Vancouver, British Columbia--(Newsfile Corp. - January 28, 2025) - Reem Capital Corp. (TSXV: REEM.P) (the "Corporation" or "Reem"), a "capital pool company" pursuant to the policies of the TSX Venture Exchange (the "Exchange") announces that, further to its news release of September 22, 2023 announcing the definitive securities exchange agreement dated September 22, 2023 (the "Definitive Agreement") with Kalron Holdings Ltd. ("Kalron"), Seegnal eHealth Ltd. ("Seegnal"), a subsidiary of Kalron, and certain securityholders of Kalron in furtherance of the Corporation's proposed Qualifying Transaction (as defined in Policy 2.4 - Capital Pool Companies of the Exchange) (the "Proposed Transaction"), it has amended certain terms of the Definitive Agreement and the proposed private placements.
RECENT DEVELOPMENTS OF KALRON AND SEEGNAL
In the end of 2023, Seegnal successfully finished and piloted its instantaneous precision medication software as a service ("SAAS") platform with live genetic profiling in hospitals. Seegnal anticipates making this capability available to all existing clients who choose to participate in Q2 2025, offering for the first time physicians at the point of care, the ability to prescribe precision medication for patient-specific (up to DNA level) tailored medicine therapy to reduce the risk of adverse drug reactions.
In January 2024, Seegnal signed a new license agreement with LEUMIT Health Services, a large HMO in Israel, for a five year term, while converting LEUMIT to Seegnal's new SAAS business model.
In November 2024, Seegnal's UK distributor, Digitals UK, secured access for Seegnal's clinical decision-support software platform on the UK Government's G-Cloud 14 framework. This listing allows UK public sector organizations, including NHS trusts, hospitals, and clinics, to procure Seegnal's "Virtual Digital Pharmacist" through a streamlined process. The UK's NHS is responsible for one of the largest public healthcare systems in Europe, which includes 515 hospitals and 390,000 doctors. The G-Cloud 14 framework, managed by the Crown Commercial Service, facilitates public sector procurement of pre-approved cloud software and services, allowing organizations to bypass lengthy tender processes.
In December 2024, Seegnal's exclusive distributor in Poland signed a binding agreement with the largest private network of hospitals and clinics in Poland to implement Seegnal's system across a network of 20 hospitals following the completion of a pilot program in one of its hospitals, which is expected to commence Q1 of 2025.
AMENDMENT TO DEFINITIVE AGREEMENT
The parties to the Definitive Agreement have amended and restated the Definitive Agreement on January 27, 2025 (the "Amended and Restated Definitive Agreement") to reflect, among other matters: (i) updates to the capitalization of Kalron; (ii) the outside date being extended to May 31, 2025; (iii) updates to the concurrent financing consisting of the Kalron Financing (as defined herein); (iv) updates to the exchange of securities being contemplated as part of the Proposed Transaction; (v) the consolidation ratio of the Corporation for the Reem Consolidation (as defined herein) being updated to 3.16:1; and (vi) the share split ratio of Kalron being updated to approximately 35.52:1 (the "Kalron Share Split").
Pursuant to the Amended and Restated Definitive Agreement:
- immediately prior to closing of the Proposed Transaction, all outstanding convertible debentures and SAFEs of Kalron will be converted, in accordance with their terms, into post-Kalron Share Split ordinary shares of Kalron ("Kalron Post-Split Shares");
- the Corporation shall acquire all of the issued and outstanding Kalron Post-Split Shares by way of a securities exchange; and
- certain holders of convertible debentures of Kalron shall receive, pursuant to the terms of the purchase agreements for such convertible debentures, warrants of Reem entitling the holder thereof to purchase one Resulting Issuer Share (as defined below) at an exercise price of $1.20 per Resulting Issuer Share (post-Reem Consolidation (as defined below)) at any time on or before the 24-month anniversary from the date of issuance.
