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MONTREAL, March 17, 2022 /CNW/ - Bold Capital Enterprises
Ltd. ("Bold") (TSXV: BOLD.P) is pleased to
announce details concerning a proposed arm's-length acquisition
(the "Transaction") of SinuSafe Medical Ltd.
("SinuSafe"), a corporation formed under the laws of
Israel.
Overview of Bold
Bold is a "capital pool company" under the policies of the TSX
Venture Exchange (the "Exchange") and it is intended that
the Transaction will constitute the "Qualifying Transaction" of
Bold, as such term is defined in Exchange Policy 2.4 – Capital
Pool Companies. The common shares of Bold (the "Bold Common
Shares") are currently listed on the Exchange and Bold is a
reporting issuer in the provinces of British Columbia, Alberta, Ontario and Québec. Bold was incorporated
under the Canadian Business Corporations Act on
May 16, 2018.
Overview of SinuSafe Medical
SinuSafe Medical is a privately-held Israeli corporation
incorporated in 2014. SinuSafe develops, manufactures, and sells
minimal invasive medical devices for otolaryngologists ("ENT
physicians") to facilitate earlier surgical interventions for
Sinusitis patients. Chronic Sinusitis is a debilitating disease
that causes significant physical and emotional pain. Its US burden
is estimated at $30-60B.1 Most chronic patients take
ineffective medications and delay surgical intervention for years
as sinus surgeries are associated with risks. However, delayed
interventions are associated with disease deterioration,
irreversible mucosal remodeling, development of comorbidities like
Asthma, worsened surgical results, and higher costs. SinuSafe
device enables ENT physicians to perform earlier, office-based
interventions without applying force or changing the patient's
anatomy. The device enables irrigation, sampling, and medications
application through the natural sinuses' openings. It uses a 1 mm
flexible composite cannula and a flexible 0.3 mm composite
super-elastic nitinol wire that cleans the sinuses and enables
medications activity. As the intervention does not require
drilling, cutting, or crushing the patients' delicate bones, it
aims to facilitate more and earlier interventions in appropriate
patients.
SinuSafe has ISO 13485 certified manufacturing facilities in
Israel. Its device is listed or
approved by the U.S. Food and Drug Administration, CE, and AMAR
authorities, allowing SinuSafe to sell it in the United States, in Europe, and Israel. Patents and patent applications
protect SinuSafe's technology.
Summary of the Proposed Transaction
Bold has entered into a binding letter of intent with SinuSafe
dated March 17, 2022 (the
"LOI") pursuant to which Bold and SinuSafe intend to
complete the Transaction, and whereby Bold (the "Resulting
Issuer") will hold all of the issued and outstanding shares in
the share capital of SinuSafe.
It is currently anticipated that the Transaction will be
structured as a share exchange, however the final structure of the
Transaction is subject to receipt of tax, corporate and securities
law advice for both Bold and SinuSafe, as well as the receipt of a
tax ruling from the Israeli tax authorities for the Transaction.
The LOI is expected to be superseded by a definitive share exchange
agreement (the "Definitive Agreement") to be signed between
the parties.
The LOI contemplates that Bold, SinuSafe and the shareholders of
SinuSafe will complete a securities exchange, resulting in the
issuance to the shareholders of SinuSafe of approximately
134,000,000 common shares of the Resulting Issuer, at a price of
$0.20, and valuing SinuSafe at
$26.8 million. Upon completion of the
Transaction and the Private Placement (as defined below), the
shareholders of SinuSafe will hold approximately 60% of the issued
and outstanding common shares of the Resulting Issuer on a
non-diluted basis.
In addition, up to an additional 84,000,000 common shares of the
Resulting Issuer, at a price of $0.20, may be issued to the shareholders of
SinuSafe upon the Resulting Issuer achieving four performance
milestones (the "Milestone Shares"). An aggregate of
21,000,000 Milestone Shares will be issued to the SinuSafe
shareholders, on a pro rata basis, for each milestone to be
determined in the Definitive Agreement.
Upon completion of the Transaction, and giving effect to the
minimum Private Placement described below, the Resulting Issuer is
expected to have 220,627,000 common shares outstanding (undiluted).
