Chelsea Acquisition Corporation ("Chelsea" or the "Corporation") (TSX
VENTURE:CAV.P) is pleased to announce details concerning its proposed qualifying
transaction involving a proposed business combination with Pediapharm Inc.
("Pediapharm"). Pediapharm is a private specialty pharmaceutical company
dedicated to serving the needs of the pediatric community.
Chelsea has entered into a letter agreement with Pediapharm dated June 25, 2013
(the "Letter Agreement"), pursuant to which Chelsea and Pediapharm intend to
complete a business combination (the "Transaction") by way of an amalgamation to
form a new company ("Amalco") called "Pediapharm Inc." Pursuant to the
Transaction, Chelsea will amalgamate with Pediapharm to form Amalco and: (i) the
issued and outstanding Pediapharm Common Shares will be exchanged for an
aggregate of 36,666,667 common shares of Amalco (the "Amalco Common Shares")
with a deemed value of $0.30 per share; (ii) the outstanding Pediapharm share
purchase warrants will be exchanged for share purchase warrants of Amalco; (iii)
each three (3) issued and outstanding Chelsea Common Shares will be exchanged
for one (1) Amalco Common Share for an aggregate of 3,666,667 Amalco Common
Shares; and (iv) each three (3) outstanding stock options and agents' options of
Chelsea will be exchanged for one stock option or agents' option of Amalco
exercisable at $0.30 per share.
It is intended that the Transaction, when completed, will constitute the
qualifying transaction of the Corporation pursuant to Policy 2.4 of the TSX
Venture Exchange Inc. (the "TSX Venture") Corporate Finance Manual. The
Transaction is subject to the policies of the TSX Venture relating to qualifying
transactions, as well as shareholder approval of each of Chelsea and Pediapharm.
About Pediapharm
Pediapharm is the only private Canadian specialty pharmaceutical company,
dedicated to serving the needs of the pediatric community. Its mission is to
bring to the Canadian market the latest innovative pediatric products with the
objective to improve the health and the well-being of children in Canada. Since
its debut in 2008, Pediapharm has entered into numerous commercial agreements
with partners from Canada and other countries around the world.
Pediapharm Corporate History and Structure
Pediapharm was incorporated under the Canada Business Corporations Act ("CBCA")
on February 24, 2003. The head and registered office of Pediapharm is located at
1 Place du Commerce, Suite 225, Ile-des-Soeurs, Quebec, H3E 1A2. Pediapharm has
one wholly-owned subsidiary, Pediapharm Licencing Inc. which is incorporated
under the CBCA.
Pediapharm currently has 11,414,001 Pediapharm Common Shares issued and
outstanding. Pediapharm has no stock options, warrants, anti-dilution or other
rights to purchase Pediapharm Common Shares issued or outstanding, other than
(i) an aggregate of 342,857 share purchase warrants exercisable at $1.05 (the
"Pediapharm Warrants"); (ii) convertible debentures of Pediapharm in the
aggregate amount of principal and interests, accrued as of August 31, 2013 of
approximately $1,985,000 which will be converted into Pediapharm Common Shares
(the "Pediapharm Debentures"); (iii) 602,038 options to purchase Pediapharm
Common Shares held by current or former directors, officers or employees of
Pediapharm at exercise prices ranging from $0.87 to $1.05 (the "Pediapharm
Options"); and (iv) additional rights to purchase Pediapharm Common Shares
pursuant to certain anti-dilution provisions, rights, deferred stock units and
agreements.
The two largest shareholders of Pediapharm are Sylvain Chretien of Verdun,
Quebec and FIER of Longueuil, Quebec; who own 29.8%, and 11.22%, respectively.
Financial Information of Pediapharm
Based on audited management prepared financial statements for the year ended
December 31, 2012, Pediapharm had revenue of $2,490,503, operating expenses of
$4,714,433, and a net loss of $2,223,930. In addition, as at December 31, 2012,
Pediapharm had working capital of $212,268, assets of $1,723,778 and liabilities
of $2,812,900.
Based on unaudited management prepared financial statements for the period ended
March 31, 2013, Pediapharm had revenue of $828,629, operating expenses of
$1,000,867, and a net loss of $276,871. In addition, as at March 31, 2013,
Pediapharm had working capital of $116 094, assets of $1,986,604, and
liabilities of $3,352,597.
Summary of the Proposed Qualifying Transaction
Pursuant to the arm's length Letter Agreement, and subject to the terms and
conditions thereof, Chelsea and Pediapharm have agreed to complete the
Transaction to form Amalco.
Pursuant to the Letter Agreement, the parties have agreed to use their
"commercially reasonable efforts" to cause Pediapharm to complete a private
placement (the "Pediapharm Private Placement") of subscription receipts of
Pediapharm (the "Subscription Receipts") at a price of $0.30 per receipt (the
"Offering Price") for gross proceeds of a minimum of $4,000,000 and a maximum of
$6,000,000. Each Subscription Receipt will be automatically converted into one
Amalco Common Share concurrent with the completion of the Transaction at no
additional cost to the holder. The parties acknowledge that Pediapharm intends
to engage a syndicate of agents to be determined (the "Agents") to act as agents
on a "commercially reasonable efforts" basis for the Pediapharm Private
Placement and in connection therewith intends to pay a cash commission to the
Agents in an amount to be determined. The parties agree the net proceeds of the
Pediapharm Private Placement will be held in escrow and released concurrent with
the completion of the Transaction.
The parties also agree Pediapharm may proceed with a non-brokered private
placement of units of Pediapharm (the "Pediapharm Units") at a price per unit to
be determined, for gross proceeds of up to $500,000 to close on or before August
31, 2013. Each Pediapharm Unit will consist of one Pediapharm Common Share and
one share purchase warrant of Pediapharm (the "Pediapharm Financing Warrants")
exercisable at a price per share to be determined, for a period of two years
from closing of such private placement. Pediapharm may also choose to proceed by
way of financing in the same maximum amount by way of a loan or any other
financing agreement.
Summary of Proposed Directors and Officers
The board of Chelsea will be replaced to consist of seven (7) directors all of
whom will be nominees of Pediapharm, namely, Sylvain Chretien, Pierre Lapalme,
three other members of the current board of Pediapharm and two independent
directors from outside the province of Quebec to be determined, provided TSX
Venture does not object to such nominations and such persons are eligible to act
as directors pursuant to the requirements of the CBCA.
After the closing of the Transaction, the officers of Amalco will be appointed
by the Board of Directors of Amalco and will include Sylvain Chretien as Chief
Executive Officer, Benoit Hebert as Vice-President, Business Development and
Licensing, Roland Boivin as Chief Financial Officer, Ashok Bhaseen as
Vice-President, Marketing and Sales and a Corporate Secretary to be determined
by the Board of Directors of the Resulting Issuer.
Sylvain Chretien, Chief Executive Officer and Director
Sylvain Chretien, Age 48, President, Chief Executive Officer and Director: Mr.
Chretien is the founder of Pediapharm as well as the president and CEO since
January 2008. He has over 24 years of experience in both the pharmaceutical and
the biotechnology sectors, where he occupied various executive positions in
sales, marketing and business development. He worked with Nordic Laboratories
from 1989 to 1994; with Pfizer Canada from 1994 to 1998; and with Biorthex Inc.
from January 1998 to June 2000. Before founding Pediapharm, Mr. Chretien had his
own consulting company called Gestion BioPrisma. Mr. Chretien was a Director of
Biophage Pharma and Warnex. He was President of the Pharmaceutical Marketing
Club of Quebec (PMCQ) in 1998 and executive member of BioQuebec in 2000. Mr.
Chretien holds an MBA in Management of Bio Industries from the Universite du
Quebec a Montreal and a B.Sc. in Sciences of Physical Activities from the
University of Laval.
Roland Boivin, Chief Financial Officer
Roland Boivin, Age 46, is the proposed Chief Financial Officer of Pediapharm.
From 1990 to 2008, Mr. Boivin held several management positions at 3M Canada,
including Business Manager - Consumer Division. In that role, he had overall
financial responsibility for the Canadian consumer market. His most recent role
at 3M was General Manager - Quebec and he became a member of the Company's
Executive Committee. Mr. Boivin has since developed expertise in Finance,
Accounting, Corporate Governance and Continuous Disclosure with small and medium
size publicly listed companies. Mr. Boivin has been the Chief Financial Officer
of Golden Hope Mines Limited, a public company listed on TSX Venture since June
2011. Mr. Boivin obtained his Bachelor of Commerce from McGill University and
his MBA from Queen's University.
Benoit Hebert, Vice-President, Business Development and Licensing
Benoit Hebert, Age 46 has been the Vice-President, Business Development and
Licensing of Pediapharm since September 2009. Mr. Hebert has more than 15 years
of industry experience and has a rare-blend of scientific expertise and business
skills. Focusing on pharmaceutical business transactions since 2000, he worked
at Axcan Pharma Inc. from July 2003 to November 2006. Mr. Hebert has lead
international licensing transactions, participated actively in product
acquisitions, managed international product development alliances and global
supplier relationship. Mr. Hebert holds an MBA in Management of Bio-industries
from the Universite du Quebec a Montreal. Mr. Hebert also received a M.Sc. in
Immunology and a Ph.D. in Virology from the Institut Armand-Frappier. Before
returning to Canada in 2000, he was a NSERC postdoctoral fellow in structural
biology at Purdue University. He is past-president and a director of the
Canadian Healthcare Licensing Association (CHLA).
Ashok Bhaseen, Vice-President, Marking and Sales
Ashok Bhaseen, Age 56 has been the Vice-President, Marketing and Sales of
Pediapharm since September 2009. Mr. Bhaseen brings over 30 years of experience
of Global Pharmaceutical marketing. He worked with Abbott Pharmaceuticals from
1995 to 2006, among various roles as Commercial Director for Pacific, Asia,
Australia and Africa with Abbott International and Canadian Market in marketing,
sales, business development, health communication and pharmacy programs. He also
worked with IMS Americas as Director, National Accounts from June 2006 to
November 2008. Prior to IMS and Abbott, he worked in International markets as
General Manager, Sales Manager and Group Product Manager with Johnson and
Johnson from 1986 to 1988 and Parke Davis from 1988 to1990. He has successfully
launched several new products in Canada and International markets in primary
care, specialty, devises and OTC area. Mr. Bhaseen is also Global President of
Thyroid Federation International. Mr. Bhaseen holds a Masters degree in
Pharmaceutical Sciences from the University of Saugor and an MBA from the
University of Bombay.
Pierre Lapalme, Director
Pierre Lapalme, Age 72, has been the Chairman of the Board of Pediapharm since
September 2009. Mr. Lapalme has served as Director and Chairman of the Board of
Biomarin Pharmaceutical Inc. since January 2004. Throughout his career, Mr.
Lapalme held numerous senior management positions in the pharmaceutical
industry, including Chief Executive Officer and Chairman of the Board of Rhone
Poulenc Pharmaceuticals, Inc. Canada (known as Sanofi Aventis), and Senior
Vice-President and General Manager of North America Ethicals. Mr. Laplante was
also President and CEO of Ethypharm North America from 1995 to 2004. Mr. Lapalme
has also served on the board of directors of public companies during the past
five years: Insy's Therapeutic, a specialty pharma corporation based in Arizona
and traded on NASDAQ (since March 2011), Sciele Pharmaceuticals Inc. (from 1998
to 2008) and Bioxel Pharma (from 2004 to 2009). He also serves on the board of
two private biotech companies and was appointed to the board of Aeterna Zentaris
in December 2009. Mr. Lapalme studied at the University of Western Ontario and
INSEAD France.
Information Concerning Chelsea
Chelsea is a capital pool company that completed its initial public offering and
the Chelsea Common Shares are listed for trading on TSX Venture. Chelsea
currently has 11,000,000 Chelsea Common Shares outstanding, stock options
outstanding to acquire 1,100,000 Chelsea Common Shares at a price of $0.10 per
share until March 1, 2022, and agent's options outstanding to acquire 300,000
Chelsea Common Shares at a price of $0.10 per share until March 5, 2014. As at
June 15, 2013, Chelsea had cash and near cash assets, net of liabilities, of
approximately $500,000.
