Rodocanachi Capital Inc.
TSX VENTURE : ROD.H

August 28, 2014 14:23 ET

Rodocanachi Capital Inc. Enters Into Definitve Agreement with AlliancePharma Inc.

MONTREAL, QUÉBEC--(Marketwired - Aug. 28, 2014) -

NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S. NEWSWIRES

Rodocanachi Capital Inc. ("Rodocanachi") (TSX VENTURE:ROD.H), a capital pool company, is pleased to announce that it has entered into a binding agreement dated August 27, 2014 (the "Definitive Agreement") with AlliancePharma Inc. ("Alliance"), a Québec-based, health industry personal placement company, to provide for the completion of a business combination with Rodocanachi (the "Transaction"), as more particularly described below.

The Transaction is subject to a number of terms and conditions as set forth in the Definitive Agreement, including (among other things) the approval of the TSX Venture Exchange (the "TSXV"). If completed, the Transaction will constitute Rodocanachi's "Qualifying Transaction" (as such term is defined in TSXV Policy 2.4 - Capital Pool Companies).

In connection and concurrently with the Transaction, Rodocanachi will complete a private placement (the "Offering") of Rodocanachi common share (on a post-Rodocanachi Consolidation basis (as defined below)) at a price of $0.15 per share for minimum gross proceeds of $300,000 and maximum gross proceeds of $500,000.

Rodocanachi will also complete shares for debt transaction (the "Shares for Debt") pursuant to which $60,000 of debt will be converted into an aggregate of 1,200,000 Rodocanachi common shares (on a pre-Rodocanachi Consolidation basis).

About AlliancePharma

Alliance is a leader in the health industry personal placement, connecting health professional to pharmacies and hospital. With offices located in the Province of Québec, Alliance has a strong growing basis of active clients, and focuses on delivering a tier-one placement platform making it possible to target and connect the right providers, in the right places, at the right times and for the right price.

Alliance was incorporated under the Business Corporations Act (Québec) on July 12, 2010, and its registered head office is located at 86, Chemin du Mont Adstock, Adstock, Québec, G0N 1S0. Alliance is primarily owned by its co-founders, Isabelle Bégin and Marc Lemieux, each of whom beneficially owns 50% of the outstanding Alliance common shares and is a resident of Québec.

Alliance has rapidly expanded since its inception, with a total revenues increasing from $1,171,390 in 2011 to $3,006,655 in 2013, with an increase of 25%, on average, on a quarter-by-quarter basis since 2011. Alliance had revenue for the nine-month period ended April 30, 2014 of $2,921,684. In the same period, Alliance had costs of revenue of $1,948,402, for a gross profit of $973,282. As at April 30, 2014 Alliance had total assets of $722,375, total liabilities of $567,112 and a shareholders' equity of $155,263. All figures cited herein are based on unaudited financial statements of Alliance and are subject to change.

The Qualifying Transaction

Pursuant to the Transaction, Rodocanachi and Alliance will complete a "three-cornered" amalgamation under the provisions of the Business Corporation Act (Québec), pursuant to which Alliance will amalgamate with a wholly-owned subsidiary of Rodocanachi (the "Amalgamation").

Immediately prior to the closing of the Amalgamation, Rodocanachi will complete a consolidation (the "Rodocanachi Consolidation") of the common shares of Rodocanachi on the basis of three (3) pre-consolidation shares for one (1) post-consolidation share. The Rodocanachi Consolidation reflects a deemed Transaction value of $0.05 per Rodocanachi common share (on a pre-Rodocanachi Consolidation basis).

A total of 23,000,000 Rodocanachi common share (on a post-Rodocanachi Consolidation basis) will be issued to existing Alliance shareholders at a deemed issue price of $0.15 per share for an aggregate acquisition cost of $3,450,000.

Pursuant to the Amalgamation, the outstanding 106 class A shares of Alliance will be exchanged for 12,190,000 Rodocanachi common share (on a post-Rodocanachi Consolidation basis) and the 1,621,606 outstanding class E shares of Alliance will be exchanged for 10,810,000 Rodocanachi common share (on a post-Rodocanachi Consolidation basis), resulting in the existing holders of common shares of Alliance becoming holders of Rodocanachi common share (on a post-Rodocanachi Consolidation basis) post-Transaction. The amalgamated entity will be a wholly-owned subsidiary of Rodocanachi post-Transaction and Rodocanachi on a post-Transaction basis will be the "Resulting Issuer" (as such term is defined under the rules of the TSXV).

Prior to the Amalgamation, Alliance may complete one or more corporate reorganizations or other transactions, including distribution of a discretionary dividend, as are deemed appropriate by the board of directors of Alliance to accommodate efficiencies for various legal structures, tax and accounting treatment and securities regulation, subject to the prior approval of such matters by Rodocanachi.

The material conditions required to be fulfilled by the parties prior to completion of the Transaction include the following: (i) the entering into of an amalgamation agreement and other agreements necessary in connection with the Transaction; (ii) receipt of all required approvals, including TSXV approval, the approval of the shareholders of Alliance in respect of the Transaction and related matters, the approval of the shareholders of Rodocanachi in respect of certain matters related to the Transaction at the annual and special shareholders meeting to be held on October 9, 2014, and all necessary consents of lenders and other third parties; (iii) completion of the Shares for Debt; (iv) the minimum Offering having been secured; (v) completion of the Rodocanachi Consolidation; (vi) upon completion of the Transaction, the Resulting Issuer meeting the applicable minimum listing requirements as a Tier 2 Life Science issuer, including, without limitation, the public float requirements of the TSXV; (vii) immediately prior to the closing of the Transaction, each of the parties required by the TSXV shall have entered into an escrow agreement upon the terms and conditions imposed pursuant to the policies of the TSXV; and (viii) certain other customary conditions for a transaction of this nature.

