PTEC.P Principal Technologies Inc

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VANCOUVER, BC, July 8, 2021 /CNW/ - Principal Technologies Inc. (the "Company") (TSXV: PTEC.P), is pleased to announce that it has entered into a definitive investment agreement dated June 11, 2021 (the "Investment Agreement") with respect to the acquisition of an 80% interest (the "Investment") in E&E CRO Consulting GmbH ("E&E"), an arm's length, private company.

It is expected that the Investment will constitute the Company's Qualifying Transaction pursuant to the policies of the TSX Venture Exchange (the "TSXV") and that upon completion of the Investment the Company will commence trading as a Tier 2 Life Sciences Issuer.

The Company expects that once governments begin to relax the various travel and other COVID-19 related restrictions that have constrained the Company's efforts to diligence investment opportunities across Europe, it will proceed with its previously disclosed intention of becoming an Investment Issuer. E&E will serve as a pipeline of potential investment opportunities to facilitate this transition, and such transition may eventually constitute a change of business pursuant to the policies of the TSXV.

About E&E

E&E is a global contract research organization ("CRO") based in Vienna, Austria, that specializes in tailored project management of international scale clinical studies primarily related to medical- device technologies. CROs seek to reduce costs for companies developing new medicines, drugs and medical devices requiring various regulatory approvals. They aim to simplify entry into these various markets, and simplify development of regulated products.

E&E provides tailor-made A-Z project management services related to clinical studies, primarily with a focus on medical technologies devices requiring regulatory approval in various international jurisdictions, including the European Union, the United States, Latin America and Oceania. E&E provides services to a diverse array of medical device developers, including established med-tech companies, startups, hospitals and their medical representatives (doctors / professors) and medical institutions, as they go through the stages of obtaining regulatory approval for their medical devices. E&E charges a fee for service, and typically receives either monthly retainers or payments on a monthly or quarterly basis in accordance with its invoices for services rendered.

E&E was incorporated on February 4, 2021 under the statute for Limited Liability Corporations (Austria) and carries on the business of a CRO that operated as a sole proprietorship since 2010. 

The following is selected financial information for E&E:

About the Investment and Concurrent Financing

The Investment will be structured as a share acquisition pursuant to which the Company will acquire 80% of the issued and outstanding securities of E&E in accordance with the Investment Agreement. As consideration for the Investment, the Company will pay the shareholder of E&E:

Any Common Shares to which the shareholder of E&E becomes entitled pursuant to the Investment shall become issuable on March 31, 2023, and shall be subject to a 24 month lock-up with 25% of all such Common Shares being released each six months after March 31, 2023.

Prior to closing or concurrently with the closing of the Investment, the Company intends to complete a private placement (the "2021 Private Placement") of its common shares for aggregate gross proceeds of €120,000 at a price of $0.16 per share, based upon an exchange rate to be set within three business days of the closing of the Investment, for an estimated 1,106,925 Common Shares.

It is expected that following the completion of the Investment and the 2021 Private Placement, the Company will have a total of approximately 17.6 million Common Shares outstanding on a non-diluted basis, comprised of approximately 16.5 million Common Shares representing the currently issued and outstanding shares of the Company, and approximately 1.1 million Common Shares representing the shares issued in connection with the 2021 Private Placement, but excluding the 1.5 million Common Shares that may become issuable on March 31, 2023 pursuant to the earn-out within the Investment Agreement. The Company will be required to pay €10,000 to an arm's length finder upon the closing of the Investment.

Completion of the Investment is subject to a number of conditions precedent, including but not limited to, the approval of the TSXV of the Investment and the listing of the Company as a Tier 2 Life Sciences Issuer. Accordingly, there can be no assurance that the Investment will be completed on the terms disclosed or at all. Shareholder approval of the Investment is not required. It is expected that trading the Company's Common Shares will remain halted until the Investment has been completed.

Directors and Officers

Upon closing of the Investment, Mr. Amir Dhalla is expected to resign from the board of directors of the Company and the board of directors and other insiders are expected to be as follows:

Gerald Trent, President, Chief Executive Officer and Director

Prior to being invited to join the Company in the capacity of CEO and President, Mr. Trent held multiple senior positions in various companies. Mr. Trent is the founder and managing director of Trent Investments, a direct investment multi-family office for ultra-high net worth individuals in Europe. Formerly he worked as Head of Global Markets & Investment Banking at Sberbank Europe AG and Head of M&A of PwC Austria (Pricewaterhouse Coopers).

Frank Stronach, Chief Financial Officer, Corporate Secretary, and Director

Mr. Stronach, has been Chief Financial Officer and a director of the Company since its incorporation on April 3, 2018. Mr. Stronach was employed at Haywood Securities Inc. in the position of Vice President of Investment Banking from May 2004 to March 2017. He joined Haywood Securities Inc. in May 2004 after 9 years with Union Securities Ltd.'s corporate finance group. Previously, Mr. Stronach spent 6 years with the Vancouver Stock Exchange, leaving his position as Manager, Listing Policy. Mr. Stronach holds an MBA degree from Queen's University and a Bachelor of Arts degree from the University of Victoria and is also a Chartered Accountant with 8 years' experience with KPMG.

