NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR RELEASE
PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR
IN PART, IN OR INTO THE UNITED STATES.
Ovid Capital Ventures Inc. (TSX VENTURE:OCA.P) ("Ovid" or the "Company"), a
capital pool company listed on the TSX Venture Exchange (the "Exchange"), is
pleased to announce that it has received conditional acceptance from the
Exchange for the closing of its proposed Qualifying Transaction (as defined
under Exchange Policy 2.4 - Capital Pool Companies) with iTech Medical, Inc.
("iTech"), and that further to its press releases dated April 19, 2013, July 3,
2013 and November 13, 2013, it has filed a filing statement, dated as of May 30,
2014, in connection with the Company's Qualifying Transaction (the "Filing
Statement"). The Filing Statement is available under the Company's profile on
SEDAR at www.sedar.com.
Assuming all conditions to closing are satisfied, the Company expects to close
the Qualifying Transaction on or about July 31, 2014. Upon completion of the
proposed Qualifying Transaction, the Company is expected to meet all of the
minimum listing requirements for a Tier 2 Life Sciences Issuer.
The Merger
As previously announced, Ovid entered into an agreement and plan of merger dated
as of November 8, 2013 (the "Merger Agreement") to complete a business
combination involving Ovid, Ovid Acquisition Corp. (a wholly-owned subsidiary of
Ovid incorporated pursuant to the laws of the State of Delaware) and iTech
pursuant to which Ovid Acquisition Corp. will be merged with and into iTech, the
separate corporate existence of Ovid Acquisition Corp. shall cease, and iTech
shall continue as the surviving corporation under the laws of the State of
Delaware. Each iTech common share issued and outstanding immediately prior to
the effective time of the merger will be converted into the right to receive:
(i) 0.29167 of a fully paid and non-assessable Ovid common share; (ii) 0.04167
of a fully paid and non-assessable Ovid Series A Preferred Share; and (iii) 0.15
of a fully paid and non-assessable Ovid Series B Preferred Share. Therefore, in
connection with the merger, it is anticipated that: (i) 27,871,216 Ovid common
shares will be issued in exchange for the iTech common shares; (ii) 3,981,875
Ovid Series A Preferred Shares will be issued in exchange for the iTech common
shares; and (iii) 14,333,604 Ovid Series B Preferred Shares will be issued in
exchange for the iTech common shares. The Ovid Series A Preferred Shares and the
Ovid Series B Preferred Shares are convertible into Ovid Common Shares in
certain circumstances described below on a 1:1 ratio.
Pursuant to the Merger Agreement, Ovid has allotted and reserved for issuance a
total of 15,000,000 Ovid common shares (the "Milestone Shares") upon the
conversion, if any, of the Ovid Series B Preferred Shares if the surviving
corporation generates a minimum of $7,500,000 in gross revenues during the three
fiscal years immediately following the closing (each such fiscal year to be for
a period of at least twelve months), as reflected on the surviving corporation's
audited annual consolidated financial statements for such fiscal years. For
greater certainty, and based upon the number of issued and outstanding iTech
common shares, the 14,333,604 Ovid Series B Preferred Shares to be issued in
exchange for the iTech common shares would be converted into an equivalent
number of Milestone Shares. The Milestone Shares, if any, will be issued
promptly following the filing of the audited annual consolidated financial
statements evidencing the fact that the above-mentioned revenue milestone has
been met, subject to the restriction that if the Milestone Shares are issued
prior to the end of the third fiscal year ended immediately following the
closing, then such Milestone Shares will be subject to a legend restricting
their resale, pledge or other transfer until the date which is 36 months
following the closing.
If the revenue milestone is not met, then the outstanding shares of Ovid Series
B Preferred Shares will automatically be cancelled and returned to treasury
without any further action or formality on the part of the holder thereof or the
Issuer. In addition, as soon as practicable, but in any event no later than five
Business Days following the effective time of the merger, iTech and its outside
accountants shall prepare and deliver to the Resulting Issuer a consolidated
closing statement of financial position of iTech as at the closing date and
prior to giving effect to the merger (the "Closing Statement"). Ovid has
allotted and reserved for issuance of up to 4,000,000 Ovid common shares
(collectively, the "Liability Shares") upon the conversion, if any, of the Ovid
Series A Preferred Shares. If, based on the Closing Statement, the consolidated
liabilities of iTech are (i) equal to or less than $300,000, then the
outstanding shares of Ovid Series A Preferred Shares will automatically convert
into a maximum of 4,000,000 Liability Shares, (ii) greater than $300,000 but
less than $400,000, then the outstanding shares of Ovid Series A Preferred
Shares will automatically convert into a maximum of 2,000,000 Liability Shares,
or (iii) greater than $400,000, then the outstanding shares of Ovid Series A
Preferred Shares will automatically be cancelled and returned to treasury
without any further action on the part of any shareholder. For greater
certainty, and based upon the number of issued and outstanding iTech common
shares, the maximum number of Liability Shares issuable upon the conversion, if
any, of the 3,981,875 Ovid Series A Preferred Shares to be issued in exchange
for the iTech common shares would be a total of 3,981,875 Liability Shares.
