TORONTO, ONTARIO--(Marketwired - Sept. 23, 2016) -
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Ventripoint Diagnostics Ltd. ("Ventripoint" or the "Company") (TSX VENTURE:VPT) announces an update on its strategy to develop, manufacture and distribute a family of Ventripoint's knowledge-based reconstruction ("KBR") products in the People's Republic of China. As previously announced in the Company's news release of November 3, 2015, the Company entered into an investment, distribution and management agreement (the "Agreement") pursuant to which Shanghai YuTian Medical Investment Management Co. Ltd ("Shanghai YuTian") would, among other milestones, establish a joint venture in China in order to develop, manufacture and distribute KBR products in China.
Shanghai YuTian reports that the joint venture has been formed and is called Ma'anshan YuTian Medical Technology Co. Ltd ("YuTian Technology"). YuTian Technology is situated in the city of Ma'anshan in Anhui Province. Shanghai YuTian is the largest shareholder in YuTian Technology and the investors include Anhui Province Hi-Tech Venture Capital Investment Co. Ltd. and Ma'anshan Economic and Development Zone Venture Capital Investment Co. Ltd. The first investments are complete and YuTian Technology is fully capitalized to meet its goals of product manufacturing, product development, certification, sales and marketing and the achievement of profitability within the next two years.
The formation and adequate capitalization of YuTian Technology is a significant milestone in the Agreement. Ventripoint is awaiting final documentation to verify this milestone has been achieved, prior to completing the next steps of the Agreement, which include the previously-announced subsequent investments, and shipping components to China to begin fabrication of Ventripoint Medical System ("VMS") units at YuTian Technology's new manufacturing facility in Ma'anshan.
"I am very excited about this well-funded JV with major support from the Chinese government venture funds and look forward to updating our shareholders with the progress over the coming quarters," stated Dr. George Adams, CEO of Ventripoint. "With this milestone achieved, we are looking at what should be an exciting year for the Company."
Ventripoint has received from YuTian Technology the first order for components to manufacture VMS units in China. The components are being collected and will be shipped to the new manufacturing facility in China. It is expected that the first VMS units will be built in this factory by the end of the year. This new facility in Ma'anshan will be ISO and FDA-GMP certified as soon as possible. CE Mark is sufficient to allow sales in Hong Kong and other areas in Asia before Chinese FDA approval is secured.
Pursuant to the Agreement, YuTian Technology and Shanghai YuTian would be responsible for distribution of the KBR products in China, while Ventripoint would be responsible for marketing the devices made in China by YuTian Technology in other parts of the world.
Corporate Development Update
The Company has completed the integration of the 4-Chamber VMS cardiac analytics package into the new VMS-PLUS hardware and has successfully installed the complete system coupled to the newest type of high-resolution digital 2D ultrasound equipment in a major hospital in Canada. Initial studies on healthy subjects have shown that this whole-heart analysis system can reconstruct all the chambers of the heart using standard 2D ultrasound "views".
"This marks another major milestone for the Company, which has developed the first system to measure functional and volumetric aspects of all 4 chambers of the heart using conventional 2D echocardiography," stated Dr. Adams. "With this development, and the formation of the JV in China, we are now in a position to begin to place our VMS units in hospitals all across the globe and dramatically increase our current revenue base."
The Company has initiated detailed testing of the new catalogues in preparation for regulatory submissions in Europe, Canada and the United States.
The Company is also announcing that it intends to complete a non-brokered private placement (the "Private Placement") of up to 4,000,000 units ("Units") at $0.15 per Unit for total gross proceeds of up to $600,000. Each Unit will consist of one common share of Ventripoint ("Common Share") and one Common Share warrant ("Warrant"). Each Warrant will entitle the holder thereof to acquire one Common Share at a price of $0.30 per Common Share for a period of 2 years after the issuance of the Warrant, subject to accelerations in certain events. Two of the subscribers in the Private Placement have agreed to accept Units as payment in full of outstanding debentures previously issued by the Company, as a shares-for-debt transaction. As a result of the proposed shares for debt, the Company's net debt would be reduced by $38,000.
The Company will use the proceeds of the Private Placement for product development, sales and marketing and general working capital purposes.
The Common Shares and the Warrants acquired by the subscribers would be subject to a hold period of four months plus one day from the date of closing of the Private Placement except as permitted by applicable securities legislation and the rules of the TSX Venture Exchange ("TSXV"). The Private Placement is subject to approval by the TSXV.
Amendment of Debentures and Shares for Debt
The Company also announces that, further to the Company's news release dated August 22, 2016, the Company has received TSXV approval for the previously-announced amendment of debentures (the "Debentures") and issuance of 1,519,998 Common Share warrants ("Warrants") to the Debenture holders. Each Warrant will entitle the holder thereof to acquire one Common Share at a price of $0.15 per Common Share for a period of 2 years with an expiry date of August 21, 2018. The Company also announces that it has issued 214,225 Common Shares at a deemed price of $0.149 per Common Share to holders of the Debentures, as payment in full of $31,920 interest owing under the Debentures as a shares-for-debt transaction (the "Shares for Debt").
Pursuant to the amendment of the Debentures, Dr. George Adams, the President and CEO of the Company, received a total of 666,666 Warrants as consideration for agreeing to extend the maturity date of his Debenture. Pursuant to the Shares for Debt, Dr. Adams received a total of 80,536 Common Shares in payment of interest owing under the terms of his Debenture. The Company has determined that exemptions from the various requirements of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions are available for the amendment of the Debenture and issuance of shares to Dr. Adams (Formal Valuation - Issuer Not Listed on Specified Markets; Minority Approval - Fair Market Value Not More Than 25% of Market Capitalization).
Forward Looking Statements:
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. The forward-looking statements and information are based on certain key expectations and assumptions made by the Company. Although the Company believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because the Company can give no assurance that they will prove to be correct.
Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Such factors may include failure to satisfy certain conditions in connection with the issuance of the Units and failure to consummate the transactions contemplated by the Agreement. Other factors which could materially affect such forward-looking information are described in the risk factors in the Company's most recent annual management's discussion and analysis that is available on the Company's profile on SEDAR at www.sedar.com. Readers are cautioned that the foregoing list of factors is not exhaustive. The forward-looking statements included in this news release are expressly qualified by this cautionary statement. The forward-looking statements and information contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.