Press Release - October 29, 1999
Mecca Medi-Tech Inc. ("Mecca" or the
is pleased to announce that it has entered into a
share exchange agreement (the "Share
Agreement") dated for reference September 21,
1999 with the shareholders of Pheromone
Corp. ("PSC"), a medical device and
company located in Calgary, to acquire all of the
issued and outstanding shares of PSC for
common shares of Mecca. The Company will
concurrently be carrying out a brokered private
placement, with Goepel McDermid Inc., acting as
agent, to raise $1,500,000 through the issuance
common shares of the Company at $1.16 per
Goepel McDermid Inc. has also agreed to
the Company's acquisition of PSC as its
Transaction, subject to the satisfactory
its further due diligence.
PSC has researched and patented a fertility monitor that can predict ovulation in women using pH changes in the skin as an indicator of ovulation. The fertility monitor looks and works like a wristwatch and displays fertility data on a LCD screen. If a woman wishes the fertility information may be hidden behind the LCD screen of the working wristwatch. Through its sensor, the device takes twelve measurements of the skin surface pH each day and its interactive computer evaluates and averages the data measurements. The computer calculation results may be viewed on the LCD display or the user may choose to be alerted by audio signals. PSC has shown that a characteristic drop in pH followed by a rise in pH can be observed four days prior to ovulation. A woman who wishes to become pregnant may use the fertility monitor as a tool to accurately predict when she is likely to ovulate. It is possible that the fertility monitor will also be used "off-label" as a convenient, non-invasive form of birth control.
PSC has produced commercial models of the fertility monitor and will evaluate the monitor in clinical studies during the last quarter of 1999. The clinical studies may result in some modification of the fertility monitor. Upon completion of the clinical studies, the Company intends to apply to the FDA for approval of the fertility monitor as a medical device under the 510K process. Under this process the FDA will usually respond to an application within 90 days. The Company's strategy is to license the fertility monitor to a strategic partner with existing channels of distribution, which will then be responsible for marketing the device.
PSC has also discovered a novel pheromone which it has partially characterized and has named Synchronin. Pheromones are airborne chemical signals that are released by an individual into the environment and which affect the physiology or behavior of other members of the same species. PSC believes Synchronin has the ability to regulate ovulation in women and that it may reduce impotence and increase male libido. PSC has shown that a single topical dose of Synchronin is capable of inducing ovulation in some women within one week of exposure to Synchronin. PSC is beginning to test the effect of Synchronin on increasing male libido and reducing impotence.
PSC acquired the fertility monitor and the pheromone technologies from Doug Marett, the President of PSC, under an agreement dated June 19, 1998. Under that agreement, PSC agreed to pay Doug Marett a royalty equal to 2% of revenue from cash, receivables or other consideration received by PSC and arising from the licensing, sale or other use of the technologies, to a maximum amount of $570,000. The first $1,500,000 of such revenue will not be subject to the royalty. The fertility monitor technology is protected by one issued U.S. patent and the corresponding international patent applications. PSC is continued under the Business Corporations Act (Alberta) and the insiders of PSC are Dr. William Cochrane, Doug Marett, Dr. Charles Borg, and W.A. Cochrane & Associates.
Dr. William Cochrane is the Chief Executive Officer of PSC, Doug Marett is President, and Dr. Charles Borg the Executive Vice President and Chief Operating Officer. Dr. Cochrane is presently a consultant to MDS Capital Corp., Toronto. He is a director of a number of Canadian and American biotechnology companies and is President (Emeritus) University of Calgary. He was previously Chair, President and Chief Executive Officer of Connaught Laboratories Ltd.; Chair of the National Biotechnology Advisory Board, and President of the Canadian Society for Clinical Investigation. Dr. Cochrane was made an Officer of the Order of Canada in 1989. Doug Marett founded PSC in 1992. Mr. Marett's discovery of the fertility monitor and pheromone technologies stem from his research of female menstrual-cycle regulation, which was supported, in part, by the National Research Council. Dr. Borg was the founder of the largest pharmaceutical advertising agency group in the 1970's and worked as a marketing consultant to major companies prior to joining PSC. On the closing of the Share Exchange Agreement, Dr. Cochrane, Mr. Marett, and Dr. Borg, and one other nominee of the shareholders of PSC, will be appointed to the Mecca board and one of the current directors at Mecca will step down.
Pursuant to the Share Exchange Agreement, Mecca has agreed to issue 7,933,333 common shares of the Company to acquire all of the issued and outstanding share capital of PSC. There are currently 3,400,000 common shares of the Company issued and outstanding. A number of the common shares of Mecca issued to the shareholders of PSC will be categorized as performance shares which, when issued, will be placed in escrow and released in accordance with the policies of the Vancouver Stock Exchange (the "VSE").
The Share Exchange Agreement provides that Mecca will pay to PSC a refundable deposit of $100,000, which will be secured by a charge over the intellectual property of PSC. PSC will use the refundable deposit to fund the continued development of the fertility monitor and the pheromone technologies.
The Company is a "venture capital pool" company under the policies of the VSE and the proposed transaction to be entered into by the Company is intended to serve as a "Qualifying Transaction" under VSE policies. The completion of the transaction is subject to a number of conditions. First, Mecca must on or before the closing, raise gross proceeds of a minimum of $1,500,000 through the issuance of common shares of Mecca at a minimum price of $1.16 per share. Second, Mecca must grant to the principals of PSC and Mecca, respectively, 500,000 and 150,000 options to acquire common shares of Mecca. 125,000 of the options to be granted to the principals of PSC will be exercisable at a price of $1.00 per share and all of the remaining options to be granted pursuant to the Share Exchange Agreement will be exercisable at a price of $1.45 per share. Third, the "majority of the minority" shareholders of the Company must approve the transaction. Finally, the transaction is subject to regulatory acceptance by the VSE.
MECCA MEDI-TECH INC.
Per: Jim Heppell President and CEO
Contact: Tel: (604) 443-7011 email: email@example.com
The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this statement. This press release may contain certain forward-looking statements. Actual events or results may differ from the Company's expectations.
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