EPS Capital Corp - News Release
EPS Capital to acquire Rycor
EPS Capital Corp ECC
Shares issued 2,900,000 1999-12-15 close $5.15
Wednesday Mar 21 2001 News Release
Mr. Kevin Giese reports
EPS Capital has entered into a letter of intent dated Feb. 16, 2001, with Rycor Technology Investments Corp. pursuant to which the company will acquire all of the issued securities of Rycor. The acquisition will constitute the company's qualifying transaction for purposes of Canadian Venture Exchange Listings Policy 2.4, and is a related party transaction pursuant to CDNX listings policies.
Rycor's MBP8298 technology -- Giving life to ideas
Rycor is a corporation based in Edmonton, Alta., which has obtained an exclusive worldwide licence to new medical technology developed at the Multiple Sclerosis Patient Care and Research Clinic at the University of Alberta, for the treatment of chronic progressive multiple sclerosis. The technology involves the intravenous injection of a naturally occurring, synthetically manufactured, protein-based peptide named MBP8298, into chronic progressive multiple sclerosis patients.
Researchers at the university have completed phase I human clinical trials, and over three out of four years of a phase II human clinical trial. Phase I trials have indicated that approximately 60 per cent of chronic progressive MS patients have been put into remission, as measured by antibody levels in the spinal fluid. In total, over 100 patients have received the peptide technology since 1992, with no clinically relevant untoward side effects observed. Rycor anticipates entering into advanced stage human clinical trials over the course of the next year.
Published phase I human clinical trial results can be accessed through the Rycor Web site: www.rycortech.com.
There are an estimated 2.5 million MS sufferers worldwide, approximately half of which have the chronic progressive form of the disease. At the present time, there are a lack of medical treatments approved for chronic progressive MS which are very effective and free of unpleasant side effects.
Patent protection
Rycor has licensed the MBP8298 peptide technology on an exclusive worldwide basis from the University of Alberta under standard terms. Patent claims cover the use of peptides for the treatment of multiple sclerosis. Patents have been issued in the United States (1998), New Zealand (1997) and Russia (1999), with additional patent claims in 31 countries around the world. In addition, Rycor has secured an exclusive worldwide licence from AutoImmune Inc. (a Delaware corporation) to certain issued patent claims related to the peptide technology.
Scientific and corporate board members
As part of its arrangement with Rycor, the University of Alberta will continue to conduct certain research in respect of the technology, and the inventors of the technology at the Faculty of Medicine and Dentistry at the University of Alberta will provide scientific advisory assistance.
Following the acquisition the officers and board members of the company will be: Clifford Giese, chairman of both EPS and Rycor, founder of the Mr. Lube service centre chain, and a past founding director of NQL Drilling Tools Inc. (a Toronto Stock Exchange company); Kevin Giese, BA, LLB, MBA, president and director of both EPS and Rycor, experienced officer, director and adviser to numerous private and public companies; Laine Woollard, BSc (Pharmacy), LLB, legal counsel, technology commercialization, at the University of Alberta, and experienced director and technology licensing manager to the pharmaceutical industry; and Michael Kennedy, LLB, director of EPS, partner with the law firm of Anfield Sujir Kennedy & Durno practicing primarily in securities transactions, and experienced director with public companies.
It is further expected that additional individuals will be added to the scientific advisory board and board of directors of the company following the acquisition. Rycor also has a number of experienced pharmaceutical regulatory, clinical trial management, scientific advisory, intellectual property and financial management personnel currently providing their services to the company.
Rycor closes $19-million private financing
Rycor is pleased to advise that it has closed its private special warrant financing, which was completed on a non-brokered basis, in the total amount of $19-million. The purpose of the financing was to finance the licensing of the technology, certain preclinical studies, clinical trials and general administration expenses. Rycor has a current working capital position of approximately $12-million and no long-term liabilities. At Feb. 28, 2001, Rycor had deferred research and development costs of $526,491, licensing costs of $18,948,722, shareholders' equity (net of deficit) of $30,378,395, and total expenses of $38,480. All figures are unaudited.
