Pacific Orient Capital Inc. (TSX VENTURE: AAQ.P) (the "Company"), a
Capital Pool Company, announced today that it has entered into a
non-binding letter of intent concerning the proposed acquisition of
AlphaRx Canada Limited ("ACL"). The proposed acquisition, if
completed, will constitute the Company's qualifying transaction
pursuant to the policies of the TSX Venture Exchange Inc. (the
"Exchange").
The Proposed Qualifying Transaction
The Company, AlphaRx, Inc. ("ARI") and ACL have entered into a
non-binding letter of intent dated April 6, 2010 (the "LOI") under
which the qualifying transaction will be completed.
The acquisition of ACL is to be completed as a share exchange
through the issuance of 5,500,000 common shares of the Company to
AlphaRx International Holdings Limited ("AIH") at a deemed price of
$0.60 per share in exchange for all of the issued and outstanding
shares in the capital of ACL (the "Transaction"). The Company will
advance ACL $25,000 on a non-refundable basis.
The Company or ACL will conduct a non-brokered private placement
(the "Proposed Financing") to raise a minimum of $1,500,000 by
issuance of common shares at $0.60 per share. Completion of the
Proposed Financing is a condition of closing the Transaction. If
the Proposed Financing is conducted through ACL, the securities
issued by ACL under the Proposed Financing will be exchanged for
common shares of the Company on a 1-for-1 basis.
Prior to completion of the Proposed Financing, AIH (an 80%
subsidiary of ARI) will own all of the outstanding shares of ACL
(being 5,500,000 common shares). All of the shares issued by the
Company to AIH will be subject to escrow provisions under the
policies of the Exchange.
Assuming completion of the minimum Proposed Financing, following
completion of the Transaction 5,500,000 (55%) of the outstanding
shares in the Company will be owned by AIH, 2,500,000 (25%) of the
outstanding shares in the Company will be owned by participants in
the Proposed Financing and the 2,000,000 shares now outstanding in
the Company will represent 20% of the outstanding shares in the
Company.
Completion of the proposed Transaction is also conditional on
the execution of a definitive share exchange agreement to be
negotiated among the parties, the satisfactory completion of due
diligence, Exchange acceptance and the satisfaction of the minimum
listing requirements of the Exchange.
The acquisition by the Company of all of the issued and
outstanding shares in the capital of ACL is not a Non-Arm's Length
Qualifying Transaction under the policies of the Exchange and the
Transaction will not be subject to approval of the shareholders of
the Company.
AlphaRx
ACL is a corporation incorporated under the Business
Corporations Act (Ontario) with offices in Markham, Ontario. Since
July 2003, ACL has conducted research and development activities on
behalf of ARI. Prior to the Transaction, ACL will discontinue its
research and development activities for ARI and ACL will receive a
15 year royalty free license, granted by ARI, to commercialize
Indaflex in Mexico and Asia. ACL expects to focus it efforts to
commercialize Indaflex in China, once regulatory approvals are
received permitting sales in that country. Indaflex is a topical
non-steroidal anti-inflammatory drug (NSAID) formulation intended
to be used in the treatment of arthritis.
Based on ACL's unaudited financial statements, expressed in
Canadian dollars, for the year ended September 30, 2009 ACL
generated $71,300 in net sales and a net loss of $117,788. As of
September 30, 2009, ACL had total assets of $66,643, total current
liabilities of $1,631,670 and a shareholder deficit of $1,565,027.
These financial results reflect the previous activities of ACL
conducting research and development activities on behalf of ARI,
activities which will be discontinued by ACL. Current liabilities
of approximately $830,000 will be assumed by ARI prior to closing
of the Transaction.
AIH is a corporation incorporated under the laws of the British
Virgin Islands. AIH is 80% owned by ARI and 20% owned by Ruby Hui
(the President of ARI's China Operations). Michael Lee is the
largest shareholder of ARI, with approximately 16.8% of the
outstanding shares.
