KAM Capital Corp.
TSX VENTURE : KMC.P

May 06, 2008 16:59 ET

KAM Capital Corp. Announces Letter of Intent for Qualifying Transaction

TORONTO, ONTARIO--(Marketwire - May 6, 2008) - KAM Capital Corp. (the "Corporation") (TSX VENTURE:KMC.P) has entered into a letter of intent (the "Letter of Intent") dated May 6, 2008, for the acquisition of all of the issued and outstanding securities of Synergist Medical Inc. ("Synergist"). Synergist was founded in 2002 and is committed to the development of the next generation robotic surgical platform. The Corporation is a capital pool company and intends for the acquisition of Synergist to constitute the Qualifying Transaction of the Corporation (the "Qualifying Transaction") as such term is defined in the policies of the TSX Venture Exchange (the "Exchange").

Term of Acquisition

Pursuant to the terms of the Letter of Intent, subject to completion of satisfactory due diligence, a definitive purchase agreement and receipt of applicable regulatory approvals, the Corporation intends to acquire all of the issued and outstanding common shares of Synergist in consideration for 26,383,738 common shares at a deemed price of $0.31 per share. These shares include the shares to be issued on exchange of securities issued to Synergist convertible debenture holders. Common shares of Synergist will be converted into common shares of the Corporation on the basis of 1.6129 Corporation shares for each Synergist share.

The Qualifying Transaction is an arm's length transaction. No insiders of the Corporation own securities in Synergist and no insiders of Synergist own securities in the Corporation.

Upon completion of the Qualifying Transaction, the Corporation will be engaged in the business of Synergist and interests as may be subsequently acquired by the Corporation.

Synergist

Incorporated in July 2002 in Ontario, Synergist is committed to developing the Amadeus Robotic Surgical Platform ("ARSP") which a three-armed robotic surgical system that will permit a surgeon to remotely manipulate surgical instruments while seated at a control console. ARSP has successfully completed Phase I development and is currently in its second phase of development. Synergist has partnered with leading development companies and has built an experienced management team and advisory board.

Synergist's goal is to establish ARSP as a superior surgical platform, ultimately becoming the standard for complex surgical procedures and many other procedures currently performed using either open or MIS surgery. Upon completion of the first version of ARSP, Synergist plans to engage in a joint development and/or a co-marketing agreement with a leading medical device company; and obtain regulatory approval for the sales of ARSP, instruments, accessories, and service agreements.

Synergist currently has 10,000,000 common shares outstanding and expects to have approximately 10,778,950 common shares and up to 900,000 options to purchase common shares in the capital of Synergist outstanding at the time of the Qualifying Transaction. Dr. Reiza Rayman (London, Ontario), Craig Leon (Toronto, Ontario) and John Unsworth (Hamilton, Ontario) each hold more than 20% of the common shares of Synergist. In addition, Synergist has issued $2,789,500 in principal amount of convertible debentures with such convertible debentures to convert into units of Synergist on the basis of $0.50 per unit. Each unit will consist of one common share of Synergist and one warrant to purchase a Synergist common shares for $0.60 per share. The convertible debentures will convert into units immediately prior to or concurrently with the Qualifying Transaction.

Management and Board of Directors of the Resulting Issuer

Upon completion of the Qualifying Transaction, it is anticipated that the Corporation's board of directors will consist of two current board members of the Corporation and two new board members. It is intended that the two new board members will be Dr. Reiza Rayman and Craig Leon. It is also intended that William Jackson will resign as President and Secretary of the Corporation, Martin Bernholtz will resign as Chief Financial Officer of the Corporation, and the new officers of the Corporation will be Dr. Reiza Rayman as President and Craig Leon as Chief Executive Officer. Synergist currently has a medical advisory board and it is expected that the same medical advisory board will be appointed to the Corporation pursuant to the qualifying transaction.

Dr. Reiza Rayman, President and Director

Dr. Rayman's training in both biophysics and medicine has allowed a broad perspective on new technology and devices as they relate to surgery. As a researcher in fluid dynamics, he concentrated on the role of the fluid dynamics of blood flow as it relates to arteriosclerosis. During subsequent medical training, Dr. Rayman became interested in minimally invasive surgical (MIS) techniques and devices, and researched the physiologic effects of MIS on infants during prolonged procedures. Additionally, his interest in the device area led to concepts and experimentation using magnetism for bowel retraction during MIS. He holds three issued US Patents and several international patents related to this apparatus and methodology.

Dr. Rayman collaborated with Dr. Doug Boyd to implement and develop new techniques related to robotic cardiac surgery. The two performed the world's first robotic beating heart cardiac bypass surgery in September 1999. Subsequently, Dr. Rayman authored grants to the federal and provincial governments to research several areas of robotic surgery. These grants were successful, and totalled to a program of $18 million, the largest research program in the history of the London Health Sciences Centre. The program has led to the formation of CSTAR (Canadian Surgical Technologies & Advanced Robotics), a $12 million facility which Dr. Rayman led in its conceptual and detailed designed phases.

