NASDAQ, TSX: NVCN
Company to execute a 1-for-100 reverse stock
split
VANCOUVER, Sept. 11, 2018 /CNW/ - Neovasc Inc.
("Neovasc" or the "Company") (NASDAQ: NVCN)(TSX: NVCN), a leader in
the development of minimally invasive transcatheter mitral valve
replacement technologies and in the development of minimally
invasive devices for the treatment of refractory angina, announced
today (1) that it has received the decision of the Nasdaq Hearings
Panel (the "Panel") to grant it a extension until October 15, 2018 to regain compliance with the
US$1.00 minimum bid price requirement
and (2) the Company's plans to execute the reverse stock split
(share consolidation), approved at its Annual General and Special
Meeting of Shareholders on June 4,
2018.
The Nasdaq Stock Market LLC ("Nasdaq") held an oral hearing on
August 30, 2018, at which the Panel
considered Neovasc's appeal of the Nasdaq Listing Qualifications
Staff (the "Staff") decision to delist the Company's common shares
(the "Common Shares") from the Nasdaq Capital Market for
non-compliance with the US$1.00
minimum bid price requirement. In its decision dated September 10, 2018, the Panel agreed to provide
Neovasc with an extension until October 15,
2018 to regain compliance with the minimum bid price
requirement. To regain compliance, the closing bid price of the
Common Shares on the Nasdaq Capital Market must be at least
US$1.00 for at least 10 consecutive
business days. The Company intends to execute a reverse stock split
on the basis of 1 post-consolidation Common Share for 100
pre-consolidation Common Shares in order to regain compliance with
the minimum bid price requirement before October 15, 2018 and avoid delisting. The Panel's
decision will stay any delisting or suspension action on the basis
of the minimum bid price deficiency until October 15, 2018.
"We believe that remaining on the Nasdaq Capital Market is a
critical piece of our turnaround strategy for the Company, and
completing the reverse stock split on an accelerated timeline is a
necessary to maintain this listing. We expect the reverse stock
split will assist our shareholders by simplifying our capital
structure through the consolidation of our shares to form a smaller
number of proportionally valuable shares," commented Fred Colen, Neovasc's President and Chief
Executive Officer.
Subject to final approval by the Toronto Stock Exchange (the
"TSX"), the board of directors of the Company has set the effective
date for the reverse stock split as September 21, 2018. Trading of the Common Shares
on a post-consolidation basis on the TSX and Nasdaq is expected to
commence on or about the opening of trading on the effective date.
The registered holders of Common Shares will be sent a letter of
transmittal by the Company's transfer agent, Computershare Investor
Services Inc., providing instructions for the exchange of their
certificates as soon as practicable following the effectiveness of
the reverse stock split. Non-registered shareholders holding Common
Shares through an intermediary (such as a securities broker,
dealer, bank or financial institution) should be aware that the
intermediary may have different procedures for processing the
reverse stock split. If shareholders hold their Common Shares
through an intermediary and they have questions in this regard,
they are encouraged to contact their intermediaries.
The reverse stock split will reduce the number of Common Shares
currently issued and outstanding from approximately 1,896,512,271
Common Shares to approximately 18,965,123 Common Shares. No
fractional Common Shares will be issued in connection with the
reverse stock split. In the event that a shareholder would
otherwise be entitled to a fractional Common Share hereunder, the
number of Common Shares issued to such shareholder shall be rounded
up to the next greater whole number of Common Shares, if the
fractional entitlement is equal to or greater than 0.5 and shall,
without any additional compensation, be rounded down to the next
lesser whole number of Common Shares if the fractional entitlement
is less than 0.5.
The reverse stock split will affect shareholders uniformly,
including holders of outstanding incentive stock options, warrants
and other securities convertible into or exercisable for Common
Shares. The exercise/conversion prices, number and exchange basis
of such securities on the effective date will be adjusted
proportionately to reflect the reverse stock split, subject to the
Event Price Provisions described below.
