Brattle Street Announces Transformative Deal; Executes Agreement to Acquire Medical Device Company; Appoints New Board and Management; Proposes Name Change to Salona Global Medical Device Corporation

SAN DIEGO, Sept. 17, 2020 (GLOBE NEWSWIRE) -- Brattle Street Investment Corp. (the “Company”) (TSXV:BRTL) is pleased to announce the execution of a definitive agreement for a transformative acquisition in the US medical device industry. As a result of the transaction, the Company intends to change the name of the Company to Salona Global Medical Device Corporation (“Salona Global”). In connection with the proposed transaction, the Company has also appointed a new Board and management team and intends to complete the Consolidation (defined below). Pursuant to Policy 5.2 of the TSX Venture Exchange (the “Exchange”) the transaction is as a Change of Business (as such term is defined by the Exchange) and accordingly the common shares of the Company (the “Common Shares”) have been halted.

Upon closing of the transaction and the re-listing, Salona Global (investor information at will be an acquisition oriented, US-based medical device company with the ultimate goal to list on a US capital market, as it plans to achieve scale through both further acquisitions and organic growth. It will be operating in the US$30 billion recovery science market including post-operative pain, wound care and other markets serving the ageing US population. Salona Global’s emphasis will include products for those over 65, who provide steady demand by virtue of government sponsored medical coverage in the US.

Salona Global Medical Device Corporation after Acquisition

  • Calendar 2019 revenues (unaudited): $15,882,344 (as a result of the Transaction (defined below)
  • Net assets (unaudited) after the Transaction: $25,016,017.34 (before costs of the Transaction and Concurrent Financing (defined below))
  • Cash after the Transaction: approximately $19,000,000 (before costs of the Transaction and Concurrent Financing)
  • An active acquisition pipeline, currently with over 10 profitable acquisition targets with revenues of $3 million to $30 million in annual revenue in various stages of maturity.
  • Experience with listing on the US capital markets.
  • State-of-the art US-based automated medical electronics facility.

The new management team of Salona Global is led by the new Chairman of the Board and interim CEO, US healthcare executive Mr. Les Cross.

  • Mr. Cross is the former Chairman and CEO of DJO Global, which completed a US$200m IPO on the NYSE in 2001 and was subsequently sold to Blackstone for US$1.6 billion in 2007.
  • Mr. Cross has been a leader in management of companies that have purchased and integrated over 20 acquisitions.

Joining Mr. Cross as Vice Chairwoman of the Board is US healthcare executive Ms. Jane Kiernan.

  • Ms. Kiernan is the former CEO of Salter Labs (, a medical device company owned by Roundtable Healthcare Partners (a private equity fund.)
  • She is a former director and Chairwoman of the Governance, Nominating and Audit Committees of American Medical Systems, a Nasdaq company that was sold to Endo Pharmaceutical for US$2.9 billion.

Mr. Cross and Ms. Kiernan are joined on the board by Dr. Ken Kashkin, the former Chief Medical Officer of Ferring Pharmaceuticals, a multi-billion dollar private healthcare company, and a former senior executive at Abbot Laboratories, and Mr. Kyle Wilks, a US Naval Academy graduate, a former Executive Director at a mid-market healthcare private equity group and a former senior manager at Baxter Healthcare. Mr. Kyle Appleby has been appointed to serve as the new interim Chief Financial Officer of the Company. The new management team is expected to continue to serve after completion of the Transaction. The appointments of the new management team and directors are subject to approval of the Exchange. The previous officers and directors of the Company, all of whom are arm’s length to the Transaction, have resigned.

Post-Closing Growth Plan for Salona Global

The acquisition oriented growth plan will aim to leverage the liquid Canadian capital markets to target smaller US-based private medical device companies offering stock and cash deals to acquire, integrate and grow a large, broad-based medical device company with the goal of ultimately listing on a US stock exchange.

