New World Resource Corp. and Perimeter Medical Imaging, Inc. announced today that they entered into a non-binding letter of intent for the acquisition of all of the issued and outstanding shares of Perimeter Medical by New World in a reverse takeover transaction. The terms of the Proposed Transactions, as described below, are non-binding and no assurance can be made that the Proposed Transactions will be completed in accordance with the terms noted herein or at all.
“Following an extensive review of strategic options, we believe that the Proposed Transactions best position our company to maximize shareholder equity,” said New World Chief Executive Officer, John Lando.
Figure 1: The second-generation OTIS™ platform imaging device is pending 510(k) clearance.
Perimeter Medical Imaging, Inc. (www.perimetermed.com) is a Toronto-based private company formed in 2013 that has raised over $16M in venture capital financing to date. The executive team of medical device leaders holds an excellent track record of successfully building companies and producing products and services which improve outcomes for clinicians and patients. Perimeter Medical’s first product, the OTIS™ 1.0, is an FDA-cleared point-of-care imaging system that provides surgeons, radiologists, and pathologists with the ability to visualize tissue microstructure in real-time during procedures that currently rely on clinician sight or palpation for in-procedure decision making.
“Following filing of our third premarket submission with the FDA this month, Perimeter Medical has reached an inflection point from research and development to focusing on customer clinical requirements. Our objective has always been to avoid unnecessary repeat surgeries. With the reverse takeover, we will have access to the capital required for initial market launch, enabling us to demonstrate the power of our platform imaging device and to explore potential applications in known clinical pain points like breast lumpectomy,” said Douglas Janzen, Chairman of the Board of Perimeter Medical.
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*Details of the Proposed Transactions*
In the Proposed Transactions, New World, or a wholly owned subsidiary of New World, will acquire 100 per cent of the issued and outstanding shares of Perimeter Medical in exchange for New World shares.
All outstanding options and warrants of Perimeter Medical will be exchanged for options and warrants of New World with adjustments to reflect the exchange ratio.
As part of the Proposed Transactions, New World shareholders would receive a warrant (the “Warrants”) to purchase one share of New World after the Proposed Transactions (the “Resulting Issuer”), at an exercise price of C$0.30 per share, for every two New World shares held immediately before the closing of the Proposed Transactions. The warrants will expire two years after the closing of the Proposed Transactions.
Had the Proposed Transactions closed on January 31, 2019, the parties estimate that New World’s existing shareholders (without giving effect to the Warrants) would have owned approximately 12% of fully-diluted capitalization of the Resulting Issuer and former Perimeter Medical holders would have owned approximately 88% of the fully-diluted capitalization of the Resulting Issuer. The actual ownership of the Resulting Issuer will be determined as of the closing of the Proposed Transactions.
“Anthony F. Holler, M.D., an investor in Perimeter Medical, commented: “Significant market opportunities exist in a range of medical applications, from real-time feedback during head and neck surgery to accurate evaluation of kidney biopsies in patients with medical kidney disease. Of particular interest, about one-quarter of North American women who have a lumpectomy procedure will require a second surgery to remove cancerous tissue that was left behind, and, as cited in this December 15, 2016, article in the Vancouver Sun, in BC specifically, the re-operation rate is even worse, at 37%.” https://vancouversun.com/health/women/too-many-breast-lumpectomies-followed-by-more-surgery-b-c-researcher-finds
Following closing of the Proposed Transactions, the Resulting Issuer chief executive and initial board of directors will be selected by Perimeter.
New World intends to apply to have all of the shares issued in the Proposed Transactions, including the shares underlying the Warrants, listed on the TSX Venture Exchange. The listing will be subject to TSXV approval, including satisfying all of the TSXV’s listing requirements.
The letter of intent is not binding and no assurance can be made that the Proposed Transactions will be completed in accordance with the terms noted herein or at all. The parties currently expect to enter into definitive agreements before the end of April 2019. Following the assumed signing of definitive agreements, the parties will work to close the Proposed Transactions in the third quarter of 2019.
Date: March 18, 2019