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VANCOUVER, BC, July 8, 2021 /CNW/ - Principal Technologies
Inc. (the "Company") (TSXV: PTEC.P), is pleased to
announce that it has entered into a definitive investment agreement
dated June 11, 2021 (the
"Investment Agreement") with respect to the acquisition
of an 80% interest (the "Investment") in E&E CRO
Consulting GmbH ("E&E"), an arm's length, private
company.
It is expected that the Investment will constitute the Company's
Qualifying Transaction pursuant to the policies of the TSX Venture
Exchange (the "TSXV") and that upon completion of the
Investment the Company will commence trading as a Tier 2 Life
Sciences Issuer.
The Company expects that once governments begin to relax the
various travel and other COVID-19 related restrictions that have
constrained the Company's efforts to diligence investment
opportunities across Europe, it
will proceed with its previously disclosed intention of becoming an
Investment Issuer. E&E will serve as a pipeline of potential
investment opportunities to facilitate this transition, and such
transition may eventually constitute a change of business pursuant
to the policies of the TSXV.
About E&E
E&E is a global contract research organization
("CRO") based in Vienna,
Austria, that specializes in tailored project management of
international scale clinical studies primarily related to medical-
device technologies. CROs seek to reduce costs for companies
developing new medicines, drugs and medical devices requiring
various regulatory approvals. They aim to simplify entry into these
various markets, and simplify development of regulated
products.
E&E provides tailor-made A-Z project management services
related to clinical studies, primarily with a focus on medical
technologies devices requiring regulatory approval in various
international jurisdictions, including the European Union,
the United States, Latin America and Oceania. E&E provides
services to a diverse array of medical device developers, including
established med-tech companies, startups, hospitals and their
medical representatives (doctors / professors) and medical
institutions, as they go through the stages of obtaining regulatory
approval for their medical devices. E&E charges a fee for
service, and typically receives either monthly retainers or
payments on a monthly or quarterly basis in accordance with its
invoices for services rendered.
E&E was incorporated on February 4,
2021 under the statute for Limited Liability
Corporations (Austria) and
carries on the business of a CRO that operated as a sole
proprietorship since 2010.
The following is selected financial information for E&E:
|
Three months
ended March 31, 2021
(unaudited)
|
Year
ended December 31,
2020
(audited)
|
Year
ended December 31,
2019
(audited)
|
Total
revenues
|
€33,016
|
€121,666
|
€83,838
|
Net
Profit(Loss)
|
€28,092
|
€60,359
|
€ (20,096)
|
Total
assets
|
€85,291
|
€141,733
|
€137,525
|
Total
liabilities
|
€14,721
|
€24,019
|
€47,855
|
About the Investment and Concurrent Financing
The Investment will be structured as a share acquisition
pursuant to which the Company will acquire 80% of the issued and
outstanding securities of E&E in accordance with the Investment
Agreement. As consideration for the Investment, the Company will
pay the shareholder of E&E:
(i)
|
aggregate upfront consideration of €100,000;
plus
|
|
|
(ii)
|
1,000,000 Common
Shares in the capital of the Company, (each, a "Common
Share") if E&E earns €125,000 in profit before tax
from the period from April 1, 2021 to March 31, 2022;
plus
|
|
|
(iii)
|
250,000 Common Shares
if E&E earns €250,000 in profit before tax from the period from
April 1, 2021 to March 31, 2022; plus
|
|
|
(iv)
|
250,000 Common Shares
if E&E earns €500,000 in profit before tax from the period from
April 1, 2022 to March 31, 2023.
|
Any Common Shares to which the shareholder of E&E becomes
entitled pursuant to the Investment shall become issuable on
March 31, 2023, and shall be subject
to a 24 month lock-up with 25% of all such Common Shares being
released each six months after March 31,
2023.
Prior to closing or concurrently with the closing of the
Investment, the Company intends to complete a private placement
(the "2021 Private Placement") of its common shares for
aggregate gross proceeds of €120,000 at a price of $0.16 per share, based upon an exchange rate to
be set within three business days of the closing of the Investment,
for an estimated 1,106,925 Common Shares.
