Novoheart Holdings Inc. Completes Acquisition of Xellera Therapeutics
VANCOUVER, BC – June 28, 2019 – Novoheart Holdings Inc. (“Novoheart” or the “Company”) (TSXV: NVH; FWB: 3NH) is pleased to announce that it has completed its previously announced acquisition (the “Acquisition”) of all of the shares of Xellera Therapeutics Limited (“XT”). As consideration for the Acquisition, Novoheart has issued an aggregate of 93,000,000 common shares (“Novoheart Shares”) and pre-paid common share purchase warrants (“Pre-paid Warrants”) at a deemed price of $0.3635 per share, for an aggregate consideration of $33,805,000.
“The completion of the acquisition of XT is a significant milestone in achieving our long-term goal of developing clinical grade cell and gene based therapies for heart diseases. It reinforces our aspiration to revolutionize human cardiac tissue engineering for the benefits of mankind.” said Allen Ma, Chairman of Novoheart’s Board. “We wish to welcome of Dr. Katherine Ngan and Mr. Roger Ngan to our board and are excited to be working with them and XT’s internationally recognized scientific team to advance the combined company. I would also like to thank the members of Novoheart’s team for all of their efforts to successfully complete this transaction.”
In connection with the Acquisition, Novoheart has also added Dr. Katherine Ngan and Mr. Roger Ngan, two of the founders of XT, to its board of directors. Detailed biographies for the new directors, as well as additional information regarding the Acquisition and XT, are included in the Company’s management information circular dated May 27, 2019 and available under the Company’s profile on SEDAR at www.sedar.com.
All of the Novoheart Shares and Pre-paid Warrants issued in connection with the Acquisition are subject to a hold period of four months and one day, expiring October 29, 2019. No finder’s fee was paid in connection with the Acquisition.
In connection with the Acquisition, New Bioera Holdings Limited (“New Bioera”), a company controlled by Ronald Li (CEO of Novoheart) acquired 37,200,000 Novoheart Shares, representing approximately 22.85% of the Novoheart Shares that are issued an outstanding upon completion of the Acquisition (without, for certainty, giving effect to the conversion of the Pre-paid Warrants, at a deemed price of $0.3635 per share). Prior to the Acquisition, Medera Group Limited (“Medera”), a company also controlled by Ronald Li held 39,977,600 Novoheart Shares, representing approximately 24.55% of the Novoheart Shares that are issued an outstanding upon completion of the Acquisition and Ronald Li held options to acquire an additional 1,720,000 Novoheart Shares. Accordingly, Medera and New Bioera may be considered joint actors of Ronald Li. In the aggregate, through New Bioera and Medera, Ronald Li may be considered to own or control an aggregate of 77,177,600 Novoheart Shares and 1,720,000 options, representing approximately 47.40% of the Novoheart Shares that are issued an outstanding upon completion of the Acquisition or approximately 47.95% of the Novoheart Shares assuming the exercise of Ronald Li’s options.
In connection with the Acquisition, Marine Bridge International Limited (“Marine Bridge”), acquired 16,118,214 Novoheart Shares and Pre-paid Warrants to acquire up to an additional 25,731,786 Novoheart Shares, representing 9.90% of the Novoheart Shares that are issued an outstanding upon completion of the Acquisition or approximately 22.20% of the Novoheart Shares assuming the exercise of all of Marine Bridge’s Pre-paid Warrants, at a deemed price of $0.3635 per share. The Pre-paid Warrants will automatically convert into Novoheart Shares upon Dr. Katherine Ngan and Mr. Roger Ngan’s personal information forms being cleared by the TSX Venture Exchange. Marine Bridge is a company controlled by Dr. Katherine Ngan and Mr. Roger Ngan, and, accordingly, they may be considered joint actors of Marine Bridge, although this news release is not an admission thereof. Prior to the Acquisition, Marine Bridge held no Novoheart Shares, Dr. Katherine Ngan owned or controlled, directly or indirectly, 4,593,028 Novoheart Shares, representing approximately 2.82% of the Novoheart Shares and Roger Ngan owned or controlled, directly or indirectly, 7,693,628 Novoheart Shares, representing approximately 4.73% of the Novoheart Shares. Together, Marine Bridge, Dr. Katherine Ngan and Roger Ngan own or control, directly or indirectly, an aggregate of 28,404,870 Novoheart Shares and 25,731,786 Pre-paid Warrants, representing approximately 17.45% of the Novoheart Shares that are issued an outstanding upon completion of the Acquisition or approximately 28.71% of the Novoheart Shares assuming the exercise of all of Marine Bridge’s Pre-paid Warrants.