ARI (OTCBB: ALRX) is a Delaware corporation trading on the Over
The Counter Bulletin Board. ARI is a pharmaceutical company,
engaged in the research and development of innovative therapeutic
products using advanced drug delivery technologies, which the
company believes can be combined with a broad range of therapeutic
products to improve their effectiveness. The core strength of ARI
revolves around its proprietary Bioadhesive Colloidal Dispersion
(BCD™) drug delivery system, which utilizes nanotechnology to
enhance and improve the medical benefits of drugs. ARI's product
candidates address various pharmaceutical markets, including
inflammation, stroke and pneumonia.
ARI currently has nine products which are at various stages of
development. The most advanced of these products is Indaflex, a
prescription drug at the clinical trial stage. Indaflex is approved
for sale in Mexico. Before Indaflex can be sold in China, ACL will
have to conduct clinical trials and obtain marketing approval from
Chinese regulatory authorities.
Indaflex's active ingredient, Indomethacin, has a long-standing
and proven clinical treatment record. With its enhanced proprietary
drug delivery system, ARI believes its clinical effectiveness to be
significantly enhanced. Topical Indaflex delivery is intended to
circumvent the significant gastro intestinal side effects found
with orally ingested NSAID's.
Insiders of the Resulting Issuer
The planned officers and directors of the Company, upon
completion of the Transaction, are:
Francis Mak, MBA, P.Eng - President, CEO and Director
Mr. Mak is the President and CEO of the Company. Mr. Mak's
background is in sales, marketing and engineering. Mr. Mak has been
an IT Specialist for a number of technology companies including MTS
Allstream and Centron Canada. Mr. Mak graduated with a Bachelor of
Electrical Engineering from Queen's University in 1986. He also
holds a Master of Business Administration degree from McMaster
University. Mr. Mak is a member of the Professional Engineers of
Ontario.
Michael M. Lee - Chairman and Director
Mr. Lee is a founder, Chairman and CEO of ARI. Mr. Lee has over
15 years of business experience in the areas of high tech
development, marketing and corporate finance. Mr. Lee holds a B.Sc.
in Applied Mathematics from the University of Western Ontario. Mr
Lee founded AlphaRx, Inc. in August 1997.
Marcel Urbanc, C.A. - Chief Financial Officer
Mr. Urbanc is the Chief Financial Officer of ARI. Mr. Urbanc
obtained his Chartered Accountant designation in 1985 after
articling with Arthur Andersen & Co. for 3 years. Prior to
joining ARI, Mr. Urbanc served as Controller and then VP Finance
& CFO of Oasis Technology Ltd., a software company involved in
transaction processing from 1994 to 2002. During his tenure at
Oasis private equity funding of approximately $45,000,000 was
raised. Mr. Urbanc has been with the Company since March 2003.
Michael Weisspapir, M.D., Ph.D.: - Chief Scientific Officer
Dr. Weisspapir is the Chief Medical Scientist of ARI. Dr.
Weisspapir has 19 years of successful experience in experimental
medicine and extensive experience in interdisciplinary research and
development in experimental pharmacology, immunopharmacology,
toxicology and neuroscience. Prior to joining the Company, Dr.
Weisspapir held a variety of research positions at the University
of Tel Aviv and Rabin Medical Center, Israel and the University
Health Network, University of Toronto, Canada.
Dr. William Gannon, M.D. - Director
Dr. Gannon has been a practicing Family Practitioner in Sarnia,
Ontario since 1973. Dr. Gannon is active in the biotech sector and
has been advisor to several Canadian pharmaceutical companies.
Daniel Donn, CA - Director
Mr. Donn serves as the President, Chief Executive Officer and
Director of Golden Sunset Trail Inc., a mineral exploration and
development company listed on the Exchange. Mr. Donn served in
various capacities with Mosaic Mapping Corporation (formerly
Londonderrie Trail Inc.) from February 2002 until September 2003.
