Labrador Technologies Inc. Announces Strategic Acquisition

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CALGARY, Alberta, June 29, 2020 (GLOBE NEWSWIRE) — Labrador Technologies Inc. (“Labrador” or the “Company”) (TSXV: LTX) is pleased to announce that it has entered into an exclusive arm’s length software license purchase agreement dated June 28, 2020 (the “Agreement”) with Claritas HealthTech Pte. Ltd. (“Claritas”). The technology, known as IE-RAD2020 (the “License Technology” or “IE-RAD2020”), was developed and is owned exclusively by Claritas. The Agreement gives Labrador exclusive usage and marketing rights to the License Software for the territory of North America in return for the issuance of 50 million shares in Labrador at a deemed price of $0.10 per share (the “Proposed Transaction”) on a post consolidated 20 to 1 basis, as further described below. The Agreement will enable customers who utilize IE-RAD2020 to access its medical image enhancement capabilities on a pay for service basis.Pursuant to the terms of the Agreement, Labrador will issue sufficient shares such that the Proposed Transaction will constitute a “Reverse Takeover” (“RTO”) of Labrador under the policies of the TSX Venture Exchange (the “Exchange” or the “TSXV”). Upon the closing of the Proposed Transaction, it is expected that Labrador will continue to be a Technology Issuer on the TSXV and will be renamed to Claritas HealthTech Inc. Any financial information related to IE-RAD2020 and Claritas, as appropriate, will be included in the RTO disclosure documentation.General Information about Claritas and LabradorAbout ClaritasClaritas is incorporated and headquartered in Singapore. Claritas conducts research and development in the fields of image enhancement, machine vision and artificial intelligence (“AI”) with a focus on medical image processing and AI assisted interpretation. The IE-RAD2020 software technology has been developed by a team of leading mathematicians and medical scientists over a period of five years. Claritas plans to transform the diagnostics industry with powerful and effective software products created using image enhancement and AI technology enabling doctors and physicians to make accurate diagnosis and improve patient lives.About LabradorLabrador is incorporated under the Business Corporations Act (Alberta), is a reporting issuer inAlberta and British Columbia and its common shares are listed and posted for trading on TSXV and was formerly engaged in the business of development and marketing of data retrieval technology with its registered and head office in Calgary, Alberta.The Licensed Technology – IE-RAD2020​
Claritas solution for radiologists, IE-RAD2020, enhances radiology images to reveal details of anatomical structures that were previously obscured utilizing “radiation noise” enabling radiologists and doctors to be able to make more accurate diagnoses.  At the same time, it retains the finer elements of the image without adding or creating any distortions. IE-RAD2020 is backed by a cloud-based network. It can be accessed online via the “Claritas Viewer”, or alternatively, integrated on-site as software that can interface with Picture Archiving and Communication System (PACS) / Digital Imaging and Communications in Medicine (DICOM) communications protocols and imaging archives system, a need both companies believe will continue to grow in the short and long term. IE-RAD2020 will serve radiology departments across a range of imaging modalities. Proposed Transaction, Private Placement and Bridge FinancingLabrador currently has 177,966,368 common shares issued and outstanding. The Agreement contemplates that Labrador will consolidate the Labrador common on a 20:1 basis (the “Consolidation”). Subsequent to the Consolidation, Labrador will have 8,898,318 common shares issued and outstanding. As stated above, Labrador will further issue 50,000,000 common shares of Labrador at a post-Consolidated deemed price of $0.10 per share. Further, Labrador’s outstanding share purchase warrants will have their exercise terms appropriately adjusted to reflect the Consolidation. Labrador has cancelled all outstanding stock options.In connection to the Proposed Transaction, Claritas will undertake a private placement of subscription receipts of units (the “Units”) for minimum gross proceeds of $2,500,000 and up to maximum gross proceeds of $5,000,000 (the “Private Placement”). Details regarding Unit pricing and composition are being negotiated and once finalized will be announced in a future news release.In addition, Churchgate Singapore Ltd. will provide Labrador $150,000 pursuant to a bridge financing (the “Bridge Financing”) of units of the Company (the “Units”) to cover costs associated with the Proposed Transaction. Each Unit consists of one secured debenture (each, a “Debenture”) and one common share purchase warrant (each, a “Bridge Financing Warrant”). The conversion price with respect to the common shares issued upon conversion of Debentures is $0.10 per common share on a post-Consolidated basis. The Debentures will be secured by a general security agreement over the Company’s assets. The Debentures will bear interest at the rate of 5% per annum and payable semi-annually. Each Bridge Financing Warrant entitles the holderthereof to acquire one common share (each, a “Bridge Financing Warrant Share”) at an exercise price of $0.10 per Bridge Financing Warrant Share for a period of 12 months from the closing date (the “Expiry Date”). Any Bridge Financing Warrants not exercised prior to the Expiry Date shall be deemed to be void and of no further force and effect.Proposed Board of Directors, Management and Other InsidersUpon completion of the Proposed Transaction, subject to regulatory approval, the directors, senior officers and insiders of Labrador are expected to be as follows:Devika M. Dutt – Republic of Singapore – Chief Executive Officer and DirectorMs. Dutt is the current Chief Operating Officer of Claritas. Ms. Dutt brings over 25 years of experience at executive level marketing, sales and business development through prior roles based out of Singapore, London and New York. Prior thereto, she co-founded and lead of one India’s pioneering and leading gourmet coffee roasting companies. She was the former Business Head, Treasury & FX, ASEAN at Thomson Reuters and prior to that an analyst at Jefferies. She holds a Bachelor of Arts Degree (Economics and Development Studies) from Smith College in Massachusetts, USA.Nikhil Kamran – Republic of Singapore – Chief Financial Officer                   Mr. Kamarn brings over 13 years of end-to-end deal execution on over 20 transactions with combined value in excess of $1 billion, covering: buyouts, majority & minority investments, joint ventures and strategic partnerships with a previous operational experience as CFO of a listed public company with market capitalization of ~$1 billion. Mr. Kamarn holds a Bachelor of Arts (Economics) from the University of Pennsylvania.Kaan Camlioglu – Calgary, Canada – Chief Operating Officer and Director              From 1996 to 2019, Mr. Camlioglu has held increasingly senior financial roles with a variety of public and private entities, including nearly a decade with the TSXV. Since January 2019, Mr. Camlioglu has been the Interim CEO of Labrador. Mr. Camlioglu is a Chartered Financial Analyst and Chartered Professional Accountant (CPA, CMA). He holds a Bachelor of Arts Degree (Economics) from the University of Calgary.Shravan Joshi – London, England – DirectorMr. Joshi is an elected Member of the Court of Common Council for Bishopsgate Ward in the City of London Corporation (“City”), where he focuses on policy and investment into City’s economy through managing strategic relationships. Since 2011, Mr. Joshi has been the managing director of SM Ventures Limited London, a consultancy and private investment company providing strategicadvice to clients. Mr. Joshi started his career in investment banking then moved into the energy sector in 1999, later specializing in trade structuring and supply chain contracts in Central Asia, Eastern Europe and North America. Mr. Joshi holds a Bachelor of Science (Hons Chemistry) from Kings College London, University of London.Dr. Laszlo Neumann – Girona, Spain – DirectorDr. Neumann holds a MSc. in Engineering and Mathematics, (1978 from TU Budapest), and a PhD in Applied Mathematics, economical modeling (1982). Dr. Neumann has led research and software development in architectural CAD, cartography, medical imaging, 3D face modeling, color harmony design, and numerical methods. He has authored 32 journal articles, 3 books, and 20 book chapters and over 55 technical publications in conferences. Between 1995 and 2007 Dr. Neumann was a visiting lecturer at TU Vienna and since 2002 he is been a ICREA Research Professor at Universitat de Girona (UdG). He is member of over a dozen IPCs and other committees.Bill deJong – Calgary, Canada – Corporate SecretaryMr. deJong is a lawyer in the Business Law Group in the Calgary office of the international law firm Fasken Martineau DuMoulin LLP, practicing law primarily in the areas of securities regulation, corporate finance, and mergers and acquisitions. Mr. deJong holds a Bachelor of Business Administration from Acadia University and a Bachelor of Laws from the University of Edinburgh.Shareholder Approval and Other MattersUnder the policies of the TSXV, Labrador is not expected to require shareholder approval for the Transaction. In this regard, Labrador and the Proposed Transaction satisfy the TSXV requirements as to not be subject to a shareholder approval requirement as: (a) the