Health Grades, Inc. Announces $2.0 Million Financing Commitment

Apr 19, 2001, 01:00 ET from Health Grades, Inc.

    LAKEWOOD, Colo., April 19 /PRNewswire/ --
 Health Grades, Inc. (Nasdaq:   HGRD) today announced that it has signed an
 agreement for a private equity financing commitment of up to $2.0 million from
 Essex Woodlands Health Ventures Fund IV, L.P. ("Essex") and Chancellor V, L.P.
 ("Chancellor"), a fund managed by INVESCO Private Capital, Inc.  Chancellor
 and Essex are the two largest stockholders of the Company.
     Under the terms of the agreement, the Company was granted the option,
 which may be exercised solely at its discretion until December 31, 2001, to
 sell Company common stock to Chancellor and Essex at an aggregate purchase
 price of up to $2.0 million. In exchange for this option, the Company is
 issuing six year warrants to purchase 500,000 shares of Company common stock
 at an exercise price per share of $0.26, which was the closing market price
 per share of the Company's common stock as reported by Nasdaq on April 16,
 2001, the date of the agreement.  In addition, the Company is repricing
 warrants in respect of 100,000 shares previously purchased by Chancellor and
 Essex to the same $0.26 exercise price.
     If the Company exercises its option, the price per share of common stock
 to be sold will be equal to the lesser of $0.26 and the closing market price
 per share of the Company's common stock on the date the Company exercises its
 option, subject to a minimum price of $0.15 per share. The Company will also
 issue six year warrants to purchase up to an additional 350,000 shares at an
 exercise price per share equal to the price per share of the common stock sold
 upon exercise of the option.
     Kerry R. Hicks, Chief Executive Officer of Health Grades, stated: "We are
 profoundly grateful that Chancellor and Essex have committed to provide
 additional financing, if necessary, in this difficult financing environment.
 Since their initial investment in the Company in March 2000, both funds have
 devoted a great deal of time and effort to assist the Company as it expands
 its healthcare information business. This financing commitment further
 underscores the significant benefits that their involvement has provided to
 Health Grades."
     The securities which have been and may be issued in connection with the
 agreement described in this press release have not been registered under the
 Securities Act of 1933, as amended, and may not be offered or sold in the
 United States absent registration or an applicable exemption from the
 registration requirements.
 
     About Health Grades
     Health Grades, Inc. (Nasdaq:   HGRD), http://www.healthgrades.com, helps
 assess and improve the quality of healthcare nationwide.  With its proprietary
 objective healthcare provider ratings and expert advisory services, Health
 Grades is creating the standard of healthcare quality.  Health Grades works
 with all aspects of the healthcare industry -- including providers, employers,
 payers and patients -- to offer targeted solutions to ensure quality
 healthcare.  Health Grades offers consumers free ratings to evaluate and
 select providers, works with providers to assess and enhance their care, and
 helps employers and payers lower healthcare costs by improving quality of care
 provided to their beneficiaries.
 
 

SOURCE Health Grades, Inc.
    LAKEWOOD, Colo., April 19 /PRNewswire/ --
 Health Grades, Inc. (Nasdaq:   HGRD) today announced that it has signed an
 agreement for a private equity financing commitment of up to $2.0 million from
 Essex Woodlands Health Ventures Fund IV, L.P. ("Essex") and Chancellor V, L.P.
 ("Chancellor"), a fund managed by INVESCO Private Capital, Inc.  Chancellor
 and Essex are the two largest stockholders of the Company.
     Under the terms of the agreement, the Company was granted the option,
 which may be exercised solely at its discretion until December 31, 2001, to
 sell Company common stock to Chancellor and Essex at an aggregate purchase
 price of up to $2.0 million. In exchange for this option, the Company is
 issuing six year warrants to purchase 500,000 shares of Company common stock
 at an exercise price per share of $0.26, which was the closing market price
 per share of the Company's common stock as reported by Nasdaq on April 16,
 2001, the date of the agreement.  In addition, the Company is repricing
 warrants in respect of 100,000 shares previously purchased by Chancellor and
 Essex to the same $0.26 exercise price.
     If the Company exercises its option, the price per share of common stock
 to be sold will be equal to the lesser of $0.26 and the closing market price
 per share of the Company's common stock on the date the Company exercises its
 option, subject to a minimum price of $0.15 per share. The Company will also
 issue six year warrants to purchase up to an additional 350,000 shares at an
 exercise price per share equal to the price per share of the common stock sold
 upon exercise of the option.
     Kerry R. Hicks, Chief Executive Officer of Health Grades, stated: "We are
 profoundly grateful that Chancellor and Essex have committed to provide
 additional financing, if necessary, in this difficult financing environment.
 Since their initial investment in the Company in March 2000, both funds have
 devoted a great deal of time and effort to assist the Company as it expands
 its healthcare information business. This financing commitment further
 underscores the significant benefits that their involvement has provided to
 Health Grades."
     The securities which have been and may be issued in connection with the
 agreement described in this press release have not been registered under the
 Securities Act of 1933, as amended, and may not be offered or sold in the
 United States absent registration or an applicable exemption from the
 registration requirements.
 
     About Health Grades
     Health Grades, Inc. (Nasdaq:   HGRD), http://www.healthgrades.com, helps
 assess and improve the quality of healthcare nationwide.  With its proprietary
 objective healthcare provider ratings and expert advisory services, Health
 Grades is creating the standard of healthcare quality.  Health Grades works
 with all aspects of the healthcare industry -- including providers, employers,
 payers and patients -- to offer targeted solutions to ensure quality
 healthcare.  Health Grades offers consumers free ratings to evaluate and
 select providers, works with providers to assess and enhance their care, and
 helps employers and payers lower healthcare costs by improving quality of care
 provided to their beneficiaries.
 
 SOURCE  Health Grades, Inc.