NVH Novoheart Holdings Inc

Novoheart Holdings Inc. (“Novoheart” or the “Company”) (TSXV: NVH) announces that it has entered into a definitive arrangement agreement (the “Arrangement Agreement”) with Novomed Limited (the “Purchaser”), a company controlled by Prof. Ronald Li, CEO and a director of the Company, pursuant to which the Purchaser will acquire all of the issued and outstanding common shares of Novoheart (“Novoheart Shares”), other than those Novoheart Shares currently owned by certain shareholders who have entered into rollover, voting and support agreements (the “Rollover Agreements”) with the Purchaser (the “Rollover Shareholders”), for cash consideration of C$0.53 per Novoheart Share (the “Transaction”) by way of a statutory plan of arrangement under the Business Corporations Act (British Columbia) (the “Arrangement”). The cash consideration price represents a 47.2% premium to the closing price of the Novoheart Shares on the TSX Venture Exchange (“TSXV”) on September 15, 2020.

As contemplated in the Arrangement Agreement, prior to the completion of the Arrangement, Prof. Ronald Li and the Rollover Shareholders have agreed to transfer certain Novoheart Shares they own to the Purchaser in exchange for shares of the Purchaser, pursuant to the Rollover Agreements entered into with the Purchaser. Prof. Ronald Li currently owns or controls a total of 77,177,600 Novoheart Shares, representing in aggregate approximately 40.91% of the currently issued and outstanding Novoheart Shares. The Rollover Shareholders (including the 77,177,600 Novoheart Shares owned or controlled by Prof. Ronald Li), as group, own or control a total of 164,868,038 Novoheart Shares, representing in aggregate approximately 87.40% of the currently issued and outstanding Novoheart Shares.

The board of directors of Novoheart (the “Board”) formed a committee of independent directors (the “Special Committee”) to, among other things, review and evaluate the terms of the proposed Transaction and consider potential alternatives to enhance shareholder value, and to make a recommendation to the Board in respect of the Transaction and other related matters. KPMG LLP, the financial advisor to the Special Committee, has provided an oral fairness opinion (to be supplemented by a written report) (the “Fairness Opinion”) that in its opinion, and based upon and subject to certain assumptions and limitations, the consideration to be received by holders of Novoheart Shares (other than the Rollover Shareholders with respect to the Novoheart Shares) (the “Shareholders”) pursuant to the Transaction is fair, from a financial point of view, to such Shareholders.

Following a review and analysis of the Transaction and the consideration of other alternatives, the Fairness Opinion and the recommendations of the Special Committee, the Board, after consulting with its financial and legal advisors, unanimously determined that the consideration to be received by the Shareholders pursuant to the Transaction is fair to such Shareholders and that the Transaction is in the best interests of Novoheart. The Board has approved the terms of the Transaction and unanimously recommends that all Shareholders vote in favour of the Transaction at the special Shareholders’ meeting to be called to consider the Transaction (the “Special Meeting”).

In connection with the Arrangement Agreement, the Rollover Shareholders (which includes certain directors and officers of the Company), who in the aggregate own 164,868,038 Novoheart Shares representing 87.40% of the issued and outstanding Novoheart Shares, based on 188,640,774 Novoheart Shares outstanding, have entered into customary voting agreements to vote in favour of the Arrangement through their Rollover Agreements.

The Arrangement and Approvals

Pursuant to the Arrangement, each Shareholder will receive cash consideration of $0.53 (the “Consideration”) for each Novoheart Share held. All currently outstanding stock options to purchase Novoheart Shares (“Options”) will be deemed to be unconditionally vested and exercisable and be deemed to be assigned, transferred and disposed of to the Company in exchange for a cash payment from the Company equal to the amount (if any) by which the Consideration exceeds the exercise price per Novoheart Share issuable pursuant to the Options. The Options shall subsequently be immediately cancelled pursuant to the Arrangement.

