Ventripoint Diagnostics Ltd.

Ventripoint Diagnostics Ltd.

March 04, 2015 08:12 ET

Ventripoint Corporate Update and Announcement of Private Placement of Convertible Debentures

SEATTLE, WASHINGTON--(Marketwired - March 4, 2015) -


Ventripoint Diagnostics Ltd. ('Ventripoint' or the 'Company') (TSX VENTURE:VPT), a company focused on heart analysis using ultrasound and knowledge-based reconstruction, provides a corporate update and announces its intention to issue up to $200,000 of 12% unsecured convertible debentures.

Sales and Marketing

The Company continues to meet with an enthusiastic reception in presenting its VMS™ heart analysis system to major teaching hospitals in the United States. So far this year, of the five institutions that had outstanding product quotes for more than 9 months at the end of 2014, two have converted to closed and installed sales, with an additional site approved for payment, which is currently being processed, and one hospital has received approval for the required funding for a previously installed unit. The remaining institution was granted purchase approval from its Medical Board, however, the budgetary committee has pushed the funding into the next cycle.

Efforts are ongoing to further our success in the U.S. We have and will continue to pursue those institutions within the United States that have demonstrated the greatest interest in the need for our product. We have presented our product to large groups within each of the leading institutions since September, 2014. It is encouraging that we have received such a positive response to what the VMS has to offer within a general appreciation for the need for right heart analysis. Of the near 20 institutions that have hosted our discussions, all but one center has expressed the desire to acquire the product and have been given quotes to start the approvals process.

"The sales process in our industry historically has been 9 months on average and we are now seeing that stretched to 12 months. The key is getting a majority of the cardiology team at any given institution to fully understand the benefits of the VMS product, which will result in greater success in gaining funding for the purchase of our product. This will have a direct and positive impact on the rate of sales," stated Jim Bodtke, Vice President Clinical Affairs and Development.

The immediate focus is attendance at the American College of Cardiology Scientific Sessions, taking place March 14-16th, 2015, in San Diego, CA. We will be present in order to meet with key potential customers who have asked for our time to engage in further discussions with regard to our product. The event offers us an excellent opportunity to communicate directly with those customers currently interested in purchasing a VMS system.

"The conference also allows us the occasion to discuss various opportunities with global leaders, in terms of OEMs, and how we might be able to work in direct collaboration with them," stated Mr. Bodtke.

Distribution in China

Previously, the Company announced a distribution agreement with Shandong Realcan Pharmaceuticals Co. Ltd ("Realcan"), a regional distributor in Shandong Province, that would allow a strategic investment into the Company of up to CDN$4,000,000. The Company has now been informed by Realcan that they are not ready to move forward with the distribution agreement and investment at this time. In order to enter the market more quickly and more broadly throughout China, Ventripoint has begun discussions with a major distributor with a national distribution network for medical devices in China. The new distributor has been to Shandong Provincial Hospital to see the VMS in use on patients, has spoken to the cardiologists, has conducted a market study that verified the market opportunity, and has now indicated an interest in entering into negotiations for the master distributorship for all of China and its territories.

Re-admission Clinical Study

Re-admissions are estimated to cost the US heathcare system $17B annually. The US Centers for Medicare and Medicaid Services (CMS) recently announced an additional 600 medical centers did not reach the target re-admission rate of 19.4% in the second year of the re-admissions reduction program, FY2014. This brings the total to over 2,600 hospitals or two-thirds of all hospitals and it is estimated that they will pay from $400-$500M in penalties, based upon the FY2014 penalty rate of 2% The penalty rate for the current year is 3%.

A clinical study examining the potential impact of the VMS on re-admission rates is ongoing at Montefiore Hospital in New York City and has reached the interim analysis point of 50 patients. The study continues to recruit patients. All 50 initial cases have been contacted and their 30-day re-admission history recorded. The Company is waiting to review the right-heart reconstructions before conducting the interim analysis to look for a correlation between right heart function and re-admission events. It is anticipated more cases will be required to meet statistical significance, but a trend in the data would be encouraging.

Private Placement

The Company is also announcing it intends to complete a non-brokered private placement of up to CDN$200,000 (the "Offering") of unsecured convertible debentures (the "Debentures"). The Debentures will have a maturity date of one year from the date of issuance, and may be converted by the holder at any time following the issuance of the Debentures to common shares of the Company at a price of $.06 per common share. The Debentures shall bear a 12% annual simple interest calculated on the principal amount, payable monthly in arrears in cash.

Depending on market conditions, the Company reserves the right to increase the maximum gross proceeds under the Offering, subject to approval of the TSX Venture Exchange.

Insiders of the Company intend to subscribe for a portion of the Debenture Offering.

The net proceeds, after deducting the expenses of the Offering, will be used to incur expenditures for: (i) continuing product and service commercialization of the VMS; and (ii) general working capital purposes and potentially to repay debt and outstanding payables.

The Offering is subject to the approval of the TSX Venture Exchange. The securities will be subject to a four-month hold period, in accordance with applicable securities laws.

Investor Relations

As previously announced on December 3, 2014, the Company entered into a contract with Transcend Resource Group (Transcend Capital Inc. ('TCI'), doing business as Transcend Resource Group) to assist with an investor communications program and to introduce the Company to relevant industry groups in North America and Europe. The term of the contract is from December 1, 2014 to February 28, 2015, and compensation includes a fee of $22,500 payable upfront and (as previously announced) and 375,000 stock options exercisable at $0.06 per common share for a term of 3 years. TCI has no other interest or other relationship with Ventripoint.

Transcend Capital Inc.

Transcend Capital Inc. is a Vancouver-based full-service investor relations company, owned by its President, Etienne Moshevich, which assists micro, small and mid-cap public companies with market awareness campaigns and helps them gain valued industry exposure through their large network of retail and institutional clients.

About Ventripoint Diagnostics Ltd.

Ventripoint has created tools to monitor patients with heart disease, a leading cause of death in developed countries. VMS is the first cost-effective and accurate tool for measuring right ventricle heart function. The Company has a suite of applications for all major heart diseases and imaging modalities including congenital heart disease, left or right heart failure and normal hearts - a multi-billion dollar market potential.

Neither 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

FORWARD-LOOKING STATEMENTS: The statements made in this news release that are not historical facts may contain forward-looking information that involves risk and uncertainties. All statements, other than statements of historical facts, which address Ventripoint's expectations, should be considered forward-looking statements. Such statements are based on management's exercise of business judgment as well as assumptions made by and information currently available to management. When used in this document, the words "may", "will", "anticipate", "believe", "estimate", "expect", "intend" and words of similar import, are intended to identify any forward-looking statements. You should not place undue reliance on these forward-looking statements. These statements reflect a current view of future events and are subject to certain risks and uncertainties as contained in the Corporation's filings with Canadian securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results could differ materially from those anticipated in these forward-looking statements. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in Ventripoint's disclosure documents on the SEDAR website at The Corporation undertakes no obligation, and does not intend, to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events. Although management believes that expectations are based on reasonable assumptions, no assurance can be given that these expectations will materialize.

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