NEWS RELEASE!!!!!!!!!
Starpoint resolves issues to facilitate recall to trade
Starpoint Goldfields Inc STS
Shares issued 15,217,577 Feb 25 close $0.47
Fri 23 Jun 2000 News Release
Mr. Rick Ilott reports
Company management met with Canadian Venture Exchange staff on Monday, June
19, 2000, and resolved several outstanding issues that will facilitate a
recall to trade. The reasons for the extended halt were to resolve
transaction structuring issues, finalize contents of this new release and
to deal with issues that arose during review of personal information forms
filed in connection with the proposed change of business.
The company first announced reactivation plans in Stockwatch Feb. 1, 2000,
disclosing management had identified several opportunities in the Israeli
high-tech sector and that it would seek shareholder approval at its next
annual general meeting to change its listing category from a mining issuer
to a technology/industrial issuer.
In mid-February, company directors Harry Bristman and Rick Ilott left for
Israel to conduct due diligence on several projects under way at Israeli
science incubation centres. While they were in Israel, they conducted due
diligence on Labor Control Systems Ltd. (LCS). The stock was halted on Feb.
28, 2000, and there were three successive announcements in Stockwatch, Feb.
28, March 1 and March 3, 2000, announcing details of the Labor Control
Systems transaction,
A contract was then negotiated and signed with LCS on April 7, 2000,
pursuant to which the company will acquire up to a 51-per-cent equity
interest for $3.5-million (U.S.).
The company will make a series of option payments totalling $3.5-million
(U.S.) in exchange for shares in LCS. The schedule of payments and interest
to be earned is as follows:
May 1, 2000 -- $200,000 (U.S.) ($100,000 (U.S.) was paid Feb. 29, 2000;
$100,000 (U.S.) was paid May 1, 2000; interest acquired was 64 shares);
Sept. 1, 2000 -- $500,000 (U.S.) (option to purchase 159 shares);
Nov. 1, 2000 -- $700,000 (U.S.) (option to purchase 225 shares);
March 22, 2001 -- $700,000 (U.S.) (option to purchase 225 shares);
Sept. 22, 2001 -- $700,000 (U.S.) (option to purchase 225 shares); and
March 22, 2002 -- $700,000 (U.S.) (option to purchase 225 shares).
The company has completed the purchase of 64 shares and if it exercises all
of the options, the company will own 1,123 of the then issued 2,202 shares.
There are antidilution provisions in place during the term of the
agreement.
LCS has been researching, developing and testing a labour progress
monitoring system (LPMS), which follows the progress of labour prior to
birth, over the last three years. After the original specifications were
determined, the initial probe was designed, produced and tested. Dynamic
simulators were used together with early stage testing on birthing mothers.
Further research is intended to modify and develop the probe, wireless palm
monitors and autonomous monitors for home use. In addition, on receipt of
approval there will be advancements in the research and development of the
industrial design of the system, and the application of wireless telemetry.
Once development of the disposable and non-disposable products is complete,
they will be manufactured according to quality control specifications.
Since the disposable probes are invasive, they must be manufactured in a
controlled and clean room environment. Production of the probes involves
plastic injecting machines, silicone rubber injection machines and
extruders and assembly facilities. LCS has identified three subcontractors
for manufacture of the probes -- Diamond S.A. for development of optical
fibres, Degania Silicone Ltd. for development of the dilation sensor and
Elcam Disposable Medical Devices Ltd. for plastics injections, final
assembly, packaging and sterilization. The monitors will be assembled at
LCS from components purchased or manufactured by other external suppliers
and subcontractors.
LCS must obtain regulatory approval from the Food and Drug Administration
in the United States and comply with CE requirements (the equivalent
organization in the European Union), and meet the regulatory approval
requirements of other countries in which the LPMS will be marketed.
LCS will provide technical support, control orders, shipments and monitor
the quality of all LPMS monitors and probes.
Feasibility of the LPMS has been proven in initial clinical trials and a
full series of clinical trials are scheduled over the next six to 10 months
at medical centres in the United States, Western Europe, India and Israel.
Approval to conduct clinical trials in India has been obtained and these
trials are scheduled to begin in July. LCS will finance this first series
of clinical trials from the moneys that it has received from the company.
Medical trials in other centres will begin after the company gets IDE
approval. In addition to the current projects, future activities include
completing the development of the system, industrial design, obtaining
approval for the station probe and developing the wireless system.
The company believes the LPS monitoring system to be an innovative,
state-of-the-art monitor. The benefits this system provides are numerous.
The company and LCS believe there will be savings of approximately $1,200
(U.S.) per birth as a result of a reduction in the number of physical
examinations from as many as 10 to one. They believe the main result will
be to reduce the risk of infection and discomfort of the mother. They
believe another benefit of this monitoring will be to reduce the frequency
of cesarean sections. The goal of LCS is to have the LPM system the
standard of care in delivery rooms worldwide.
David Tomer, the founder of LCS, in conjunction with a team of
obstetricians and gynecologists, developed and are continuing to develop
and improve the LPMS technology. Mr. Tomer travelled to Vancouver to meet
with management, shareholders, and brokers, and discuss the technology at
the company's annual general meeting held April 28, 2000.
LCS's products use fibre optic and eventually wireless technology. The
disposable probes of LPMS are expected to account for 90 per cent of sales.
The initial strategic target is the 8.2 million annual births in Europe and
North America with eventual presence in all developed countries.
LCS expects to continue its activities in product development, clinical
trials, FDA and GE (Europe) approval and eventually global marketing of
this advanced medical technology.
