TORONTO, ONTARIO--(Marketwired - Feb. 19, 2014) -
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Bradmer Pharmaceuticals Inc. ("Bradmer") (TSX VENTURE:BMR.H) announced today that it has entered into a letter of intent dated February 18, 2014 with Alpha Cancer Technologies Inc. ("Alpha"), a corporation existing under the laws of the Province of Ontario, to complete a going-public transaction for Alpha (the "Proposed Transaction").
It is currently anticipated that the Proposed Transaction will proceed by way of an amalgamation of Bradmer and Alpha under the Business Corporations Act (Ontario) (the "Amalgamation"), with the amalgamated entity (the "Resulting Issuer") being named "Alpha Cancer Technologies Inc." (or such other name as Alpha may determine). The Proposed Transaction, if completed, will constitute a reverse take-over transaction pursuant to which the shareholders of Alpha will hold a significant majority of the outstanding common shares of the Resulting Issuer. The Proposed Transaction will be an arm's length transaction under the policies of the TSX Venture Exchange (the "Exchange").
Alpha is a pre-clinical biopharmaceutical company (incorporated in September 2008) with a targeted chemotherapy delivery platform focused on the global oncology market. Alpha holds the exclusive worldwide rights to recombinant human Alpha Fetoprotein (AFP), a shuttle protein that targets AFP receptors found almost exclusively on most solid and liquid cancer cells. Alpha's lead asset ACT-901 combines AFP with paclitaxel, a generic chemotherapeutic drug, to target cancer cells and more effectively deliver paclitaxel to cancerous tumors. Alpha has the benefit of substantial knowledge and intellectual property investment by its licensor in the development of AFP including an international patent portfolio and an existing drug master manufacturing file deposited with the FDA, with preclinical and human safety data in over 400 patients from Phase I and II clinical trials of AFP. As a result, Alpha has significantly mitigated the risk profile and has an expedited clinical development path to bring ACT-901 through to commercialization.
"While there have been advances in the treatment of cancer, there is no question that cancer remains one of the largest areas of significant unmet medical need," commented Dr. Alan Ezrin, President and Chief Executive Officer of Bradmer. "Alpha's targeted approach to the treatment of cancer has the potential to become an important game changer using Alpha Fetoprotein to target chemotherapy to AFP receptors which are expressed on most cancer cells. This targeted approach holds great promise for enhanced delivery and increased therapeutic effectiveness while minimizing non-target tissue side effects. As such, ACT-901 should significantly reduce or eliminate known side effects of paclitaxel."
Upon completion of the Proposed Transaction, the Resulting Issuer will carry on the business of Alpha. The parties intend that the Resulting Issuer will be listed on the Exchange as a Life Sciences Issuer following completion of the Proposed Transaction.
The board of directors of the Resulting Issuer will consist of nominees of Alpha; however, Bradmer shall be entitled to appoint Dr. Alan Ezrin (the President and Chief Executive Officer of Bradmer) to the board of directors of the Resulting Issuer. It is anticipated that the current executive officers of Alpha, including Dr. Igor Sherman (President and Chief Executive Officer) and Richard Potts (Chairman), will become executive officers of the Resulting Issuer.
In conjunction with, and prior to the closing of the Proposed Transaction, Alpha intends to complete a private placement of Alpha Shares, 10% convertible notes, subscription receipts and/or other securities convertible into Alpha Shares for aggregate gross proceeds of between $7,000,000 and $10,000,000 (the "Private Placement"), at an offering price or conversion price, as applicable, of $0.50 per Alpha Share. Euro Pacific Canada, Inc. has been engaged by Alpha to act as agent for part of the Private Placement. Any convertible securities of Alpha issued pursuant to the Private Placement will be converted to Alpha Shares immediately prior to the completion of the Amalgamation. The pricing of the Private Placement reflects a pre-money enterprise value for Alpha of approximately $25,000,000.
For the purposes of the Proposed Transaction, the deemed value of each outstanding Bradmer Share will be $0.0632 (on a pre-Amalgamation basis). Pursuant to the Amalgamation, it is anticipated that: (i) holders of Alpha Shares (including purchasers under the Private Placement) will receive one common share of the Resulting Issuer (an "Amalco Share") in exchange for each outstanding Alpha Share (the "Alpha Exchange Ratio"); and (ii) holders of Bradmer Shares will receive one Amalco Share in exchange for every 7.91 outstanding Bradmer Shares (the "Bradmer Exchange Ratio"). All outstanding convertible securities of Alpha and Bradmer (including all outstanding options or warrants) will be exchanged, subject to regulatory approval, for convertible securities of the Resulting Issuer having economically equivalent terms and conditions (having regard to the Alpha Exchange Ratio and Bradmer Exchange Ratio, respectively).