It is intended that the Proposed Transaction will constitute a reverse take-over of the Corporation by Kalron inasmuch as the former shareholders, debentureholders and other securityholders of Kalron will own approximately 78.64% of the outstanding Resulting Issuer Shares, which such calculation does not factor in the completion of the Kalron Financing (as defined below) nor any financial advisory services securities being issued at closing of the Proposed Transaction. The Corporation following the completion of the Proposed Transaction is herein referred to as the "Resulting Issuer". The Resulting Issuer Shares to be issued to former shareholders, debentureholders and other securityholders of Kalron will be issued at a deemed price of $0.80 per Resulting Issuer Share.
The Proposed Transaction will constitute the "Qualifying Transaction" of the Corporation as such term is defined in Policy 2.4 - Capital Pool Companies (the "CPC Policy") of the Exchange. The Corporation expects to be classified as a Tier 2 Technology Issuer upon closing of the Proposed Transaction and it is anticipated that the Resulting Issuer Shares will trade on the Exchange under the stock symbol "SEGN". The Resulting Issuer Shares will remain halted pending receipt and review of acceptable documentation regarding the Qualifying Transaction pursuant to the CPC Policy.
To the knowledge of the directors and executive officers of Kalron, the following persons currently beneficially own, directly or indirectly, or exercise control or direction over more than 10% of the ordinary shares of Kalron: (a) Mikal Ltd. ("Mikal"), an entity established under the laws of Israel and controlled by Gilat Management Services Ltd. ("Gilat") (an entity established under the laws of Israel and controlled by Mr. Avraham Gilat, a resident of Israel) and Edtom Ltd. ("Edtom") (an entity established under the laws of Israel and controlled by Mr. Ron Nafatli, a resident of Israel), which currently owns 71.0% of the outstanding ordinary shares of Kalron; (b) Roni Shiloh, which currently owns 13.5% of the outstanding ordinary shares of Kalron; and (c) Edtom, an entity controlled by Mr. Ron Nafatli, which currently owns 10.2% of the outstanding ordinary shares of Kalron. Gilat also owns 0.4% of the outstanding ordinary shares of Kalron.
Each of Mikal, Edtom and Gilat are expected to qualify as a Principal and Insider (as such terms are defined in the policies of the TSXV) of the Resulting Issuer following closing of the Proposed Transaction, as it is anticipated that they will each have beneficial ownership of, or control or direction over, directly or indirectly, more than 10% of the outstanding Resulting Issuer Shares (as defined below). Mikal and Edtom will hold, directly, 50.1% of the Resulting Issuer Shares following closing of the Proposed Transaction.
On or immediately prior to the closing of the Proposed Transaction, the Corporation will consolidate its outstanding share capital (the "Reem Consolidation") on the basis of one new common share of Reem for each 3.16 existing common share of Reem. There are currently 7,900,000 common shares of Reem outstanding which will result in approximately 2,500,000 post-Reem Consolidation common shares issued and outstanding. The Reem Consolidation will also affect the holders of the Corporation's outstanding options, as described below, on the same basis.
Prior to the closing of the Proposed Transaction, Kalron will complete the Kalron Share Split and will split its outstanding ordinary shares on the basis of approximately 35:52 new ordinary shares of Kalron for each one existing ordinary share of Kalron. The Kalron Share Split will not affect the holders of Kalron's outstanding convertible debentures or SAFE.
Following the completion of the Proposed Transaction, the Reem Consolidation and the Kalron Financing, there will be approximately 45,602,073 Resulting Issuer Shares outstanding, and approximately 30,951,308 Resulting Issuer Shares will be reserved for issuance pursuant to convertible securities of the Resulting Issuer.
The Proposed Transaction will not constitute a "Non-Arm's Length Qualifying Transaction" (as such term is defined by the Exchange). In addition, the Proposed Transaction is not a "related party transaction" as such term is defined by Multilateral Instrument 61-101 - Protection of Minority Security Holders and is not subject to Policy 5.9 of the Exchange. As a result, no meeting of the shareholders of the Corporation is required pursuant to the CPC Policy or applicable securities laws.
