PTEC Principal Technologies Inc

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• Binding Share Purchase Agreement to purchase 100% of Denmark-based Vivostat A/S ("Vivostat").
• Vivostat has a unique system for on-site preparation and application of autologous concentrated fibrin and platelet enriched fibrin sealants for use in post-surgical procedures.
• Used in over 200,000 surgical procedures, Vivostat's system has peer-reviewed evidence of zero rejection and infection rates.
• Vivostat has been profitable for the last 3 years and currently generates revenues of approximately €3,600,000 per year with a 60% gross profit margin.
• Vivostat is currently only actively marketed in six European countries representing less than 10% of its total addressable market.
• Transaction is expected to close on or before March 15, 2024, subject to receipt of applicable approvals, including of the TSX Venture Exchange ("TSX-V") and satisfaction of conditions.

VANCOUVER, BC, Feb. 6, 2024 /CNW/ - Principal Technologies Inc. (the "Company" or "Principal") (TSXV: PTEC) (FSE: J07), is pleased to announce that as at February 6, 2024, it entered into an arm's length binding Share Purchase Agreement ("SPA") to acquire (the "Acquisition") 100% of the equity interests of Vivostat, a 23-year-old Danish company which uses a unique autologous fibrin sealant solution for post-surgical use.

The Company will pay approximately €7,500,000 in cash plus 2,500,000 common shares in the capital of the Company at a price of $0.15, based on last closing price of the common shares on the TSX-V prior to this announcement, to the owners of Vivostat, as adjusted under the SPA. The Company has received an expression of interest from a major European fund with respect to financing the Acquisition and also expects to close a concurrent non-brokered equity offering to be priced in the context of the market after the announcement of the Acquisition (the "Offering").

Vivostat currently generates approximately €3,600,000 in revenues per year with a 60% gross profit margin. With Principal's backing and global expertise, Vivostat intends to accelerate the sales and marketing efforts in the six European Union ("EU") countries, which currently account for the majority of sales, and to grow sales in the numerous other EU countries where it is licensed.

Jerry Trent, CEO of Principal, said, "We are delighted to announce our first major acquisition. This purchase is the culmination of an extensive due diligence process on dozens of potential healthcare targets in Europe. We were seeking a profitable target that offered truly industry-leading, licensed products with untapped global appeal. Such a target should also serve as a solid base upon which to build a profitable, scalable medtech and healthcare portfolio with strong synergies between its component companies. Vivostat checked all our boxes. We are excited to ramp up sales far beyond the current market. It is gratifying to note that all of Vivostat's key employees will remain with the Company and become critical parts of the growth we forecast for the Company."

Sven Lange, CEO of Vivostat, added, "The acquisition by Principal now sets the stage for the global sales expansion of our industry-leading and patented product, subject to securing applicable foreign licenses."

The Company expects to pay a 1% finder's fee in relation to the acquisition of Vivostat, subject to approval of the TSX-V. The transactions contemplated by the SPA and Offering are subject to receipt of all necessary regulatory approvals, and the satisfaction of various conditions to closing, including the approval of the TSX-V. The Offering remains subject to entering into definitive documentation.

The Shares issued pursuant to SPA will be subject to a hold period expiring four months and one day from the date of issuance in accordance with applicable Canadian securities laws.

Trading of the Company's common shares on the TSX-V will remain halted pending receipt and review of acceptable documentation pursuant to Section 5.6 (d) of TSXV Policy 5.3 regarding a Fundamental Acquisition.

Vivostat A/S manufactures and distributes a unique system for on-site preparation and application of autologous concentrated fibrin and platelet enriched fibrin sealants. The technology was originally developed by Bristol Myers Squibb in the 1990's at an approximate cost of over €80 million.

These fibrin sealants are beneficial in surgery to assist in the healing process and preventing infection. Vivostat's products are currently distributed primarily in the EU with over 12,500 surgical applications in the past year alone and over 200,000 since inception. The patented Vivostat system is backed by extensive positive research from peer-reviewed journals demonstrating evidence of zero rejection or infection rates.

Principal Technologies Inc. is a Canadian-based healthcare acquisition company. The Company is engaged in building a portfolio of profitable healthcare technology companies with a focus on those with global distribution potential which have intellectual property capable of enhancing medical treatment quality, cost efficiency, optimization of the patient pathway, and implementation of point of care technologies.

ON BEHALF OF THE BOARD

Jerry Trent, Chief Executive Officer
Principal Technologies Inc.

Neither the TSX-V nor its Regulation Services Provider (as that term is defined in policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.

This press release contains "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws. This information and statements address future activities, events, plans, developments and projections. All statements, other than statements of historical fact, constitute forward-looking statements or forward-looking information. Such forward-looking information and statements are frequently identified by words such as "may," "will," "should," "anticipate," "plan," "expect," "believe," "estimate," "intend" and similar terminology, and reflect assumptions, estimates, opinions and analysis made by management of the Company in light of its experience, current conditions, expectations of future developments and other factors which it believes to be reasonable and relevant.

Forward-looking information and statements involve known and unknown risks and uncertainties that may cause the Company's actual results, performance and achievements to differ materially from those expressed or implied by the forward-looking information and statements and accordingly, undue reliance should not be placed thereon. Forward-looking statements included in this press release include the closing of the transactions contemplated by the SPA and the Offering on the terms and timing set out herein; receipt of additional licences; the funding for the cash portion of the purchase price of Vivostat; the receipt of all application regulatory approvals and satisfaction of conditions pursuant to the Offering and the SPA; realizing synergies between component companies and further acquisitions by Principal; and retention of Vivostat employees.

Risks and uncertainties that may cause actual results to vary include but are not limited to the availability of financing; fluctuations in commodity prices; changes to and compliance with applicable laws and regulations, including environmental laws and obtaining requisite permits and approvals; political, economic and other risks; as well as other risks and uncertainties which are more fully described in our annual and quarterly Management's Discussion and Analysis and in other filings made by us with Canadian securities regulatory authorities and available at www.sedarplus.ca. The Company disclaims any obligation to update or revise any forward-looking information or statements except as may be required.

SOURCE Principal Technologies Inc.