The Private Placement
Concurrently with the Qualifying Transaction, and as a condition to the closing
of the merger, Ovid intends to complete a brokered private placement the
("Private Placement") by issuing a minimum of 12,750,000 Units and a maximum of
15,000,000 Units at a purchase price of $0.20 per Unit, for gross proceeds to
Ovid of a minimum of $2,550,000 and a maximum of $3,000,000. Each Unit is
comprised of one Ovid common share and one-half of one Ovid Warrant, each whole
Ovid Warrant entitling the holder thereof to acquire one additional Ovid common
share at an exercise price of $0.30 for a period of 24 months from the closing.
Proceeds from the Private Placement will be used by Ovid to pay for the costs of
the Qualifying Transaction, to fund the Resulting Issuer's operating expenses,
including research and development and marketing expenses and to fund working
capital.
Ovid has engaged Jones, Gable & Company Ltd. (the "Agent") to act as agent, on a
best efforts basis, in connection with the Private Placement and will receive as
compensation (i) a commission of 10% of the gross proceeds of the Private
Placement, and (ii) compensation options (the "Agent's Options") to acquire such
number of Ovid common shares which is equal to 10% of the aggregate number of
Ovid common shares sold pursuant to the Private Placement. Each Agent's Option
shall entitle the Agent to acquire one additional Ovid common share at an
exercise price of $0.20 per share for a period of 24 months from the closing.
Conditions of the Qualifying Transaction
The Qualifying Transaction is subject to certain conditions, including but not
limited to, the completion of the Private Placement, obtaining the iTech
shareholder approval, no material adverse change occurring until the closing,
receiving all necessary regulatory and third party approvals, and the Exchange
being satisfied that, after completion of the Qualifying Transaction, the
Resulting Issuer will satisfy the Exchange's minimum listing requirements in
order to become a Tier 2 Life Sciences Issuer.
Annual and Special Meeting of Ovid Shareholders
Ovid wishes to remind its shareholders that it will hold its annual and special
meeting of shareholders on June 19, 2014 in Montreal, Quebec. The notice of
meeting, management information circular and proxy form have been mailed to all
shareholders and are also available under Ovid's profile on SEDAR at
www.sedar.com. At the meeting, in addition to the presentation of Ovid's audited
financial statements, the election of directors and the appointment of an
auditor, Ovid shareholders will be asked to consider, and if deemed advisable,
approve the following three separate special resolutions which will be
implemented in connection with the closing of the Qualifying Transaction: (i)
amending the Articles of Ovid to change the registered office of the Company
from the Province of Quebec to the Province of Ontario; (ii) changing the name
of the Company from "Ovid Capital Ventures Inc." to "iTech Medical Inc.", or
such other name that the Board of Directors, in their sole discretion, may
determine; and (iii) amending the Articles of Ovid to allow the Board of
Directors to appoint one or more additional directors, who shall hold office for
a term expiring not later than the close of the next annual meeting of
shareholders, but the total number of directors so appointed may not exceed one
third of the number of directors elected at the previous annual meeting of
shareholders.
Further Information
All information contained in this news release with respect to Ovid and iTech
was supplied by the parties respectively, for inclusion herein, and each party
and its directors and officers have relied on the other party for any
information concerning the other party.
Completion of the Transaction is subject to a number of conditions, including
but not limited to, Exchange acceptance and, if applicable, pursuant to the
requirements of the Exchange, 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 released 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
proposed transaction and has neither approved nor disapproved the contents of
this press release.
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.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release
includes certain "forward-looking statements" under applicable Canadian
securities legislation. Forward-looking statements include, but are not limited
to, statements with respect to: the terms and conditions of the proposed
Transaction; the terms and conditions of the proposed Private Placement; use of
funds; and the business and operations of the Resulting Issuer after the
proposed Transaction. Forward-looking statements are necessarily based upon a
number of estimates and assumptions that, while considered reasonable, are
subject to known and unknown risks, uncertainties, and other factors which may
cause the actual results and future events to differ materially from those
expressed or implied by such forward-looking statements. Such factors include,
but are not limited to: general business, economic, competitive, political and
social uncertainties; delay or failure to receive board, shareholder or
regulatory approvals; and the ability of the Resulting Issuer to execute and
achieve its business objectives. 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. Ovid and iTech
disclaim any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise,
except as required by law.
FOR FURTHER INFORMATION PLEASE CONTACT:
Edward Ierfino
President and Chief Executive Officer
(514) 562-1374
(TSXV:OCA.P)
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