FORM F3 MATERIAL CHANGE REPORT

Transcription

1 FORM F3 MATERIAL CHANGE REPORT 1. Name and Address of Company Open Source Health Inc. (the Company ) 365 Bay Street, Suite 400 Toronto, Ontario, M5H 2V1 2. Date of Material Change October 23, News Release A press release disclosing the material change was released on October 26, 2015, through the facilities of The Newswire. 4. Summary of Material Change The Company announced that further to its news release dated July 10, 2015, the previously announced non-brokered private placement of units (the Units ) for gross proceeds of $250,000 was to be amended to closing of $132, (the Offering ). Each Unit will consist of one common share ( Common Share ) in the capital of the Company and one common share purchase warrant (a Warrant ), each Warrant entitling the subscriber to purchase an additional Common Share for a period of twenty-four (24) months from the date of issuance at a price of $0.35 per Warrant. The Offering will be subscribed for by Pilkington Capital Corporation ( Pilkington ), a company controlled by Mr. Gary Bartholomew, a director and Chairman of the Company and Ms. Sonya Satveit, a director, President and CEO of the Company. 5. Full Description of Material Change The material change is fully described in the Company s press release which is attached as Schedule A and is incorporated herein. The following supplementary information is provided in accordance with Section 5.2 of Multilateral Instrument Protection of Minority Security Holders in Special Transactions ( MI ). (a) a description of the transaction and its material terms: In connection with the Offering, (i) Ms. Sonya Satveit, a director, President and Chief Executive Officer of the Company acquired 371,322 Units of the Company; and (ii) Pilkington Capital Corporation ( Pilkington ), a company controlled by Mr. Gary Bartholomew, a director and Chairman of the Company, acquired 156,900 Units of the Company, resulting in the issuance of the 371,322 Units to Ms. Satveit, and the 156,900 Units to Pilkington being a related party transaction as defined in Multilateral Instrument Protection of Minority Securityholders in Special Transactions. The Company completed the Offering to improve its financial position.

2 (b) the anticipated effect of the transaction on the issuer s business and affairs: The completion of the Offering will provide working capital to the Company, and improve the Company s financial position. (c) a description of: (i) the interest in the transaction of every interested party and of the related parties and associated entities of the interested parties: Immediately prior to the completion of the Offering, Ms. Satveit held 4,787,500 Common Shares, 3,199,978 Warrants and 87,500 options of the Company, representing approximately 41.62% of the issued and outstanding Common Shares on a non-diluted basis, and 54.59% on a partially diluted basis (assuming the full exercise of 3,199,978 Warrants and 87,500 options held by Ms. Satveit only). In connection with the Offering, Pilkington, a company controlled by Mr. Bartholomew, acquired 156,900 Units of the Company. Immediately prior to the completion of the Offering, Mr. Bartholomew, by virtue of control or direction over Pilkington, had control or direction over 263,555 Common Shares, 467,778 Warrants and 100,000 options of the Company, representing approximately 2.29% of the issued and outstanding Common Shares on a non-diluted basis, and 6.89% on a partially diluted basis (assuming the full exercise of 467,778 Warrants and 100,000 options held by Mr. Bartholomew). (ii) the anticipated effect of the transaction on the percentage of securities of the issuer, or of an affiliated entity of the issuer, beneficially owned or controlled by each person or company referred to in subparagraph (i) for which there would be a material change in that percentage: After completion of the Offering, Ms. Satveit holds 5,158,822 Common Shares, 3,571,300 Warrants and 87,500 options of the Company, representing approximately 43.44% of the issued and outstanding Common Shares on a nondiluted basis, and 58.15% on a partially diluted basis (assuming the full exercise of 3,571,300 Warrants and 87,500 options held by Ms. Satveit only). In connection with the Offering, Pilkington will receive 156,900 Units of the Company. After completion of the Offering, Mr. Bartholomew, by virtue of control or direction over Pilkington, has control or direction over 420,455 Common Shares, 624,678 Warrants and 100,000 options of the Company, representing approximately 3.61% of the issued and outstanding Common Shares on a nondiluted basis, and 9.36% on a partially diluted basis (assuming the full exercise of 624,678 Warrants and 100,000 options held by Mr. Bartholomew).

