TORONTO, ONTARIO – (Marketwire – April 9, 2010) – East Pacific Capital Inc. (TSX VENTURE: AAQ.P – News, the “Company”), a Capital Pool Company, announced today that it has entered into a non-letter binding of intent concerning the proposed acquisition of AlphaRx Canada Limited (“ACL”). The proposed acquisition, if completed, constitutes a qualifying transaction of the Company in accordance with the policies of the TSX Venture Exchange Inc. (the “Exchange”).
The proposed transaction classification
The Company, AlphaRx, Inc. (“ARI”) and ACL have entered into a nonbinding letter of intent dated April 6, 2010 (the “Letter of Intent”) under which the sorting operation is complete.
The acquisition of the ACL is to be completed as an exchange of shares through the issuance of 5,500,000 common shares of the Company to AlphaRx International Holdings Limited (“IAC”) at a price consideration of $ 0.60 per share in exchange for all of the issued and outstanding shares in the capital of the anterior cruciate ligament (the “Transaction”). The Company is advancing $ 25,000 ACL on a non-refundable.
The Company or ACL will conduct a private placement without intermediaries (the “Project Financing”) to raise a minimum of $ 1,500,000 by the issuance of common stock at $ 0.60 per share. Completion of the proposed financing is a condition of closing of the transaction. If the proposed financing is done through the anterior cruciate ligament, the securities issued by ACL in the proposed financing will be exchanged for shares of the company in a basic 1-for-1.
Before the completion of the proposed financing, AIH (a subsidiary of 80% of the IRA) will own all the outstanding shares of ACL (being 5,500,000 ordinary shares). All shares issued by the Company for AIH are subject to the provisions escrow policies of the Exchange.
Assuming the completion of the proposed minimum funding after the completion of the transaction 5,500,000 (55%) of the outstanding shares of the Company will be owned by the IAI, 2,500,000 (25%) of the outstanding shares of the Company will be owned by the participants in the funding proposal and outstanding 2,000,000 shares of the Company now represent 20% of the outstanding shares of the Company.
Completion of the proposed transaction is also conditional on the execution of a definitive exchange agreement to be negotiated between the parties, the satisfactory completion of due diligence, Exchange acceptance and enforcement of the minimum contribution requirements of the Exchange.
The acquisition by the Company of all shares issued and outstanding in the capital of the ACL is a non-arm’s length qualifying transaction under the policies of the Exchange and shall not be subject to shareholder approval 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 the IRA. Before the transaction, ACL will stop research and development for the IRA and the ACL will receive a royalty-free license for 15 years, granted by ARI, to commercialize Indaflex in Mexico and Asia. ACL hopes to focus the efforts to commercialize Indaflex in China, once regulatory approvals are received permit sales in that country. Indaflex is a topical anti-inflammatory drugs (NSAIDs) formulation intended to be used in the treatment of arthritis.
Based on unaudited financial statements of the ACL, in Canadian dollars for the year ended September 30, 2009 ACL generates $ 71.300 in net sales and a net loss of $ 117.788. At September 30, 2009, ACL had total assets of 66,643 U.S. dollars, total current liabilities of 1,631,670 U.S. dollars and a stockholder deficit of $ 1,565,027. These results reflect financial activities ACL previous surveys and development activities on behalf of ARI, the activities to be suspended for ACL. Current liabilities of approximately $ 830,000 will be paid by ARI before the closing of the transaction.
IAI is a corporation incorporated under the laws of British Virgin Islands. HAI is 80% owned by acute respiratory infections and 20% owned Ruby Hui (the President of China Operations ARI).Michael Lee is the largest shareholder of the IRA, with about 16,8% of shares outstanding.
ARI (OTCBB: ALRX – News) is a Delaware corporation trading on the Over the Counter Bulletin Board. ARI is a pharmaceutical company dedicated to research and development of innovative therapeutic products using advanced technologies of drug delivery that the company believes it can be combined with a broad range of therapeutic products to improve their effectiveness. The core strength of the IRA revolves around its proprietary Bioadhesive Colloidal Dispersion (BCD (TM)) drug delivery system, which uses nanotechnology to enhance and improve the medical benefits of drugs. ARI’s product candidates address various pharmaceutical markets, including inflammation, stroke and pneumonia.
IRCC now has nine products in various stages of development. The more advanced of these products is Indaflex, a prescription drug in clinical trials. Indaflex is approved for sale in Mexico.Before Indaflex can be sold in China, ACL, will have to carry out clinical trials and obtain marketing approval from Chinese regulatory authorities.
Indaflex active ingredient, Indomethacin, has a history of long-term treatment and tested. With its improved power management system of patented drugs, ARI believes that its clinical efficacy to be significantly improved. Topical Indaflex delivery is intended to circumvent the gastro intestinal side effects were found significant with orally ingested NSAIDs.