It is expected that following the completion of the Investment
and the 2021 Private Placement, the Company will have a total of
approximately 17.6 million Common Shares outstanding on a
non-diluted basis, comprised of approximately 16.5 million Common
Shares representing the currently issued and outstanding shares of
the Company, and approximately 1.1 million Common Shares
representing the shares issued in connection with the 2021 Private
Placement, but excluding the 1.5 million Common Shares that may
become issuable on March 31, 2023
pursuant to the earn-out within the Investment Agreement. The
Company will be required to pay €10,000 to an arm's length finder
upon the closing of the Investment.
Completion of the Investment is subject to a number of
conditions precedent, including but not limited to, the approval of
the TSXV of the Investment and the listing of the Company as a Tier
2 Life Sciences Issuer. Accordingly, there can be no assurance that
the Investment will be completed on the terms disclosed or at all.
Shareholder approval of the Investment is not required. It is
expected that trading the Company's Common Shares will remain
halted until the Investment has been completed.
Directors and Officers
Upon closing of the Investment, Mr. Amir
Dhalla is expected to resign from the board of directors of
the Company and the board of directors and other insiders are
expected to be as follows:
Gerald Trent, President, Chief
Executive Officer and Director
Prior to being invited to join the Company in the capacity of
CEO and President, Mr. Trent held multiple senior positions in
various companies. Mr. Trent is the founder and managing director
of Trent Investments, a direct investment multi-family office for
ultra-high net worth individuals in Europe. Formerly he worked as Head of Global
Markets & Investment Banking at Sberbank Europe AG and Head of
M&A of PwC Austria (Pricewaterhouse Coopers).
Frank Stronach, Chief
Financial Officer, Corporate Secretary, and Director
Mr. Stronach, has been Chief Financial Officer and a director of
the Company since its incorporation on April
3, 2018. Mr. Stronach was employed at Haywood Securities
Inc. in the position of Vice President of Investment Banking from
May 2004 to March 2017. He joined Haywood Securities Inc. in
May 2004 after 9 years with Union
Securities Ltd.'s corporate finance group. Previously, Mr. Stronach
spent 6 years with the Vancouver Stock Exchange, leaving his
position as Manager, Listing Policy. Mr. Stronach holds an MBA
degree from Queen's University and a Bachelor of Arts degree from
the University of Victoria and is also
a Chartered Accountant with 8 years' experience with KPMG.
John McCoach, Director
Mr. McCoach held multiple senior positions in various companies.
John McCoach retired from full time
employment in 2016. At that time, he was President of the TSX
Venture Exchange Inc. He was a member of the Capital Markets
Authority Implementation Organisation Regulatory Authority Board of
Directors from August, 2016 through March, 2021. He has also held
the roles of Lead Director, Chairman of the Governance Committee,
Member of the Audit Committee and a Member of the Compensation
Committee of Liberty Defense Holdings, Ltd. since 2019. From
October 2017 to May 2019, he was a director, the Chairman of the
Audit Committee and member of the Human Resources and Compensation
Committee of Nautilus Minerals Inc. From June 2018 to May
2019, he served as Interim CEO of Nautilus Minerals Inc.
Furthermore, since 2018 he has been a director of Principal
Technologies Inc. Finally, he is currently a director of KWESST
Micro Systems Inc. (formerly Foremost Ventures Corp.), a position
he has held since 2018.
Prinz von Liechtenstein,
Director
Prinz von Liechtenstein, is a
member of the Princely Family of Liechtenstein. He conducted his studies at the
University of Vienna in economics
and information technology, as well as politics. Since 1976, Prinz
von Liechtenstein has been
managing director and board and supervisory board member of several
international enterprises operating in multiple areas, such as
trade, business advisory, and financial services. His Serene
Highness is, among other engagements, also owner and executive
director of the supervisory board of a five-star chalet hotel in
Corinthia, Austria.
Dr. Leopold Specht,
Director
Dr. Specht, is an international legal expert in the areas of
international taxation, project financing, cross-boarder mergers
and acquisitions, and corporate law, and taught at Harvard Law
School, University of Naples,
Northeastern University School of Law,
to name a few. He conducted his studies at Harvard Law School,
University of Rome, and University
of Vienna. Dr. Specht is the
founder and managing partner of the international law firm Specht
& Partner, with offices in Vienna, Moscow, Prague, Budapest, Belgrade, and Zagreb and is fluent in five languages
(German, English, Russian, Italian, French). He is also Managing
Director of Dr. Leopold Specht Beteiligungs- und
Vermoegensverwaltung GmbH since 1996 and of Specht Asset Management
Services GmbH since 2007. Dr. Specht is also Director of
Drazenowitsch-Hering-Privatstiftung since 2000 as well as
Supervisory Board Member of Amalgaro Investment SE since 2019 and
of ALMDORF 'Seinerzeit' Touristik Aktiengesellschaft since
1994.