3 (d) unless this information will be included in another disclosure document for the transaction, a discussion of the review and approval process adopted by the board of directors and the special committee, if any, of the issuer for the transaction, including a discussion of any materially contrary view or abstention by a director and any material disagreement between the board and the special committee: A resolution approving the Offering was passed at the meeting of the board of directors of the Company held on July 9, No special committee was established in connection with the transactions, and no materially contrary view or abstention was expressed or made by any director. (e) A summary in accordance with section 6.5 of MI , of the formal valuation, if any, obtained for the transaction, unless the formal valuation is included in its entirety in the material change report or will be included in its entirety in another disclosure document for the transaction: (f) disclosure, in accordance with section 6.8 of MI , of every prior valuation in respect of the issuer that relates to the subject matter of or is otherwise relevant to the transaction: (i) that has been made in the 24 months before the date of the material change report: (ii) the existence of which is known, after reasonable enquiry, to the issuer or to any director or officer of the issuer: (g) the general nature and material terms of any agreement entered into by the issuer, or a related party of the issuer, with an interested party or a joint actor with an interested party, in connection with the transaction: In connection with the Offering, (i) Ms. Satveit entered into a subscription agreement with the Company, subscribing for 371,322 Units of the Company at a deemed price of $0.25 per Unit for gross proceeds of $92,830.68; and (ii) Pilkington entered into a subscription agreement with the Company, subscribing for 156,900 Units of the Company at a deemed price of $0.25 per Unit for gross proceeds of $39,225.00, each Unit consisting of one common share (a Common Share ) and one common share purchase warrant (a Warrant ) in the capital of the Company, each Warrant entitling the holder thereof to purchase an additional Common Share (a Warrant Share ) for 24 months from the closing date at a price of $0.35 per Warrant Share.

4 (h) disclosure of the formal valuation and minority approval exemptions, if any, on which the issuer is relying under sections 5.5 and 5.7 of MI respectively, and the facts supporting reliance on the exemptions: The participation by Ms. Satveit and Pilkington in the Offering constitutes a related party transaction for the Company under Multilateral Instrument Protection of Minority Security Holders in Special Transactions ( MI ). The Offering is exempt from the formal valuation and minority shareholder approval requirements of MI as neither the fair market value of securities being issued to the related party nor the consideration being paid by the related party will exceed 25% of the Company's market capitalization. This material change report is being filed less than 21 days before the closing date of the Offering, which was reasonable and necessary in the circumstances to improve the Company s financial position. 5.2 Disclosure for Restructuring Transactions 6. Reliance on subsection 7.1(2) of National Instrument The report is not being filed on a confidential basis. 7. Omitted Information. No significant facts have been omitted from this Material Change Report. 8. Executive Officer. For further information, contact Gary Bartholomew, Chairman of the Company at (647) , Ext Date of Report. This report is dated at Toronto, this 2 nd day of November, OPEN SOURCE HEALTH INC. Per: Gary Bartholomew (Signed) Gary Bartholomew, Chairman

5 FOR IMMEDIATE RELEASE: Open Source Health Provides Update to Non-Brokered Private Placement Toronto, Canada October 26, 2015: Open Source Health Inc. (CSE: OSH) (the Company ), a cloud based patient engagement system that puts control in the hands of women to Educate, Advocate and Collaborate on their own healthcare, wishes to announce that further to its news release dated July 10, 2015, the previously announced non-brokered private placement of units (the Units ) for gross proceeds of $250,000 is to be amended to closing of $132, Each Unit will consist of one common share ( Common Share ) in the capital of the Company and one common share purchase warrant (a Warrant ), each Warrant entitling the subscriber to purchase an additional Common Share for a period of twenty-four (24) months from the date of issuance at a price of $0.35 per Warrant. The Offering will be subscribed for by Pilkington Capital Corporation ( Pilkington ), a company controlled by Mr. Gary Bartholomew, a director and Chairman of the Company and Ms. Sonya Satveit, a director, President and CEO of the Company. The participation by Pilkington and Ms. Satveit in the Offering constitutes a related party transaction as defined under Multilateral Instrument Protection of Minority Security Holders in Special Transactions ( MI ). The Offering is exempt from the formal valuation and minority shareholder approval requirements of MI as neither the fair market value of securities being issued to the related party nor the consideration being paid by the related party will exceed 25% of the Company's market capitalization. A material change report in respect of the related party transaction will be filed less than 21 days before the closing of the Offering due to the Company's immediate need to address its financial situation. Proceeds raised from the Offering will be used for business development, corporate marketing initiatives, project specific infrastructure and general working capital purposes. About Open Source Health Inc.: Open Source Health takes a truly patient-centered approach and is in the business of providing a realtime integrative healthcare solution for women in an open source architecture. Open Source Health Inc. is leading the digital transformation of integrative and preventative health by leveraging the latest trends in digital health, personalized health, social health and participatory medicine. For more information, visit Contact: For further information, please contact Investor Relations at Open Source Health Inc. Toll Free: in North America International Calling:

6 Forward Looking Statements Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Open Source Health Inc. ( OSH ), including, but not limited to, the impact of general economic conditions, industry conditions and the uncertainty of obtaining additional financing. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Forwardlooking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release, and OSH does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.