The post-acquisition organic growth strategy is to increase revenue and profits and therefore earnings per share (EPS) by:

  • Increasing revenues through international distribution: Leveraging management’s existing and robust sales distribution networks in Europe and Australia to increase sales for each acquired company.
  • Increasing Product Lines: Developing, in-licensing or acquiring new IP protected devices synergistic with the acquisitions
  • Increasing Profits: Operational integration reducing supply chain risks and increasing cash flow and margin

Salona Global anticipates leveraging its first acquisition, the proposed acquisition of South Dakota Partners, Inc. (“SDP”), a large state-of-the-art manufacturing facility incorporated and located in South Dakota currently producing proprietary and white label medical devices for pain management, cold and hot therapy, NMES, PEMF and ultrasound.

To augment the new management team, particularly in the acquisition process, the plan is to keep the former management team solely as M&A and market advisors. The former team includes the former Chairman and Vice Chairman of Patient Home Monitoring Corp., the predecessor issuer of Viemed Healthcare, Inc. (listed on the Toronto Stock Exchange and Nasdaq) and Protech Home Medical Corp. (listed on the Exchange).

“At DJO Global, once we listed on the New York Stock Exchange, we completed and integrated eleven intellectual property-driven acquisitions, becoming a billion dollar plus company,” said Les Cross, Chairman of Salona Global. “I believe we have an incredible opportunity with the medical market as it stands today. We have a multi-pronged strategy to achieve growth. I believe we can acquire privately held, US focused medical device companies at favorable valuations. After the acquisition is closed, we look to expand their product reach into Europe and Australia through my long-standing experience in doing just that at DJO. Finally, once we have enough scale, we plan to introduce more aggressive marketing in the US to grow sales domestically. In the end, we should see a dramatic increase in revenues and cash flow in each acquired entity.”

The COVID-19 epidemic has made it all the more obvious that a large, well-run medical device company, offering IP protected products made in the USA, can succeed in offering its products to a growing population of the world who may suffer ever increasing health problems. Our goal is to become a leading supplier, manufacturer and developer of these products going forward through both acquisition and organic growth.

With this listing, we secure a competitive advantage in acquiring small US device companies. The prior team at Brattle Street proved the liquidity model of the TSXV with their previous deal PHM, now Viemed and Protech. With liquidity, we can attract many small and profitable medical device companies to acquire in advance of listing on a US capital market once we have amassed revenues and growth through our business model. Our competitors in this smaller end of the market are either offering private illiquid stock or cash at a discount with no upside participation. The Canadian capital markets are a great method to launch quickly for our ultimate plan of a US capital markets listing next year.”

Acquisition Pipeline Details

The new management team has a deep pipeline of small, privately held, stand-alone and bolt-on medical device companies targeted for acquisition in the highly fragmented global market for injury, surgical prevention, rehabilitation and recovery for the ageing population throughout the continuum of care.

  • Private small ($3mm to $30mm in sales) medical device companies struggle with sufficient capitalization and operational expertise to fully realize the value of their intellectual property (IP)
  • Niche players that succeed in developing a handful of quality products often turn to larger listed companies who don’t allow ownership to participate in the upside of including their device in a larger company
  • Smaller US listed companies lack liquidity and coverage to offer sufficient upside to vendors
  • Salona Global will be positioned to offer acquisition targets upside though stock/cash deals with a liquid Exchange listing

Consolidation, First Acquisition and Concurrent Financing


The Company intends to consolidate its issued and outstanding Common Shares on the basis of 7.37 post-consolidation Common Shares for 10 pre-consolidation Common Shares (the “Consolidation”), or such number of pre-consolidation shares as may be determined by the board of directors or may be required to obtain approval of the Consolidation from the Exchange. There are currently 46,841,454 Common Shares issued and outstanding. If and upon the Consolidation becoming effective, it is expected there will be approximately 34,522,151 post-Consolidation Common Shares issued and outstanding on a non-diluted basis (not including the Common Shares issuable pursuant to the Concurrent Financing (defined below) and assuming no additional Common Shares are issued after the date hereof). The Consolidation is subject to the approval of the Exchange. Registered shareholders are advised not to mail in the certificate(s) representing their Common Shares until they receive a letter of transmittal and confirmation from the Company by way of news release that the Company is proceeding with the Consolidation.