In connection with the Proposed Transaction, Seegnal has entered into an engagement letter with Exiteam Ltd. ("Exiteam") whereby Exiteam will be paid a financial advisory services fee of Resulting Issuer Shares equaling 2% of the issued and outstanding Resulting Issuer Shares following completion of the Proposed Transaction, calculated on a fully-diluted basis, upon closing of the Proposed Transaction (the "Exiteam Financial Advisory Services Fees"). Additionally, Seegnal has entered into an engagement letter with and Quarck Investments Ltd. ("Quarck") whereby Quarck will be paid a financial advisory services fee of Resulting Issuer Shares equaling 2% of the issued and outstanding Resulting Issuer Shares following completion of the Proposed Transaction, calculated on a non-diluted basis, upon closing of the Proposed Transaction (the "Quarck Financial Advisory Services Fees"). The Exiteam Financial Advisory Services Fees and the Quarck Financial Advisory Services Fees are subject to Exchange acceptance in accordance with the policies of the Exchange. Ronnie Jaegermann is a director, officer and shareholder of Exiteam and a director of the Corporation.
The following table summarizes the proposed pro forma capitalization of the Resulting Issuer following completion of the Proposed Transaction, the Reem Consolidation, the Kalron Share Split and the Kalron Financing:
| Resulting Issuer Shares | Securities Outstanding After Giving Effect to the Proposed Transaction (% of fully diluted) | |||
| Issued to shareholders of Kalron pursuant to the Proposed Transaction (excluding the convertible debenture and SAFE holders of Kalron) | 6,560,310 | 8.57% | ||
| Issued to shareholders of Kalron upon conversion of the convertible debentures and SAFE of Kalron pursuant to the Proposed Transaction(1) | 29,299,790 | 38.27% | ||
| Existing shareholders of Reem (post-Consolidation) | 2,500,000 | 3.27% | ||
| Issued to investors in the Kalron Financing(2) | 5,000,000 | 6.53% | ||
| Issued to Exiteam as the Exiteam Financial Advisory Services Fees | 1,424,771 | 1.86% | ||
| Issued to Quarck as the Quarck Financial Advisory Services Fees | 817,202 | 1.07% | ||
| Total Resulting Issuer Shares (basic) | 45,602,073 | |||
| Reserved for issuance upon the exercise of Resulting Issuer Warrants (as defined below) to be issued in the Kalron Financing(2) | 5,000,000 | 6.53% | ||
| Reserved for issuance upon the exercise of warrants of the Resulting Issuer to be issued upon conversion of the Kalron convertible debentures(1) | 25,378,469 | 33.15% | ||
| Reserved for issuance upon exercise of outstanding Reem stock options (post-Consolidation) | 250,000 | 0.33% | ||
| Reserved for issuance upon the exercise of warrants to be issued to Capital Canada Limited(3) | 322,839 | 0.42% | ||
| Total Resulting Issuer Shares (diluted) | 76,553,381 | 100% | ||
- Certain convertible debentures accrue interest and such amounts factor in estimated interest to February 28, 2025. These amounts are subject to change as interest continues to accrue. The warrants of the Resulting Issuer shall be issued at an exercise price of $1.20 per Resulting Issuer Share (post-Consolidation).
- Assumes completion of the $4,000,000 Kalron Financing.
- To be issued pursuant to an engagement letter between Seegnal and Capital Canada Limited entitling Capital Canada Limited to warrants of the Resulting Issuer for services relating to prior financings of Kalron and Seegnal.
