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VANCOUVER, BC / ACCESSWIRE / December 15, 2021 / Gstaad Capital Corp. (the "Company") (TSXV:GTD) is pleased to announce that it has entered into a letter of intent, dated effective November 29, 2021 (the "LOI") with LuxHygenix Inc. ("LuxHygenix"), an arms-length privately held Delaware corporation. The LOI sets out the general terms and conditions pursuant to which the Company will acquire all of the issued and outstanding securities and convertible notes of LuxHygenix in exchange for securities of the Company (the "Transaction").
Upon successful completion of the Transaction, it is anticipated that the Company will be listed as a Tier 2 Technology issuer on the TSX Venture Exchange ("TSX-V"), under a name to be agreed between the Company and LuxHygenix, and will continue the existing business of LuxHygenix. The Transaction is intended to constitute the Company's "qualifying transaction" pursuant to Policy 2.4 - Capital Pool Companies of the TSX-V.
About LuxHygenix
Founded by five engineers and physicists, with offices and a laboratory in Scottsdale, Arizona, LuxHygenix is dedicated to developing technology that can produce safe and powerful solid-state light beams with multiple commercial applications.
The initial focus of LuxHygenix is addressing the control of infectious pathogens and microbes safely and effectively in healthcare operating environments, mass transportation, public safety, education, and the food service industries using the 200-225nm wavelengths of the UV spectrum. Beyond UV, the technology enables powerful and inexpensive product development in other parts of the electromagnetic spectrum for unique solutions in other vertical markets such as communication, navigation, medicine and agriculture.
Although UV light is an effective disinfectant for pathogens, both airborne and on surfaces, it is important to note that most of the UV spectrum may also be harmful to people. However, there is one narrow part of the UV spectrum, namely from 200 nm (nanometers) to 225 nm (the "Goldilocks band"), that has been shown to be highly effective against pathogens, yet safe for humans.
Until now, the only option for producing UV light in the Goldilocks band has been expensive gas lamp technologies that were introduced decades ago. Light output from these gas lamps is weak and requires long periods of time (many hours) to accomplish significant levels of disinfection. Therefore, the current methods used for producing Goldilocks band light are neither time-effective nor practical. Further, while liquid-based disinfectants work well for spot applications, room-sized applications of liquid disinfectants are time and labor intensive, while using an invisible light that is safe for nearby occupants, is easy and convenient.
Using years of semiconductor, nanotechnology, and physics experience, the team at LuxHygenix has developed a technology that can produce very powerful light beams, three orders of magnitude greater than existing methods in the Goldilocks band of the UV spectrum that can disinfect a room-sized facility in under one minute. With an innovative solid-state approach, Goldilocks lamps may be manufactured very inexpensively. Patents have been filed and proof of concept exhibits have been developed by the LuxHygenix team, and LuxHygenix is currently in negotiations and is near a working agreement with a major medical facility to use their technology to disinfect hospital facilities (operating, examination, and patient rooms).
Additional applications of the technology, which include mass transit customer protection, classroom and student protection, portable and noninvasive devices for both first responders and military medics are also in development.
The technology is revolutionary and has the potential to create several safe, effective, and profitable new industry verticals. Opportunities exist in (a) healthcare markets, (b) large city mass transportation systems, (c) global air and maritime transportation systems, (d) emergency medical systems, (e) classrooms, and (f) restaurants and the global food handling industries.
Summary of Terms of the Transaction:
| Structure: | The Company and LuxHygenix will enter a definitive Share Exchange Agreement, ("SEA") whereby the consideration for the acquisition of all outstanding shares of LuxHygenix will be paid for by the issuance of five common shares of the Company for each one share of LuxHygenix issued and outstanding. All existing convertible debt of LuxHygenix will be converted into shares of LuxHygenix prior to completion of the Transaction. The Company has also agreed to issue 5,000,000 performance escrow shares, (the "Performance Shares"), to be issued pro rata to each of the five founding partners based upon their existing interest in LuxHygenix, subject to the Financial Performance Targets noted below. The Performance Shares will be issued subject to certain performance escrow restrictions, to be released subject to the following performance targets (the "Performance Targets") being attained by LuxHygenix. Completion of any one Performance Target qualifies the issuance of 1,000,000 Performance Shares:
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In the event the Performance Targets are not met by LuxHygenix by April 30, 2025, no further Performance Shares will be issued.