The First Transaction

The Company has entered into a purchase agreement with the majority shareholders of SDP (the “Purchase Agreement”) pursuant to which the Company will acquire all of the shares of SDP (the “Transaction”). The Transaction will result in a Change of Business (as such term is defined by the Exchange) by the Company pursuant to Policy 5.4 of the Exchange. Upon completion of the Transaction, it is the intention of the parties that the Company will continue the business of SDP.

SDP is a large state-of-the-art manufacturing facility incorporated and located in South Dakota, currently producing proprietary and white label medical devices for pain management, cold and hot therapy, NMES, PEMF and ultrasound. Founded in 2016, SDP has grown quickly as a quality leader in robotics and electronics development, design and production of medical devices. SDP’s unaudited year-over-year revenue growth is over 150% since operations began.

The Transaction will effectively provide for the acquisition of all the outstanding equity interests of SDP by the Company, indirectly through a wholly-owned subsidiary of the Company (the “Acquisition Subsidiary”), in a transaction in which the shareholders of SDP (the “Vendors”) will be issued shares of the Acquisition Subsidiary (the “Exchangeable Shares”) which will be exchangeable for up to 19,162,000 (post-Consolidation) Common Shares (the “Consideration Shares”). The Consideration Shares will be issuable to the Vendors on the date that is 13 months from closing and will be decreased if SDP does not achieve US$11,900,000 in revenues for the 12-month period after closing and if the net assets of SDP 12 months following closing is less than approximately $2.8 million. More complete detail about the potential downward adjustment in consideration to the Vendors and prior financial history of the Target appear at the end of this press release.

The closing of the Transaction is not expected to create any new 10% shareholders of Salona Global.

Concurrent Financing

The Company proposes to complete a private placement of subscription receipts (the “Subscription Receipts”) at a price of $0.85 per Subscription Receipt, for gross proceeds of a minimum of $8,500,000 (the “Concurrent Financing”). The funds will be used to increase cash to better enable Salona Global to execute its plan to acquire medical device companies in the US and expand their product reach globally, as well as for general working capital. The pre-money valuation of Salona Global (upon closing of the Transaction) is expected to be $45,900,000.

Each Subscription Receipt will automatically convert into one unit of Salona Global (each, a “Unit”) on the satisfaction or waiver of all conditions precedent to the Transaction and certain other ancillary conditions (the “Release Conditions”) without any further consideration on the part of the subscriber. Each post-Consolidation Unit shall consist of one Common Share and one-quarter of one common share purchase warrant. Each whole warrant will be exercisable for one Common Share at $1.25 per share for 24 months from closing of the Concurrent Financing. The expiry date of the warrants may be accelerated by the Company at any time following the six-month anniversary of the closing of the Concurrent Financing and prior to the expiry date of the Warrants if the volume weighted average trading price of the Common Shares is greater than $1.60 for any ten (10) consecutive trading days, at which time the Company may accelerate the expiry date of the warrants by issuing a news release confirming the reduced warrant term whereupon the warrants will expire on the 20th calendar day after the date of such news release.

The foregoing Unit and Warrant prices are all post-Consolidation figures.

Closing of the Transaction remains subject to several conditions precedent, including the preparation and filing of a disclosure document approved by the Exchange, completion of the Concurrent Financing, execution of non-competition agreements by major SDP shareholders, and other typical terms and conditions including , accuracy of representations and warranties, no adverse change in the business of the target or material increase in indebtedness, applicable shareholder approvals, and obtaining Exchange approval for the Transaction. Les Cross, who did not join the board of Salona Global until after approval of the Purchase Agreement, owns 4.6% of the shares of SDP. He is not an officer or director of SDP, and will comply with all rules regarding conflicts in connection with decisions to close the Transaction.