Delisting or suspension from the Nasdaq Capital Market will
trigger an event of default under the Notes, which are secured by
substantially all of the Company's assets, and which could force
the Company into bankruptcy protection. In recognition of the vital
importance of Neovasc remaining listed on the Nasdaq Capital Market
to its stakeholders, management and the Board of Directors have
elected to proceed with executing a reverse stock split despite
certain provisions ("Event Price Provisions") in the remaining
Warrants and Notes that, on the sixteenth trading day following a
reverse stock split, reduce the exercise price or conversion price,
as applicable. then in effect to the average VWAP of the five
trading days with the lowest VWAP of the Common Shares in the
preceding fifteen trading days in the case of the Notes and twenty
trading days in the case of the Warrants. As a result, the exercise
and conversion prices of the 34,628,148 Series A warrants,
22,431,506 Series E warrants, as well as 1,322,192 Series A
warrants and Series B warrants that could be issued upon exercise
of the outstanding Series C Warrants, and US$26,442,500 principal amount of Notes that
remain outstanding will be adjusted following the reverse stock
split in accordance with the Event Price Provisions.
For a description of the risks associated with the Warrants and
Notes, the amount of such securities exercised and converted to
date, the dilution to date and potential dilution in the future due
to such exercises or conversions, see the Company's Annual Report
on Form 20-F and Management's Discussion and Analysis for the
quarter ended June 30, 2018, copies
of which are available on SEDAR at www.sedar.com and as filed with
the U.S. Securities and Exchange Commission (the "SEC") at
www.sec.gov.
The Company is also listed on the TSX and the Company's
noncompliance with the Nasdaq minimum bid price requirement does
not affect the Company's compliance status with the TSX.
About Neovasc Inc.
Neovasc is a specialty medical device company that develops,
manufactures and markets products for the rapidly growing
cardiovascular marketplace. Its products include the Neovasc
Reducer™ (the "Reducer"), for the treatment of refractory angina,
which is not currently commercially available in the United States and has been commercially
available in Europe since 2015,
and the Tiara™ (the "Tiara"), for the transcatheter treatment of
mitral valve disease, which is currently under clinical
investigation in the United
States, Canada and
Europe. For more information,
visit: www.neovasc.com.
This news release contains forward-looking statements within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995 and applicable Canadian securities laws regarding the
Company's plans and expectations concerning completing a reverse
stock split, the effect of a reverse stock split on the price of
the Common Shares, remaining listed on the Nasdaq Capital Market,
future exercises and conversions of the Warrants and Notes and the
resulting dilution, and the growing cardiovascular
marketplace. Words and phrases such as "plan", "future",
"continue", "intend", "could", "would", "can" and "will", and
similar words or expressions, are intended to identify these
forward-looking statements. Forward-looking statements are based on
estimates and assumptions made by the Company in light of its
experience and its perception of historical trends, current
conditions and expected future developments, as well as other
factors that the Company believes are appropriate in the
circumstances. Many factors and assumptions could cause the
Company's actual results, performance or achievements to differ
materially from those expressed or implied by the forward-looking
statements, including, without limitation, the substantial doubt
about the Company's ability to continue as a going concern; risks
relating to the Warrants and Notes issued pursuant to the 2017
Financings, resulting in significant dilution to the Company's
shareholders; risks relating to the Company's need for significant
additional future capital and the Company's ability to raise
additional funding; risks relating to cashless exercise and
adjustment provisions in the Warrants and Notes issued pursuant to
the 2017 Financings, which could make it more difficult and
expensive for the Company to raise additional capital in the future
and result in further dilution to investors; risks relating to the
sale of a significant number of Common Shares; risks relating to
the exercise of Warrants or conversion of Notes issued pursuant to
the 2017 Financings, which may encourage short sales by third
parties; risks relating to the possibility that the Common Shares
may be delisted from the Nasdaq Capital Market or the TSX, which
could affect their market price and liquidity; risks relating to
the Company's common share price being volatile; risks relating to
the influence of significant shareholders of the Company over the
Company's business operations and share price; risks relating to
the Company's significant indebtedness, and its effect on the
Company's financial condition; risks relating to claims by third
parties alleging infringement of their intellectual property
rights; risks relating to lawsuits that the Company is subject to,
which could divert the Company's resources and result in the
payment of significant damages and other remedies; the Company's
ability to establish, maintain and defend intellectual property
rights in the Company's products; risks relating to results from
