TORONTO, April 24, 2020 /CNW/ - Klinik Health Ventures
Corp. (TSXV: KHV.P) ("Klinik" or
the "Corporation") is pleased to announce that
following the execution of a letter of intent dated as of
March 20, 2020 with 2576560 Ontario
Inc. doing business as NeuPath Health ("NeuPath"), Klinik
has entered into an arrangement agreement (the "Arrangement
Agreement") dated as of April 24,
2020 with NeuPath. Pursuant to the Arrangement Agreement,
Klinik will acquire indirectly all of the issued and outstanding
common shares of NeuPath ("NeuPath Shares") in consideration
for common shares of Klinik (each a "Klinik Share")
(together with the related transactions and corporate procedures
set out in the Arrangement Agreement,
the "Transaction").
It is intended that the Transaction shall constitute Klinik's
Qualifying Transaction, as such term is defined in Policy 2.4 of
the Corporate Finance Manual of the TSX Venture Exchange
(the "Exchange").
The Transaction is subject to, among other things, receipt of
the requisite shareholders approvals of NeuPath, final approval of
the Exchange, court approval and standard closing conditions,
including the conditions described below. Subject to the
satisfaction of the closing conditions, the parties expect to close
the Transaction on or about June 25,
2020.
Upon completion of the Transaction, Klinik will carry on with
the business and activities of NeuPath (Klinik after the completion
of the Transaction is referred to herein as the "Resulting
Issuer").
Description of the Transaction
The Transaction is to be carried out pursuant to the Arrangement
Agreement under a court-approved statutory plan of arrangement
pursuant to the Business Corporations Act (Ontario). The Transaction will require
approval by at least 66⅔% of the votes cast by shareholders of
NeuPath present at a special meeting of NeuPath shareholders.
Klinik has entered into customary voting support agreements with
certain NeuPath shareholders as well as each of NeuPath's directors
and executive officers.
Pursuant to the Arrangement Agreement (i) holders of issued
and outstanding NeuPath Shares will receive five (5) Klinik Shares
for each one (1) NeuPath Share (the "Exchange Ratio")
held by them; and (ii) all options and warrants convertible
into NeuPath Shares shall be exchanged, based on the Exchange
Ratio, for similar securities to purchase common shares of the
Resulting Issuer on substantially similar terms and conditions. As
a condition of the Transaction, and subject to Klinik shareholder
approval, Klinik will also undertake a share consolidation of
Klinik Shares (the "Consolidation"). Subject to Klinik
shareholder approval, the Consolidation will occur on the basis of
one (1) post-Consolidation Klinik Share for every five (5)
Pre-Consolidation Klinik Share that will be issued and outstanding
immediately after giving effect to steps (i) and (ii) noted above
(the "Consolidated Shares"). The Consolidated Shares
will represent all of the issued and outstanding common shares
(the "Resulting Issuer Shares") of the Resulting
Issuer.
It is anticipated that upon completion of the Transaction,
former NeuPath shareholders will hold approximately 86% of the
Resulting Issuer Shares and former Klinik shareholders will hold
approximately 14% of the Resulting Issuer Shares, on a non-diluted
basis.
As further described in the Corporation's news release of
March 20, 2020 (the "Initial
News Release"), Klinik will hold an annual and special meeting
(the "Klinik Meeting") to consider certain matters
related to the Transaction, including but not limited to
(i) the Consolidation, (ii) a name change,
(iii) amendments to the stock option plan, (iv) adoption
of a restricted share unit plan and employee share purchase plan,
and (v) the election of new directors for the Resulting
Issuer.
In connection with the Transaction and pursuant to the
requirements of the TSX Venture Exchange
(the "Exchange"), Klinik intends to a file a filing
statement (the "Filing Statement") instead of an
information circular as previously described in the Initial News
Release. The Filing Statement will contain details regarding the
Transaction, Klinik, NeuPath and the Resulting Issuer.
The completion of the Transaction is subject to a number of
conditions precedent, including without limitation:
- approval of the Transaction by NeuPath shareholders;
- approval by Klinik shareholders of the matters noted above in
relation to the Transaction; and
- receipt of all required consents, waivers and approvals from
the Exchange, the court, and any other securities regulatory
authority having jurisdiction.
Copies of the Arrangement Agreement, and, when available, the
Filing Statement, and certain related documents and agreements will
be filed with Canadian securities regulators and will be accessible
on SEDAR (www.sedar.com) under Klinik's profile.
Board of Directors of the Resulting Issuer
Subject to Klinik shareholders approval and Exchange approval,
it is proposed that the Board of the Resulting Issuer shall consist
of one (1) nominee from Klinik and six (6) from NeuPath.
Pursuant to the Arrangement Agreement, it is proposed that the
directors of the Resulting Issuer will consist of Dianne Carmichael and the individuals listed in
the Initial Press Release.
Dianne Carmichael
(Chair)
Ms. Carmichael has over 30 years of diverse
executive management and board of director experience spanning from
start-up and growth companies to multinationals. Dianne was
Chairman & CEO of a publicly traded investment firm before
shifting to healthcare to make a difference in the lives of those
touched by profound illness. As President of Best Doctors Inc., she
helped create a remote second opinion platform that connected
patients with the top 2% of medical experts worldwide and which
today, covers over 40 million international patients. Most
recently, she was President Payer Markets and Head of Corporate
Strategy and M&A at McKesson, a Fortune 5 healthcare company.