GreenIslands Global Opportunities Fund
Upon closing of the Investment and 2021 Private Placement,
GreenIslands Global Opportunities Fund ("GreenIslands") is
expected to own approximately 68% of the Common Shares.
GreenIslands is an exempted liability company incorporated under
the laws of the Cayman Islands
that falls within the definition of a "mutual fund" pursuant to
Section 4(4) of the Mutual Funds Law (Revised) of the Cayman Islands, as amended from time to time,
and not registered with the Cayman Islands Monetary Authority.
GreenIslands is managed by the Simplon Asset Management Ltd. fund
manager who is directed by Mr. Sean Patrick
Lewis, Ms. Laura McGeever and
Mr. Leo Kassam.
Sponsorship
As the Investment is expected to constitute a Qualifying
Transaction pursuant to the policies of the TSXV, sponsorship will
be required by the TSXV unless exempt therefrom in accordance with
the TSXV's policies or a waiver is obtained. In the absence of an
available exemption from the sponsorship requirements, the Company
intends to make an application to the TSXV for a waiver from
sponsorship requirements. There is no assurance that if applied
for, a waiver will be granted.
Arm's Length Transaction
The Transaction will not constitute a Non-Arm's Length
Transaction in accordance with the policies of the TSXV.
Completion of the qualifying transaction is subject to a
number of conditions, including but not limited to, execution of a
binding definitive agreement relating to the qualifying
transaction, Exchange acceptance and if applicable pursuant to
Exchange requirements, shareholder approval. Where applicable, the
qualifying transaction cannot close until the required shareholder
approval is obtained. There can be no assurance that the qualifying
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 qualifying transaction, any information
released or received with respect to the qualifying 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 TSXV has in no way passed upon the merits of the proposed
qualifying transaction and has neither approved nor disapproved the
contents of this press release.
Forward Looking Information
Certain statements and information herein, including all
statements that are not historical facts, contain forward-looking
statements and forward-looking information within the meaning of
applicable securities laws. Such forward-looking statements or
information include but are not limited to statements or
information with respect to: the proposed terms of the Investment
and the 2021 Private Placement; the business plans of E&E and
the Company, including qualification as an investment issuer; the
timing of the Investment; the insiders of the Company upon closing
of the Investment; and the closing of the Investment.
With respect to forward-looking statements and information
contained herein, the Company and E&E have made numerous
assumptions including among other things, assumptions about the
ability to close the Investment and the 2021 Private Placement,
general business and economic conditions and anticipated costs and
expenditures of the Investment. The foregoing list of assumptions
is not exhaustive.
Although management of the Company believes that the
assumptions made and the expectations represented by such
statements or information are reasonable, there can be no assurance
that forward looking statements or information herein will prove to
be accurate. Forward-looking statements and information by their
nature are based on assumptions and involve known and unknown
risks, uncertainties and other factors which may cause actual
results, performance or achievements, or industry results, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements or information. These factors include, but are not
limited to: the Investment and the 2021 Private Placement may not
close on the terms set forth herein, or at all; risks relating to
the availability of financing or investment opportunities for the
Company; risks relating to the receipt of all requisite approvals
for the Investment, including the approval of the TSXV; risks
associated with the business of the Company given its limited
operating history; changes in general economic conditions or
conditions in the financial markets; changes in laws; risks related
to the direct and indirect impact of COVID-19 including, but not
limited to, its impact on general economic conditions, the ability
to obtain financing as required, and causing potential delays in
Investment; and other risk factors as detailed from time to time.
The Company does not undertake to update any forward-looking
information, except in accordance with applicable securities
laws.
Neither TSXV nor its Regulation Services Provider (as that
term is defined in the policies of the TSXV) accepts responsibility
for the adequacy or accuracy of this news release.
SOURCE Principal Technologies Inc.