John McCoach, Director

Mr. McCoach held multiple senior positions in various companies. John McCoach retired from full time employment in 2016. At that time, he was President of the TSX Venture Exchange Inc. He was a member of the Capital Markets Authority Implementation Organisation Regulatory Authority Board of Directors from August, 2016 through March, 2021. He has also held the roles of Lead Director, Chairman of the Governance Committee, Member of the Audit Committee and a Member of the Compensation Committee of Liberty Defense Holdings, Ltd. since 2019. From October 2017 to May 2019, he was a director, the Chairman of the Audit Committee and member of the Human Resources and Compensation Committee of Nautilus Minerals Inc. From June 2018 to May 2019, he served as Interim CEO of Nautilus Minerals Inc. Furthermore, since 2018 he has been a director of Principal Technologies Inc. Finally, he is currently a director of KWESST Micro Systems Inc. (formerly Foremost Ventures Corp.), a position he has held since 2018. 

Prinz von Liechtenstein, Director

Prinz von Liechtenstein, is a member of the Princely Family of Liechtenstein. He conducted his studies at the University of Vienna in economics and information technology, as well as politics. Since 1976, Prinz von Liechtenstein has been managing director and board and supervisory board member of several international enterprises operating in multiple areas, such as trade, business advisory, and financial services. His Serene Highness is, among other engagements, also owner and executive director of the supervisory board of a five-star chalet hotel in Corinthia, Austria.

Dr. Leopold Specht, Director

Dr. Specht, is an international legal expert in the areas of international taxation, project financing, cross-boarder mergers and acquisitions, and corporate law, and taught at Harvard Law School, University of Naples, Northeastern University School of Law, to name a few. He conducted his studies at Harvard Law School, University of Rome, and University of Vienna. Dr. Specht is the founder and managing partner of the international law firm Specht & Partner, with offices in Vienna, Moscow, Prague, Budapest, Belgrade, and Zagreb and is fluent in five languages (German, English, Russian, Italian, French). He is also Managing Director of Dr. Leopold Specht Beteiligungs- und Vermoegensverwaltung GmbH since 1996 and of Specht Asset Management Services GmbH since 2007. Dr. Specht is also Director of Drazenowitsch-Hering-Privatstiftung since 2000 as well as Supervisory Board Member of Amalgaro Investment SE since 2019 and of ALMDORF 'Seinerzeit' Touristik Aktiengesellschaft since 1994.

GreenIslands Global Opportunities Fund

Upon closing of the Investment and 2021 Private Placement, GreenIslands Global Opportunities Fund ("GreenIslands") is expected to own approximately 68% of the Common Shares. GreenIslands is an exempted liability company incorporated under the laws of the Cayman Islands that falls within the definition of a "mutual fund" pursuant to Section 4(4) of the Mutual Funds Law (Revised) of the Cayman Islands, as amended from time to time, and not registered with the Cayman Islands Monetary Authority. GreenIslands is managed by the Simplon Asset Management Ltd. fund manager who is directed by Mr. Sean Patrick Lewis, Ms. Laura McGeever and Mr. Leo Kassam.

Sponsorship

As the Investment is expected to constitute a Qualifying Transaction pursuant to the policies of the TSXV, sponsorship will be required by the TSXV unless exempt therefrom in accordance with the TSXV's policies or a waiver is obtained. In the absence of an available exemption from the sponsorship requirements, the Company intends to make an application to the TSXV for a waiver from sponsorship requirements. There is no assurance that if applied for, a waiver will be granted.

Arm's Length Transaction

The Transaction will not constitute a Non-Arm's Length Transaction in accordance with the policies of the TSXV.

Completion of the qualifying transaction is subject to a number of conditions, including but not limited to, execution of a binding definitive agreement relating to the qualifying transaction, Exchange acceptance and if applicable pursuant to Exchange requirements, shareholder approval. Where applicable, the qualifying transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the qualifying 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 qualifying transaction, any information released or received with respect to the qualifying 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 TSXV has in no way passed upon the merits of the proposed qualifying transaction and has neither approved nor disapproved the contents of this press release.

Forward Looking Information

Certain statements and information herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include but are not limited to statements or information with respect to: the proposed terms of the Investment and the 2021 Private Placement; the business plans of E&E and the Company, including qualification as an investment issuer; the timing of the Investment; the insiders of the Company upon closing of the Investment; and the closing of the Investment.

With respect to forward-looking statements and information contained herein, the Company and E&E have made numerous assumptions including among other things, assumptions about the ability to close the Investment and the 2021 Private Placement, general business and economic conditions and anticipated costs and expenditures of the Investment. The foregoing list of assumptions is not exhaustive.

Although management of the Company believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that forward looking statements or information herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. These factors include, but are not limited to: the Investment and the 2021 Private Placement may not close on the terms set forth herein, or at all; risks relating to the availability of financing or investment opportunities for the Company; risks relating to the receipt of all requisite approvals for the Investment, including the approval of the TSXV; risks associated with the business of the Company given its limited operating history; changes in general economic conditions or conditions in the financial markets; changes in laws; risks related to the direct and indirect impact of COVID-19 including, but not limited to, its impact on general economic conditions, the ability to obtain financing as required, and causing potential delays in Investment; and other risk factors as detailed from time to time. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.

SOURCE Principal Technologies Inc.