MONTREAL, QUEBEC--(Marketwire - Dec. 22, 2011) - Biotonix (2010) Inc. ("Biotonix") (TSX VENTURE:BTX), a company listed on the TSX Venture Exchange, is pleased to announce that it has entered into an arm's length letter agreement (the "Agreement") dated December 21, 2011 with 9130-4519 Québec Inc. doing business under the name The Atman Co. ("Atman"), a non-reporting issuer incorporated under the laws of the Province of Quebec, pursuant to which Biotonix will, subject to a number of conditions, acquire all of the issued and outstanding securities of Atman. The transaction will constitute a reverse take-over (the "RTO") of Biotonix under the policies of the TSX Venture Exchange (the "Exchange").
Atman provides 6th generation psychometric testing solutions to enterprises seeking to maximize success in employee recruitment, job allocation and team building by scientifically matching each individual's character and talents to specific company needs. For more information please visit www.atmanco.com. After the RTO, Biotonix will continue to conduct its current business in addition to Atman's, offering innovative health solutions for posture correction and fitness using a web-based imaging software technology. For more information please visit www.biotonix.com.
Pursuant to the Agreement, Atman will become a wholly-owned subsidiary of Biotonix and the two shareholders of Atman will hold approximately 55% of the common shares of Biotonix. Michel Guay, the President and sole director of Atman, holds approximately 95 % of the outstanding shares of Atman and Francesca Primeau holds the remaining 5%. After the closing of the RTO and the related transactions identified below, Michel Guay will hold approximately 46.24% of the total common shares of Biotonix and no other person will hold 20% or more of the company. Biotonix will also pay Michel Guay $150,000 over a three year period, beginning on the closing of the RTO, in partial consideration for his undertaking to continue to manage the Atman business following the RTO. Mr. Guay resides in Ville Lorraine, Quebec.
Currently, 3252736 Canada Inc. holds 37% of the issued and outstanding common shares of Biotonix. The beneficial owners of 3252736 Canada Inc. are W. Brian Edwards, Sylvain Guimond, Yves Morissette, Alain Morissette and Christian Savard. No other person currently holds or controls, directly or directly, 20% or more of the common shares of Biotonix. There are no non arm's-length parties involved in this transaction.
In its unaudited year-end unaudited statements dated May 31, 2011, Atman showed a profit of $129,714 on revenues of $518,370. Its November 30, 2011 results showed revenues of $315,440 with a loss of $19,232. Atman reports that second quarter losses such as this are cyclical and expected, as they reflect the summer holidays in its clients' human resources departments.
As a condition of the transaction, Biotonix will hold a meeting (the "Meeting") of its shareholders to approve the RTO pursuant to the rules and policies of the Exchange. The Biotonix shareholders will also be asked to approve a consolidation (the "Share Consolidation") of the common shares of Biotonix on a basis of two old shares for one new share (a "Consolidated Share"). If approved, the Share Consolidation will become effective prior to completion of the RTO. Biotonix currently has 23,138,667 common shares outstanding, with the result that 11,569,334 Consolidated Shares will be outstanding just prior to the RTO. The former shareholders of Atman will be issued 15 million Consolidated Shares at an ascribed price of $0.20 each, reflecting a $3 million valuation of Atman. Atman will also seek approval for the transaction from its shareholders.
At the Meeting, Atman will have the right to nominate up to four of the directors of the Biotonix board of directors of Biotonix comprised of seven directors. The shareholders will also be asked to approve a new name for Biotonix.
The current board of directors of Biotonix consists of W. Brian Edwards (also Chairman), Alain Morissette, Richard Blais, Sylvain Guimond and Normand Drouin (see announcement below), with Louise St-Onge being the current CEO and Daniel Chevrier the finance director. It is the intention of the parties that, following the RTO, Michel Guay will become President and a director of Biotonix, with Louise St-Onge and Daniel Chevrier remaining in the same positions. The remaining directors of Biotonix will be determined at the Meeting.
Prior to the closing of the RTO, Atman shall issue a $200,000 convertible debenture, which will be converted on the closing of the RTO into 1 million Consolidated Shares at a conversion price of $0.20 each. Proceeds of this financing will be used to restructure the existing Atman debt. Biotonix will make a private placement of its pre-consolidation common shares prior to closing the RTO at $0.10 each, for maximum proceeds of $150,000, the proceeds of which will be used to finance the RTO and related transactions. Biotonix will also make a prospectus offering to raise gross proceeds of at least $500,000, to close conditional upon and at the same time as closing of the RTO. Terms of this public financing have not yet been finally determined. The proceeds of this offering will be used for working capital needs of Biotonix following the RTO. Biotonix will identify a broker for the foregoing financings in due course.
Following the closing of the RTO and the foregoing transactions, Biotonix will have approximately 30,819,334 Consolidated Shares issued and outstanding.
Biotonix is also pleased to announce that Normand Drouin has joined its board of directors effective December 21, 2011. Mr. Drouin is an engineer and is the President and owner of SGND Inc. He has 35 years experience in the internet technologies sector and currently coaches CEOs with their business growth challenges. Mr. Drouin is a resident of Ste-Julie, Quebec.
Biotonix also announces that Normand Drouin was awarded 50,000 options to purchase its common shares at the price of $0.10 each, with an expiration date of December 21, 2016. Biotonix also re-issued the 150,000 and 75,000 options, respectively granted to Louise St-Onge and Daniel Chevrier on November 22, 2011, at the higher exercise price of $0.10 each.
Completion of the transaction is conditional upon, among other things, due diligence by Biotonix and Atman and the negotiation and execution of definitive documentation.
Completion of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. 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 to be prepared in connection with the transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the securities of Biotonix should be considered highly speculative.
The TSX Venture Exchange 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 TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.