Luca Capital Inc.
TSX VENTURE : LUI.P

April 20, 2007 18:25 ET

Luca and VentriPoint Revise Qualifying Transaction

CALGARY, ALBERTA--(CCNMatthews - April 20, 2007) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR TO U.S. NEWSWIRE SERVICES

Luca Capital Inc. ("Luca") (TSX VENTURE:LUI.P) today announced amendments to the structure of its previously announced proposed Qualifying Transaction pursuant to an amended and restated letter agreement dated April 19, 2007 (the "Amended Letter Agreement"). The transaction involves the completion of up to a $400,000 debenture private placement, up to a $4,025,000 equity private placement and the business combination (the "Business Combination") of Luca with VentriPoint, Inc. ("VentriPoint"), which will constitute the Qualifying Transaction of Luca pursuant to Policy 2.4 of the TSX Venture Exchange Inc. ("TSX Venture").

About VentriPoint

As previously announced, VentriPoint is a clinical diagnostic company based in Seattle, Washington that commenced operations in January 2005 with a view to commercializing innovative and patented imaging technologies developed by the University of Washington. Applying this technology, VentriPoint is attempting to develop a breakthrough diagnostic tool for the rapid and cost effective measurement of a heart's volume and ventricular ejection fractions (blood flow), which technology, together with its associated online service, will be extendable to a variety of heart related disease states.

Reorganization of VentriPoint

VentriPoint currently has 5,964,975 common shares outstanding, US$150,000 of convertible promissory notes (the "VentriPoint Convertible Notes"), and stock options and warrants to purchase 1,260,386 common shares of VentriPoint at prices ranging from US$0.30 to US$0.50 per share (the "VentriPoint Existing Options"). Prior to completion of the Business Combination, VentriPoint expects to issue an additional 1,595,000 common shares on conversion of the principal and interest owing pursuant to the VentriPoint Convertible Notes. In addition, VentriPoint may issue up to an additional 550,000 common shares or VentriPoint Existing Options exercisable at prices between US$0.30 and US$0.50 per share to purchase up to 550,000 common shares of VentriPoint to be issued to advisors (the "Advisor Securities"). VentriPoint then expects to effect a split of its outstanding common shares into new common shares (the "Ventri Shares") such that immediately prior to completion of a proposed debenture private placement and after completion of the above described transactions (collectively referred to herein as the "VentriPoint Reorganization"), VentriPoint will have outstanding no more than an aggregate of 13,832,971 VentriPoint Shares and no more than 2,315,519 VentriPoint Existing Options.

Proposed Equity and Debt Financings

The parties have agreed to use their commercially reasonable efforts to cause Luca to complete an equity private placement ("Equity Private Placement") of up to 11,500,000 subscription receipts (the "Subscription Receipts") at a price of $0.35 per receipt for gross proceeds of up to $4,025,000 as opposed to VentriPoint completing the private placement. Each Subscription Receipt will be exchangeable for units of Luca (the "Units") immediately prior to the closing of the Business Combination and the gross proceeds of the Equity Private Placement will be held in escrow until the closing of the Business Combination. Each Unit will consist of one common share of Luca (the "Luca Common Shares") and one half of one warrant (the "Equity Warrants"). Each whole Equity Warrant shall have an exercise price of $0.50 per share and will have a term of eighteen (18) months from the time the Subscription Receipts are exchangeable for Units. The parties have agreed it is a condition of completion of the Business Combination that the Equity Private Placement shall be completed for a minimum of $3,000,000.

Blackmont Capital Inc. has been engaged to act as agent (the "Agents") on a "commercially reasonable efforts" basis for the Equity Private Placement and in connection therewith will be paid a cash commission. In addition, the Agent and its sub agents, if any, will be granted agent's options (the "Equity Agent's Options") to purchase 10% of the number of Units issued on exchange of the Subscription Receipts sold under the Equity Private Placement, with each Equity Agent's Option entitling the Agent to purchase one Unit at a price of $0.35 per Unit for a period of 18 months from the date the Subscription Receipts are exchanged for Units.