Rycor capital structure
Rycor has issued and committed to issue a total of 38,431,289 common shares. As part of the licensing of the technology, Rycor issued 18,123,275 Class A common shares and has committed to issue a further 2,876,775 Class A common shares. As part of its $19-million special warrant financing, Rycor issued 10,621,076 Series A special warrants at a price of 20 cents per Series A special warrant and 6,810,163 Series B special warrants at a price of $2.50 per Series B special warrant. Each Series A special warrant entitles the holder to acquire one Class A common share of Rycor. Each Series B special warrant entitles the holder to acquire one Class A common share of Rycor and one non-transferable share purchase warrant. Each share purchase warrant entitles the holder to purchase one Class A common share of Rycor at a price of $3.00 per share on or before Dec. 31, 2001, and at a price of $4.00 per share on or before Dec. 31, 2002.
Terms of the acquisition
As consideration for the acquisition, the company will issue 38,431,289 common shares at a deemed price of 72 cents per share, being one common share for each issued and outstanding Class A common share of Rycor and one common share for each issued and outstanding Rycor Series A special warrant and each issued and outstanding Rycor Series B special warrant. Additionally, the warrants issuable on exercise of the Rycor special warrants will be exchanged for warrants to purchase up to 6,810,163 common shares of the company exercisable at a price of $3.00 per share on or before Dec. 31, 2001, and at a price of $4.00 per share on or before Dec. 31, 2002. Related parties of the company as a group, beneficially own or have the right to acquire 2,876,775 Class A common shares of Rycor, 1,581,020 Series A special warrants of Rycor and 648,630 Series B special warrants of Rycor. It is expected that following the acquisition, the insiders of the company (being those shareholders owning greater than 10 per cent of the shares of the company, or officers or directors) will be the University of Alberta, Clifford Giese, Kevin Giese, Mr. Kennedy and Mr. Woollard.
Clifford Giese, Kevin Giese, Ted Ticknor, certain of their associates and the University of Alberta have entered into a pooling agreement pursuant to which 21 million common shares of the company will be held in pool for a period of one year from the date the CDNX issues a final exchange notice in respect of the acquisition.
Sponsorship
Yorkton Securities Inc. has agreed to act as sponsor in connection with the acquisition, subject to completion of satisfactory due diligence. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion. Yorkton has also agreed to act as agent for a public offering of up to 3.3 million units of the company at a price of $2.50 per unit, each unit consisting of one common share and one-half of one warrant, each whole warrant entitling the holder to purchase a further common share for a period of two years from closing at a price of $3.50 per share during the first year and at a price of $4.50 per share during the second year. A portion of the offering may be sold as special warrants on a non-brokered private placement basis, in which case the size of the public offering will be reduced. Yorkton will be paid a commission of 8 per cent of the gross proceeds of the offering, and will receive warrants to purchase that number of units as is equal to the 10 per cent of the number of units sold pursuant to the offering at a price of $2.50 per unit for two years following the closing. It is expected that the public offering will close contemporaneously with the closing of the acquisition.
Company share capitalization
EPS currently has 2.9 million common shares issued and outstanding, and 3.32 million common shares on a fully diluted basis. On closing of the acquisition, the company will be issuing options to purchase 900,000 common shares at a price of $2.50 per common share.
It is expected that upon closing of the acquisition and public offering, the company will have approximately 44,631,289 common shares issued and outstanding, and approximately 54,906,452 common shares on a fully diluted basis.
New company name
Concurrent with the completion of the acquisition, the company will be renamed BioMS Medical Corp.
Closing conditions
Completion of the transaction is subject to a number of conditions, including but not limited to, CDNX acceptance and majority of the minority shareholder approval. 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 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 capital pool company should be considered highly speculative.
The Canadian 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.
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