Ventripoint Announces Closing of First Tranche of Non-Brokered Secured Convertible Debenture Unit Private Placement and Exchange of Existing Debentures and Repricing and Extension of the Associated Wa

(TheNewswire)

Toronto, Ontario – TheNewswire - February 10, 2020 – Ventripoint Diagnostics Ltd. (“Ventripoint” or the “Corporation”), (TSXV:VPT) is pleased to announce that it has closed the first tranche of its previously announced non-brokered private placement of secured convertible debenture units for gross proceeds of $725,000 and the exchange of existing debentures and repricing and extension of the associated warrants.  The Corporation intends to complete the previously announced non-brokered private placement with total gross proceeds of up to CDN$1,220,000 (the “Offering”) of debenture units of the Corporation. Depending on market conditions, the Corporation reserves the right to increase the maximum gross proceeds under the Offering, subject to approval of the TSX Venture Exchange (the “Exchange”).

Non-Brokered Debenture Unit Private Placement

The Corporation has closed the first tranche of its non-brokered private placement of debenture units of the Corporation (“Units”) and issued 725 Units under the Offering. Each Unit is comprised of: (i) CDN$1,000 principal amount of convertible secured debentures (“Debentures”), which shall mature on February 9, 2022; and (ii) 12,000 common share purchase warrants (“Warrants”) with each Warrant exercisable for one common share of the Corporation (“Common Share”) at an exercise price of CDN$0.10 per Common Share until February 9, 2022. The Corporation issued 8,700,000 Warrants as part of the first tranche of the Offering.  The securities issued pursuant to the Offering are subject to a four month hold period that expires on June 9, 2020. The Warrants include an accelerated expiry clause such that the exercise period of the Warrants will be reduced to 30 days if for any ten consecutive trading days during the unexpired term of the Warrant (the "Premium Trading Days"), the closing price of the Company’s shares exceeds the exercise price of the Warrants by 25% (and for more certainty, the reduced exercise period of 30 days will begin no more than 7 calendar days after the tenth Premium Trading Day).

The Debentures are secured by the assets of the Corporation and bear simple interest at an annual rate of 6.5% for the first year and 10% in the second year, calculated on the principal amount, with any accrued but unpaid interest under the Debentures due and payable quarterly in either cash or Common Shares (at the option of the Corporation), with the number of Common Shares being determined by using the market price on the date of settlement. The Debentures may be converted by the holder at any time within the first year following the date of issuance at a price of CDN$0.075 per Common Share and thereafter at a price of $.10 per Common Share. The Debentures may be redeemed in whole or in part by the Corporation at any time following the date that is four months plus one day from the date of closing of the Offering, upon payment of the principal amount plus a premium of 2.5% of such principal amount and all accrued and unpaid interest.

Two insiders of the Corporation (consisting of two directors of the Corporation) subscribed for an aggregate of 300 Units (representing $300,000) under the Offering and had $150,000 of existing debenture units replaced with new debenture units. The Corporation’s partner in China, YuTian Medical Investment, subscribed for 150 Units (representing $150,000) under the Offering through its wholly-owned subsidiary Hefei KBR Hi-tech Co. Ltd.

The Debentures and the Warrants issued pursuant to the Offering and any Common Shares issued upon the conversion of the Debentures or exercise of Warrants, will be subject to a hold period of four months plus one day from the date of closing of the Offering, except as permitted by applicable securities legislation and the rules of the Exchange. The Offering is subject to approval by the Exchange.

Finders acting in connection with this Offering received a finder’s fee in the aggregate total amount of $9,800 and an aggregate of 117,600 finder’s Warrants, which is less than 1% of the Offering. Each finder’s Warrant is identical to the Warrants under the Offering.

The Corporation will use the proceeds of the Offering will be used to restart operations, sales and marketing, manufacturing and general working capital purposes.

Exchange of Existing Debentures and Repricing and Extension of the Associated Warrants

The Corporation replaced the currently issued and outstanding unsecured convertible debentures (1,095 debentures representing $1,095,000) issued on January 25, 2019 with new secured debentures (1,095) with the same terms as the Offering Debentures (“Replacement”).  The associated warrants (9,066,000 warrants outstanding) were amended (“Amendment”) to have the same terms and expiry date as the Offering Warrants.  

The Corporation did not pay any finder’s fees on the Replacement and Amendment transactions, which are subject to final approval by the Exchange.

Related Party Transactions

The Offering and the Replacement transactions are related party transactions within the meaning of TSXV Policy 5.9 and Multilateral Instrument 61-101 (“MI-61-101”) as insiders of the Corporation (consisting of two directors of the Corporation) subscribed for an aggregate of 300 Units (representing $300,000) under the Offering and one insider had 150 debenture units (representing $150,000) replaced with new debenture units and 900,000 existing warrants amended. The Corporation is relying on exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and (b) and 5.7(a) and (b) of MI 61-101, as the Corporation is not listed on a specified market and the fair market value of the participation in the transactions by insiders does not exceed 25% of the market capitalization of the Corporation, as determined in accordance with MI 61-101 and the fair market value of the transactions is not more than $2,500,000. The Corporation did not file a material change report in respect of the related party transaction at least 21 days before the closing of the Offering, which the Corporation deems reasonable in the circumstances in order to complete the transactions.

Completion of the Offering, Replacement and Amendment is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals, including TSXV final acceptance.

Issuance of Share for Interest on Existing Debentures

Pursuant to the debentures issued January 25, 2019, the Corporation has paid the interest for three months due January 25, 2020 on the debentures by issuing 239,197 Common Shares which represents $17,940 at the 10-day volume-weighted average price of $.075.  With this issuance, the Corporation has 69,725,942 issued common shares.

About Ventripoint Diagnostics Ltd.

Ventripoint’s technology is a leading Artificial Intelligence (AI) approach known as Knowledge-Based Reconstruction (KBR), used to create applications to monitor heart disease, a leading cause of death worldwide. The VMS+ is the first cost-effective and accurate AI tool for measuring whole heart function using conventional ultrasound.  The Corporation has developed a suite of applications for all major heart diseases and is actively commercializing the approach to improve cardiac care.

For further information, please contact:

Dr. George Adams, CEO, Telephone: (519) 803-6937

Email: [email protected]

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. In particular, this news release contains forward-looking information relating to the Offering and the use of the proceeds therefrom. The forward-looking statements and information are based on certain key expectations and assumptions made by the Corporation, including expectations and assumptions concerning the use of net proceeds of the Offering. Although the Corporation 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 Corporation 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 which could materially affect such forward-looking information are described in the risk factors in the Corporation's most recent annual management’s discussion and analysis that is available on the Corporation’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 Corporation 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.

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Copyright (c) 2020 TheNewswire - All rights reserved.