The auditors of LCS, KPMG, were engaged to complete annual financial
statements for LCS to Dec. 31, 1999. The audit report is dated April 13,
2000. The statements (showing Israeli currency figures with U.S. dollar
equivalents) with comparatives to Dec. 31, 1998 (Israeli currency figures),
indicate that LCS had working capital of $36,597 (U.S.) at Dec. 31, 1999
(which is prior to the company's investment of $200,000 (U.S.)).
Dr. Reuven Lewinsky, the senior staff obstetrician/gynecologist at the Bnai
Zion Medical Centre, Haifa, Israel, will act as consultant to the LCS
project and oversee the clinical testing. Dr. Lowinsky is involved in
numerous research projects surrounding maternal/fetal issues and is the
author of approximately 67 publications and abstracts and 93 presentations
worldwide to his name. As a result of allegations contained in a Jerusalem
Post article dated May 17, 2000, he replaces Prof. Ben Rafael who has
stepped down as consultant and adviser to LCS.
Dr. Victor Gomel, of Vancouver, B.C., has been appointed to the advisory
board of the company. Dr. Gomel holds the rank of professor in the
department of obstetrics and gynecology of the University of British
Columbia. Dr. Gomel's special interests lie in the field of gynecology and
reproductive medicine. In the area of reproduction, his research interests
include fertility, tubal physiology, postoperative adhesions, reproduction
surgery and in vitro fertilization. He is internationally known for his
pioneering work in his field. He is on the editorial boards of several
important international scientific societies and served as their president,
and has received many international awards in recognition of his work.
Dr. Gomel will liaise with LCS and advise the company on the
appropriateness of the LCS budgets. The company will then implement steps
to ensure that funds invested by the company in LCS are monitored and spent
in accordance with these budgets.
Director Harry Bristman will pool 50 per cent of his present share position
of 2,340,815 shares and director Mr. Iloft will pool 50 per cent of his
present share position of 1,797,075 shares until the company completes the
acquisition of a 51-per-cent interest in LCS, presently scheduled to close
on March 22, 2002. The release formula will be tied to achieving financial
milestones. As the company raises funds and exercises an option to purchase
an interest in LCS, Mr. Bristman and Mr. Iloft will be entitled to a pro
rata release of their pooled shares. Mr. Bristman and Mr. Iloft will be
granted a relief from pooling requirements allowing them the opportunity to
sell a portion of their pooled shares during this period provided funds are
reinvested in full compliance with exchange private placement policies.
Securities so purchased are not required to be pooled.
The company will proceed with the private placement for 800,000 units at 25
cents per unit announced in Stockwatch Feb. 9, 2000. Each unit comprises
one common share and one non-transferable share purchase warrant
exercisable to purchase one common share at 50 cents per share for two
years from issue date of the securities.
The private placement for 770,000 units at 26 cents per unit announced in
Stockwatch Feb. 22, 2000, will now be a brokered private placement with
Wolverton Securities Ltd. participating as agent. Each unit comprises one
common share and one share purchase warrant exercisable to purchase one
common share at 52 cents for two years from issue date of the securities. A
commission of up to 10 per cent of the funds raised will be paid, and the
company will issue an agent's warrant entitling the agent to purchase up to
25 per cent of the total units sold, for a two-year period.
Additional financing will be required to successfully finance the company's
intended investment in LCS and to maintain satisfactory working capital
positions. On receiving approval, the company must satisfy the exchange's
listing requirements, as required for a Tier 2 issuer. There is no
assurance that the company will be able to raise funds sufficient to
achieve these objectives.
The closing price of the company's shares on Feb. 28, 2000, immediately
prior to its halt was 47 cents. To raise the balance of $3.3-million (U.S.)
(approximately $4.8-million (Canadian)) to complete its investment in LCS
by way of a private or public financing, as an example, the company would
have to issue up to 9,636,000 shares at 50 cents.
Agreements announced previously relating to financing, investor relations
and technical management have been signed respectively with Wayne Taylor
(April 4, 2000), D.A. Huston & Associates (Feb. 9, 2000) and Duncan Suttles
(Feb. 7, 2000).
Mr. Taylor's prime task will be to assist in identifying sources of
financing to support the contractual obligations to LCS and to provide
adequate continuing working capital. Vigorous efforts are under way to
select suitable institution and medical interest financing in Canada, the
United States and elsewhere.
Mr. Taylor, Dr. Gomel and Derek Huston (the principal of D.A. Huston &
Associates) will be granted incentive options entitling them to purchase up
to 200,000 shares each at 50 cents per share. The hold period for any
shares issued on exercise of these options will run from the date the
company's shares are recalled to trade and with respect to the options
granted to Mr. Huston will vest in stages over 12 months in accordance with
CDNX policies.
On April 28, 2000, at the annual general meeting, the shareholders approved
various resolutions, which included the name change from Starpoint
Goldfields Inc. to Starpoint Medi-Tech Inc., a change in the direction of
the company from a resource to an industrial issuer, and the agreement with
LCS. The following directors and officers were elected: Mr. Bristman,
chairman and director; Mr. Ilott, president and director; Gordon Read,
director; Stan Stanley, director; and Donald Lyons, secretary.
The name change will be effective on receipt of exchange acceptance of the
LCS transaction.
These developments in no way alter the company's intention to exploit its
precious metal properties in the Democratic Republic of Congo.
The company will complete and file a filing statement with the exchange
containing prospectus level disclosure of the matters described herein.
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.
Although Wolverton Securities Ltd., has agreed to act as sponsor in
connection with the transaction, an agreement to sponsor should not be
construed as any assurance with respect to the merits of the transaction or
the likelihood of completion.
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