OnPoint to Become Public Under Reverse Merger
OnPoint Medical Diagnostics, Inc., will soon become a public company under a reverse-merger agreement with Florida-based Vertical Health Solutions, Inc. (VHS).
Under the terms of the agreement, Edina-based OnPoint has become a wholly owned subsidiary of VHS and is the sole business and operations of the company.
VHS will now seek shareholder approval to reincorporate in Minnesota and officially change its name to OnPoint Medical Diagnostics, Inc.
Reverse-merger agreements are an alternative way for a company to go public without going through a traditional initial public offering. In this case, OnPoint and VHS merged, and VHS received 8 percent equity in OnPoint. Once the deal is approved, the members of OnPoint's board of directors and executive team will become the board of directors and executive team of VHS.
Upon the completion of the reverse merger, VHS will have 8.2 million shares of common stock-some issued and some outstanding-and the former stockholders of OnPoint will hold approximately 87 percent of those outstanding shares.
According to U.S. Securities and Exchange Commission filings, VHS has not had any business operations for a number of years. In 2007, the company sold its only operating subsidiary, Drug Depot, Inc.
“The company, based on proposed business activities, is a 'blank-check' company,” VHS said in its most recent annual filing.
Before it sold that subsidiary, VHS operated a Florida retail and veterinary compounding pharmacy that provided specialized compounding pharmaceutical prescription services to veterinarians and their customers in the companion animal sector.
“We are delighted to complete this reverse merger,” William Cavanaugh, OnPoint's CEO, said in a statement. “The going public transaction provides a strong financial foundation with potential enhanced access to capital.”
OnPoint was founded in 2006 and is a development-stage company commercializing MRI-quality assurance testing software and technologies. The company's products are developed by Mayo Clinic and licensed to OnPoint.
According to Cavanaugh, it will take 30 to 60 days to go through the approval process with shareholders. The company's proposed new ticker symbol-ONPT-is awaiting approval as well.