Ovid Capital Ventures Inc.
TSX VENTURE : OCA.P

December 03, 2014 12:17 ET

Ovid Capital Ventures Inc. Provides Update Regarding Its Qualifying Transaction

MONTREAL, QUEBEC--(Marketwired - Dec. 3, 2014) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR RELEASE PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES.

Ovid Capital Ventures Inc. (TSX VENTURE:OCA.P) ("Ovid" or the "Company"), a capital pool company listed on the TSX Venture Exchange (the "TSXV"), is pleased to provide an update regarding its proposed Qualifying Transaction (as defined under Exchange Policy 2.4 - Capital Pool Companies) with iTech Medical, Inc. ("iTech").

As previously disclosed, on November 8, 2013, the Company signed a definitive merger agreement (the "Definitive Agreement") with iTech, which outlined the general terms and conditions pursuant to which the Company and iTech would be willing to complete a transaction that will result in a reverse take-over of the Company by the shareholders of iTech (the "iTech Transaction"). The iTech Transaction was subject to requisite regulatory approval, including the approval of the TSXV, standard closing conditions, the approval of the directors of each of the Company and iTech of the Definitive Agreement, completion of due diligence investigations to the satisfaction of each of the Company and iTech, as well as the completion of a concurrent equity financing for minimum gross proceeds to the Company of $2,550,000 (the "Minimum Financing Condition"). Unfortunately, and despite obtaining requisite regulatory and corporate approvals, the iTech Transaction has been terminated due to the Minimum Financing Condition not being met.

New Qualifying Transaction with BIOflex Medical Magnetics, Inc.

On November 30, 2014, the Company signed a letter of intent with BIOflex Medical Magnetics, Inc. ("BIOflex") and iTech, as the sole shareholder of BIOflex, with respect to an acquisition by the Company of all of the assets of BIOflex (the "BIOflex Transaction").

The BIOflex Transaction is subject to requisite regulatory approval, including the approval of the TSXV and standard closing conditions, the approval of the directors of each of the Company, BIOflex and iTech of a definitive Asset Purchase Agreement and completion of due diligence investigations to the satisfaction of each of the Company and BIOflex, as well as the conditions described below. The legal structure for the Transaction will be confirmed after the parties have considered all applicable tax, securities law and accounting efficiencies, however, it is currently contemplated that the transaction will be structured as an asset acquisition.

Trading in the common shares of Ovid is halted at present. It is unlikely that the common shares of Ovid will resume trading until the BIOflex Transaction is completed and approved by the TSXV.

Conditions to BIOflex Transaction

Prior to completion of the BIOflex Transaction (and as conditions of closing):

  • The parties will prepare a filing statement in accordance with the rules of the TSXV, outlining the terms of the Transaction.

  • BIOflex, iTech and the Company will enter into an Asset Purchase Agreement.

  • BIOflex will obtain the requisite shareholder approvals for the BIOflex Transaction and any ancillary matters contemplated in the Asset Purchase Agreement.

  • All requisite regulatory approvals relating to the BIOflex Transaction, including, without limitation, TSXV approval, will have been obtained.

  • The Company will close a concurrent financing (described below) for minimum gross proceeds of $1,000,000.

The Proposed BIOflex Transaction

As of the date hereof, the Company has 10,898,000 common shares ("Ovid Shares") issued and outstanding, and securities exercisable or exchangeable for, or convertible into, or other rights to acquire, an aggregate of 1,451,600 Ovid Shares at an exercise price of $0.10 per Ovid Share.

The Company proposes to acquire all of the assets (the "Purchased Assets") of BIOflex for a total consideration of $3,075,000, payable on the closing date as follows: (i) $100,000 by certified cheque or wire transfer; and (ii) 17,000,000 Ovid Shares, at an issue price of $0.175, having a deemed value of $2,975,000.

The Company will not assume any of the liabilities or obligations of BIOflex of any nature or kind whatsoever, contingent or otherwise, other than the amount of $50,000 payable to one person in 20 equal monthly instalments as of February 1, 2016 relating to certain intellectual property comprised in the Purchased Assets.

It is expected that the Resulting Issuer will be classified as a Tier 2 Life Sciences Issuer.

Concurrent Private Placement

The Company will arrange a private placement (the "Private Placement") of securities of the Company that will close concurrently with, and as a condition of, the BIOflex Transaction. Pursuant to the Private Placement, the Company intends to issue a minimum of 5,714,285 units (the "Units") at price of $0.175 per Unit for minimum gross proceeds to the Company of $1,000,000 and a maximum of 8,571,428 Units at the same price for maximum gross proceeds to the Company of $1,500,000. Each Unit will consist of one common share and one common share purchase warrant. Each warrant will entitle the holder to acquire one additional common share at an exercise price of $0.25 per share for a period of two years from the completion of the BIOflex Transaction.

Next Steps and Proposed Board of Directors and Officers

BIOflex and Ovid are working to negotiate the definitive Asset Purchase Agreement, complete the audited financial statements of BIOflex and prepare a new filing statement in respect of the BIOflex Transaction that will be filed with the regulatory authorities, including the TSXV as promptly as practicable. Updated financial information regarding BIOflex will be released in a subsequent press release.

Upon completion of the BIOflex Transaction, it is anticipated that the board of directors of the Resulting Issuer shall be comprised of: Wayne D. Cockburn, Michael Newman and Kosta Kostic. In addition, it is expected that the officers of the Resulting Issuer shall be Wayne D. Cockburn as Chief Executive Officer, Charlie Zablotsky as President, and Bryan Knebel as Chief Financial Officer. The backgrounds of the proposed directors and officers were previously disclosed. Mr. Kostic is an existing director of Ovid.

Further Information

All information contained in this news release with respect to Ovid and iTech was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and, if applicable, pursuant to the requirements of the Exchange, majority of the minority shareholder approval. Where applicable, 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 or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the 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 TSX Venture Exchange Inc. 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 THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the proposed BIOflex Transaction; the terms and conditions of the proposed Private Placement; use of funds; and the business and operations of the Resulting Issuer after the proposed BIOflex Transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; and the ability of the Resulting Issuer to execute and achieve its business objectives. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Ovid, BIOflex and iTech disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contact Information

  • Ovid Capital Ventures Inc.
    Edward Ierfino
    President and Chief Executive Officer
    (514) 562-1374