Following the voting portion of the Dec. 17th Annual General Meeting, the Board asked for, and took questions from, the shareholders in attendance as well as gave a brief summary of questions that had been submitted through the Corporations’ website and emails. There were numerous questions posed and the Board along with Management provided answers and updates. Here are a number of the questions, answers and or updates, which were provided.
What is the difference between L.O.M. Medical International Inc. and L.O.M. Laboratories Ltd. (“L.O.M.” or the “Company”)?
L.O.M. Medical International Inc. (“L.O.M.” or the “Company”) was incorporated in Delaware on March 17th, 1997, so is a USA company. L.O.M. Medical International Inc. is subject to the laws in Delaware and also the US, in terms of filing tax returns and corporate annual returns.
L.O.M. Laboratories Ltd. (“L.O.M.” or the “Company”) was incorporated on the 7th day of May 1996 in the Province of British Columbia. It was later registered as an Alberta company. L.O.M. Laboratories Ltd. is subject to the laws in Alberta and also Canada, in terms of filing tax returns and corporate annual returns. L.O.M. Laboratories Ltd. owns the intellectual property that includes our two syringes, two blood collection devices and PowerPAK PLUS interchangeable needle system.
Until recently, virtually all the shares of L.O.M. Laboratories Ltd. were owned by L.O.M. Medical International Inc. and we called it “wholly owned subsidiary” of the parent company L.O.M. Medical International Inc. The recent Privileged Right’s Offering was offered solely to benefit the investors (current shareholders) with a more advantageous tax treatment. Please note that the investors in L.O.M. Laboratories Ltd. were given the same pro rata equity investment as the owners of shares in L.O.M. Medical International Inc. Other than a tax benefit, the 500,000 shares sold in L.O.M. Laboratories Ltd. would have been the same had we sold the shares in L.O.M. Medical International Inc.
Are we meeting our time lines with product development and marketing?
Yes, in the 2½ years that we have been working with L.O.M. we have developed 5 products: a 3ml and a 1ml syringe, 2 blood collection devices and the PowerPAK PLUS interchangeable needle system and we have retained Deloitte Corporate Finance from Edmonton to assist us in marketing our intellectual property. Deloitte has expertise in sales of medical companies and the two accountants that we are working with have experience in this field. In fact according to Deloitte we are right on target. They have advised us that it is not unusual for this type of undertaking to take 2 years or more. It has been approximately 18 months thus far as we work diligently with the assistance of Deloitte Corporate Finance to move towards our goal of finding a buyer for our intellectual property.
Why we do not provide details such as the name of the possible buyers we are talking to?
It is common practice to be under a strict non-disclosure agreement that includes not providing names or details of any negotiations that we are having with possible buyers, joint venture partners or possible licensees. This is to protect both parties from competitors and also shareholders who may compromise what the Company is doing. This is no different from other companies.
How close are we to signing an agreement?
This is too difficult to predict. We can assure you that we are doing everything possible to maximize the return on investment for our shareholders.
How many products do we have and at what stage of development are they?
The Retractable Syringes
- L.O.M. Medical International Inc. has developed 3ml pneumatic retractable needle syringe that offer superior protection against post-injection needle stick injuries. After injection, forward movement of the plunger causes activation of our proprietary gas cell technology that retracts the needle into the plunger where it is locked in place. The gentle activation pressure and controlled needle retraction allow the needle to be retracted from within the patient.
- We also have produced a 1ml prototype using the same gas cell technology that can be adapted for 5 ml, 10 ml or larger size syringes.
The PowerPAK PLUS Interchangeable Needle System.
- The PowerPAK PLUS patent pending technology adapts each size syringe to use various gauge needles. For example, an 18 gauge blunt needle can be used to draw medicament and a finer 25 gauge needle can then be used for injection.
The Butterfly Style Blood Collection Device.
- This small-scale device is similar to blood collection devices used in hospitals where a Vacutainer™ style receiver is connected to the blood collection device with a tube. After one or more vials are filled the caregiver then presses two finger grips together to cause the needle to retract directly from the patient making it an extremely safe device.
The Straight Tube Blood Collection Device
- This device accepts Vacutainer™ style vials directly into its barrel. After one or more vials are filled the caregiver then presses the last vial forward to cause the needle to gently retract directly from the patient making it an extremely safe device.
The Gas Cell
- Two versions of our gas cell technology have been developed to provide energy to retract the needle of the syringe into the plunger after injection. This proprietary gas cell technology has been integrated into the design of our syringes and blood collection devices.
Status of Product Development
October 29, 2014. L.O.M. Medical International Inc. is pleased to report that it has now completed the 3rd Generation Syringe. The new version has significant improvements over the 2nd Generation Syringe that has several patents granted and others pending. The Company has completed the first stage of testing on the latest model and reports that the syringe is exceeding expectations during performance reviews. We believe this is our final syringe design with no further modifications required. Additional independent testing is planned and will commence in the near future.
Once we have a “sale” what is the process?
If there is an outright sale of the assets of L.O.M., the Board will prepare a summary of the agreement in an information circular making a recommendation to the shareholders to either accept or reject the offer. All shareholders will receive a notice and will be entitled to vote on the proposal. A majority of shareholders (more than 50%) is required in order for the assets to be sold.
It is important to note that we are not trying to sell the shares of L.O.M. but the assets. This consists of the 2 syringes, 2 blood collection devices along with the PowerPAK PLUS, including the patents that L.O.M. owns.
It is important to be aware that while it is our preference to sell all the assets to one buyer and we have working towards that goal we may choose the option of entering into license agreements with one or several different companies. Alternatively, we could enter into a number of joint venture agreements. We will continue to work with Deloitte Corporate Finance and the shareholders throughout this process.
What about Dilution?
The board is aware and cognizant of dilution and we want to keep it as low as possible. There have been a number of financings over the last 2½ years, raising the minimum amount required for new or unforeseen expenses. L.O.M. has no choice but to raise the necessary funds, primarily by selling shares, enabling us to accomplish our goals and maintain our obligations and patents. L.O.M. has never had “cash flow” and has none at the present time.
When we joined the Board of L.O.M. the company was involved in a lengthy and expensive legal action, both in USA and Canada. The funds expended in this legal action were approximately $1.5 million. We were faced with the immediate task of financing if L.O.M. was to continue in business. This initial financing was done at $5.00 per share and resulted in very little dilution (approximately .013%).
On Behalf of the Board
Herbert R. Towning
President & CEO