Executives of the Issuer resulting
the officers and directors under the Company upon completion of the transaction are:
Mak Francisco, MBA, P. Eng – President, CEO and Director
MAK is the President and CEO of the Company. Mr Mak background is in sales, marketing and engineering. Mr. Mak has been an IT specialist for a number of technology companies such as MTS Allstream and Canada Centron. Mr. Mak graduated with a degree in Electrical Engineering from Queen’s University in 1986. He also holds a Master of Business Administration from McMaster University. Mr. Mak is a member of Professional Engineers of Ontario.
Michael M. Lee – President and Director
Mr. Lee is the founder, president and CEO of ARI. Mr. Lee has over 15 years of business experience in the areas of high technology development, marketing and corporate finance. Mr. Lee holds a BS in Applied Mathematics from the University of Western Ontario. Mr. Lee founded AlphaRx, Inc. in August 1997.
Marcel Urbanc, C.A. - CFO
Mr. Urbanc is the CFO of the IRA. Mr. Urbanc obtained his Chartered Accountant designation in 1985 after working at Arthur Andersen & Co. for 3 years. Prior to joining ARI, Mr. Urbanc he served as Controller and then Vice President of Finance and Chief Financial Officer of Oasis Technology Ltd., a software company involved in the processing of transactions from 1994 to 2002. During his stay at the Oasis private equity financing of approximately $ 45,000,000 was raised. Mr. Urbanc has been with the company since March 2003.
Weisspapir Michael, MD, Ph.D. – Chief Scientific Officer
Dr. Weisspapir is the chief medical scientist of acute respiratory infections. 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 various research positions at the University of Tel Aviv and Rabin Medical Center, Israel and the Health Network, University of the University of Toronto, Canada.
Dr. William Gannon, M.D. - Director
Dr. Gannon has been a practice of family physicians in Sarnia, Ontario since 1973. Dr. Gannon is active in the biotechnology sector and has been an advisor to several Canadian pharmaceutical companies.
Daniel Donn, CA – Director
Mr. Donn served as President, CEO and Director of Golden Sunset Trail Inc., a mining exploration and development contained in the Exchange. Mr. Donn served in various mosaic Mapping Corporation (formerly Camino Londonderrie 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 and Sewer Systems Inc. and before that, Red Oak Trail Corp.), a water company and management waste contained in 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 Director of Finance and Co-Editor of the magazine and Innogis Technology Review Inc. Technology Inc., an industrial Issuer contained in the Canadian transaction. Mr. Donn also served as Director of Finance, 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 Stock Exchange for the appointment of Ruby Hui as a director and chairman, Cheng Conroy as director of the Company. Each of them is a resident of Hong Kong. There can be significant delays in carrying out reviews of Exchange for residents of Hong Kong and so the appointment of Ruby and Cheng Hui Conroy is expected to occur some time after the completion of the transaction. The appointment of Ruby and Cheng Hui Conroy will not proceed unless the Exchange is satisfied with the results of their examination.Francisco is expected to Daniel Mak and Donn will step down as directors and officers at the time that Ms. Hui and Mr. Cheng are appointed. The following is information on Ruby and Cheng Hui Conroy.
Ruby Hui
Ms. Hui is the president of China operations for this entity, through its subsidiary AlphaRx Life Sciences Ltd. Ms. Hui has extensive experience in marketing and project management. Ms. Hui was marketing director of New World Development, an investment company several million holding company with interests in health care, pharmaceuticals, real estate, hotels, infrastructure, telecommunications, retailing in Hong Kong and China. Before joining New World Development, Ms. Hui was Senior Property Manager in China Estates Holdings Limited, a real estate development company based in Hong Kong and listed on the Stock Exchange of Hong Kong, which is directed and controlled by family members. Ms. Hui indirectly owns 20% of autoimmune hepatitis.
Cheng Conroy
Mr. Cheng is the director of Chow Tai Fook Board Group. Chow Tai Fook Group is a private company owned by prominent members of the family of Mr. Cheng, with a total market value of more than 32 billion U.S. dollars. Group companies are primarily focused on mainland China and Hong Kong followed by the rest of world. Its workforce worldwide 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 warranty as to the merits of the transaction or the possibility of realization.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if any, pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction may not close until shareholder approval required is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, unless specified in the information circular or filing statement to be prepared as part of the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. The trading of 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 could differ materially from the results is suggested in the forward looking statements. The Company and the anterior cruciate ligament assume no obligation to update forward-looking statements or to update the reasons actual results could differ from those reflected in the forward looking-statements unless otherwise required by applicable securities laws to the Company and the anterior cruciate ligament. More information about the identification of risks and uncertainties is contained in filings by the Company with Canadian securities regulators, which filings are available on the Corporation’s profile at www.sedar.com.
This release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of 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 registration requirements.
Neither TSX Venture Exchange nor the Rules service provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.