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TORONTO, May 03, 2019 (GLOBE NEWSWIRE) — MTC Growth Fund-I Inc. (“MTC” or the “Corporation”) is pleased to announce that it has entered into binding letter agreements (collectively, the “Letter Agreements”) with: (i) shareholders of Medic Plast S.A. (“Medic Plast” or “MP”), a Uruguayan entity engaged in the pharmaceutical and medical device business, and Yurelan S.A. (“Y”), a Uruguayan entity engaged in an agricultural related business, to acquire MP and Y in exchange for common shares of MTC (the “Resulting Issuer Shares”) as it exists after the completion of the RTO (as hereinafter defined) (the “Resulting Issuer”); and (ii) Ramm Pharma Corp. (“Ramm”), a private Ontario company, and creditor to MP and Y, pursuant to which a wholly-owned subsidiary of MTC (“Subco”) will amalgamate with Ramm (the “Amalgamation”) on the terms and conditions of an amalgamation agreement to be entered into among MTC, Subco and Ramm.
Medic Plast is a leader in the field of cannabinoid pharmacology and product formulation for cannabis-based pharmaceuticals and other cannabis-based products. Founded in 1988 in Montevideo, Uruguay, Medic Plast is a well established pharmaceutical and medical product business and amongst the first and only companies in the world to have developed medically registered and approved plant derived cannabinoid pharmaceutical products. Medic Plast currently has multiple approved and registered products that have been authorized for sale in several Latin American countries, as well as a robust pipeline of new products in various stages of approval and development. Medic Plast is also in the process of finalizing a state of the art GMP certified cannabis extraction and formulation facility. With Yurelan’s large scale cultivation facility, the combined operations are expected to provide for complete vertical integration. Further to its industry leading activities in the cannabis sector, Medic Plast operates a successful pharmaceutical, cosmetic and nutraceutical product development and medical services business which has been servicing the local market for 30 years.
“We are very pleased to announce our plans to go public which marks an important milestone for our company. Years of global research, drug development, and physician education have positioned Medic Plast as a leader in the field of cannabis-derived prescription drugs and products,” stated Armando Blankleider, President of Medic Plast. “The company is comprised of industry leading experts and is backed by some of the most successful pioneers in the cannabis sector. The public listing and capital raised will help to accelerate our growth strategy as we continue to expand our distribution to meet the extensive and growing demand for cannabinoid-based prescription drugs and products globally.”
The Letter Agreements outline the general terms and conditions pursuant to which the Corporation, MP, Y, and Ramm have agreed to complete a series of transactions (collectively, the “RTO”) that will result in a reverse take-over of the Corporation by the shareholders of MP and Y, and the shareholders Ramm, and holders of convertible debentures of Ramm (the “Convertible Debentures”). On completion of the RTO, each of MP, Y, and the entity resulting from the Amalgamation will be wholly-owned subsidiaries of the Resulting Issuer, and the Resulting Issuer will focus on the current business and affairs of MP and Y. The Letter Agreements were negotiated at arm’s length.
Completion of the RTO is conditional on the Corporation reorganizing from an investment fund issuer to a corporate issuer, effecting a subdivision (the “Stock Split”) of its issued and outstanding shares on the basis of 4.76648 new Resulting Issuer Shares for each one (1) MTC Share (as hereinafter defined), and the filing of articles of amendment to: (a) change the Corporation’s authorized capital to an unlimited number of common shares; and (b) change and reclassify all of its issued and outstanding redeemable shares into common shares (collectively, the “Corporate Reorganization”). The Corporate Reorganization must be approved by not less than 66⅔% of the votes cast by holders of redeemable shares of MTC at a meeting of shareholders. It is expected that the Corporation will call and convene an annual and special meeting of the holders of its redeemable shares to approve, among other items, the Corporate Reorganization.
Concurrent Subscription Receipt Financing
Prior to the completion of the RTO, it is anticipated that Ramm will complete a non-brokered private placement of subscription receipts (the “Subscription Receipts”) at a price of C$1.35 per Subscription Receipt (the “Issue Price”). Each Subscription Receipt shall entitle the holder to receive, without payment of additional consideration, one (1) common share of Ramm (an “Underlying Share”) upon satisfaction or waiver of the Escrow Release Conditions (as hereinafter defined), with each Underlying Share to be exchanged, without further consideration, for one Resulting Issuer Share upon the completion of the RTO. MTC may sell subscription receipts having similar economic terms to the Subscription Receipts except that on conversion a holder will receive Resulting Issuer Shares (the “MTC Subscription Receipts”) in connection with the RTO. The sale of Subscription Receipts and MTC Subscription Receipts are anticipated to raise aggregate gross proceeds of at least C$24,000,000 (collectively, the “Offering”).
The gross proceeds from the sale of the Subscription Receipts and the MTC Subscription Receipts will be held in escrow (the “Escrowed Proceeds”) by an escrow agent acceptable to Ramm and MTC (the “Escrow Agent”) (the Escrowed Proceeds, together with any interest and other income earned pending satisfaction of the Escrow Release Conditions, are referred to as the “Escrowed Funds”). The Escrowed Funds will be released from escrow to Ramm or MTC, respectively, upon the satisfaction of conditions which include the following (the “Escrow Release Conditions”) on or prior to September 30, 2019 (subject to extension to no later than October 31, 2019) (the “Escrow Deadline”): (a) the satisfaction or waiver of all conditions precedent to the completion of the RTO, including, without limitation, the conditional approval of the Canadian Securities Exchange (the “Exchange”) for the RTO; (b) shareholder approval of the Corporate Reorganization; and (c) Ramm or MTC, as applicable, having delivered a direction to the Escrow Agent confirming that the conditions set forth above have been met or waived.