clinical trials of the Company's products, which may be unfavorable
or perceived as unfavorable; the Company's history of losses and
significant accumulated deficit; risks associated with product
liability claims, insurance and recalls; risks relating to use of
the Company's products in unapproved circumstances, which could
expose the Company to liabilities; risks relating to competition in
the medical device industry, including the risk that one or more of
the Company's competitors may develop more effective or more
affordable products; risks relating to the Company's ability to
achieve or maintain expected levels of market acceptance for the
Company's products, as well as the Company's ability to
successfully build its in-house sales capabilities or secure
third-party marketing or distribution partners; the Company's
ability to convince public payors and hospitals to include the
Company's products on their approved products lists; risks relating
to new legislation, new regulatory requirements and the efforts of
governmental and third-party payors to contain or reduce the costs
of healthcare; risks relating to increased regulation, enforcement
and inspections of participants in the medical device industry,
including frequent government investigations into marketing and
other business practices; risks associated with the extensive
regulation of the Company's products and trials by governmental
authorities, as well as the cost and time delays associated
therewith; risks associated with post-market regulation of the
Company's products; health and safety risks associated with the
Company's products and industry; risks associated with the
Company's manufacturing operations, including the regulation of the
Company's manufacturing processes by governmental authorities and
the availability of two critical components of the Reducer; risk of
animal disease associated with the use of the Company's products;
risks relating to the manufacturing capacity of third-party
manufacturers for the Company's products, including risks of supply
interruptions impacting the Company's ability to manufacture its
own products; risks relating to the Company's dependence on limited
products for substantially all of the Company's current revenues;
risks relating to the Company's exposure to adverse movements in
foreign currency exchange rates; risks relating to the possibility
that the Company could lose its foreign private issuer status under
U.S. federal securities laws; risks relating to breaches of
anti-bribery laws by the Company's employees or agents; risks
associated with future changes in financial accounting standards
and new accounting pronouncements; risks relating to the Company's
dependence upon key personnel to achieve its business objectives;
the Company's ability to maintain strong relationships with
physicians; risks relating to the sufficiency of the Company's
management systems and resources in periods of significant growth;
risks associated with consolidation in the health care industry,
including the downward pressure on product pricing and the growing
need to be selected by larger customers in order to make sales to
their members or participants; risks relating to the Company's
ability to successfully identify and complete corporate
transactions on favorable terms or achieve anticipated synergies
relating to any acquisitions or alliances; risks relating to the
Company's ability to successfully enter into fundamental
transactions as defined in the Series C warrants issued pursuant to
the 2017 Financings; anti-takeover provisions in the Company's
constating documents which could discourage a third party from
making a takeover bid beneficial to the Company's shareholders; and
risks relating to conflicts of interests among the Company's
officers and directors as a result of their involvement with other
issuers. These risk factors and others relating to the Company are
discussed in greater detail in the "Risk Factors" section of the
Company's Annual Report on Form 20-F and in Management's Discussion
and Analysis for the quarter ended June 30,
2018 (copies of which may be obtained at www.sedar.com or
www.sec.gov). In particular, the Company notes in addition to the
specified criteria for continued listing, Nasdaq also has broad
discretionary public interest authority that it can exercise to
apply additional or more stringent criteria for the continued
listing of the Company's Common Shares, or suspend or delist
securities even if the securities meet all enumerated criteria for
continued listing on the Nasdaq Capital Market. The Nasdaq could
use this discretionary authority at any time to delist the
Company's Common Shares. There can be no assurance that Nasdaq will
not exercise such discretionary authority. In addition,
notwithstanding the extension by the Panel, there is no assurance
that the Company will be able to regain compliance with the minimum
bid price requirement prior to the expiry of such extension, or if
it does, that the Company will be able to maintain such compliance
as a result of the risks and uncertainties described above. The
Panel may also require that the Company maintain a closing bid
price of at least US$1.00 for more
than 10 consecutive business days. The Company has no
intention and undertakes no obligation to update or revise any
forward-looking statements beyond required periodic filings with
securities regulators, whether as a result of new information,
future events or otherwise, except as required by law.
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SOURCE Neovasc Inc.