UPDATES TO FINANCINGS IN CONNECTION WITH THE PROPOSED TRANSACTION
Instead of the previously announced Reem private placement of subscription receipts, Kalron intends to complete a non-brokered private placement (the "Kalron Financing") of up to 5,000,000 subscription receipts (the "Subscription Receipts") at $0.80 per Subscription Receipt for aggregate gross proceeds of up to $4,000,000 (or such greater amount as may be agreed to by Reem and Kalron). Each Subscription Receipt will, following the completion of the Proposed Transaction and the satisfaction of certain escrow release conditions, entitle the holder to receive, without the payment of additional consideration or taking of further action, one unit of Kalron consisting of (i) one Kalron Post-Split Share, and (ii) one share (post-Kalron Share Split) purchase warrant of Kalron (a "Kalron Warrant" or "Kalron Warrants"), with each Kalron Warrant entitling the holder thereof to acquire one Kalron Post-Split Share at a price of $1.20 until twenty-four (24) months following the completion of the Proposed Transaction. Each Kalron Post-Split Share and Kalron Warrant issued to holders of Subscription Receipts upon satisfaction of the escrow release conditions shall be exchanged for one common share of the Resulting Issuer (a "Resulting Issuer Share"), and one share purchase warrant of the Resulting Issuer (a "Resulting Issuer Warrant" or "Resulting Issuer Warrants") pursuant to the terms of the Definitive Agreement, with each Resulting Issuer Warrant entitling the holder thereof to acquire one Resulting Issuer Share at a price of $1.20 until twenty-four (24) months following the completion of the Proposed Transaction. Proceeds of the Kalron Financing will be held in escrow pending satisfaction of customary escrow release conditions, including the completion, satisfaction or waiver of all conditions precedent to the Proposed Transaction and the receipt of all required shareholder and regulatory approvals, as applicable (including the conditional approval of the Exchange) in connection with the Proposed Transaction, all of which shall be set forth in a subscription receipt agreement to be entered into. In connection with the Kalron Financing, Kalron may pay certain finders cash commission of up to 8% of the gross proceeds of the Kalron Financing. 100% of the cash payable to such finders shall be payable to such finders upon release of the Kalron Financing proceeds from escrow. Kalron anticipates that two of its existing shareholders, Mikal and Edtom, will invest a total of $1,000,000 CAD as lead investors in the Kalron Financing.
Kalron closed the previously announced financing of convertible debentures of Kalron.
The following table sets out the proposed principal uses of funds by the Resulting Issuer, after giving effect to the Proposed Transaction and assuming completion of the Kalron Financing:
| Kalron Private Placement | |
| Sales and Marketing | $1,400,000 |
| Research and Development | $1,200,000 |
| General and Administration | $800,000 |
| Public Company and Listing Expenses | $500,000 |
| Unallocated Working Capital | $100,000 |
| Total | $4,000,000(1) |
(1) Assumes completion of the $4,000,000 Kalron Financing.
SELECTED FINANCIAL STATEMENT INFORMATION
The following table presents selected financial statement information on the financial condition and results of operations for the Corporation and Kalron. Such information is derived from the unaudited financial statements of Kalron for the period ended September 30, 2024 and the unaudited financial statements of the Corporation for the period ended November 30, 2024. The information provided herein should be read in conjunction with such unaudited financial statements, which have been prepared in accordance with IFRS. The Corporation's financial statements have been filed on SEDAR.
| Kalron | Reem Capital Corp. | |
| As at September 30, 2024 and for the 9 month period ended September 30, 2024 | As at November 30, 2024 and for the 3 month period ended November 30, 2024 | |
| (unaudited) (USD) | (unaudited) (CAD) | |
| Balance Sheet | ||
| Current Assets | 857,000 | 265,309 |
| Other assets | 207,000 | Nil |
| Total Assets | 1,064,000 | 265,309 |
| Current Liabilities | 19,247,000(1) | 18,398 |
| Non-Current Liabilities | Nil | Nil |
| Total Liabilities | 19,247,000 | 18,398 |
| Shareholders' Equity (Deficit) | (18,183,000) | 246,911 |
| Total Liabilities and Shareholders' Equity | 1,064,000 | 265,309 |
| Revenues | 1,061,000 | Nil |
| Net profit/loss | (2,798,000) | (10,385) |
(1) Includes non-cash convertible loans of USD$15,098,000, all of which are anticipated to be converted in connection with the Proposed Transaction.