From March 2000 until April 2003, Mr. Donn has served in various
capacities with Clearford Industries Inc. (formerly Innovative
Water & Sewer Systems Inc. and before that, Red Oak Trail
Corp.), a water and waste management company listed on the
Exchange. From December 1995 until April 2004, Mr. Donn served as
President of Dionne Inc., a private investment company which
carries on business in Ontario. Mr. Donn was a consultant to Thermo
Tech Technologies Inc. from April 2000 to July 2000. From 1997 to
1999, Mr. Donn was the Chief Financial Officer and Co-Editor for
the Technology Review Inc. and Innogis Technology Inc., an
industrial Issuer listed on the Canadian Dealing Network. Mr. Donn
also served as Chief Financial Officer, Secretary/Treasurer and
director of ATH Fund Inc., a private investment company from 1987
to December 1995.
The Company intends to seek approval from the Exchange for the
appointment of Ruby Hui as a director and President, and Conroy
Cheng as a director, of the Company. Each of them is a resident of
Hong Kong. There can be significant delays in conducting Exchange
reviews for residents of Hong Kong and so the appointment of Ruby
Hui and Conroy Cheng is expected to occur some time after the
completion of the Transaction. The appointment of Ruby Hui and
Conroy Cheng will not proceed unless the Exchange is satisfied with
the results of its review. It is expected that Francis Mak and
Daniel Donn will resign as directors and officers at the time that
Ms. Hui and Mr. Cheng are appointed. The following is information
concerning Ruby Hui and Conroy Cheng.
Ruby Hui
Ms. Hui is the President of China Operations for ARI, through
its subsidiary AlphaRx Life Sciences Ltd. Ms. Hui has extensive
experience in marketing and project management. Ms. Hui was
Marketing Manager at New World Development, a multi-billion
investment holding company with interests in health care,
pharmaceuticals, property development, hotels, infrastructure,
telecommunications and retailing in Hong Kong and China. Before
joining New World Development, Ms. Hui was Senior Property Manager
at Chinese Estates Holdings Limited, an property development
company based in Hong Kong and listed on the Hong Kong Stock
Exchange, which is run and controlled by her family members. Ms.
Hui indirectly owns 20% of AIH.
Conroy Cheng
Mr. Cheng is a board director of Chow Tai Fook Group. The Chow
Tai Fook Group is a substantial private enterprise owned by members
of Mr. Cheng's family, with a total market value over US$32
Billion. The Group's businesses primarily focus on mainland China
and Hong Kong followed by the rest of the world. Its worldwide work
force totals more than 100,000 employees.
Sponsor
Mackie Research Capital Corporation, subject to completion of
satisfactory due diligence, has agreed to act as sponsor in
connection with the Transaction. An agreement to sponsor should not
be construed as any assurance with respect to the merits of the
Transaction or the likelihood of completion.
Completion of the transaction is subject to a number of
conditions, including but not limited to, Exchange acceptance and
if applicable pursuant to Exchange Requirements, majority of the
minority shareholder approval. Where applicable, the transaction
cannot close until the required shareholder approval is obtained.
There can be no assurance that the transaction will be completed as
proposed or at all.
Investors are cautioned that, except as disclosed in the
management information circular or filing statement to be prepared
by 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 capital pool company should be considered highly
speculative.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed transaction and has neither approved nor
disapproved the contents of this press release.
Certain information in this press release may contain
forward-looking statements. 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. The Company and ACL assume 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 the Company and ACL. Additional information
identifying risks and uncertainties is contained in filings by the
Company with Canadian securities regulators, which filings are
available under the Corporation's profile at www.sedar.com.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of the
securities in any State in which such offer, solicitation or sale
would be unlawful. The securities have not been registered under
the United States Securities Act of 1933, as amended, and may not
be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements.
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.
Contacts: Pacific Orient Capital Inc. Francis Mak President
& CEO (905) 479-3245 pacinc@ymail.com
Pacific Orient Capital (TSXV:AAQ.P)
Historical Stock Chart
From May 2024 to Jun 2024
Pacific Orient Capital (TSXV:AAQ.P)
Historical Stock Chart
From Jun 2023 to Jun 2024