The Subscription Receipts will be created and issued pursuant to the terms of a subscription receipt agreement (the "Subscription Receipt Agreement") to be entered into among Luca, the Agent and an escrow agent (the "Escrow Agent"). The Subscription Receipt Agreement will provide that upon closing of the sale of the Subscription Receipts all proceeds from the sale of the Subscription Receipts (the "Escrowed Funds") will be deposited with the Escrow Agent pursuant to the terms of the Subscription Receipt Agreement. The Escrowed Funds will only be released to Luca upon receipt, on or prior to September 30, 2007, by the Escrow Agent of a notice (the "Closing Notice") from Luca, and acknowledged by the Agent, confirming that the Transaction has been completed. The Subscription Receipt Agreement will also provide that if the Transaction has not been completed by 5:00 p.m. (Calgary time) on the day that is 120 days after the closing date of the issuance of the Subscription Receipts, Luca shall issue each Subscriber an additional 0.1 of a Subscription Receipt for each Subscription Receipt held.

The parties intend to use their commercially reasonable efforts to cause VentriPoint to complete the previously announced private placement (the "Debenture Private Placement") of up to $400,000 principal amount of convertible debentures of VentriPoint (the "Convertible Debentures"). The Convertible Debentures will be secured against the assets of VentriPoint, will bear interest at a rate of 5% per annum, will automatically mature one year from the date of issuance, and, if the Business Combination is completed, the Convertible Debentures will be automatically converted (both principal and interest) into VentriPoint Shares and share purchase warrants of VentriPoint (the "Debenture Warrants") immediately prior to the closing of the Business Combination.

About the Business Combination

Luca and VentriPoint have agreed to complete the Business Combination pursuant to a share exchange and to change the name of Luca to VentriPoint Diagnostics Ltd. Pursuant to the terms of the Business Combination each holder of VentriPoint Shares shall receive one Luca Common Shares with a deemed value of $0.35 per share for each VentriPoint Share held. Each holder of VentriPoint Existing Options or Debenture Warrants as described herein will receive the same number of options or warrants to purchase Luca Common Shares with identical terms and conditions. The holders of Luca Common Shares and stock options and agent's options shall continue to hold their securities of Luca.

About the Resulting Issuer

A description of the business of VentriPoint, which will be the business of Luca after completion of the Business Combination, as well as other details concerning the Resulting Issuer, were previously announced in Luca's press release dated April 10, 2007.

The completion of the Business Combination is subject to the approval of TSX Venture and all other necessary regulatory approval. The completion of the Business Combination is also subject to additional conditions precedent, including: (i) shareholder approval of Luca and VentriPoint for the Business Combination; (ii) completion of the VentriPoint Reorganization; (iii) satisfactory completion of due diligence reviews by the parties; (iv) receipt of board of directors approval of each of Luca and VentriPoint; (v) entering into of a formal share purchase agreements in connection with the Business Combination; (vi) entering into of employment agreements between VentriPoint and each of Joseph Ashley and Dr. Florence Sheehan (in a manner that will permit her to also retain her position at the University of Washington); (vii) completion of the Equity Private Placement for minimum gross proceeds of $3 million; and (viii) certain other conditions.

Trading in the Luca Common Shares will remain halted until such time as TSX Venture has received a sponsorship acknowledgement form from Blackmont Capital Inc., or has provided an exemption from sponsorship, as well as certain other required documentation.

As indicated above, completion of the Business Combination is subject to a number of conditions, including but not limited to, TSX Venture acceptance and shareholder approval. The Business Combination cannot close until the required shareholder approval is obtained. There can be no assurance that the Business Combination will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Information Circular to be prepared in connection with the Business Combination, any information released or received with respect to the Business Combination may not be accurate or complete and should not be relied upon. Trading in the securities of Luca should be considered highly speculative.

The securities described in this press release have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

This news release contains certain forward-looking statements, including statements regarding the VentriPoint Reorganization, the Debenture Private Placement, the Equity Private Placement and the Business Combination, in addition to statements regarding future business plans of VentriPoint, Luca and the Resulting Issuer, that involve substantial known and unknown risks and uncertainties, certain of which are beyond Luca's control. Such risks and uncertainties include, without limitation, risks associated with research and development, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada and the United States, changes in laws and regulations, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof. Actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that Luca will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to Luca or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Luca does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Business Combination and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Luca Capital Inc.
    Danny Dalla-Longa
    President
    (403) 215-2428
    or
    VentriPoint, Inc.
    Joseph Ashley
    President and Chief Executive Officer
    (206) 283-0221