ABOUT KALRON
Kalron is a privately-held holding corporation that was established under the laws of Israel in 2017. Other than a minority shareholder of Seegnal, Kalron is the sole shareholder of Seegnal, an Israeli based corporation which had operated under Teva Pharmaceuticals Industries Ltd. ("Teva") until its purchase by Kalron in December 2017.
Seegnal was founded in 2015 as a fully owned subsidiary of Teva to develop a clinical decision support system software for clinicians at the point of care, aimed at improving patient care and outcomes, improving clinician experience and substantially lower healthcare expenditures. Seegnal provides patient-tailored SAAS system for one-glance managing and mitigating drug related problems while providing decision support to healthcare professionals at the point of care. Seegnal has developed, owns and is marketing a SAAS based software platform of addressing the need of detecting and solving drug-related problems, which has been determined as the fourth leading cause of mortality in developed countries.1 Seegnal's SAAS based software platform is a patient-tailored, clinicians'-friendly drug-related problem solution. Seegnal exclusively integrates at the point-of-care, unique patient specific data like genetics, food, results of lab tests, ECG, smoking and the effects of many concomitant medications, while delivering accuracy, sensitivity and specificity. The software was developed for clinicians to manage and resolve Drug Related Problems, relevant specifically per patient, quickly and effectively. In 2017, Seegnal was purchased from Teva by Kalron. As part of the acquisition, Kalron committed to continue to employ Seegnal's employees and to pay Teva certain royalties on sales. Seegnal is marketing its SAAS-based platform in the State of Israel, the UAE, the United States of America and Poland. The platform is currently a "standard of care" system for over 10,000 clinicians in Israel on a daily basis when prescribing medications to their patients. Two of Israel's four HMO's are using the system as their primary solution.
Kalron, through its subsidiary Seegnal, has developed a vast intellectual property portfolio. The SAAS based technology contains over 1500 specific algorithms as well as United States of America, Israeli and Chinese granted patents in the areas of Graphical User Interface ("GUI") and workflow. The Seegnal system's functional disruptive GUI approach reduces the workload to 1% compared to legacy systems, while providing over 98% alert accuracy and utilizing advanced pharmacogenetics algorithms to provide futuristic precision medication therapy today.
ABOUT REEM
Reem was incorporated under the Business Corporations Act (British Columbia) and is a Capital Pool Company governed by the policies of the Exchange. Reem's principal business is the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction. Investors are cautioned that trading in the securities of a Capital Pool Company should be considered highly speculative.
SIGNIFICANT CONDITIONS TO CLOSING
The completion of the Proposed Transaction is subject to a number of conditions, including but not limited to completion of the Kalron Financing, satisfactory due diligence reviews, approval by both boards of directors, approval from the shareholders of Kalron, obtaining necessary governmental and third party approvals (including approval from the Israeli Tax Authority), waiver of sponsorship and Exchange acceptance. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.
SPONSORSHIP
The Corporation intends to obtain a waiver from sponsorship in connection with the Proposed Transaction from the Exchange. There is no guarantee that such waiver can be obtained.
ARM'S LENGTH QUALIFYING TRANSACTION
The control persons of Kalron are not (and their associates and affiliates are not) control persons in the Corporation. Accordingly, the acquisition by the Corporation of all the issued and outstanding shares of Kalron is not a Non-Arm's Length Qualifying Transaction for the purposes of Exchange policies. As a result, the Proposed Transaction will not be subject to approval of the shareholders of the Corporation and therefore no meeting of the shareholders of the Corporation is required as a condition to the completion of the Proposed Transaction.
