Essex Angel Capital Inc.
TSX VENTURE : EXC.P

July 15, 2011 13:51 ET

Essex Angel Capital Inc. Announces Closing of Qualifying Transaction

TORONTO, ONTARIO--(Marketwire - July 15, 2011) - Essex Angel Capital Inc. (the "Corporation") (TSX VENTURE:EXC.P) is pleased to announce that it has completed its previously announced qualifying transaction (the "Qualifying Transaction") pursuant to which it has completed investments in Wellness Indicators, Inc. ("Wellness") and 3Gyros Inc. ("3Gyros" and together with Wellness, the "Target Companies"). Following completion of the Qualifying Transaction and receipt of final TSX Venture Exchange (TSX-V) approval, the Corporation will be listed as a Tier 2 Investment Issuer on the TSX-V.

On closing, the Corporation purchased:

(i) US$1,000,000 aggregate amount of 6.0% subordinated secured convertible debentures (the "Wellness Debentures") of Wellness. The Wellness Debentures will mature on the date that is 48 months from the date hereof (the "Closing Date). The Corporation may convert, at any time, the outstanding principal amount of the Wellness Debentures, in whole or in part, into common shares of Wellness (the "Wellness Shares") at a conversion price of US$3.25 per share, subject to adjustments in certain stated events. In addition, the Corporation received warrants (the "Wellness Warrants") entitling the Corporation to acquire, for 10 years following the Closing Date, 153,846 Wellness Shares at a price of US$3.25 per share, subject to adjustments in certain stated events; and
(ii) $500,000 aggregate amount of 2.0% secured subordinated debentures (the "3Gyros Debentures") of 3Gyros. In addition, the Corporation received warrants (the "3Gyros Warrants") entitling the Corporation to acquire, for nominal consideration, for eight years following the Closing Date an aggregate amount of common shares of 3Gyros (the "3Gyros Shares") equal to 37% of the fully diluted number of 3Gyros Shares on the date of exercise of the 3Gyros Warrants.

The Qualifying Transaction remains subject to final acceptance from the TSX-V. Trading of the Corporation's common shares on the TSX-V as a Tier 2 Investment Issuer under its current name and trading symbol "EXC" will commence on the second business day following receipt by the Corporation of the final TSX-V bulletin in respect of the Qualifying Transaction. Effective as of the date of the final TSX-V bulletin, the Corporation will no longer be considered a capital pool company.

PI Financial Corp. (the "Sponsor") acted as sponsor for the Qualifying Transaction. In consideration for its services, the Sponsor received a cash fee and 100,000 common share purchase warrants (the "Sponsor's Warrants"). Each Sponsor's Warrant is exercisable by the Sponsor for a period of two years from the date hereof at a price of $0.11. The Sponsor's Warrants are subject to a hold period expiring on November 16, 2011.

DIRECTORS AND OFFICERS

In connection with completion of the Qualifying Transaction, Michael Labiak resigned as Chief Financial Officer and Julian Hawkins was appointed to replace Mr. Labiak. Additionally, Richard Galdi resigned as Chief Operating Officer of the Corporation and Michael Labiak was appointed to replace Mr. Galdi. All of the current directors of the Company have remained, and as a result the directors and management of the Corporation now consist of the following:

  • Richard Galdi - Chairman, President, Chief Executive Officer and Director
  • Michael Labiak - Chief Operating Officer, Executive Vice-President and Secretary
  • Julian Hawkins - Chief Financial Officer
  • Jason Krueger - Director
  • Michael Magnus- Director

ABOUT THE TARGET COMPANIES

Wellness is a privately-held company headquartered in Rochester Hills, Michigan. Wellness is a developer and manufacturer of urine tests designed to serve as a primary screening tool to assess the health status of individuals. The test results are intended to be used by insurers and employers to better manage their prevention and intervention programs, thereby minimizing risk and containing costs of healthcare and health insurance. To that end, the investment will enable Wellness to conduct planned field trials in the summer of 2011 with a large North American insurer. The test results can also be used to augment weight loss, fitness, athletic and military training regimens. Wellness holds an IP portfolio based on umbrella patents interlocked with technical patents on multiple components.

3Gyros is a privately-held company headquartered in Tecumseh, Ontario and is a maker of zero calorie, zero fat and gluten-free health conscious salad dressings and condiments, with distribution in Walmart, Sobeys and other notable food retailers across Canada.

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 future business activity of the Target Companies.

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, including, but not limited to, the Corporation's and the Sponsor's satisfactory due diligence investigations of the Target Companies and the ability of the Corporation to obtain the necessary regulatory approvals. 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.

Investors are cautioned that, except as disclosed in the filing statement dated July 6, 2011 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.

The TSX-V has in no way passed upon the merits of the Qualifying Transaction and has neither approved nor disapproved the contents of this press release. 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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