TORONTO, ONTARIO--(Marketwire - Sept. 26, 2012) - Way Ventures Inc. ("Way Ventures") (TSX VENTURE:WAY.P), a Capital Pool Company, is pleased to announce that on September 19, 2012 it entered into a letter of intent with BioMatera Inc. ("BioMatera"), to complete a business combination (the "Transaction") whereby all of the issued and outstanding securities of BioMatera will be exchanged for securities of Way Ventures. The Transaction is intended to constitute the Qualifying Transaction of Way Ventures as such term is defined in Policy 2.4 of the Corporate Finance Manual of the TSX Venture Exchange (the "Exchange").
BioMatera was incorporated on May 6, 1998 and is governed by the Business Corporations Act (Quebec). It was founded in response to the growing demand for environmentally friendly alternatives to traditional plastic products. The company has developed a process to manufacture cost-effective biopolymer resins that can be substituted in most applications where petrochemical-based plastics are used, in particular in the industrial, medical and cosmetic fields.
These resins, called PolyHydroxyAlkanoates, or "PHAs", are present in nature, encapsulated in a large number of bacteria that use them as energy reserves. PHAs can replace many conventional plastics, such as polypropylene, polyethylene or polyethylene terephtalate. Created from renewable resources, PHAs are perfectly stable and durable and under the right conditions, degrade naturally in a few weeks or months.
BioMatera has developed and patented technologies and processes to produce natural and biodegradable polymers. In addition to being 100% biobased and biodegradable, Biomatera's PHA biopolymers have unique properties that make them versatile for a wide range of industrial, cosmeceutical and biomedical applications.
BioMatera's vision is centered on the philosophy of sustainable development. Through research, development and the optimization of its technology platform, BioMatera is working in partnership with market leaders to develop a new generation of state-of-the-art, ecological products. BioMatera's operations are primarily based in Quebec.
Sylvie Otis, the founder of BioMatera, has a long history as an entrepreneur and a management consultant (see biography below).
BioMatera as at June 30, 2012 had assets of approximately $2,894,296 consisting in part of capital assets valued at $1,800,750 and intangible assets of $493,875. BioMatera has current liabilities of $7,120,006 and a long-term liability of $100,000. The asset and liability numbers have not been audited or assigned present values.
In June 2011 BioMatera proposed to several debt owners to convert their debt into common shares. These propositions were accepted with approximately $2.4 million (estimated as of June 30, 2012) to be converted. These conversions will generate an expense in the income statements, to be determined upon conversion. Furthermore, as of September 7, 2012, BioMatera has accepted a purchase offer for a building for the amount of $2.15million, which will eliminate a mortgage on the property of $1.75 million. Once the conversions and the sale transactions are completed, the liabilities will be adjusted to approximately $2.9 million.
In conjunction with the Transaction process, BioMatera will generate audited financial statements for inclusion in an Information Circular to be filed on www.sedar.com prior to closing of the Transaction. BioMatera is controlled by Investissement Otis Inc. (a company incorporated in the province of Quebec and controlled by Sylvie Otis), and Jean-Marc Lafaille, currently residing in Belgium.
The Qualifying Transaction
In furtherance of the Transaction, Way Ventures will consolidate (the "Consolidation") its current issued and outstanding shares on the basis of 3.9713 pre-consolidation common shares (the "Way Shares") for each 1 post consolidation Way Share issued and outstanding. The Consolidation and the Transaction will be approved at a meeting of Way Ventures shareholders at a date to be determined in the near future. Upon completion of the Consolidation, Way Ventures will have 1,410,117 Way Shares issued and outstanding.
Subject to regulatory approval, and immediately following the Consolidation, Way Ventures will acquire all of the currently issued and outstanding securities of BioMatera by issuing 17,658,480 post-consolidation Way Shares to shareholders of BioMatera in exchange for all of the issued and outstanding common shares of BioMatera (the "BioMatera Shares"), being 220,731 shares, on the basis of 80 Way Shares for each 1 BioMatera Share (the "Conversion Ratio"). Security holder of BioMatera will also exchange 4,266 warrants to purchase BioMatera Shares for warrants to purchase 341,280 Way Shares, and 6,410 options to purchase BioMatera Shares pursuant to BioMatera's employee stock option plan will be exchanged for 512,800 options to purchase Way Shares, and the exercise prices for such securities will be divided by the Conversion Ratio. The proposed Transaction will constitute an arm's length transaction.
Prior to or concurrently with the closing of the Transaction, it is anticipated that a private placement (the "Private Placement") for minimum gross proceeds of $4 million and maximum of gross proceeds of $10 million will be completed. The anticipated offering price for such securities will be equal or comparable to $1.50 per share. Standard fees and commissions are anticipated to be paid in connection with the Private Placement, and the net proceeds of this issuance will be used for general working capital purposes. The parties shall determine if the Private Placement shall be completed by way of an issuance of securities of BioMatera, the resulting issuer, or a combination of both. Any security issued by BioMatera pursuant to the Private Placement shall be exchanged upon closing of the Transaction for corresponding securities of the resulting issuer based on the Conversion Ratio.
