PACEPartners Inc.
TSX VENTURE : PIA.P

April 19, 2013 16:23 ET

PACEpartners Inc. Announces Closing of Its Qualifying Transaction and Prospectus Offering of 24,000,000 Units for Maximum Offering Proceeds of $6,000,000

CALGARY, ALBERTA--(Marketwired - April 19, 2013) -

NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

PACEpartners Inc. (TSX VENTURE:PIA.P) (PACEpartners) is pleased to announce that it has closed its previously announced Qualifying Transaction with Vivione Biosciences, LLC (Vivione) in accordance with the policies of the TSX Venture Exchange (the Exchange). Pursuant to the Qualifying Transaction, an aggregate of 7,433,980 Class A Common Shares and 29,737,466 Class B Common Shares of PACEpartners were issued to securityholders and debt holders of Vivione.

As a result of the Qualifying Transaction, Vivione became a wholly-owned subsidiary of PACEpartners, and the business of the resulting company (the Resulting Issuer) will be centered on the commercialization of the RAPID-B diagnostic system, which is an integrated system of hardware, software and chemical reagents that tests for the presence of bacteria or other pathogens in key environments. This technology could have potentially diverse application from food safety to clinical diagnostics to industrial applications, by identifying and quantifying micro-organism levels more rapidly and with greater precision than currently employed techniques.

Concurrently with the closing of the Qualifying Transaction, PACEpartners completed its previously announced public offering (the Prospectus Offering) of 24,000,000 units for gross proceeds of $6,000,000, which was the maximum amount under the Prospectus Offering, at a price of $0.25 per unit. Each unit consists of one Class A Common Share in the capital of PACEpartners and one half of one non-transferable Class A Common Share purchase warrant (each whole warrant, a Warrant). Each Warrant entitles the holder to purchase one Class A Common Share at an exercise price of $0.35 at any time prior to 4:30 p.m. (Calgary time) on the date that is 18 months following the closing date of the Prospectus Offering, subject to accelerated expiry in certain circumstances.

The Prospectus Offering was conducted by Macquarie Private Wealth Inc. (Macquarie) on a "commercially reasonable efforts" agency basis. Macquarie received a corporate finance fee, a cash commission equal to 8% of the gross proceeds of the Prospectus Offering and options were granted to Macquarie and a sub-agent to purchase in aggregate 1,920,000 Class A Common Shares at a price of $0.25 per share, exercisable for a period of 24 months from the date of the closing of the Prospectus Offering.

As a result of the closing of the Qualifying Transaction and the Prospectus Offering, there are 36,058,980 Class A Common Shares and 29,737,466 Class B Common Shares of PACEpartners issued and outstanding.

Kevin Kuykendall, the new Chief Executive Officer of the Resulting Issuer, stated "I am very pleased with the result today including achieving the maximum amount under the Prospectus Offering. These funds will provide the necessary working capital to further commercialize the RAPID-B diagnostic system. As a result of six years of development with the U.S. Food and Drug Administration - National Center for Toxicological Research, I am looking forward to this next chapter in our company's evolution."

The net proceeds of the Prospectus Offering will be used by the Resulting Issuer to commercialize the RAPID-B diagnostic system, to pay costs associated with the Prospectus Offering and the Qualifying Transaction and for working capital and other corporate purposes.

Board of Directors and Management of Resulting Issuer

At the closing of the Qualifying Transaction, the directors of the Resulting Issuer are Ian E. Gallie, Kevin Kuykendall, Ted Moskal, Lal Narang and Philip A. Tuttle.

The management team of Resulting Issuer consists of Kevin Kuykendall as Chief Executive Officer, Chester J. Jachimiec as Chief Financial Officer and Corporate Secretary and Ted Moskal as President and Chief Science Officer.

Trading Halt

At the request of PACEpartners, trading in its Class A Common Shares has been halted since May 8, 2012 and has not resumed as at the date of this press release. Following the issuance of the final bulletin by the Exchange, the Class A Common Shares are expected to commence trading under the symbol "PIA" on or about Wednesday, April 24, 2013.

Early Warning

Mr. Glenn Smith, of Calgary, Alberta, acquired ownership of an aggregate of 9,341,400 Class A Common Shares, being approximately 25.9% of the issued and outstanding Class A Common Shares, and 4,670,700 Warrants pursuant to the Prospectus Offering for aggregate proceeds of $2,335,350. Assuming that Mr. Smith exercises all of his 4,670,700 Warrants, Mr. Smith would hold approximately 34% of the Class A Common Shares. Mr. Smith advises that the Class A Common Shares were acquired for investment purposes and Mr. Smith may, from time to time on an individual or joint basis, acquire additional securities of the Resulting Issuer, dispose of some or all of the existing or additional securities he holds or will hold, or may continue to hold his current position.

Litmus LLC, of Arkansas, a unitholder of Vivione, acquired ownership of an aggregate of 3,047,371 Class A Common Shares, being approximately 8.4% of the issued and outstanding Class A Common Shares, and 12,190,278 Class B Common Shares (in aggregate the Litmus Shares) as a result of the completion of the Qualifying Transaction. The Litmus Shares were all acquired pursuant to the terms of the Qualifying Transaction at a deemed price of $0.25 per share. The Litmus Shares are subject to the escrow requirements of the TSX Venture Exchange. Assuming that Litmus LLC converts all of its Class B Common Shares into Class A Common Shares, Litmus LLC would hold approximately 31.5% of the Class A Common Shares. The Litmus Shares were acquired for investment purposes and Litmus LLC may, from time to time on an individual or joint basis, acquire additional securities of the Resulting Issuer, dispose of some or all of the existing or additional securities it holds or will hold, or may continue to hold its current position.

Cautionary Statements

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the Prospectus Offering, Qualifying Transaction and the business of the Resulting Issuer. Readers are cautioned to not place undue reliance on forward-looking information. The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Resulting Issuer's current belief or assumptions as to the outcome and timing of such future events. Actual results and developments may differ materially from those contemplated by this forward-looking information due to, among other things, the inability of the Resulting Issuer to obtain final approval from the Exchange in the expected timeline and the RAPID-B diagnostic system not being successfully commercialized. The reader is cautioned not to place undue reliance on this forward-looking information.

The securities mentioned herein have not been and will not be registered under the United States Securities Act of 1933, as amended, or the securities laws of any state, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release does not constitute an offer to sell or the solicitation of any offer to buy these securities in any jurisdiction.

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • PACEpartners Inc.
    Kevin Kuykendall
    Chief Executive Officer
    (214) 886-5733