Since this is an arm’s length transaction with unrelated parties, the Transaction is not a “related party transaction” as such term is defined by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions and is not subject to Policy 5.9 of the Exchange. Notwithstanding the foregoing, pursuant to Policy 5.2 of the Exchange, as a Change of Business, shareholder approval for the Transaction is required. Any Common Shares held by Mr. Cross will not be voted in respect of shareholder approval of the Transaction.

On closing of the Transaction, Salona Global will be an Industrial/Technology/Life Sciences issuer under the policies of the Exchange.

Concurrent with the completion of the Transaction, the current directors and officers of the Company will continue to manage the Company and the senior management team of SDP will continue to manage SDP.


Sponsorship of a Change of Business is required by the Exchange unless exempt in accordance with Exchange policies. The Company intends on applying for an exemption from the sponsorship requirements under subsection 3.4(a)(ii) of Policy 2.2 of the Exchange, however, there is no assurance that the Company will ultimately obtain this exemption.

Potential Downward Adjustment in Consideration to Vendors in First Transaction

As stated previously, in the Transaction, the Vendors may ultimately receive a maximum of 19,162,000 (post-Consolidation) Consideration Shares. Upon closing of the Transaction, the Vendors will not receive Common Shares, but will instead receive the Exchangeable Shares (shares in the Acquisition Subsidiary). The Vendors will hold fewer than 3% of all of the outstanding shares in the Acquisition Subsidiary, with the Company owning the remaining shares. The Exchangeable Shares will be exchangeable into the Consideration Shares only after a measurement period (defined below) to determine if SDP has met certain targets for maintaining (a) revenue, and/or (b) adjusted net assets (defined below). The twelve-calendar month period beginning on the first day of the first calendar month immediately following the month during which the closing occurs is the “Measurement Period”. During calendar year 2019, unaudited revenues of SDP were estimated to be US$11,971,662, with unaudited assets of US$15,526,339 and liabilities of US$10,975,803. During the Measurement Period, if SDP fails to achieve gross revenue of US$11.9 million, the number of Consideration Shares the Vendors will be able to receive shall be reduced by the number of US dollars of gross revenue under US$11.9 million multiplied by 4.422. In addition to and separate from the test for reduced revenue, there will also be a determination of whether SDP has maintained its adjusted net assets, which is defined as an amount equal to SDP’s (A) cash, plus (B) accounts receivable (net of an allowance for returns and doubtful accounts), plus (C) raw material inventory, plus (D) work in progress inventory, plus (E) finished goods inventory, plus (F) all management or other fees paid by SDP to the Company or any affiliate or any fees paid by SDP to any third party on behalf of the Company during the Measurement Period, minus (G) the Specified Liabilities, which are defined as (a) accounts payable, (b) other payables, (c) credit card balances, (d) income and other taxes payable (including any accrued amounts attributable to periods pre and post-closing), (e) the aggregate amount of all equity investments made by the Company or any of its affiliates into SDP during the Measurement Period, and (f) all other Indebtedness except for the portion of indebtedness set forth in the Purchase Agreement. To the extent adjusted net assets at the end of the Measurement Period are below US$2,148,685.94, then the number of Consideration Shares the Vendors will be able to receive shall be reduced by the number of US dollars below the baseline multiplied by 13.266. Any reduction related to a shortfall in adjusted net assets is in addition to, not instead of, the reduction relating to a shortfall in revenue. Upon exchange of the Exchangeable Shares for Common Shares, the Company will own 100% of the shares of the Acquisition Subsidiary.

The Company will provide notice to the Vendors of its calculation of any shortfall in revenue or adjusted net assets within 30 days of the end of the 12-month Measurement Period, and any disputes may be submitted to a neutral accountant for final determination of the number of shares to be awarded. Notwithstanding the foregoing, any downward consideration adjustment in shares issued to the Vendors shall not be so great as to allow the reduced number of shares to have value of less than US$5million, with share value being determined by 10-day vwap of the Common Shares on the date of the determination.