Assuming the issuance of all Milestone Shares, the Resulting Issuer
will have 304,627,000 common shares outstanding (undiluted).
If the maximum Private Placement is completed, then the Resulting
Issuer is expected to have 233,127,000 common shares outstanding
(undiluted), which would increase to 317,127,000 common shares
outstanding (undiluted) if all of the Milestone Shares are
issued.
Certain of the Resulting Issuer shares issued to the principals
of SinuSafe who will become management of the Resulting Issuer,
will be subject to escrow in accordance with Exchange policies. A
finder's fee of up to 6,862,500 finder's shares, at a price of
$0.20, is expected to be payable to
certain arm's length third parties in connection with the
Transaction. The finder's fee will be paid to such arm's length
parties for their role in introducing the parties and facilitating
completion of the Transaction. The payment of any finder's fees is
subject to prior approval by the Exchange.
Bold shareholder approval is not required with respect to the
proposed Transaction because the Transaction does not constitute a
"Non-Arm's Length Qualifying Transaction" pursuant to the policies
of the Exchange. However, the structure of the Transaction is being
finalized and, based on the final structure as reflected in the
Definitive Agreement, shareholder approval may be required
under applicable corporate law. Trading in the Bold Common
Shares has been halted and is not expected to resume until the
Transaction is completed or until the Exchange receives the
requisite documentation to resume trading.
It is expected that upon completion of the Transaction, the
Resulting Issuer, to be renamed SinuSafe (SNS), will be listed as a
Tier 2 Technology Issuer on the Exchange.
Completion of the Transaction will be subject to certain
conditions, including but not limited to: (a) completion of
due diligence by the parties; (b) completion of the minimum Private
Placement; (c) receipt of all necessary approvals of the boards of
directors of Bold and SinuSafe; (d) all required regulatory and
third party approvals, including but not limited to, a tax ruling
from the Israeli tax authority; (e) approval of the Transaction by
the Exchange as Bold's "Qualifying Transaction"; (f) the parties'
entry into a Definitive Agreement in furtherance to the LOI; and
(g) closing of the Transaction on or before July 31, 2022, unless
extended in writing by Bold and SinuSafe.
A more comprehensive news release will be issued by Bold in due
course disclosing details of the Transaction, including financial
information respecting SinuSafe, the names and backgrounds of all
persons who will constitute directors, officers and insiders of the
Resulting Issuer, the details of any meetings of the shareholders
of Bold and SinuSafe required to approve the Transaction and
matters related thereto (as applicable), and selected financial
information once the Definitive Agreement has been executed and
certain conditions have been met, including satisfactory completion
of due diligence.
Loan
Subject to the prior approval of the Exchange in accordance with
Policy 2.4 – Capital Pool Companies, Bold intends to lend
SinuSafe the greater of: (i) $250,000; and (ii) 20% of its working capital.
The loan will be secured against all the assets of SinuSafe, have a
term of 12 months, and be subject to an annual interest rate of 5%
payable at maturity. The term of the loan may be accelerated in the
event that the parties do not complete the proposed
Transaction.
Amendment to Bold's Stock Option
Concurrently with the closing of the Transaction, Bold intends
to amend its current stock option plan to accommodate a broader
equity based compensation plan which, subject to the approval of
the Exchange, is intended to reserve up to 10% of the Resulting
Issuer's share capital, on a post-Transaction basis, for grants or
awards to such eligible officers, directors, employees and advisors
to the Resulting Issuer as the board of directors may determine
from time to time. The amended plan is expected to be a
rolling plan 10%, but the final determination will be made by the
board of directors of the Resulting Issuer.
Board of Directors
Following completion of the Transaction, and subject to
requirements of the Exchange, the board of directors of the
Resulting Issuer on the closing of the Transaction is expected to
be five members comprised of four nominees of SinuSafe and one
nominee from the existing board of directors of Bold.
