Covalon Technologies Announces $2.6 Million Private Placement and Warrant Exercise

Covalon Technologies Ltd., an advanced medical technologies company, today announced that the Company intends to raise an aggregate of approximately $2,600,000, of which approximately $1,825,000 stems from a non-brokered private placement (the “Offering”) and $775,000 from the exercise of currently outstanding warrants.

Covalon Technologies reports the Offering comprises approximately 931,121 units at a price of $1.96 per unit for aggregate gross proceeds of $1,825,000. Each unit is comprised of one common share and one common share purchase warrant. Each common share purchase warrant entitles the holder to acquire an additional common share at a price of $2.30 per share for a period of three years from the closing date.

Insiders of Covalon are expected to participate in the Offering for an aggregate of 752,551 units for gross proceeds of $1,475,000. The closing of the Offering is subject to approval by the TSX Venture Exchange (the “TSXV”) and all securities issued pursuant to the Offering will be subject to a hold period expiring four months from the date of closing. Proceeds of the Offering will be used by Covalon to develop and commercialize new wound care products, expand international distribution channels and for general working capital.

No commission or finder’s fee will be paid in connection with the Offering. As Insiders will participate in the Offering, any such subscriptions will be considered to be related party transactions within the meaning of TSXV Policy 5.9 and Multilateral Instrument 61-101 (“MI 61-101“). The Company intends to rely on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(b) and 5.7(a) of MI 61-101 in respect of such Insider participation.

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