Depending upon market and other conditions, or as future circumstances may dictate, either or both of Ronald Li and Marine Bridge may, respectively, from time to time, increase or decrease their holdings of Novoheart Shares or other securities of Novoheart. In connection with the closing of the Acquisition, each of New Bioera and Marine Bridge entered into a lock-up agreement with the Company, pursuant to which, among other things, the Novoheart Shares received as the consideration for the Acquisition will be subject to restrictions on sale for a period of up to three years, with semi-annual vesting at 15%, 15%, 15%, 15%, 20% and 20%, respectively.
This portion of this news release is issued pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues of the Canadian Securities Administrators, which also requires an early warning report to be filed with the applicable securities regulators containing additional information with respect to the foregoing matters. A copy of the early warning reports of Ronald Li and Marine Bridge will be available on Novoheart’s issuer profile on SEDAR at www.sedar.com. Ronald Li has an address at Unit 811-813, 8/F, No. 15 Science Park West Avenue, Hong Kong Science Park, Shatin, New Territories, Hong Kong and can be contacted at (852) 26183356, attention Ronald Li, to obtain a copy of his early warning report. Marine Bridge’s head office is located at Flat 901-902, 9/F East Ocean Centre, 98 Granville Rd, Tsim Sha Tsui East, Kowloon, Hong Kong and Marine Bridge can be contacted at (852) 27937888, attention Roger Ngan or Katherine Ngan, to obtain a copy of its early warning report.
Novoheart is a global stem cell biotechnology company pioneering an array of next-generation human heart tissue prototypes. It is the first company in the world to have engineered miniature living human heart pumps that can revolutionize drug discovery, helping to save time and money for developing new therapeutics. Also known as 'human heart-in-a-jar', Novoheart’s bio-artificial human heart constructs are created using state-of-the-art and proprietary stem cell and bioengineering approaches and are utilized by drug developers for accurate preclinical testing as to the effectiveness and safety of new drugs, maximizing the successes in drug discovery whilst minimizing costs and harm caused to patients.
About Xellera Therapeutics Limited:
Xellera Therapeutics Limited (XT) is dedicated to developing cell- and gene-based therapies. XT’s mission is to bring advanced therapeutic options to patients in an era of precision medicine. XT is focused on building a Good Manufacturing Practice (GMP) facility for generating clinical-grade human stem cell lines, initially within the Southern Chinese population. The goal of these clinical-grade stem cell libraries will be to enable quicker identification of suitable donor material for cell-based therapies, minimizing the wait and avoiding complications commonly associated with transplantation, such as immune rejection or side effects caused by immunosuppression.
For further information, please contact:
Ronald Li, CEO
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
Information set forth in this news release may involve forward-looking statements under applicable securities laws. Forward-looking statements are statements that relate to future, not past, events. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar expressions. All statements, other than statements of historical fact, included herein including, without limitation; statements about the expected benefits of the Acquisition, the timing and completion of XT’s GMP facility, the development of new revenue streams, the success of the Company’s commercialization efforts, raising additional or alternative financing, the Company’s future plans, its goals and expectations, and the potential applications of its MyHeartTM platform are forward-looking statements. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the risks identified under the heading “Risk Factors” in Novoheart Holdings Inc.’s annual information form for the year ended June 30, 2018 or other reports and filings with the TSX Venture Exchange and applicable Canadian securities regulators. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the respective companies undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue certainty to forward-looking statements.