Ovid Capital Ventures Inc. enters into letter of intent with iTech Medical, Inc. in respect of a proposed qualifying transaction

Not for distribution to United States newswire services or for release publication, distribution or dissemination directly, or indirectly, in whole or in part, in or into the United States.

MONTREAL, April 19, 2013 /CNW Telbec/ - Ovid Capital Ventures Inc. (TSXV: OCA.P) ("Ovid") is pleased to announce that it has signed a non-binding letter of intent (the "LOI") with iTech Medical, Inc., a corporation existing under the laws of Delaware ("iTech"), which outlines the general terms and conditions pursuant to which Ovid and iTech would be willing to complete a transaction that will result in a reverse take-over of Ovid by the shareholders of iTech (the "Transaction"). The LOI was negotiated at arm's length and is effective as of April 18, 2013.

The LOI is to be superseded by a definitive merger, amalgamation or share exchange agreement (the "Definitive Agreement") to be signed on or before June 30, 2013 (or such other date as may be mutually agreed in writing between Ovid and iTech). The Transaction is subject to requisite regulatory approval, including the approval of the TSX Venture Exchange (the "TSXV") and standard closing conditions, the approval of the directors of each of Ovid and iTech of the Definitive Agreement and completion of due diligence investigations to the satisfaction of each of Ovid and iTech, as well as the conditions described below. The legal structure for the Transaction will be confirmed after the parties have considered all applicable tax, securities law and accounting efficiencies, however, it is currently contemplated that the transaction will be structured as an exchange of securities.

Ovid is incorporated under the provisions of the Canada Business Corporations Act with its registered and head office in Montreal, Quebec. It is a capital pool company and intends for the Transaction to constitute its "Qualifying Transaction", as such term is defined in the policies of the TSXV. Ovid is a "reporting issuer" in the provinces of British Columbia, Alberta, Ontario, Quebec and New Brunswick.

Since the Transaction is not a non-arm's length transaction, Ovid is not required to obtain shareholder approval for the Transaction.

Trading in the common shares of Ovid is halted at present. It is unlikely that the common shares of Ovid will resume trading until the Transaction is completed and approved by the TSXV.

Subject to TSXV approval, Ovid has also agreed to provide to iTech a secured loan in the principal amount of up to $250,000 as soon as possible following TSXV approval of same and agreement on standard loan and security documentation acceptable to Ovid and iTech, each acting reasonably.  Ovid has already advanced $25,000 to iTech.

Conditions to Transaction

Prior to completion of the Transaction (and as conditions of closing):

  • The parties will prepare a filing statement in accordance with the rules of the TSXV, outlining the terms of the Transaction.

  • iTech and Ovid will enter into a Definitive Agreement in respect to the Transaction on or before June 30, 2013.

  • iTech will obtain the requisite shareholder approvals for the Transaction and any ancillary matters contemplated in the Definitive Agreement.

  • All requisite regulatory approvals relating to the Transaction, including, without limitation, TSXV approval, will have been obtained.

  • Ovid will close a concurrent brokered financing (described below) for minimum gross proceeds of $2,300,000.

The Proposed Transaction

Pre-Closing Capitalization of Ovid

As of the date hereof, Ovid has 10,898,000 common shares ("Ovid Shares") issued and outstanding, and securities exercisable or exchangeable for, or convertible into, or other rights to acquire, an aggregate of 1,451,600 Ovid Shares at an exercise price of $0.10 per Ovid Share.

Pre-Closing Capitalization of iTech

As of the date hereof, iTech has 96,511,931 shares of common stock ("iTech Shares") issued and outstanding, and securities exercisable or exchangeable for, or convertible into, or other rights to acquire, an aggregate of 9,536,080 iTech Shares.

