Essex Angel Capital Inc.

Essex Angel Capital Inc.

June 15, 2012 11:14 ET

Essex Angel Capital Inc. Announces Binding Agreement to Acquire Up to 2% Royalty from Wellness Indicators, Inc. and Private Placement of Debentures

WINDSOR, ONTARIO--(Marketwire - June 15, 2012) -


Essex Angel Capital Inc. (TSX VENTURE:EXC) (the "Corporation") is pleased to announce that it has signed a binding letter agreement (the "Letter Agreement") with Wellness Indicators, Inc. ("Wellness"), whereby Wellness agreed to grant the Corporation a quarterly royalty (the "Royalty") equal up to 2.0% of the gross sales of Wellness in each fiscal quarter (the "Gross Sales"). Wellness and the Corporation will enter into a definitive royalty agreement within 20 days of the date hereof. The definitive agreement shall terminate on the date that Wellness completes a liquidity event. Additionally, Essex agreed to acquire a minimum of US$100,000 and up to US$1,000,000 of 6.0% principal amount of secured convertible debentures of Wellness (the "Wellness Debentures"). The Wellness Debentures will be convertible into shares of voting stock of Wellness at a price of US$1.00 per Share for a period of four years from the issuance date. The grant of the Royalty is subject to Essex acquiring a minimum of US$100,000 principal amount of Wellness Debentures. The Royalty shall be payable pro rata based on the principal amount of Wellness Debentures acquired by Essex.

The Corporation also announced a non-brokered private placement (the "Private Placement") of unsecured convertible debentures (the "Debentures") of the Corporation for gross proceeds of up to $1,000,000 (the "Aggregate Principal Amount"). The net proceeds of the Private Placement will be used to fund the acquisition of the Wellness Debentures and general working capital purposes. Interest payable on the Debentures shall be equal to 50% of the Royalty received by the Corporation from Wellness, if any, payable pro rata on the Aggregate Principal Amount (for example, each $100,000 of the Aggregate Principal Amount shall receive 5% of the Royalty), provided that interest shall never exceed 60% of the principal amount of the Debentures or such other amount which may, from time to time, constitute a criminal interest rate under the Criminal Code (Canada). The Debentures shall mature on the date (the "Maturity Date") which is the earlier of: (i) 60 months from the issuance date; and (ii) the date of: (a) a change of control of the Corporation; or (b) a completion of a liquidity event by Wellness. The principal amount of the Debentures shall be convertible into common shares of the Corporation (the "Common Shares") at a price of $0.10 per Common Share, subject to adjustment in certain events, at any time prior to the Maturity Date, at the holder's option, or on the Maturity Date. On or after the date that is 18 months from the date of issuance of the Debentures and prior to the Maturity Date, the Corporation may, at its option, redeem the Debentures, in cash and/or in Common Shares at a price of $0.10 per share, in whole or, from time to time, in part, at a price equal to 120% of the principal amount plus accrued and unpaid interest. The Debentures and the Common Shares issuable upon conversion of the Debentures will be subject to a four month hold period in accordance with applicable Canadian securities laws. The Private Placement is subject to the approval of the TSX Venture Exchange. The Corporation may issue such number of compensation warrants equal up to 10% of the aggregate amount of the Debentures issued under the Private Placement and pay finder's fees of up to 10% of the gross proceeds. The Private Placement is scheduled to close on or about July 31, 2012.

This news release does not constitute an offer to sell or solicitation of an offer to sell any of the Common Shares in the United States. The Common Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to a U.S. Person unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

This press release contains certain forward-looking statements about the Corporation's future plans and intentions. 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 included or incorporated by reference in this press release include statements with respect to the execution, and the terms, of the definitive royalty agreement, the terms of the Wellness Debentures and the proposed terms of, and the intended use of proceeds of, the Private Placement.

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. 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.

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

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