Chelsea Acquistion Corporation Announces Execution of Amalgamation Agreement With Pediapharm Inc.

CALGARY, ALBERTA--(Marketwired - Oct. 17, 2013) -

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Chelsea Acquisition Corporation (TSX VENTURE:CAV.P) ("Chelsea" or the "Corporation") is pleased to announce that it has entered into a formal amalgamation agreement (the "Amalgamation Agreement") with Pediapharm Inc. ("Pediapharm") dated effective October 11, 2013, pursuant to which Chelsea will amalgamate (the "Business Combination") with Pediapharm under the Canada Business Corporations Act to form an amalgamated company ("Amalco") on such terms as were previously announced on July 15, 2013. The Business Combination, 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 Business Combination is subject to the approval of TSX Venture and all other necessary regulatory approvals. The completion of the Business Combination is also subject to additional conditions precedent, including shareholder approval of each of Chelsea and Pediapharm and the completion by Pediapharm of a brokered private placement (the "Minimum Pediapharm Subscription Receipt Private Placement") of a minimum of 13,333,333 subscription receipts ("Subscription Receipts") at a price of $0.30 per Subscription Receipt for minimum gross proceeds of $4,000,000.

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.

As indicated above, completion of the Business Combination is subject to a number of conditions, including but not limited to, completion of the Minimum Pediapharm Subscription Receipt Private Placement, TSX Venture acceptance and shareholder approval. The Business Combination cannot close until the required shareholder approval is obtained. There can be no assurance that the Business Combination will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the information circular of Chelsea prepared in connection with the Business Combination, any information released or received with respect to the Business Combination may not be accurate or complete and should not be relied upon. Trading in the securities of Chelsea or Pediapharm should be considered highly speculative.

The TSX Venture has in no way passed upon the merits of the Business Combination and has neither approved nor disapproved the contents of this press release. Neither TSX Venture nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture) accepts responsibility for the adequacy or accuracy of this press release.

This press release contains forward-looking statements. More particularly, this press release contains statements concerning: the completion of the Minimum Pediapharm Subscription Receipt Private Placement, the receipt of TSX Venture and shareholder approval of the Business Combination and the completion of the Business Combination. The forward-looking statements are based on certain key expectations and assumptions made by Chelsea and Pediapharm including the timing of completion of the Minimum Pediapharm Subscription Receipt Private Placement, the timing of receipt of required shareholder and TSX Venture approvals and the satisfaction of other conditions to the completion of the Business Combination as set forth in the Amalgamation Agreement.
Although Chelsea and Pediapharm believe that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because no assurance can be provided that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks that the Minimum Pediapharm Subscription Receipt Private Placement is not completed, required shareholder and TSX Venture approvals are not obtained on terms satisfactory to the parties or at all, and risks that other conditions to the completion of the Business Combination are not satisfied on the timelines set forth in the Amalgamation Agreement or at all.

The forward-looking statements contained in this press release are made as of the date hereof and neither Chelsea nor Pediapharm undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

This press release does not constitute an offer for sale of securities in the United States.