Other Matters Concerning the Qualifying Transaction
The completion of the Transaction is subject to the approval of TSX Venture and
all other necessary regulatory approval. The completion of the Transaction is
also subject to additional conditions precedent, including completion of the
Private Placement for gross proceeds of a minimum of $4.0 million, shareholder
approval of Chelsea and Pediapharm, satisfactory completion of due diligence
reviews by the parties, board of directors approval of Chelsea and Pediapharm,
completion of the Escrow Transfer (defined below) and certain other usual
conditions.
The Transaction will be an arm's length transaction as none of the directors,
officers or insiders of Chelsea own any interest in Pediapharm.
Chelsea also announces it has reserved a price of $0.10 per Chelsea Common Share
($0.30 per Amalco Common Share) for the grant of stock options to acquire up to
10% of the number of issued and outstanding Amalco Common Shares (the "Stock
Options") in the event the Transaction is completed. The grant of the Stock
Options is subject to regulatory approval. The Stock Options will be granted to
directors, officers, employees and consultants of Amalco, concurrent with the
completion of the Transaction.
The parties have agreed that on completion of the Transaction, Macquarie Private
Wealth Inc. ("Macquarie") shall be paid a finder's fee of: (i) $200,000, with
$50,000 being payable in cash and the balance to be payable by the issuance of
500,000 Amalco Common Shares; and (ii) Candido Services (9132-8757 Quebec Inc.)
("Candido") shall be paid a finder's fee of $130,000 with $32,500 being payable
in cash and the balance to be payable by the issuance of 325,000 Amalco Common
Shares, resulting in total finder's fees of $330,000 ($82,500 in cash and
$247,500 in Amalco Common Shares).
Concurrent with the closing of the Transaction, the current founding
shareholders of Chelsea will transfer within escrow an aggregate of 1,333,333
Amalco Common Shares at a price of $0.21 per share to the insiders of
Pediapharm, subject to the receipt of all necessary regulatory approval (the
"Escrow Transfer").
Chelsea will apply to the TSX Venture for an exemption from the sponsorship
requirements in connection with the Qualifying Transaction. There is no
assurance that such exemption will be granted. If such exemption is not granted,
Chelsea will be required to engage a sponsor for the Transaction.
Trading of the Chelsea Common Shares will not resume until all documents
required by the TSX Venture have been filed. Chelsea will issue a further news
release when TSX Venture has received the necessary documentation and trading of
the Chelsea Common Shares is to resume.
As indicated above, completion of the Transaction is subject to a number of
conditions, including but not limited to, TSX Venture acceptance and shareholder
approval. The Transaction cannot close until the required shareholder approval
is obtained. There can be no assurance that the Transaction will be completed as
proposed or at all.
Investors are cautioned that, except as disclosed in the Information Circular 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 Corporation should
be considered highly speculative.
Neither the TSX Venture nor its Regulation Service Provider (as that term is
defined in the policies of the TSX Venture) has in no way passed upon the merits
of the proposed transaction and has neither approved nor disapproved the
contents of this press release.
Except for historical information contained herein, this news release contains
forward-looking statements that involve risks and uncertainties. Actual results
may differ materially. Neither Pediapharm nor Chelsea will update these
forward-looking statements to reflect events or circumstances after the date
hereof. More detailed information about potential factors that could affect
financial results is included in the documents filed from time to time with the
Canadian securities regulatory authorities by Chelsea.
The securities of Chelsea being offered have not been, nor will 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 U.S.
registration requirements. This release does not constitute an offer for sale of
securities in the United States.
FOR FURTHER INFORMATION PLEASE CONTACT:
Chelsea Acquisition Corporation
Douglas Stuve
Director
(403) 234-3337
Pediapharm Inc.
Sylvain Chretien
Chief Executive Officer
(514) 239-7966
Grafico Azioni Chelsea Acquisition Corporation (TSXV:CAV.P)
Storico
Da Ott 2024 a Nov 2024
Grafico Azioni Chelsea Acquisition Corporation (TSXV:CAV.P)
Storico
Da Nov 2023 a Nov 2024
