX Marketing
888-543-0944
marketing@clouddx.com

For investor inquiries please contact:

Jay Bedard
Cloud DX Investor Relations
647-881-8418
jay.bedard@clouddx.com

Officer responsible for this release:

Robert Kaul
Chief Executive Officer
888-543-0944
robert.kaul@clouddx.com

Forward-Looking Information

This news release contains forward-looking statements and information within the meaning of applicable securities legislation. Often, but not always, forward-looking statements and information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements or information contained in this news release. In particular, this news release includes certain forward-looking statements concerning the timing and completion of the Exchange, the timing and completion of the Series 2 Financing, the use of proceeds of the Series 2 Financing, receipt of TSXV approvals, and receipt of Minority Approval.

Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. In making the forward-looking statements in this news release, the Company has applied several material assumptions, including without limitation, information concerning the receipt of approvals from the TSXV and the holders of the secured debentures of the Company, receipt of Minority Approval, the use of proceeds of the Series 2 Financing, expected closing dates, and its ability to close the Series 2 Financing.

Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward looking information.

Neither the 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.

SOURCE: Cloud DX Inc.