Profound Medical Inc has launched a going-public transaction via a reverse take-over of Mira IV Acquisition Corp (TSXV: MRY.P), which trades on the TSX Venture Exchange. The company has also completed a private placement for gross proceeds of about $24 million. Two long-time venture capital investors in Profound Medical, Genesys Capital and BDC Capital, joined the offering and provided bridge financing. Strategic investor Knight Therapeutics Inc also joined the offering and extended a $4 million secured loan. The Toronto-based Profound Medical, which was founded in 2008, is a medical device business focused on developing and commercializing a minimally invasive treatment for prostate cancer.
Profound Medical Announces Going-Public Transaction and Concurrent $28 Million Financing to Fund Next Stage of Growth
TORONTO, April 30, 2015 (GLOBE NEWSWIRE) — Profound Medical Inc. (“Profound”), a medical device company developing and commercializing a unique, minimally invasive treatment for prostate cancer, announced today that Profound entered into a definitive agreement dated April 29, 2015 with Mira IV Acquisition Corp. (“Mira”; TSXV: MRY.P), a capital pool company traded on the TSX Venture Exchange, pursuant to which a wholly-owned subsidiary of Mira will amalgamate with Profound to complete an arm’s length qualifying transaction (the “Transaction”) in accordance with the policies of the TSX Venture Exchange (the “TSXV”). The Transaction will constitute a reverse take-over of Mira, following which the holders of common shares of Profound, including common shares issued to holders of Subscription Receipts issued in the private placement described below, will hold a majority of the outstanding common shares of Mira. The amalgamation will be structured as a three-cornered amalgamation and as a result the amalgamated corporation will become a wholly-owned subsidiary of Mira at the time of the completion of that transaction. Following completion of the Transaction, Mira will change its name to “Profound Medical Corp.”.
In connection with the Transaction, Profound completed today a private placement of subscription receipts (“Subscription Receipts”) for gross proceeds of approximately $24 million, led by GMP Securities, L.P. and Cormark Securities Inc., and including Bloom Burton & Co. and Mackie Research Capital Corporation. Each Subscription Receipt issued in the private placement will be exchangeable for one common share in the capital of Profound upon the satisfaction of certain conditions related to the Transaction, which is expected to close on or about May 21, 2015.
“This financing transaction, in conjunction with the contemplated Mira transaction, is a highlight of a transformational year and brings the company one step closer to making a significant difference in the future of men’s prostate health,” says Steve Plymale, CEO, Profound Medical Inc. “We appreciate the interest and confidence that the investment community has in our technology.”
In anticipation of the offering of Subscription Receipts, on January 27, 2015, Profound closed a bridge financing transaction with Genesys Ventures II LP (“Genesys”) and BDC Capital Inc. (“BDC”), two shareholders of Profound, for aggregate gross proceeds of $1,500,000. Assuming the Transaction closes on May 21, 2015, each of these secured convertible notes, including the accrued interest thereunder, will automatically convert into common shares of Profound at the price of $1.50 per common share (being the equivalent of the issue price per Subscription Receipt) into approximately 346,000 common shares and 692,000 common shares of Profound, respectively. Separately, Genesys and BDC participated in the private placement with an additional aggregate investment of $4,800,000.
Profound also announced that, in connection with the private placement and the Transaction, Knight Therapeutics Inc. (“Knight”; TSX:GUD) has provided a secured loan of $4,000,000 for an initial period of four years with an interest rate of 15% per annum, with payments of interest and principal deferred until June 30, 2017. In addition, Profound also entered into a distribution, license and supply agreement with Knight pursuant to which Knight will act as the exclusive distributor of Profound’s TULSA-PRO system in Canada for an initial ten year term, renewable for successive ten year terms by either party. As a transaction fee in connection with these arrangements, Profound has agreed to issue to Knight 4% of the equity of Profound after giving effect to the Transaction. Profound has also granted to Knight the right to nominate one member to the board of directors in connection with this loan transaction. It is expected that Knight’s nominee for election to the board of directors will be Jonathan Ross Goodman, Knight’s President & CEO. Separately, Knight participated in the private placement with an additional investment of approximately $2,000,000.
Profound’s technology, Transurethral Ultrasound Ablation (“TULSA”), is an investigational phase device used in a minimally invasive treatment for localized prostate cancer. The real-time, MRI-guided ultrasound procedure ablates the whole gland, from the inside-out, in a single session. The potential for faster patient recovery and significantly reduced side effects enables patients and their partners to quickly resume their quality of life.
TULSA-PRO is an investigational device not yet approved for commercial use. Profound recently completed 12 months of follow up in the 30 patient TULSA safety and feasibility trial and is in the process of analysing data. Upon completion of the qualifying transaction with Mira, Profound will have access to the private placement proceeds and will commence its pivotal clinical trial of 110+ patients and support the pending European and Canadian TULSA-PRO product launch.
About Profound Medical Inc.
Profound Medical is a medical device company that has developed a unique and minimally invasive treatment to ablate the prostate gland. Profound’s novel technology combines MRI technology with ultrasound thermal energy that is delivered via a transurethral approach. This investigational method of prostate ablative therapy provides highly accurate and precise treatment within the prostate in a short time span, allowing for fast patient recovery. The potential of this technology is currently being assessed in clinical trials. For more information, visit profoundmedical.com
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
ANY SECURITIES REFERRED TO HEREIN WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE “1933 ACT”) AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.
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Notice regarding forward-looking statements:
This release includes forward-looking statements regarding Profound and its business, which may include, but is not limited to, statements with respect to the completion of the Transaction, the terms on which the Transaction are intended to be completed and the use of the net proceeds from the private placement. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “is expected”, “expects”, “scheduled”, “intends”, “contemplates”, “anticipates”, “believes”, “proposes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Such statements are based on the current expectations of the management of each entity. The forward-looking events and circumstances discussed in this release, including completion of the Transaction, may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the companies, including risks regarding the medical device industry, failure to obtain regulatory or shareholder approvals, economic factors, the equity markets generally and risks associated with growth and competition. Although Profound has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Profound undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, other than as required by law.
Steve Plymale, CEO
Profound Medical Inc.
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