MISSISSAUGA, ON, Aug. 30, 2013 /CNW/ - Covalon Technologies Ltd. (the
"Company" or "Covalon") (TSXV: COV), an advanced medical technologies
company, today announced that further to its press release of August
16, 2013, it has completed, subject to final approval of the TSX
Venture Exchange, a non-brokered private placement comprised of 750
units (the "Units") at a price of $1,000 per Unit for gross proceeds of
$750,000. Each Unit consists of $1,000 principal amount of 12% senior
secured convertible debenture (the "Debentures" and each a "Debenture")
and 6,451 warrants (each, a "Warrant"). Proceeds of the private
placement will be used by Covalon to fund the market launch of the
Company's new products IV Clear™ and SurgiClear™ and for general
Each Debenture is convertible at the holder's option into 6,451 common
shares of the Company (the "Common Shares") at a conversion price of
$0.155 at any time on or prior to August 30, 2016. These conversion
rights are subject to standard anti-dilution provisions. The Debentures
bear interest at the rate of 12% per annum and are direct secured
obligations of the Company ranking senior to all indebtedness of the
Company. Interest will accrue and be added to the principal amount
outstanding under the Debentures. Each Warrant entitles the holder
thereof to acquire one Common Share at an exercise price of $0.155 at
any time on or prior to August 30, 2016. The Debentures and the Common
Shares issuable upon conversion of the Debentures and exercise of the
Warrants will be subject to a hold period of four months and one day
following August 30, 2013.
The private placement is subject to final TSX Venture Exchange
Pursuant to the private placement, and as already approved by
shareholders of the Company, Abe Schwartz announced that he has
acquired 330 Units. After giving effect to this acquisition, Mr.
Schwartz directly or beneficially holds an aggregate of: (i) $330,000
principal amount secured convertible debentures, representing 44.0% of
the outstanding convertible debentures of the Company; (ii) 1,038,740
Common Shares representing 11.2% of the issued and outstanding Common
Shares; (iii) 2,903,830 Common Share purchase warrants, representing
44.0% of the Warrants issued pursuant to the Offering and 50.1% of all
outstanding share purchase warrants of the Company (including the
Warrants); and (iv) 220,000 stock options. If all share purchase
warrants held by Mr. Schwartz were to be fully exercised and all
convertible debentures held by Mr. Schwartz were to be fully converted,
Mr. Schwartz would beneficially own approximately 30.5% of the
Company's Common Shares on a diluted basis, which results in Mr.
Schwartz becoming a 'control person' as defined in the TSX Venture
Exchange Corporate Finance Manual. Mr. Schwartz has acquired the
securities of the Company for investment purposes. Mr. Schwartz has no
present intention of acquiring other securities of the Company or
disposing of any of the securities of the Company he currently holds.
Of the remaining 420 units, directors and officers of the Company
subscribed for 120 Units for gross proceeds of $120,000. No commission
or finder's fee was paid in connection with the private placement. As
Insiders participated in the private placement, any such subscriptions
will be considered to be related party transactions within the meaning
of TSXV Policy 5.9 and Multilateral Instrument 61-101 ("MI 61-101").
The Company intends to rely on the exemptions from the valuation and
minority shareholder approval requirements of MI 61-101 contained in
sections 5.5(b) and 5.7(a) of MI 61-101 in respect of such Insider
participation. The terms of the private placement were reviewed and
received the unanimous approval of the Company's board of directors.
For further information regarding the acquisition of securities of the
Company by related parties, or to obtain a copy of the early warning
report in respect of this transaction, please refer to the Company's
SEDI profile available at www.sedi.ca.
Covalon Technologies Ltd. researches, develops and commercializes new
healthcare technologies that help save lives around the world.
Covalon's patented technologies, products and services address the
advanced healthcare needs of medical device companies, healthcare
providers and individual consumers. Covalon's technologies are used to
prevent, detect and manage medical conditions in specialty areas such
as wound care, tissue repair, infection control, disease management,
medical device coatings and biocompatibility. To learn more about
Covalon, visit our website at www.covalon.com
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.
This news release contains forward-looking statements which reflect the
Company's current expectations regarding future events. The
forward-looking statements are often, but not always, identified by the
use of words such as "seek", "anticipate", "plan, "estimate", "expect",
"intend" and statements that an event or result "may", "will",
"should", "could" or "might" occur or be achieved and other similar
expressions. These forward-looking statements involve risk and
uncertainties, including the difficulty in predicting product
approvals, acceptance of and demands for new products, the impact of
the products and pricing strategies of competitors, delays in
developing and launching new products, the regulatory environment,
fluctuations in operating results and other risks, any of which could
cause results, performance, or achievements to differ materially from
the results discussed or implied in the forward-looking statements.
Many risks are inherent in the industry; others are more specific to
the Company. Investors should consult the Company's ongoing quarterly
filings for additional information on risks and uncertainties relating
to these forward-looking statements. Investors should not place undue
reliance on any forward-looking statements. The Company assumes no
obligation to update or alter any forward-looking statements whether as
a result of new information, further events or otherwise.
SOURCE: Covalon Technologies Ltd.
For further information:
CEO, Covalon Technologies Ltd.
Phone: 905.568.8400 x 233
Toll free: 1.877.711.6055
Web site: www.covalon.com