Terms of the Transaction

Ovid proposes to acquire all of the iTech Shares pursuant to the terms of a Definitive Agreement. It is expected that Ovid Shares will be issued to the holders of iTech Shares in exchange for all of the issued and outstanding iTech Shares on the basis of one (1) Ovid Share, at a deemed issue price of $0.20, for every three (3) iTech Shares (the "Exchange Ratio") issued and outstanding as at the effective date of the Transaction resulting in the current shareholders of Ovid holding 25% of the common shares of the combined entity (the "Resulting Issuer") and the former shareholders of iTech holding approximately 75% of the common shares of the Resulting Issuer (immediately prior to giving effect to the Private Placement (as defined below), the Finder's Shares (as defined below) and the Milestone Shares (as defined below), if any). In addition, the iTech Shares underlying iTech's outstanding securities exercisable or exchangeable for, or convertible into, or other rights to acquire iTech Shares will be exercisable into Ovid Shares on the same terms and conditions as such original outstanding iTech securities. Furthermore, Ovid shall allot and reserve for issuance a total of up to 15,000,000 common shares ("Milestone Shares") to the iTech Shareholders, on a pro rata basis, if the Resulting Issuer generates $7.5 million in revenue by the end of the third fiscal year immediately following the closing of the Transaction, as reflected on the Resulting Issuer's audited annual consolidated financial statements for such fiscal years.  The Milestone Shares, if vested, would be issued promptly following the filing of the audited annual consolidated financial statements evidencing the fact that the revenue milestone has been met, subject to the restriction that if the Milestone Shares are issued prior to the end of the third fiscal year ended immediately following the closing of the Transaction, then such securities will be subject to a legend restricting their resale until the date which is 36 months following the closing of the Transaction.  Finally, pursuant TSXV Policy 5.1, Ovid shall issue 1,500,000 common shares ("Finder's Shares") concurrently with the closing of the Transaction to Guardian Securities House as a finder's fee for introducing Ovid to iTech.

It is expected that the Resulting Issuer will be classified as a Tier 2 Life Sciences Issuer.

Concurrent Private Placement

Concurrently with, and as a condition of, the closing of the Transaction, Ovid will complete a brokered private placement (the "Private Placement") of securities ("Ovid Securities") at a minimum price per Ovid Security of $0.20.  The Private Placement shall be for minimum gross proceeds of $2,300,000. The Ovid Securities may consist of Ovid Shares or units of Ovid consisting of Ovid Shares and Ovid common share purchase warrants, as the case may be (or such other securities of Ovid as may be agreed among iTech, Ovid and the agent for the Private Placement).  Further details regarding the Private Placement, including the identity of the lead agent, will be included in a subsequent press release once additional details become available.

About iTech

iTech Medical, Inc. is a medical device company that develops and markets innovative medical devices and technologies to treat pain. iTech is focusing its efforts in two key areas (i) developing technologies that can be used in the diagnosis of conditions that cause musculoskeletal pain, and (ii) developing products that treat pain. The company markets its products through direct sales and through a network of distributors worldwide.

iTech was incorporated in 1997 in Nevada as "Impact Medical Solutions, Inc." In December 2006, iTech merged with its wholly-owned subsidiary Freedom 1, Inc., a Delaware corporation, and effectively reincorporated into Delaware. On September 25, 2009 a Certificate of Amendment to iTech's Articles of Incorporation was filed with the Delaware Secretary of State changing the name of the company to "iTech Medical, Inc." iTech was formerly registered with the United States Securities and Exchange Commission and ceased reporting in August 2011.

On February 15, 2013, iTech purchased BIOflex Medical Magnetics, Inc. ("BIOflex"), a private healthcare company that has been developing and selling biomagnetic therapy devices since 1986. BIOflex's product line comprises more than 20 items including body supports, mattress overlays, seat cushions and products for people suffering from neck and back pain. BIOflex's unique, patented technology incorporates a proprietary design and magnetic field strength to maximize the effects at the source of pain and discomfort. BIOflex operates from an FDA-registered facility and its products are registered with the FDA as Class I medical devices.

Muscle Pattern Recognition (MPR)

iTech is currently developing a non-invasive medical device called Muscle Pattern Recognition (MPR). MPR is a patented technology that objectively analyzes muscle recruitment patterns of the neck and back. iTech is developing the MPR System to provide objective, clinically relevant evidence on the status of underlying biomechanical and neuromuscular integrity, or the overall health of the neck and back, to assist healthcare and rehabilitation professionals in the evaluation and treatment of neck and back injuries and illnesses.