Dr. Rayman has held roles including Principal Investigator, Robotic Telesurgery and Hybrid Cardiac Surgery, CSTAR, and Assistant Professor, Department of Surgery, at the University of Western Ontario. He holds an MSc (biophysics) from the University of Western Ontario and an MD from the University of Toronto.

Craig Leon, Chief Executive Officer and Director

Craig Leon is and has served as Chief Operating Officer and Chief Financial Officer of Redwood Asset Management Inc. since August 2003. Mr. Leon is and has been engaged with GrowthQuest Capital Inc., a private portfolio management firm since 1997, where his primary responsibilities have included establishing the operations, sales and marketing infrastructure of the company. Mr. Leon has also acted as an associate portfolio manager with GrowthQuest Capital Inc. From June 2000 to July 2003, Mr. Leon served as a consultant to Generex Biotechnology Corporation. While at Generex Biotechnology Corp., Mr. Leon's responsibilities included the evaluation of strategic investment opportunities and potential acquisition candidates. During 1999 to 2000, Mr. Leon was co-founder of MiFund.com, a corporation providing global financial institutions with a customized and scalable system to facilitate the distribution of proprietary and non-proprietary financial products and services. Mr. Leon gained most of his capital markets experience through working with corporations such as Bank of Montreal and Nesbitt Burns where his responsibilities included the trading of fixed income securities. Mr. Leon received his undergraduate degree from McGill University and obtained his MBA from York University.

William Jackson, Director

Mr. Jackson is currently the Chief Business Officer and a Director of Covalon Technologies Ltd. He is responsible for business development, marketing and sales, vendor and customer contacts, out-licensing and in-licensing transactions and acquisitions. In his previous role as Chief Financial Officer, Chief Operating Officer and Director of Covalon Technologies Ltd., Mr. Jackson played the key role at Covalon, raising of approximately $21 million from the start up through the going public transaction when Covalon completed its Qualifying Transaction with a CPC to the recent secondary public financing round and managed the set up of manufacturing operations for Covalon. Mr. Jackson, who was a co-founder of Covalon Technologies Ltd., has over fifteen years of experience working in the development and sale of medical devices. He is a successful entrepreneur who has been involved in transforming various "start-up" companies into market leaders, and specializes in building business relationships, strategic partnerships and sales. His experience includes sales with Karl Storz Endoscopy Inc. (as the first agent to grow his territory by $1,000,000 in the first year) and Stryker Corporation (as a member of the President's Council and as a top ten sales performer). Mr. Jackson was also the co-founder and President of Quick Stitch Ltd. (as innovative clothing repair franchise achieving eight franchise within one year of being founded), co-founder of Preferred Medical Products Inc. that achieving 80% market share in Canada within four years and 15% market share in the US before the start-up catheter manufacturing company sold to Ballard Medical Products and Vice-President, Finance to TIME Process Inc. a turnaround from insolvency to profitability (a business focused on the development of technology for advanced metal fusion).

Martin C. Bernholtz, Director

Mr. Bernholtz is currently Vice President, Finance with Kerbel Group Inc., an integrated construction and land development company. His responsibilities include finance, accounting, personnel and residential management. He serves as a director of Covalon Technologies Ltd., PowerComm Inc. and Selectcore Ltd. and serves on certain committees of each including audit, governance and compensation. While in public practise he was involved in business valuation and financial litigation support services. Mr. Bernholtz graduated with a bachelor degree in business administration from York University in 1981. He became a Chartered Accountant in 1984.

Sponsorship of Qualifying Transaction

Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with the Exchange policies. The Corporation is currently reviewing the requirements for sponsorship and may apply for exemption from sponsorship requirements pursuant to the policies of the Exchange, however there is no assurance that the Corporation will ultimately obtain this exemption.

Proforma Capital Structure

The Corporation currently has 7,249,999 common shares issued and outstanding and 1,333,332 reserved for issuance on the exercise of options. Upon closing of the Qualifying Transaction, the Corporation will have approximately 33,633,737 common shares issued and outstanding. There may also be additional options to directors, officers and consultants granted.

In accordance with Exchange policy, the Corporation's shares are currently halted from trading and will remain so until the completion of the Qualifying Transaction.

Description of Significant Conditions to Closing

Completion of the Qualifying Transaction is subject to a number of conditions including but not limited to, due diligence, Exchange acceptance and if required by Exchange policies, majority of the minority 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 Corporation will make a subsequent news release with information on sponsorship and summary financial information in accordance with Exchange policy.

Cautionary Statements

This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the proposal to complete the Qualifying Transaction and associated transactions, including statements regarding the terms and conditions of the Qualifying Transaction and associated transactions. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Qualifying Transaction and associated transactions, that the ultimate terms of the Qualifying Transaction and associated transactions will differ from those that currently are contemplated, and that the Qualifying Transaction and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this news release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Corporation, Synergist, or their respective financial or operating results or (as applicable), their securities.

The Exchange has in no way passed upon the merits of the Qualifying Transaction and has neither approved nor disapproved the contents of this news release.

Contact Information

  • KAM Capital Corp.
    William Jackson
    (647) 261-9502