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Social Capital backs Perimeter Medical Imaging AI with C$43.4m

Toronto and Dallas-based medical imaging company Perimeter Medical Imaging AI has closed a private placement financing, raising C$48.7 million.

Toronto and Dallas-based medical imaging company Perimeter Medical Imaging AI has closed a private placement financing, raising C$48.7 million. Of the total, C$43.4 million was invested by Social Capital, which will have the right to nominate a board director. Perimeter develops ultra-high-resolution, real-time, advanced imaging tools for cancer surgery.

PRESS RELEASE

TORONTO & DALLAS — Perimeter Medical Imaging AI, Inc. (TSX-V:PINK)(OTC:PYNKF) (FSE:4PC) (“Perimeter” or the “Company”), a medical technology company driven to transform cancer surgery with ultra-high-resolution, real-time, advanced imaging tools to address high unmet medical needs, is pleased to announce the closing of its previously announced private placement of units (each, a “Unit”) for gross proceeds of C$48.7 million to the Company (the “Private Placement”). The Private Placement included the C$43.4 million strategic investment in the Company (the “Investment”) by Social Capital.

Jeremy Sobotta, Perimeter’s Chief Executive Officer stated, “We are extremely excited to have completed this transformative, pivotal event for Perimeter and to welcome Social Capital as a shareholder of Perimeter. This strategic partnering with Social Capital comes at a time when we are ramping up our Perimeter S-Series market development activities and commercialization efforts across the U.S., while also supporting the ongoing clinical development of our next-gen AI technologies. We are very optimistic that the Private Placement will allow the Company to unlock additional growth and potential and we thank Social Capital for its support and endorsement of our vision to transform cancer surgery with ultra-high resolution, real-time, advanced imaging tools.”

Chamath Palihapitiya, founder and CEO of Social Capital, said, “Perimeter has the opportunity to change how we approach removing cancerous tumors from the body. Starting with breast cancer, Perimeter’s OCT technology can potentially eliminate the need for a second or sometimes even third surgery because not all of the cancer was removed the first time – a risk faced by 1 in 4 breast cancer patients in America today. Over time, we hope Perimeter can apply this technology to a range of other tumor removal surgeries. We are excited to begin this partnership with Jeremy and his team to raise the standard of care for cancer patients.”

Details Regarding the Private Placement
The Private Placement was completed on a non-brokered basis for gross proceeds of C$48.7 million at a price of C$3.00 per Unit for a total of 16,234,333 Units. Each Unit consisted of one common share (each, a “Common Share”) and a total of one warrant (“Warrant”) to purchase an additional Common Share (a “Warrant Share”). 80% of the Warrants issued in the Private Placement have a strike price of C$3.99 and 20% of the Warrants issued in the Private Placement have a strike price of C$4.50. Half of the Warrants at each strike price are subject to accelerated expiry if the 60-day volume weighted average trading price of Perimeter’s Common Shares is greater than the strike price during the applicable period. The other half of the Warrants are not subject to accelerated expiry, and instead they may be exercised for cash or exercised using a cashless exercise feature at any time prior to expiry. Subject to the accelerated expiry clause described above, all Warrants will expire five years following the closing of the Private Placement.

As the result of its C$43.4 million Investment, Social Capital acquired 14,466,667 Common Shares and 14,466,664 Warrants. Social Capital and Perimeter have also entered into an investor rights agreement whereby Social Capital will have the right to nominate one director to the board of Perimeter, as well as anti-dilution rights to participate in future financings, and customary registration rights. Social Capital’s board nomination and anti-dilution rights under the investor rights agreement will last so long as Social Capital holds at least 15% of the Common Shares of Perimeter on an undiluted basis, and Social Capital’s registration rights will last so long as Social Capital holds at least 10% of the Common Shares of Perimeter on an undiluted basis.

On a non-diluted basis, Social Capital now holds approximately 23.3% of the outstanding Common Shares making Social Capital a “Control Person” (as that term is defined in the policies of the TSX Venture Exchange (the “TSXV”)) of Perimeter. The Investment by Social Capital was consented to in writing by shareholders of Perimeter holding greater than 50% of Perimeter’s outstanding Common Shares at the time the Private Placement was announced, including Roadmap Capital Inc., Perimeter’s largest shareholder, which entered into a support agreement in favour of the Private Placement at the time the Private Placement was announced.

In addition to the Investment by Social Capital, the Company issued an additional 1,767,666 Units to other investors for gross proceeds of C$5.3 million (resulting in aggregate gross proceeds of C$48.7 million).

The net proceeds of the Private Placement will be used for working capital, commercialization of Perimeter’s technology, clinical studies and the further development of Perimeter’s technology, and general corporate purposes.

All Common Shares and Warrants issued pursuant to the Private Placement will be subject to a statutory hold period of four months plus one day which expires on May 27, 2022.
In connection with the Closing of the Private Placement, the Company paid a finder’s fee equal to 3% of the proceeds from the sale of Units to Social Capital by issuing 434,000 Common Shares (the “Finder’s Shares”) at a deemed price of $3.00 per Common Share. The Company also paid finder’s fees equal to 6% of the proceeds from the sale Units to certain investors introduced to Perimeter by other finders by paying cash in the amount of C$197,399.88.

The Common Shares comprising part of the Units, the Warrants and the Warrant Shares (if such Warrant Shares are issued before the date that is four months and one day following the applicable Closing Date) and the Finder’s Shares shall be subject to a hold period ending on the date that is four months and one day following the applicable Closing Date.