Following completion of the Amalgamation, assuming an aggregate of $10,000,000 is raised by Alpha pursuant to the Private Placement at an offering price of $0.50 per Alpha Share: (i) existing shareholders of Bradmer will hold approximately 3.4% of the outstanding Amalco Shares; (ii) existing shareholders of Alpha will hold approximately 68.9% of the outstanding Amalco Shares; and (iii) purchasers under the Private Placement will hold approximately 27.7% of the outstanding Amalco Shares.
The letter of intent is non-binding with respect to commercial terms, but includes binding obligations typical in the circumstances, including those relating to a period of exclusive dealing and confidentiality. The Proposed Transaction is subject to a number of terms and conditions, including the entering into by the parties of a definitive agreement with respect to the Proposed Transaction on or prior to March 31, 2014 (such agreement to include representations, warranties, conditions and covenants typical for a transaction of this nature and magnitude), the completion of the Private Placement for minimum gross proceeds to Alpha of $7,000,000 on or prior to March 31, 2014, the completion of satisfactory due diligence investigations, the approval of the directors of each of Bradmer and Alpha, the approval of the shareholders of Bradmer, the approval of the shareholders of Alpha and the approval of the Exchange and other applicable regulatory authorities.
The Amalco Shares to be issued to holders of Alpha Shares (including those issued under the Private Placement) and to the holders of Bradmer Shares pursuant to the Amalgamation will be freely-tradeable, subject to the usual restrictions contained in applicable securities legislation and any escrow requirements that may be imposed contractually or pursuant to applicable stock exchange rules or policies.
In connection with the Proposed Transaction, Wildlaw Capital Markets Inc. ("WCM") is entitled to receive on closing of the Proposed Transaction: (i) $200,000 payable either in cash, or at WCM's option, by the issuance to it of 400,000 Amalco Shares; (ii) warrants exercisable to acquire an aggregate of 500,000 Amalco Shares, at an exercise price of $0.50 per share, for a period 24 months following the closing of the Amalgamation; and (iii) 100,000 Amalco Shares, pursuant to the terms and conditions of an agreement with Bradmer (as amended based on negotiations with Alpha in connection with the entering into of the letter of intent).
Trading in Bradmer Shares will remain halted pending the satisfaction of all applicable requirements of the Exchange. There can be no assurance that trading in the Bradmer Shares will resume prior to the completion of the Proposed Transaction.
Further details concerning the Proposed Transaction and Alpha (including financial information) will be set out in a further comprehensive press release, if and when a definitive agreement is reached between the parties, in accordance with the policies of the Exchange.
All information contained in this press release relating to Alpha was provided by Alpha to Bradmer for inclusion herein. Bradmer has not independently verified such information and shall bear no liability for any misrepresentation contained therein.
Completion of the Proposed Transaction is subject to a number of conditions, including, but not limited to, acceptance by the Exchange and shareholder approval. The Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular of Bradmer to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Bradmer should be considered to be highly speculative.
The Exchange has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
ANY SECURITIES REFERRED TO HEREIN WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "1933 ACT") AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.
This news release contains certain "forward looking statements" including, for example, statements relating to the completion of the Proposed Transaction (including its proposed terms and conditions) and Private Placement. Such forward-looking statements involve risks and uncertainties, both known and unknown. The results or events depicted in these forward-looking statements may differ materially from actual results or events. The forward-looking events and circumstances discussed in this release, including the completion of the Proposed Transaction (including its proposed terms and conditions) and the Private Placement, may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting Alpha, Bradmer or the Resulting Issuer, including risks regarding the life sciences, biotechnology and pharmaceuticals industries, failure to obtain regulatory or shareholder approvals, market conditions, economic factors, the state of equity markets generally and risks associated with growth, the protection of intellectual property and competition. Any forward-looking statement speaks only as of the date of this news release and, except as may be required by applicable securities laws, Bradmer and Alpha disclaim any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise.