Ehave, Inc. today announced that it has entered into a definitive asset purchase agreement with ZYUS Life Sciences Inc., pursuant to which Zyus will acquire all of the assets and rights relating to Ehave’s health informatics platform for a total purchase price of CAD $3.2 million in cash and stock. In addition, Ehave has entered into agreements with the holders of its outstanding promissory notes and warrants to exchange them for common shares.
Asset Sale
Under the terms of the Asset Purchase Agreement, Zyus will acquire Ehave’s intellectual property and license, marketing, and development agreements relating to its health informatics platform. Ehave will continue in its development and trials of digital assessments and therapeutic games for children with attention-deficit/hyperactivity disorder, autism spectrum disorder, and other mental health challenges. Ehave’s data-rich patient management, assessment, and remediation tools are designed to improve the lives of persons suffering from common mental health disorders. With Ehave, clinicians can make better treatment decisions across teams and disciplines while keeping patients informed and engaged throughout their mental healthcare journey.
The Asset Sale remains subject to the satisfaction of customary closing conditions, including applicable regulatory approvals, and the approval of the Company’s shareholders. The Company intends to hold a special meeting (the “Meeting”) of its shareholder to approve the Asset Sale, at which two-thirds (2/3) of the Company’s shareholders present in person or represented by proxy must approve the Asset Sale. Further information regarding the Meeting and the Asset Sale will be provided in a management information circular, which will be mailed to the Company’s shareholders in due course. Investors are cautioned that, except as disclosed in the management information circular, any information released or received with respect to the Asset Sale may not be accurate or complete and should not be relied upon.
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As part of its review of the Asset Sale, Ehave engaged a Canadian investment bank to conduct a fair market assessment of the value of the Zyus stock that Ehave is to receive as partial consideration under the Asset Sale. Garfinkle Biderman LLP is acting as legal counsel to Ehave.
Recapitalization
In addition, as stated above, Ehave entered into agreements with holders of USD$2.8 million of promissory notes to exchange such notes for common shares. Ehave will also issue shares of Ehave common stock in return for the cancelation of 4,383,333 Ehave warrants and the cancellation of 8,051,791 Ehave stock options. As a result of the recapitalization described above, all outstanding promissory notes, warrants, and certain options were exchanged for common shares.
“These are transformative transactions for Ehave,” said Prateek Dwivedi, Chief Executive Officer of Ehave. “First, we will be able to significantly strengthen our balance sheet by holding stock in Zyus, a company led by management with a proven track record in the medical cannabis space, as well as converting notes, warrants, and stock options into Ehave common stock. Second, we believe we will have adequate working capital to continue to drive our mental health operating business forward in a positive way. Finally, we will continue to evaluate additional merger and acquisition opportunities to maximize shareholder value.”
Date: April 01, 2019
Source: Cision