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March 10, 2006
NovaDX Makes Offer to Acquire Resource Company Portfolio
March 10, 2006 -- NovaDX Ventures Corp. is pleased to announce that it has made an offer (the "Offer") to acquire the portfolio assets of Canadian Small Cap Resource Fund 2004 Limited Partnership (the "Fund"). The Offer, which provides the Limited Partners of the Fund with an alternative to the proposed dissolution of the Fund on March 31, 2006, will be considered by the Limited Partners at a meeting to be held on March 29, 2006. The Fund was originally formed in November, 2004 to invest in flow-through securities of resource companies engaged in mineral exploration in Canada. At the time of its formation, the Fund raised approximately $5 million, which was utilized to acquire a portfolio of securities in Canadian resource issuers.
If the Offer is accepted by the Limited Partners, the Fund will enter into an asset acquisition agreement with NovaDx pursuant to which the Limited Partners will have the option to receive their pro rata portion of the net asset value of the Fund either in cash or in Units of NovaDx. The portfolio securities held by the Fund will be valued in accordance with a valuation formula which takes into account recent trading activity and liquidity. The General Partner of the Fund has received an independent fairness opinion that the Offer from NovaDx is fair, from a financial perspective, to the Limited Partners.
In the event that a Limited Partner elects to receive Units of NovaDx, such Units will be issued at a deemed price of $0.30 per Unit, with each Unit consisting of one common share of NovaDx and one half of one warrant. Each full warrant will entitle the holder to purchase an additional common share of NovaDx at a price of $0.40 per share for one year, subject to a 30 day acceleration clause if the shares trade a $0.60 or greater for 10 consecutive days.
In connection with the Offer, NovaDx is also pleased to announce that it has engaged Blackmont Capital Inc. ("Blackmont"), on a commercially reasonable efforts basis, to complete a brokered private placement of Units for minimum gross proceeds of $750,000, to a maximum of $2 million. The Units being offered under the private placement will have identical terms to the Units being offered to the Limited Partners under the Offer. The funds raised from the private placement will be utilized to fund any cash requirements of the Offer, and thereafter, for working capital purposes.
For acting as agent Blackmont will receive a 7% cash commission and broker options entitling them to purchase 10% of the number of Units sold pursuant to the private placement, at a price of $0.30 per unit, for a period of one year. In addition, for completing the private placement, and for acting as sponsor of the transaction, if required by the TSX Venture Exchange, Blackmont will receive a corporate finance fee, payable in cash or Units, at Blackmont's option.
The acquisition of the Fund's portfolio and the completion of the private placement remain subject to the approval of the TSX Venture Exchange and will require that NovaDx graduate from NEX to the TSX Venture Exchange, as an investment issuer. In the event that the Offer is accepted by the Limited Partners, NovaDx will be required to comply with Exchange Policy 5.2 -- Changes of Business and Reverse Takeovers, including the provisions which will require that trading be halted until certain documentation is filed with the Exchange. If the transactions are completed, NovaDx has agreed to retain Bolder Investment Partners, Ltd. to provide portfolio advisory services. In addition Stephen Wilkinson, President, CEO and a Director of the General Partner of the Fund, has agreed to join NovaDx as its President.
For more information, please contact Scott Ackerman at 1-866-824-8938.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
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