Summary of the Proposed Private Placement
Pursuant to the LOI, concurrent with the closing of the
Transaction, Bold intends to complete a non-brokered private
placement (the "Private Placement") of units of Bold (the
"Bold Units"), at a price of $0.20 per Bold Unit (the "Offering
Price"), for aggregate gross proceeds of a minimum of
$6,500,000 and a maximum of
$9,000,000. Each Bold Unit will be
comprised of one Bold Common Share and one common share purchase
warrant (a "Bold Warrant"). Each Bold Warrant is
exercisable for one Bold Common Share at a price of $0.25 for the first year and thereafter at a
price of $0.35 for the second year
following its issuance. It is currently anticipated that the
Private Placement will be non-brokered, however Bold may engage
registered dealers or finders to assist in identifying eligible
accredited investors and pay a commission in respect thereof.
Sponsorship
Sponsorship of a Qualifying Transaction is required by the
Exchange unless the Transaction qualifies for an exemption from the
sponsorship requirement. Bold intends to apply for a waiver from
the sponsorship requirement in connection with the Transaction and
will provide further details in due course.
Forward Looking Information
This press release contains statements that constitute
"forward-looking information" ("forward-looking
information") within the meaning of the applicable Canadian
securities legislation. All statements, other than statements of
historical fact, are forward-looking information and are based on
expectations, estimates and projections as at the date of this news
release. Any statement that discusses predictions, expectations,
beliefs, plans, projections, objectives, assumptions, future events
or performance (often but not always using phrases such as
"anticipate", "believe", "continue", "estimate", "expect",
"intend", "projected" or variations of such words and phrases or
stating that certain actions, events or results "may", "could",
"would", "might" or "will" be taken to occur or be achieved) are
not statements of historical fact and may be forward-looking
information.
More particularly and without limitation, this press release
contains forward-looking statements concerning the Transaction
(including the structure, terms and timing thereof), the continued
business of SinuSafe, the Definitive Agreement, the issuance of
additional news releases describing the Transaction, the name of
the Resulting Issuer, the trading of the Bold Common Shares on the
Exchange, holding of shareholder meetings in connection with
the Transaction, the completion of the Private Placement (including
the final terms and timing thereof) and the compensation of any
registrants in connection with the Private Placement. In disclosing
the forward-looking information contained in this press release,
Bold has made certain assumptions, including that: the Private
Placement will be launched and completed on acceptable terms; all
applicable shareholder and regulatory approvals for the Transaction
will be received; and that the Transaction will be completed on
mutually acceptable terms and within a customary timeframe for
transactions of this nature. Although Bold believes that the
expectations reflected in such forward-looking information are
reasonable, it can give no assurance that the expectations of any
forward-looking information will prove to be correct. Known and
unknown risks, uncertainties and other factors may cause the actual
results and future events to differ materially from those expressed
or implied by such forward-looking information. Such factors
include but are not limited to: availability of financing; delay or
failure to receive board, shareholder or regulatory approvals; and
general business, economic, competitive, political and social
uncertainties. There can be no certainty that the Transaction will
be completed on the terms set out in the LOI or at all.
Accordingly, readers should not place undue reliance on the
forward-looking information contained in this press release. Except
as required by law, Bold disclaims any intention and assumes no
obligation to update or revise any forward-looking information to
reflect actual results, whether as a result of new information,
future events, changes in assumptions, changes in factors affecting
such forward-looking information or otherwise.
Completion of the Transaction is subject to a number of
conditions, including but not limited to, execution of a binding
definitive agreement relating to the Transaction, and Exchange
acceptance and, if applicable pursuant to Exchange requirements,
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.
Bold Capital Enterprises Ltd.
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 news release.
The securities have not been and will not be registered
under the United States Securities Act of 1933, as amended and may
not be offered or sold in the United
States absent registration or an applicable exemption from
the registration requirement. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy
nor shall there be any sale of the securities in any jurisdiction
in which such offer, solicitation or sale would be
unlawful.
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1 See
Caulley, Lisa, et al. "Direct costs of adult chronic rhinosinusitis
by using 4 methods of estimation: results of the US Medical
Expenditure Panel Survey." Journal of Allergy and Clinical
Immunology 136.6 (2015): 1517-1522; and Rudmik, Luke.
"Economics of chronic rhinosinusitis." Current allergy and
asthma reports 17.4 (2017): 1-10.
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SOURCE Bold Capital Enterprises Ltd.