The Transaction contains customary deal protection provisions which, among other matters, restrict Novoheart from soliciting, assisting, initiating, knowingly encouraging or facilitating any inquiry, proposal, or offer concerning alternative acquisition proposals. However, the Transaction permits Novoheart to respond to unsolicited written acquisition proposals under certain circumstances which include where such acquisition proposal constitutes or could reasonably constitute or lead to a “superior proposal” (as defined in the Arrangement Agreement). The Purchaser has the right to match any competing proposal for Novoheart in the event a superior proposal is made. No termination fee is payable by Novoheart should the Purchaser elect not to match such competing proposal and Novoheart elect to pursue such proposal

The Transaction is subject to customary approvals, including, but not limited to, the approval of at least 66⅔% of the votes cast in person or by proxy at the Special Meeting, and the approval of a “majority of the minority” of the Shareholders being a majority of the votes cast in person or by proxy at the Special Meeting excluding shareholders whose votes may not be included in determining if minority approval is obtained pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Special Meeting is expected to be held on or before November 20, 2020.

Closing of the Transaction is also subject to the satisfaction of a number of conditions customary for transactions of this nature, including the receipt of certain regulatory, court and stock exchange approvals.

Further information regarding the Arrangement will be contained in the information circular that Novoheart will prepare, file and send to each Shareholder in connection with the Special Meeting.

Following closing of the Transaction, the Company will apply to have the Novoheart Shares de-listed from the TSXV.

A copy of the Arrangement Agreement will be filed on Novoheart’s SEDAR profile and will be available for viewing at www.sedar.com.

Advisors

Blake, Cassels & Graydon LLP is acting as legal counsel to Novoheart. Farris LLP is acting as legal counsel to the Special Committee. Borden Ladner Gervais LLP is acting as legal counsel to the Purchaser.

About Novoheart Holdings Inc.

Novoheart is a global stem cell biotechnology company that pioneers an array of next-generation human heart tissue prototypes. It is the first company in the world to have engineered miniature living human heart pumps that can revolutionize drug discovery, helping to save time and money for developing new therapeutics. Also known as 'human heart-in-a-jar', Novoheart’s bio-artificial human heart constructs are created using state-of-the-art and proprietary stem cell and bioengineering approaches and are utilized by drug developers for accurate preclinical testing as to the effectiveness and safety of new drugs, maximizing the successes in drug discovery while minimizing costs and harm caused to patients. With the acquisition of Xellera Therapeutics Limited for manufacturing Good Manufacturing Product (GMP)-grade clinical materials, Novoheart is now developing gene- and cell-based therapies as well as other next-generation therapeutics for cardiac repair or regeneration.

Common shares of Novoheart are traded on the TSXV under the symbol “NVH”.

Additional Information and Where to Find It

In connection with the Transaction, Novoheart will file a proxy statement and information circular with the securities commissions in Canada. Shareholders are advised to read the proxy statement and information circular when they are available because they will contain important information. Shareholders will be able to obtain free copies of the proxy statement and information circular when available and other relevant documents from SEDAR at www.sedar.com, or from the Company’s website at www.novoheart.com.

For further information, please contact:

Novoheart Holdings Inc.: Novoheart Holdings Inc. Suite 2600, 595 Burrard Street Vancouver, British Columbia V7X 1L3

Ronald Li Chief Executive Officer

(604) 398-3170 info@novoheart.com

Forward-Looking Statements

Information set forth in this news release may involve forward-looking statements under applicable securities laws. Forward-looking statements are statements that relate to future, not past, events. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar expressions. Examples of forward-looking statements in this press release include statements regarding the Transaction, the ability of the Company to consummate the Arrangement on the terms of the Arrangement Agreement, de-listing from the TSXV, the anticipated timing for holding the Special Meeting and the receipt of necessary approvals including court, shareholder, stock exchange, regulatory and other third party approvals. These statements are only predictions based on the Company’s current expectations and projections about future events. Although the Company believes the expectations reflected in such forward-looking statements, and the assumptions upon which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Such assumptions include assumptions as to the time required to prepare and mail shareholder meeting materials, including the management proxy circular of the Company, the ability of the parties to receive, in a timely manner, the necessary shareholder, court, stock exchange and regulatory approvals and the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Transaction. Although we believe the expectations reflected in such forward-looking statements, and the assumptions upon which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct and if such expectations are not met, our business may suffer.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the risk that the conditions to completion of the Arrangement will not be satisfied, including approval by Shareholders, court approval, an event, change or other circumstance that could give rise to the termination of the Arrangement Agreement will occur, the retention of employees and other personnel will be adversely affected by uncertainty surrounding the Arrangement and the risks identified in the Company’s annual information form for the year ended December 31, 2019 or other reports and filings with the TSXV and applicable Canadian securities regulators. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the respective companies undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue certainty to forward-looking statements.