Prior to that, Dianne was President, UHN
Solutions at UHN, Canada's
leading group of research hospitals, and Managing Director, MaRS
Health Ventures and Innovation. Today, Ms. Carmichael continues to
make a difference for patients by helping health-tech companies
bring high impact innovations to scale globally through her
company, Carmichael Worldwide Inc. Dianne currently serves as the
Chief Advisor for the HealthTech division of the Council of
Canadian Innovators, founded by Jim
Balsillie, where they bring the voice of Canadian tech CEOs
to government and policy makers. Dianne has served on numerous
healthcare boards, including Holland Bloorview Kids Rehab Hospital,
PatientsCanada, CAPCH, Centre for Regenerative Medicine, Mt.
Sinai's Personalized Medicine Institute & W.I.N. She was
awarded Canada's Most Powerful
Women by WXN, Canadian Women Transforming Health Care and
University of Waterloo Alumni of the
Year. She holds a B.A. from the University of
Waterloo.
If the Transaction is not completed it is expected that the
current directors of Klinik will remain in place.
Capital Structure of NeuPath
The Corporation is clarifying that the number of NeuPath's
issued and outstanding warrants ("NeuPath Warrants") and
compensation warrants ("NeuPath Compensation Warrants") are
10,658,683 and 57,570 respectively, rather than the corresponding
numbers listed in the Initial News Release.
Sponsorship for Qualifying Transaction
Raymond James Ltd. has been retained to act as sponsor in
connection with the Qualifying Transaction in accordance with the
Exchange Policy 2.2 – Sponsorship and Sponsorship
Requirements.
Insiders of the Resulting Issuer
In addition to the proposed directors and officers of the
Resulting Issuer disclosed in this press release and the Initial
Press Release, it is expected that upon completion of the
Transaction, Bloom Burton & Co. Inc. ("Bloom Burton")
will also be considered an Insider (as such term is defined in the
policies of the Exchange) of the Resulting Issuer. Upon completion
of the Transaction, Bloom Burton will own, directly and indirectly,
approximately 16% of the Resulting Issuer Shares. Bloom Burton is a
company existing under the laws of Ontario specializing in the healthcare
investment industry. Bloom Burton and its affiliates provide
capital raising, M&A advisory, equity research, business
strategy and scientific consulting, advisory on direct invest and
company creation and incubation services.
Klinik Refundable Deposit
Subject to Exchange approval, Klinik has agreed to advance to
NeuPath a refundable deposit in the amount of $225,000 (the "Deposit") to be used
by NeuPath for expenses incurred with respect to the Transaction.
The Deposit shall bear no interest and will be due and payable upon
the earlier of: (i) July 30, 2020; and (ii) if the
Transaction is not completed, on the date that is ten (10) days
from the termination date of the Arrangement Agreement. The Deposit
shall not be refunded in the event that the Transaction is
completed.
Trading Halt
Trading in the Klinik Shares was voluntarily halted on
March 20, 2020 and will remain halted
until the documentation required by the Exchange in connection with
the Transaction has been reviewed and accepted by the Exchange.
Subject to compliance with the policies of the Exchange, Klinik
may request that trading in the Klinik Shares remain halted pending
the completion or abandonment of the Transaction.
Completion of the Transaction is subject to a number of
conditions, including but not limited to, Exchange acceptance and
if applicable pursuant to Exchange requirements, majority of the
minority shareholder approval. Where applicable, the
Transaction cannot close until the required shareholder approval is
obtained. There can be no assurance that the Transaction will be
completed as proposed or at all.
Investors are cautioned that, except as disclosed in the
management information circular or filing statement to be prepared
in connection with the Transaction, any information release or
received with respect to the Transaction may not be accurate or
complete and should not be relied upon. Trading in the securities
of a capital pool company should be considered highly
speculative.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the Transaction and has neither approved nor disapproved
the contents of this press release.
Raymond James Ltd., subject to completion of satisfactory due
diligence, has agreed to act as sponsor in connection with the
Transaction. An agreement to sponsor should not be construed as any
assurance with respect to the merits of the transaction or the
likelihood of completion.
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.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities in any
jurisdiction.
Cautionary Statement Regarding Forward-Looking
Information
This news release contains certain forward-looking
statements, including statements relating to the completion of the
Transaction and the timing for its completion; the satisfaction of
closing conditions, which include, without limitation: (i) the
Consolidation; (ii) the Klinik name change; (iii) the
election of new directors; (iv) amendments to the stock option
plan of Klinik; (v) adoption by Klinik of a restricted share
unit plan and employee share purchase plan; (vi) approval of
NeuPath shareholders of the Transaction; and (vii) receipt of
the necessary Exchange and court approvals in connection with the
Transaction; the timing of filing of a Filing Statement; receipt of
the Deposit and other statements that are not historical facts.
Wherever possible, words such as "may", "will", "should", "could",
"expect", "plan", "intend", "anticipate", "believe", "estimate",
"predict" or "potential" or the negative or other variations of
these words, or similar words or phrases, have been used to
identify these forward-looking statements. These statements reflect
management's current beliefs and are based on information currently
available to management as at the date hereof.
Forward-looking statements involve significant risk,
uncertainties and assumptions. Many factors could cause actual
results, performance or achievements to differ materially from the
results discussed or implied in the forward-looking statements. As
a result, the Corporation cannot guarantee that the Transaction
will be completed on the terms described herein or at all. These
factors should be considered carefully and readers should not place
undue reliance on the forward-looking statements. Although the
forward-looking statements contained in this press release are
based upon what management believes to be reasonable assumptions,
the Corporation cannot assure readers that actual results will be
consistent with these forward-looking statements.
These forward-looking statements are made as of the date of this
press release, and the Corporation assumes no obligation to update
or revise them to reflect new events or circumstances, except as
required by law.
SOURCE Klinik Health Ventures Corp.