If (i) the Escrow Release Conditions are not satisfied on or before the Escrow Deadline, or (ii) prior to the Escrow Deadline Ramm or MTC, as applicable, announces to the public that it does not intend to satisfy the Escrow Release Conditions, the Escrowed Funds shall be returned to the holders of the Subscription Receipts or MTC Subscription Receipts, as applicable, on a pro rata basis and the Subscription Receipts and MTC Subscription Receipts, as applicable, will be cancelled without any further action on the part of the holders.
In connection with the Offering, a cash finder’s fee of 6.0% of the gross proceeds sold by each finder may be paid, and common share purchase warrants (the “Finder Warrants”) representing 6.0% of the number of Underlying Shares issuable upon the conversion of the Subscription Receipts (or Resulting Issuer Shares issuable upon conversion of the MTC Subscription Receipts) sold by each finder may be issued, to qualified finders. Each Finder Warrant will entitle the holder to acquire one (1) Underlying Share or one (1) Resulting Issuer Share, as applicable, at the Issue Price for a period of 24 months after the completion of the RTO.
Terms of the RTO
In connection with the RTO, MTC will acquire all of the issued and outstanding shares of MP and Y in exchange for an aggregate of 59,820,000 common shares of MTC (the “MTC Shares”) on a post-Stock Split basis, and then complete the Amalgamation. Under the Amalgamation, the name of MTC will be changed to “Ramm Pharma Corp.”.
Following the RTO, an aggregate of 750,000 Resulting Issuer Shares will be held by the former holders of MTC Shares. After conversion of Convertible Debentures, Ramm will have an aggregate of 14,000,000 common shares outstanding which will be exchanged for Resulting Issuer Shares in connection with completion of the Amalgamation on a one-for-one basis.
Upon completion of the RTO, and assuming that the Offering results in the issuance of C$24,000,000 of Subscription Receipts, it is expected that, on a non-diluted basis, the current shareholders of MTC will hold approximately 0.8% of the Resulting Issuer Shares, purchasers in the Offering and holders of common shares of Ramm and Convertible Debentures will hold, in the aggregate, approximately 34.4% of the Resulting Issuer Shares, and the former shareholders of MP and Y will hold, collectively, approximately 64.8% of the Resulting Issuer Shares.
Insiders, Officers and Board of Directors of the Resulting Issuer
Upon completion of the RTO, it is anticipated that the board of directors of the Resulting Issuer will be comprised of five directors. It is expected that Jack Burnett will serve as Chairman of the Board and Chief Executive Officer of the Resulting Issuer.
Set out below are the names and backgrounds of all persons who are currently expected to be considered insiders of the Resulting Issuer on completion of the RTO.
Jack Burnett – Chairman, Chief Executive Officer and a Director
Mr. Burnett is a successful entrepreneur with over 40 years’ experience in capital markets and international corporate leadership roles. Mr. Burnett has led companies from inception to acquisition in multiple industries including real estate, insurance and telecom. His deep global business relationships span both private and public markets where he has been a director, officer and majority shareholder of successful multinational companies.
Dr. Armando Blankleider – Director
Dr. Blankleider is a Medical Doctor and the founder and President of Medic Plast. Dr. Blankleider has directly led Medic Plast’s initiatives for the design and introduction of new products, as well as the design and monitoring of teams for the development of production processes and the general management of Medic Plast. Dr. Blankleider also has a depth of experience in Quality Management ISO Standards, has acted as a delegate to develop the Rules of Good Manufacturing Practices for medical products for the private sector within the MERCOSUR and is an active participant in international conferences for the medical and pharmaceutical products industry globally.
Daniel Augereau – Director
Mr. Augereau is a seasoned executive who has held senior leadership and board-level positions at companies spanning a diverse mix of industries over a 50+ year career. Since 2005, Mr. Augereau has served as the Chairman and Chief Executive Officer of Synergie SA (Euronext: SDG), the French leader of temporary work and human resources management services for the industrial, tertiary, logistics, medical, building and public works sectors.
Conditions to RTO
The RTO is subject to receipt of the required regulatory approvals, including, but not limited to, the approval of the Exchange, the execution of definitive documents giving effect to the RTO, and standard closing conditions. In addition, the RTO is subject to customary conditions including, without limitation, the following:
- Each of MTC, MP, Y, Ramm and Subco will enter into definitive agreements with respect to the RTO.
- MTC will convene a meeting of its shareholders for the purpose of approving, among other matters: (i) the Corporate Reorganization; and (ii) the approval of the RTO, if required by the Exchange.
- Minimum gross proceeds of C$24,000,000 are raised pursuant to the Offering.
The ultimate legal structure for the RTO will be determined after the parties have considered all applicable tax, securities law, and accounting efficiencies and may change from what is described in this news release.
The Corporation is an un-listed Canadian mutual fund corporation that was established under the laws of the Province of Ontario by a declaration of trust dated October 1988, with its registered and head office in Toronto, Ontario. MTC and is a reporting issuer within the meaning of the Securities Act (Alberta), Securities Act (Ontario) and Securities Act (Quebec).
Forward Looking Statements
This news release contains “forward-looking statements” within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the terms and conditions of the proposed RTO; the terms and conditions of the proposed Offering; the ability of MTC to complete the RTO and the ability of Ramm to complete the Offering, respectively, on the terms described herein or at all; use of funds; and the business and operations of the Resulting Issuer after the proposed RTO. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board, shareholder or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, neither MTC, MP, Y nor Ramm assume any obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
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MTC Growth Fund-I Inc.
Original Article: http://www.digitaljournal.com/pr/4288320