The TSX-V may require that a portion of the common shares issued to acquire LuxHygenix be subject to escrow or restrictions on resale.
LuxHygenix has engaged with a large US based international law firm to ensure that the corporate structure of the transaction will be established to ensure no immediate tax liability will be incurred by the shareholders of LuxHygenix and be in compliance with all tax regulations.
Should an immediate tax be incurred on the Qualifying Transaction, LuxHygenix can withdraw from this agreement without penalty.
Concurrent Financing
Pursuant to the letter of intent, and in connection with the Transaction, the Company will complete a brokered private placement (the "Concurrent Financing") on closing to raise a minimum of $6,600,000 at a price to be determined by the Company and LuxHygenix. Net proceeds of the Concurrent Financing will be used for the ongoing development of LuxHygenix, and for working capital and general corporate purposes post closing. The Company may pay finders' and Investment banking fees to eligible parties in completion of the Concurrent Financing. The Company will provide further information regarding the Concurrent Financing once final terms have been determined.
Management and Directors of the Resulting Issuer
At the Closing, it is anticipated that the board of directors of the Company will be reconstituted to consist of six directors, which will include Melvyn Slater, James Jaskie, Michael Johnson, Paul Larkin and Andrew Bowering, and the appointment of an independent director to be named prior to closing. Biographical information regarding the current proposed directors and officers of the Company following completion of the Transaction is set out below:
Melvyn Slater PhD - Director and Chief Executive Officer
Dr. Melvyn Slater is a 40-year veteran of the wireless and semiconductor industries. His experience includes business leadership in R&D, turnaround and start up situations. He has broad international business exposure and over the course of his career has led activities and partnerships in North America, Europe, Asia, Australia and South America. Dr. Slater served as the inaugural CEO of National Information and Communication Technology in Australia and nurtured the company from near inception to maturity. During his career he has served as a senior executive at Motorola, Gemplus and Spansion. Dr. Slater has close ties to the academic community and has served on the Engineering Advisory Board of the Electrical Engineering and Computer Science Department at the University of California at Berkeley (chair from 1995-1999), on the Engineering Advisory Board of the University of Illinois, on the Board of Directors of the National Center for Supercomputing Applications and on the Board of Directors of MCC in Austin Texas and as Chairman of the Advisory Board to the School of Biological and Health Systems Engineering at Arizona State University.
James Jaskie PhD - Director and Chief Technology Officer
Dr. Jaskie retired from Motorola, where he was Chief Scientist for Motorola Labs. He was a Dan Noble Fellow, Motorola's highest technical award. In 2005, he was named one of the Scientific American 50, in which the magazine honors the 50 leaders of science and technology in the world. In 2006, Dr. Jaskie received one of NASA's Nano 50 awards for their list of the 50 most innovative people and projects in the country. Jim has concentrated on Energy and Nanotechnology Research & Development in his career. He has over 50 patents issued, including the first patent to use quantum dots for their designable color spectrum, the first patent for Carbon Nanotubes (CNTs) and their electrical behavior, and many patents concerning energy. Jim is the author of over a hundred scientific journal articles and innumerable invited conference presentations.
Michael Johnson PhD - Director and Chief Operating Officer
Dr. Johnson received his BS and PhD degrees in Physics from Arizona State University. His early work experience was gained from positions at Motorola as an engineer in the field of compound semiconductor device test and later as an R&D scientist in field emission display and associated process development. Next was a stint developing novel, low-temp processes for Magneto resistive Random-Access Memory (MRAM) development and later commercialization. Later work included R&D in electron field emission devices and applications, as well as device and materials characterization. Michael also has considerable experience with Multiphysics and optical modeling. More recently he has worked in the field of graphene and related carbon nanostructures, both as a consultant and heading a development team at a start-up company. Michael has numerous publications and issued patents in his name.