The Transaction will constitute an arm's-length transaction, and as such, the Transaction will not require approval by the shareholders of Rodocanachi. Rodocanachi intends to prepare and submit a filing statement in connection with the transaction in due course.

Sponsorship

The parties have entered into an engagement letter effective August 27, 2014 (the "Engagement Letter"), to retain the services of Jones, Gable & Company Ltd. (the "Sponsor"), a member firm of the TSXV, to act as sponsor for the Transaction. The Sponsor will receive a sponsor/advisory fee of $30,000 (plus applicable taxes), of which $22,500 (plus applicable taxes) has been paid as a non-refundable deposit as of the execution of the Engagement Letter. As additional compensation, the Sponsor will receive 400,000 compensation options (the "Compensation Options"), each of which will entitle the holder to acquire one (1) common share of the Resulting Issuer upon the payment of $0.15 for a period of twenty-four (24) months following the date of completion of the Transaction.

Proposed Directors and Officers of the Resulting Issuer

The existing officers and director of Alliance are Isabelle Bégin and Marc Lemieux. Set forth below is information on each individual that is currently anticipated to be a director or officer of the Resulting Issuer upon closing of the Transaction.

Isabelle Bégin (Co-Founder, President, Chief Executive Officer and Director) - In 2010, after evolving in the pharmaceutical industry as representative for over 15 years and developing privilege relationship with pharmacist owner across the Province of Québec, Ms. Bégin decided to create a placement platform focused on practical solution for its customers. Ms. Bégin holds a B.A.A. in business administration from the Laval University.

Marc Lemieux (Co-Founder, Chief Financial Officer and Chairman of the Board) - Mr. Lemieux played a key role in Alliance's growth. Through his guidance and leveraging on his experience of more than 20 years as a distributor of medical product and representative, Mr. Lemieux has been an essential contributor to Alliance's business development and finance. Mr. Lemieux holds a B.A.A. in business administration from the Laval University.

Patrick Fernet (Corporate Secretary and Director) - Mr. Fernet is a lawyer and a graduate of the University of Montreal. He has also successfully completed the Canadian Securities Course and he is a graduate in business administration of the Cégep Jean de Brébeuf. Over the past 14 years he has worked as a legal consultant on business and financial matters for small cap emerging companies. Through these years he was involved and has acquired a wide experience in the legal, the accounting and the financial sector. He is also acting as officer, director and member of the audit committee of public companies.

Maxime Lemieux (Director) - Mr. Lemieux is part of the Business Law group at Langlois Kronström Desjardins LLP in Montréal. He is primarily acting for public companies, agents, securities distributors and underwriters in Canada, to which he offers legal counseling services on public and private offerings and on mergers and acquisitions. He has been a member of the Québec bar since 2006, completed a LL.L and a LL.B at the University of Ottawa as well as a MBA at Laval University and the Fachhoschule Kiel in Germany. He is also acting as director and member of the audit committee of public companies

Private Placement

Pursuant to the Offering, Rodocanachi will issue and sell a minimum of $300,000 of Rodocanachi common share (on a post-Rodocanachi Consolidation basis) and a maximum of $500,000 to purchasers resident in Canada prior to the closing of the Transaction.

Each Rodocanachi common share (on a post-Rodocanachi Consolidation basis) will be sold at a price of $0.15.

Following the completion of the Transaction, existing Alliance shareholders will own approximately 83.54% (79.68% assuming completion of the maximum Offering) of the issued and outstanding common shares of the Resulting Issuer, existing Rodocanachi shareholders (including the recipient of the Shares for Debt) will own approximately 9.20% (8.78% assuming completion of the maximum Offering) of the issued and outstanding common shares of the Resulting Issuer and purchasers of Rodocanachi common share (on a post-Rodocanachi Consolidation basis) will own approximately 7.26% (11.55% assuming completion of the maximum Offering) of the issued and outstanding common shares of the Resulting Issuer.
ABOUT RODOCANACHI CAPITAL INC.

Rodocanachi is a capital pool company (CPC) formed under the TSXV CPC program.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance. There can be no assurance that the transaction will be completed as proposed or at all.

All information in this press release concerning Alliance has been provided for inclusion herein by Alliance. Although Rodocanachi has no knowledge that would indicate that any information contained herein concerning Alliance is untrue or incomplete, Rodocanachi assumes no responsibility for the accuracy or completeness of any such information.

Investors are cautioned that, except as disclosed in the filing statement 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 a CPC should be considered highly speculative.

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Certain information in this press release may constitute forward-looking information, including without limitation the completion of the Offering, Amalgamation and Transaction, as well receipt of all necessary approvals in connection therewith. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. Rodocanachi assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to Rodocanachi. Additional information identifying risks and uncertainties is contained in the Rodocanachi's filings with the Canadian securities regulators, which filings are available at www.sedar.com.

Contact Information

  • Jean-Sebastien Besner
    President, CEO and CFO
    (514) 282-7827