It is currently anticipated that the board of directors of the resulting issuer will consist of Matthew Watson who is currently a director of Way Ventures, as well as Mrs. Otis, Serge LeBel, and Jean-Marc Lafaille. Mrs. Otis will act as President, Jean Marc Lafaille will act as VP Business development Europe, Félix Daviault-Ford will act as Scientific Director, Annie Aubin as Controller and interim Chief Financial Officer and Louis Hoël will act as VP Business Development of the Resulting Issuer. The current directors of Way Ventures, other than Matthew Watson, will resign upon closing of the Transaction.
Way Ventures will be seeking a waiver from the Exchange of the requirement to obtain a Sponsor Report. If it is unable to obtain such a waiver, it will seek Sponsorship from an Exchange member firm, and will disclose such an engagement once formalized.
Ms. Otis is president and CEO of BioMatera founded in May of 1998. She has a long proven track record as an entrepreneur and a management consultant having established two management consulting companies and worked in strategic planning for over 20 years. At the start of her career, she occupied various positions in the fields of operational research and organizational development in the health industry as Operational Research and Organizational Development Consultant at the Chicoutimi Hospital from 1974 to 1982. This led her to establish her first management consulting firm in 1982 specializing in change management and implementation of new technologies, Les Consultants Sylvie Otis Inc., which she eventually sold to Groupe CGI Inc., a leading North American information technology company, where she became the Vice-President of their management consulting division focusing on strategic planning and implementation of new technologies in 1988. In 1989 she joined Alcan Inc. to direct an interdisciplinary group formed to study the restructuring of the company by looking into ways of optimizing the management of its resources and exploring business development opportunities. In 1998, she founded a second management consulting business, Synopsis Inc., specializing in strategic planning. Ms. Otis holds a Bachelor in Industrial Relations and has completed studies for a Master's degree in the same field from University of Laval (Quebec City, Canada, 1974 and 1983, respectively).
Mr. Serge LeBel (Quebec Bar 1983) is actively involved in the practice of commercial law and litigation as a partner of BCF LLP (www.bcf.ca) and has more than twenty eight years of experience in the practice of law. He has developed an expertise in business law for a diversified clientele that he guides and advises in a range of operations. He also has expertise in the fields of commercial litigation, construction, insurance, banking, and insolvency. He is a member of the Board of Loto Québec, and Chair-president of its Corporate Governance Committee. He is also a member of the Board of the Québec Port Authority, Chair of its Corporate Governance Committee, and a member of its Audit Committee. In addition, Mr. LeBel is a member of the Board of Directors of the Interprovincial Lottery Corporation Inc. and a member of its Corporate Governance Committee. Mr. LeBel obtained his designation as a Certified Corporate Director (ASC) from the Collège des administrateurs de sociétés in 2008.
Jean-Marc Lafaille was born in Canada and currently resides in Brussels. Member of the Québec Bar since 1967, he has completed studies for a Master's degree in economics. Mr. Lafaille has forty years of experience as a senior executive in major companies, including: legal counsel for Loto-Québec, General Manager of the Atlantic Lottery Corporation, CEO of Loto-Québec, board member of Videotron, CEO of Videoway Inc., president of GTECH Europe (Gtech Holdings Corporation on the NYSE) and executive on many of Gtech's subsidiaries in Europe. He is currently board member of BioMatera Inc., Mediabiz International Inc. and Media-Max Inc.
Mr. Daviault-Ford joined BioMatera in 2003. Graduated from Laval University in Microbiology, he has participated actively in the development of BioMatera processes, from the initial research to the scale-up of processes for industrial production. Before joining BioMatera, Mr Daviault-Ford has worked in research and development in brewing sciences and has participated in the launching of numerous local breweries. Having a strong understanding of BioMatera's processes and combining skills in communication and project management, Mr Daviault-Ford has led the company's scientific activities for the past three years.
Mr Hoël's career spans over twenty years in the financial sector including working for GE Capital and most recently as an entrepreneur. In 2006, he restructured, refinanced and managed for the next 3 years a junior mining exploration company. He has experience in developing businesses through regional and global sales, innovative marketing strategies and the structure of management.
Ms. Annie Aubin joined BioMatera in September 2000 as controller. Ms. Aubin was appointed as Interim Chief Financial Officer on August 7, 2008. Ms. Aubin obtained a Bachelors Degree in Business Management from the Université du Québec in Hull (Gatineau, Québec) in 1991. Mrs Aubin worked for an accounting firm from 1993 to 1995 before working as an independent accountant for several companies from 1996 to 2000.
Other than Mr. Hoel, who is a resident in Ontario, and Mr. Lafaille, who resides in Belgium, the above individuals are residents of Quebec.
The Transaction is conditional upon, among other things: receiving all necessary regulatory and third party approvals and authorizations, the closing of the Private Placement, receipt of an independent valuation of BioMatera if required by the Exchange, receipt and satisfaction by Way Ventures of audited annual financial statements of BioMatera, approval by each of the board of directors of BioMatera and Way Ventures, approval by the shareholders of BioMatera and Way Ventures, if necessary, confirmation of no material adverse change having occurred for either entity prior to close, the completion of a definitive agreement setting forth the terms and conditions for the closing of the Transaction, the completion of due diligence satisfactory to each party, obtaining any third party consents necessary, the entering into of satisfactory employment agreements with senior management personnel of the Resulting Issuer, satisfaction of Way Ventures and Biomatera with the terms and amounts of "key-person" life insurance policies on senior management personnel; and receipt by the Exchange of a satisfactory Sponsor Report, if required.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are 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 transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.