Andrew Bowering - Independent Director
Mr. Bowering is a venture capitalist and businessman who has operated and managed public and private entities for over 35 years. During his career, he has founded and managed numerous companies that have gone from early stage to ultimate sale. Mr. Bowering is typically a large investor in his companies but has raised hundred of millions in capital for entities that have included water treatment, resource exploration and development and consumer retail companies.
He is the founder, a director and significant shareholder of Prime Mining Corp. and American Lithium Corp., both TSX Venture 50 companies that currently have a combined market capitalization exceeding $1.2 billion. In addition to Prime and American Lithium, Mr. Bowering is a founder, director and significant shareholder of Apollo Silver Corp along with other TSX Venture listed companies. Previously to his current endeavours, he founded companies including Millennial Lithium Corp, M2 Cobalt Corp, Cap-Ex Iron Ore Ltd., Pinnacle Mines Ltd.
Paul Larkin - Director and Chairman of the Board
Since 1983, Mr. Larkin has been the President of the New Dawn Group, an investment and financial consulting firm located in Vancouver, British Columbia, New Dawn is primarily involved in corporate finance, merchant banking and administrative management of public companies. Mr. Larkin was an investment banker before founding New Dawn in 1983.
He has been a Director and/or Officer of various TSX, NYSE, and TSX Venture Exchange listed companies, since forming New Dawn. He was a Founding Partner, Director and Chairman of the Audit and M & A committees of US. Geothermal Inc. (HTM: NYSE MKT), a leading geothermal renewable energy company that was sold to Ormat Technologies Inc. (NYSE:ORA) in 2018 for an enterprise value of US$200 million plus. He is currently a Director of Vancouver based; RE Royalties Corp., listed on the TSX.V (RE), and Prime Mining Corp., listed on the TSX.V (PRYM).
Further Information
Trading in the common shares of the Company has been halted and is expected to remain halted pending completion of the Transaction and the satisfaction of the listing requirements of the TSX-V. Completion of the Transaction is subject to a number of conditions including the satisfactory completion of due diligence, the negotiation and entering into of a definitive agreement, the completion of the Concurrent Financing, receipt of all required shareholder, regulatory and third-party consents, including approval of the TSX-V and the shareholders of LuxHygenix, and satisfaction of other customary closing conditions. The Transaction and Concurrent Financing cannot close until the required approvals are obtained. There can be no assurance that the Transaction and Concurrent Financing will be completed as proposed or at all. A finder's fee in warrants to purchase common shares of the Company will be payable on closing to Stuart Lawrence, an arms-length British Columbia resident, subject to regulatory approval.
The Transaction is subject to the sponsorship requirements of the TSX-V unless an exemption from those requirements is granted. The Company intends to apply for an exemption from the sponsorship requirements; however, there can be no assurance that an exemption will be obtained. If an exemption from the sponsorship requirements is not obtained, a sponsor will be identified at a later date. An agreement to act as sponsor in respect of the Transaction should not be construed as any assurance with respect to the merits of the Transaction or the likelihood of its completion.
A summary of significant financial information with respect to LuxHygenix will be included in a subsequent news release. Further details about the proposed Transaction, the Concurrent Financing, and LuxHygenix will be provided in a subsequent News Release and in the filing statement to be prepared by the Company and filed in connection with the Transaction. Investors are cautioned that, except as disclosed in such filing statement, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon.
For further information, please contact:
Gstaad Capital Corp.
Paul Larkin, President
Email: [email protected]
LuxHygenix Inc.
Melvyn Slater, Chief Executive Officer
Email: [email protected]
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX Venture Exchange acceptance. The Transaction cannot close until the required approvals are obtained, and the outstanding conditions satisfied. 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 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 the Company should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release may contain certain "Forward-Looking Statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When or if used in this news release, the words "anticipate", "believe", "estimate", "expect", "target, "plan", "forecast", "may", "schedule" and similar words or expressions identify forward-looking statements or information. These forward-looking statements or information may relate to proposed financing activity, regulatory or government requirements or approvals, the reliability of third-party information and other factors or information. Such statements represent the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties. Many factors, both known and unknown, could cause results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements. The Company does not intend, and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules and regulations.
SOURCE: Gstaad Capital Corp.
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