MISSISSAUGA, ON, Aug. 16, 2013 /CNW/ - Covalon Technologies Ltd. (the
"Company" or "Covalon") (TSXV: COV), an advanced medical technologies
company, today announced that it intends to complete, subject to the
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 will consist of $1,000 principal
amount of 12% senior secured convertible debenture (the "Debentures"
and each a "Debenture") and 6,452 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 working capital.
Each Debenture will be convertible at the holder's option into 6,452
common shares of the Company (the "Common Shares") at a conversion
price of $0.155 at any time on or prior to the Maturity Date, which
will be three years from the closing date. These conversion rights will
be subject to standard anti-dilution provisions. The Debentures will
bear interest at the rate of 12% per annum and will be 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 will entitle the holder
thereof to acquire one Common Share at an exercise price of $0.155 at
any time for a period of three years from the date of the Private
Placement. 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 the
It is anticipated that insiders of the Company, including directors and
officers will subscribe for up to 580 Units for gross proceeds of up to
$580,000. At the Company's Annual and Special Meeting of shareholders
on June 13, 2013, approximately 99% of the represented Common Shares of
disinterested shareholders approved a resolution allowing Abe Schwartz,
the Chairman of the Board of Directors of the Company, to continue to
financially support the Company by increasing his holdings in the
Company, and thereby becoming a 'control person' as defined in the TSX
Venture Exchange Corporate Finance Manual. It is anticipated that Mr.
Schwartz will subscribe for 356 Units for gross proceeds of $356,000.
No commission or finder's fee will be paid in connection with the
private placement. As Insiders will participate 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.
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