Rinoa Enterprises Ltd.
TSX VENTURE : RIN.P

November 01, 2006 12:00 ET

Rinoa Enterprises Ltd. and Paragon Pharmacies Ltd. Announce Completion of Amalgamation to Form Paragon Pharmacies Limited

CALGARY, ALBERTA--(CCNMatthews - Nov. 1, 2006) -

(Not for dissemination in the United States of America)

Rinoa Enterprises Ltd. (TSX VENTURE:RIN.P) ("Rinoa" or the "Corporation"), a capital pool company, is pleased to announce that it has completed its previously announced qualifying transaction by amalgamating with Paragon Pharmacies Ltd. ("Paragon"), a private corporation incorporated under the laws of Alberta and based in Kelowna, British Columbia, to form Paragon Pharmacies Limited ("Amalco") effective October 31, 2006 (the "Amalgamation"). At meetings held on October 13, 2006 (see media release dated October 13, 2006), shareholders of each of Rinoa and Paragon voted unanimously in favour of approving the Amalgamation.

As a result of the completion of the Amalgamation, Amalco is now the owner and operator of 17.5 retail pharmacies (seven located in British Columbia and 10.5 in Alberta) and two medical supply stores located in Kelowna and Vernon, British Columbia, respectively. Amalco's business plan is to acquire independent pharmacies that provide potential for increasing revenues, bottom-line and operational efficiencies. Amalco's management believes that an ageing demographic and increasing prescription sales provides the market opportunity for Amalco to implement this business plan.

In connection with the Amalgamation:

a) all of the Paragon shares issued and outstanding immediately prior to the closing of the Amalgamation have been exchanged on the basis of one (1) common share in the capital of Amalco ("Amalco Share") for each Paragon share;

b) all of the Paragon options issued and outstanding immediately prior to the closing of the Amalgamation have been exchanged on the basis of one (1) option to purchase an Amalco Share ("Amalco Option") for each Paragon option then outstanding with the exercise price of each Amalco Option being equivalent to the exercise price of each Paragon option;

c) all of the Paragon warrants issued and outstanding immediately prior to the closing of the Amalgamation have been exchanged on the basis of one (1) common share purchase warrant of Amalco ("Amalco Warrants") for each Paragon warrant then outstanding, with the exercise price for each Amalco Warrant being equivalent to the exercise price for each Paragon warrant;

d) all of the Rinoa shares issued and outstanding immediately prior to the closing of the Amalgamation have been exchanged on the basis of one (1) Amalco Share for each Rinoa share then outstanding; and

e) all of the Rinoa options issued and outstanding immediately prior to the closing of the Amalgamation have been exchanged on the basis of one (1) Amalco Option for each Rinoa option then outstanding with the exercise price of each Amalco Option being equivalent to the exercise price for each Rinoa option.

with the result that Amalco now has 31,934,423 Amalco Shares, 985,675 Amalco Options (with exercise prices ranging from $0.20 to $1.50) and 5,710,707 Amalco Warrants (with exercise prices ranging from $0.80 to $1.50) issued and outstanding as of the date hereof.

An aggregate of 14,430,910 Amalco Shares have been deposited in escrow pursuant to a form 5D Tier 1 Escrow agreement and an aggregate of 2,000,000 Amalco Shares have been deposited in escrow pursuant to a Form 2F CPC escrow agreement (the "Escrow Agreements"). The Amalco Shares subject to the Escrow Agreements will be released from escrow as to 25% on issuance of the TSX Venture Exchanges' final bulletin approving the qualifying transaction (the "Bulletin") and an additional 25% of the escrowed shares will be released on each six month anniversary from the date of issuance of the Bulletin.

The board of directors and officers of Amalco are now comprised of Craig Cameron, President, Chief Executive Officer and a director, Scott Wesolowski, Chief Financial Officer, Jason Monteleone, Vice President, Finance, Reginald Hihn, Vice President, Operations and a director, Dennis Shewchuk, Vice President, Sales, Don Cocar, Director of Operations, Ben Holden, Vice President, Corporate Development, Renee Cameron, Controller and Charles Burgess, Brent Herman, Allan McLeod, Bruce Moody and Jim Waters, all of whom are directors.

Final approval for the Amalgamation is expected from the TSX Venture Exchange upon submission of final documentation in a form acceptable to the TSX Venture Exchange. Amalco's trading symbol on the TSX Venture Exchange will change to "PGN" upon receipt of the required final regulatory approvals and issuance of the Bulletin.

Bieber Securities Inc. acted as sponsor in connection with the Amalgamation.


The TSX Venture 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.

Contact Information

  • Paragon Pharmacies Ltd.
    Craig Cameron
    President and Chief Executive Officer
    (250) 491-3936