According to the U.S. National Institute for Occupational Safety and Health (NIOSH), back pain is one of the most common and significant musculoskeletal problems in the world. In the U.S., it is estimated that the annual direct and indirect cost of diagnosing and treating back injuries is $75 - $100 billion (Crow W, Willis D. "Estimating Cost of Care for Patients with Acute Low Back Pain: A Retrospective Review of Patient Records." J Am Osteopath Assoc. 2009:109:229-233). In addition, according to information available from the NIOSH, back pain is the leading cause of disability in the U.S. for people younger than 45, the most expensive health care problem for those in the 20 to 50 year-old age group, and accounts for over 24% of all occupational injuries involving days away from work.  Finally, based on information from the U.S. Bureau of Labour Statistics, occupational musculoskeletal disorders account for $1 of every $3 spent for workers' compensation.

Within the medical community, the target markets for MPR include those health care providers who treat patients with back pain, namely Neurologists, Orthopedic Physicians, Physical Medicine and Rehabilitation (PM&R), Occupational Medicine, General Practitioners and Chiropractors. There are over 450,000 of these practitioners in the U.S. alone.

The largest market for MPR outside the medical community is the self-insured employer market which represents between 35 - 40 million workers in the U.S. iTech believes that this market is acutely aware of the economic cost associated with back problems and is highly motivated to adopt new technologies to help save on employee health care costs.  Other significant markets include Health Maintenance Organizations (HMOs), Workers' Compensation Carriers and Insurance Companies.

BIOflex Magnetic Devices

BIOflex has a diverse line of over 20 products (>40 SKUs) that targets a number of large markets including the sports medicine and orthopedic market, the low back pain market, the sleep systems market and more. BIOflex's product line includes various body supports and braces; car, truck and office seat cushions; a line of bedding products; and various other health aids. Individual products sold by BIOflex are registered as Class 1 medical devices with the FDA.

Pain is associated with a wide range of injury and disease, and is sometimes the disease itself. Millions suffer from acute or chronic pain every year and the effects of pain exact a tremendous cost in terms of health care costs, rehabilitation and lost worker productivity, as well as the emotional and financial burden it places on patients and their families. According to a June 2011 Institute of Medicine Report: Relieving Pain in America: A Blueprint for Transforming Prevention, Care, Education, and Research, pain is a significant public health problem that costs society up to $635 billion annually.

Magnetic therapy is considered a Complementary and Alternative Medicine (CAM). CAM products and services are generally regulated under the Federal Food, Drug, and Cosmetic Act, and although not considered part of main-stream medicine, the market is one of the fastest growing fields in healthcare and is more widely used today than ever before. Millions of people worldwide are spending billions of out-of-pocket dollars on CAM therapies - including medical magnets - and its widespread use continues to have an impact on users, practitioners, researchers and policy makers.

The management of pain is a large and growing market in need of efficacious pain treatment modalities, without side-effects, that are minimally or non-invasive and can be delivered at a low cost. According to an article and academic study, recent estimates put the worldwide sales of magnets for the treatment of pain at over $5 billion annually; with approximately $300 million in the U.S. alone.

MPR Business Model

iTech expects to generate revenue from two sources (i) the sale or leasing of the device and (ii) a recurring revenue stream based on a per-use basis of the MPR test. Due to the proprietary nature of the iTech MPR System, iTech are able to maintain control over the data and data analysis. As a result, iTech is building a database of back injuries which it believes in two years will be larger than any other database of its kind. iTech expects this database to open up a number of new business opportunities, including the development of unique clinical models that can be used to further reduce the cost of health care.

BIOflex Business Model

iTech intends to dramatically expand BIOflex revenue through a number of marketing and distribution initiatives, including: establishing strategic Joint Ventures/Partnerships; building relationships with Wholesale Distribution Centers; through Internet Catalog Sellers; through Direct Response TV (DRTV) campaigns; through Distribution Agreements; and through Direct Sales, and more.

Consolidated Financial Information Concerning iTech

iTech is preparing audited consolidated financial information regarding iTech and BIOflex, which will be included in the filing statement that will be submitted to the TSXV and released in a subsequent press release.

Insiders, Officers and Board of Directors of the Resulting Issuer

Upon completion of the Transaction, it is anticipated that the board of directors of the Resulting Issuer shall be comprised of: Wayne D. Cockburn, Charles Zablotsky and Warren Baker. In addition, it is expected that the officers of the Resulting Issuer shall be Wayne D. Cockburn (Chief Executive Officer) and a Chief Financial Officer and a Chief Medical Officer to be appointed shortly. Mr. Zablotsky is currently the President of BIOflex.

Following completion of the Transaction and the Private Placement (assuming gross proceeds of $2,300,000), but excluding the issuance of the Milestone Shares, it is anticipated that no one shareholder will exercise control or direction over more than 10% of the issued and outstanding shares of the Resulting Issuer.

The following sets outs the names and backgrounds of all persons who are expected to be considered insiders of the Resulting Issuer.

Wayne D. Cockburn, Chief Executive Officer and Director

Mr. Cockburn joined iTech in September 2003 as co-founder of the business. Mr. Cockburn was President and CEO of iTech from September 2003 until June 2011. Mr. Cockburn rejoined iTech in January 2012 as President and CEO. Prior to iTech, Mr. Cockburn was President at MPR Health Systems from January 2002 until September 2003 and Executive Vice President from January 2000 until January 2002. From January 1995 to December 1999, Mr. Cockburn was Vice-President, Business Development for Lorus Therapeutics Inc., a public biotechnology company. Mr. Cockburn's background includes strategic planning, corporate finance, corporate partnering, corporate governance and mergers and acquisitions. Mr. Cockburn has served on the board of directors of several private and public companies, and currently serves on the boards of two private companies.

Charles Zablotsky, Director

Mr. Zablotsky joined iTech in February 2013 when iTech purchased BIOflex Medical Magnetics Inc. Mr. Zablotsky is co-founder of BIOflex and has been the CEO/COO of BIOflex since its inception in 1985. Prior to creating BIOflex, Mr. Zablotsky was founder/owner of Shop-Rite Supermarket, a multi-million dollar grocery store that established national sales and profitability records. Mr. Zablotsky has extensive experience in formulating advertising budgets and campaigns; pioneered many successful new marketing campaigns; and brought new and innovative marketing and operational methods to the medical magnet industry. Mr. Zablotsky received his education at Franconia College and Nuffield College, Oxford University, UK.

Warren G. Baker, Director

Mr. Baker is currently the President and CEO of Operculum Inc., a medical device company focused on next generation permanent birth control solutions for women. Additionally, he is a Senior Consultant with Pharmatech Associates advising pharmaceutical and medical device companies on current FDA Compliance Strategies. Mr. Baker joined iTech in February 2011 as President, Chief Operating Officer and member of the Board of Directors. Mr. Baker was appointed Chief Executive Officer in March 2011 and Board Chair in November 2011. In December 2011, Mr. Baker resigned as CEO and continues today as the Board's Chairman. From January 4, 2004 to June 30, 2006 , he was Chief Operating Officer of Advanced Research Technologies ("ART") of Montreal, Quebec where he lead the development and commercialization of their optical imaging technology for the identification and diagnosis of breast cancer and identification of optically tagged biomarkers in preclinical pharmaceutical studies. Prior to that, Mr. Baker was President and Chief Executive Officer of Electromed Imaging, a global leader in cardiac image information management systems, where he first joined as Chief Operating Officer in 2002. During his work with both ART and Electromed Imaging, Mr. Baker was responsible for the strategic acquisition and integration of both new intellectual property and the merger of synergistic global business organizations.


Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless exempt in accordance with TSXV policies. Ovid is currently reviewing the requirements for sponsorship and may apply for an exemption from the sponsorship requirements pursuant to the policies of the TSXV, however, there is no assurance that Ovid will ultimately obtain this exemption. Ovid intends to include any additional information regarding sponsorship in a subsequent press release.

Further Information

All information contained in this news release with respect to Ovid and iTech was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and, if applicable, pursuant to the requirements of the TSXV, 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.


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation.  Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the proposed Transaction; the terms and conditions of the proposed Private Placement; use of funds; and the business and operations of the Resulting Issuer after the proposed Transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; and the ability of the Resulting Issuer to execute and achieve its business objectives. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.  Ovid and iTech disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE: Ovid Capital Ventures Inc.

For further information:

For further information regarding the Transaction, please contact:

Edward Ierfino, Chief Executive Officer, Ovid Capital Ventures Inc.

Telephone: 514-562-1374
Email: eierfino@gmail.com

Wayne D. Cockburn, Chief Executive Officer, iTech Medical, Inc.

Telephone: 905-853-2424
Email: wayne.cockburn@itechmedical.com

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Ovid Capital Ventures Inc.

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