For more information please contact:

Les Cross
Chairman of the Board and interim Chief Executive Officer
Tel: 1 (800) 760-6826

Additional Information

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable, disinterested shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained.

At this time, the Company intends to maintain its ability to continue providing lending and credit in the healthcare industry, but plans to limit its use of that capability going forward in order to implement its strategy within the medical device market. All information contained in this press release with respect to the Company and SDP was supplied, for inclusion herein, by the respective parties and each party and its directors and officers have relied on the other party for any information concerning the other party.

Forward Looking Statements

There can be no assurance that the Transaction will be completed as proposed or at all. The certain financial data contained herein is unaudited and may be subject to refinement or modification during the audit process. Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this news release.

The securities referred to in this news release have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This news release does not constitute an offer for sale of securities for sale, nor a solicitation for offers to buy any securities. Any public offering of securities in the United States must be made by means of a prospectus containing detailed information about the company and management, as well as financial statements.

Unless otherwise specified, all dollar amounts in this press release are expressed in Canadian dollars.

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

Forward-Looking Information

Although the Company believes, in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. When used in this press release, the words “estimate”, “project”, “belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release include: the number of Common Shares upon completion of the Consolidation; the expected pre-money valuation of the Company prior to the Concurrent Financing; information relating to the business plans of the Company and SDP; closing of the Transaction (including receipt of Exchange approval, and the closing of the Transaction and timing thereof); the business to be conducted by the Company upon completion of the Transaction; the number of Common Shares to be issued in connection with the Transaction and the relative ownership thereof; closing of the Concurrent Financing and the use of proceeds therefrom; the Company’s expected acquisition pipeline of approximately 12 profitable acquisition targets with revenues of $3 million to $30 million in annual revenue; the Company’s intention to expand product sales to Europe and Australia; the Company’s intention to introduce more aggressive US marketing; the Company’s intention to become a supplier, manufacturer and developer of medical devices and associated technology; the Company’s intention to list on the US capital markets after building revenues through acquisitions and organic growth; and the Company’s post-acquisition organic growth plan and strategy, including to increase revenue and profits and therefore earnings per share (EPS) and the manner in which the Company proposes to accomplish it. Such statements and information reflect the current view of the Company and SDP, respectively. Risks and uncertainties may cause actual results to differ materially from those contemplated in those forward-looking statements and information. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: (i) there is no assurance that the Company and SDP will obtain all requisite approvals for the Transaction, including the approval of the Exchange for the Transaction (which may be conditional upon amendments to the terms of the Transaction); (ii) there is no assurance that the Concurrent Financing will be completed as contemplated or at all; (iii) following completion of the Transaction, the Company may require additional financing from time to time in order to continue its operations and financing may not be available when needed or on terms and conditions acceptable to the Company;(iv) new laws or regulations could adversely affect the Company’s business and results ‎of operations; and (v) the stock markets have experienced volatility that often has been unrelated to ‎the performance ‎ of companies. These fluctuations may adversely affect the price of the Company’s securities, regardless of its operating performance. There are a number of important factors that could cause the Company’s and SDP’s actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others: currency fluctuations; disruptions or changes in the credit or security markets; results of operation activities and development of projects; project cost overruns or unanticipated costs and expenses, and general market and industry conditions and risks related to COVID-19 including various recommendations, orders and measures of governmental authorities to try to limit the pandemic, including travel restrictions, border closures, non-essential business closures, quarantines, self-isolations, shelters-in-place and social distancing, disruptions to markets, economic activity, financing, supply chains and sales channels, and a deterioration of general economic conditions including a possible national or global recession. The terms and conditions of the Transaction may be based on the Company’s due diligence and the receipt of tax, corporate and securities law advice for both the Company and SDP. The Company undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Company, SDP, their securities, or their respective financial or operating results (as applicable). The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company’s forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. The forward-looking information contained in this press release represents the expectations of the Company as of the date of this press release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. The Company does not undertake to update this information at any particular time except as required in accordance with applicable laws.