Last checked at 19 Mar 2007 07:00
Embargoed: 0700hrs 19th March 2007
MeDaVinci plc ("MeDaVinci") Investment
MeDaVinci is pleased to announce that it has increased its equity stake in ErgoDynamics Holding B.V. ("ErgoDynamics") to 32% and agreed to support ErgoDynamics with the provision of a loan facility (with warrants attached) of up to EUR 750,000 which will be used by ErgoDynamics to accelerate its marketing and R&D as well as to refinance its existing debt.
Back Pain & ErgoDynamics
ErgoDynamics has developed and is commercialising patented technology for the treatment and relief of back pain in the workplace. After stress, back pain is recognised as the second largest cause of longer term absence from work. Approximately 30% of the workforce in developed economies incurs back problems at some point and around 8% of this workforce call in sick at some time because of it. Direct and indirect healthcare costs relating to back problems are significant. For example, in a country like The Netherlands (the pilot country for ErgoDynamics with a working population of 6.5 million), the direct and indirect costs are estimated at more than EUR 7 billion annually. Scientific research shows that about one third of the back problems specifically concern lower back pain - the focus area of ErgoDynamics' technology.
ErgoDynamics' technology was developed by Dr. Leo van Deursen MD, a recognised authority in back pain research and treatment. The technology employs an electronic device which can be built into chairs or cushions in almost any seated working environment. The device generates a marginal but continuous motion which relieves stress on the spine and therefore reduces and/or prevents lower back pain. Chairs with the built in device are presently being tested by target groups within more than 30 large multinationals and institutions in The Netherlands. Results so far have been extremely promising and ErgoDynamics is working with several personnel departments and health care advisors regarding an active roll out of the device. Furthermore, ErgoDynamics recently introduced a new special chair for the transportation industry. Over time this technology can be made available for all office positions and other jobs that require extensive sitting. For the key target groups the cost of the technology as a preventative tool or for relief purposes will be marginal compared to the savings related to absence of work, therapy, medication, etc.
Investment Details
In March 2006 MeDaVinci acquired an initial stake of 19.2% in ErgoDynamics Applications B.V. Recently the company structure was reorganised integrating all patents and other IP rights (previously controlled by the inventor) with the commercial activities in ErgoDynamics. As a result no further present or future royalties on the technology will be payable by ErgoDynamics. Following this MeDaVinci has agreed to increase its equity stake to 32% for a purchase consideration of EUR 643,720 payable to Intellectual Property Partners B.V. ("IPP") to be satisfied by the allotment to IPP of 3,578,369 newly issued ordinary shares of 1p each credited as fully paid at a price of 12 pence per share ("Consideration shares"). Consideration Shares will be subject to a lock in arrangement of at least 12 months from IPP. As a result of the issue of the Consideration Shares, IPP's interest in the Company will increase to 8,578,369 ordinary shares, equivalent to 20.8% of the issued share capital of the Company as enlarged by the issue of the Consideration Shares. Furthermore, MeDaVinci will subscribe to a loan note of up to EUR 750,000. The loan note will be a 4 year facility carrying a 6% interest and warrants to subscribe for further shares in ErgoDynamics to the value of EUR 750,000 at today's valuation. A full exercise of the warrants, based on the present capital structure of ErgoDynamics, would bring MeDaVinci's shareholding up to 49.9%.
For the calendar year 2006 ErgoDynamics realised revenues from its initial pilot projects of approximately EUR 78,000 and ended the year with an operating loss of approximately EUR 214,000. The other shareholders in ErgoDynamics are two Dutch private equity funds and the Van Deursen family (founder and inventor).
Because of the size of its shareholding in the Company, IPP is considered to be a related party under the AIM Rules. The Directors, having consulted with the Company's Nominated Adviser, Collins Stewart Europe Limited, consider the terms of the investment in ErgoDynamics to be fair and reasonable insofar as the Company's shareholders are concerned.
Application has been made for the 3,578,369 Consideration Shares, which will rank pari passu with existing ordinary shares in the Company, to be admitted to trading on AIM on the 26th of March 2007.
For further information please contact,
Rob Westerhof, Chief Executive
Peter Teerlink, ChairmanTel. +31 (0)10 288.43.43Ben SimonsHansard GroupTel. +44 (0) 207 245 1100Simon AtkinsonCollins StewartTel. +44 (0) 20 7523 8000
Notes: MeDaVinci is an active investment company focussed on innovative technologies, products and services in the Health and Wellness markets.
MEDAVINCI PLC