INSIDERS OF THE RESULTING ISSUER
Other than has been previously referred to in this press release, and to the knowledge of the directors and senior officers of the Corporation or Kalron, no person will become an insider of the Resulting Issuer as a result or upon completion of the Proposed Transaction.
FURTHER INFORMATION
Reem will provide further details in respect of the Proposed Transaction and the Kalron Financing in due course by way of a subsequent news release, however, Reem will make available to the Exchange all information, including financial information, as may be requested or required by the Exchange.
All information contained in this news release with respect to Reem and Kalron was supplied by the respective party, for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied on the other party for any information concerning the other party.
Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to the Exchange Requirements, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. 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 non-offering prospectus 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 a capital pool company should be considered highly speculative.
The 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.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
For further information please contact:
Reem Capital Corp.
Jonathan Held, CFO
Telephone: 416-270-9566
Email: jheld@aloefinance.com
Kalron Holdings Ltd.
Eyal Schneid, CEO
Telephone: 213-309-5030
Email: eyal.schneid@seegnal.com
Website: www.seegnal.com
Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Neither the Exchange nor its Regulation Services Provider (as that term is defined in the polices of the Exchange) has in any way passed upon the merits of the Proposed Transaction and associated transactions and neither of the foregoing entities has in any way approved or disapproved of the contents of this press release.
FORWARD-LOOKING STATEMENTS
This press release contains statements that constitute "forward-looking information" ("forward-looking information") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking information and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "believe", "estimate", "expect", "intend", "projected" or variations of such words and phrases or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information.
More particularly and without limitation, this press release contains forward-looking statements concerning the Proposed Transaction (including the terms and timing thereof), the Kalron Financing including the amounts anticipated to be raised and the existing shareholders intending to participate in such Kalron Financing, the escrow release conditions and the use of proceeds therefrom, the details of any securities issuances, conversions, exchanges or cancellations, the continued business of the Resulting Issuer, the trading of the Resulting Issuer Shares on the Exchange and the stock symbol in connection therewith, the anticipated insiders of the Resulting Issuer, the holding of shareholder meetings in connection with the Proposed Transaction, the closing of the Proposed Transaction including the Reem Consolidation, the Kalron Share Split and the Kalron Financing, the successful implementation of Seegnal's instantaneous, precision medication capabilities through live genetic profiling in hospitals and other SAAS products, the successful implementation of Kalron and Seegnal's business plans and the completion of the pilot program in Poland and implementation of Seegnal's system across hospitals in Poland. In disclosing the forward looking information contained in this press release, Reem has made certain assumptions, including that: all applicable shareholder and regulatory approvals for the Proposed Transaction will be received; that the Proposed Transaction will be completed on mutually acceptable terms and within a customary timeframe for transactions of this nature and the acceptance of the Seegnal products by customers in the United States and Europe. Although Reem believes that the expectations reflected in such forward-looking information are reasonable, it can give no assurance that the expectations of any forward-looking information will prove to be correct. Known and unknown risks, uncertainties and other factors may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Such factors include, but are not limited to: availability of financing; delay or failure to receive board, shareholder or regulatory approvals; and general business, economic, competitive, political and social uncertainties. There can be no certainty that the Proposed Transaction will be completed on the terms set out in the Definitive Agreement or at all. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release. Except as required by law, Reem disclaims any intention and assumes no obligation to update or revise any forward-looking information to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking information or otherwise.
1 Miles Hacker, Pharmacology, 2009 (https://www.sciencedirect.com/topics/medicine-and-dentistry/adverse-drug-reaction); Ernst FR, Grizzle AJ: Drug-related morbidity and mortality: updating the cost-of-illness model. J Am Pharm Assoc. 2001, 41 (2): 192-9; and Jason L et al., Journal of American Medical Association 1998; 279: 1200-1205.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/238629
SOURCE: Reem Capital Corp.