Proposed Transaction is an Arm’s Length transaction; (b) Labrador is a Tier 2 issuer without active operations; (c) Labrador is not subject to a cease trade order and is not expected to be subject to such an order upon completion of the Proposed Transaction; and (d) shareholder approval of the Proposed Transaction is not required under applicable corporate and securities laws. However, Labrador is expected to seek shareholder approval of certain matters related to the implementation of the Proposed Transaction, including, but not limited to, the approval of the appointment of new board of directors of Labrador to be effective upon completion of the Proposed Transaction and approval to change the name and trading symbol of Labrador upon completion of the Proposed Transaction.Conditions to Completion of the Proposed Transaction and Regulatory MattersCompletion of the Proposed Transaction is subject to a number of conditions including, but not limited to, TSXV and, if applicable, disinterested shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all. Investorsare cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Labrador should be considered highly speculative. The TSXV has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this news release. Neither the 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 release.In addition to the above, the Proposed Transaction is subject to a number of further conditions, including but not limited to: (a) closing conditions customary to transactions of the nature of the Proposed Transaction; (b) approvals of all regulatory bodies having jurisdiction in connection with the Proposed Transaction; (c) TSXV regulatory approval; (d) debt reduction of payables outstanding; and (e) the completion of raising the minimum amount for the Private Placement and completion of the Bridge Financing. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.Arm’s Length TransactionThe Proposed Transaction is an “Arm’s Length Transaction” under policies of the TSXV.SponsorshipSponsorship of the Proposed Transaction is required unless an exemption is available or a waiver from this requirement can be obtained in accordance with the policies of the TSXV. Labrador intends to apply for a waiver to the sponsorship requirement. There is no assurance that a waiver from this requirement will be granted. Significant Conditions to Completion of the Proposed Transaction Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to: (a) closing conditions customary to transactions of the nature of the Proposed Transaction; (b) approvals of all regulatory bodies having jurisdiction in connection with the Proposed Transaction; (c) TSXV regulatory approval; and (d) the completion of the Private Placement. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.Trading HaltTrading in the Labrador common shares has been halted and may remain halted pending the review of the Proposed Transaction by the TSXV and other certain conditions are satisfied. There can be no assurance that trading in the Labrador common shares will resume prior to the completion of the Proposed Transaction.Additional InformationFor further information, please contact:Kaan Camlioglu, Interim Chief Executive Officer
Labrador Technologies Inc.
T: (403) 818-1091
E: kcamlioglu@icloud.com Cautionary StatementsInvestors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Labrador should be considered highly speculative. This press release does not constitute an offer of the securities of the Company for sale in the United States. The securities of the Company have not been registered under the United States Securities Act of 1933, (the “1933 Act”) as amended, and may not be offered or sold within the United States absent registration or an exemption from registration under the 1933 Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.Forward-Looking StatementsThis news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the terms, conditions and completion of the Proposed Transaction, the pro forma capitalization of the resulting issue of the Proposed Transaction, completion of the Private Placement, Bridge Financing and the anticipated type and number of securities to be issued thereunder, the Labrador shareholder meeting and results thereby, the Labrador name change, the Consolidation, the business and operations of Labrador, Claritas and Claritas HealthTech Ltd.; the go-forward management and directors; and the quality of results, usability and general future success of IE-RAD2020.Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board, shareholder, court or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place unduereliance on the forward-looking statements and information contained in this news release. Except as required by law, Labrador assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.