Small Pharma completes reverse take-over
Common Shares Expected to Commence Trading on the TSX Venture Exchange on or about May 6, 2021
April 29, 2021 – Vancouver, British Columbia – Small Pharma Inc. (TSXV: DMT) (formerly Unilock Capital Corp.) (the “Company”), announces that it has completed its previously announced acquisition of all of the outstanding shares of Small Pharma Ltd (“Small Pharma”), a neuropharmaceutical company specialised in IP led development of novel treatments for mental health conditions (the “Reverse Takeover”). The Reverse Takeover constitutes the Company’s Qualifying Transaction (as defined by Policy 2.4 of the TSX Venture Exchange (the “TSXV”)) and was completed according to the terms of an offer agreement dated March 25, 2021 (the “Offer Agreement”), pursuant to which the Company made an offer to the Small Pharma securityholders to purchase all of the ordinary shares in the capital of Small Pharma (the “Small Pharma Shares”) currently held or to be held prior to the closing of the Reverse Takeover at an exchange ratio as set out in the Offer Agreement.
Unless otherwise indicated, all currency references are to Canadian dollars.
Peter Rands, CEO of the Company, said:
“The closing of this reverse takeover is a major step for Small Pharma to becoming a fully listed company on the TSX Venture Exchange. Together with the $58 million raised, Small Pharma is now well positioned to advance its strategy to deliver a portfolio of psychedelic-assisted treatments for people suffering from mental health conditions.”
Prior to the Reverse Takeover taking effect:
1. the Company: (a) changed its name to “Small Pharma Inc.”; (b) approved a new stock option plan (the “New Option Plan”); and (c) consolidated the common shares in the capital of the Company (the “Common Shares”) on the basis of 4.6 old Common Shares into one (1) new Common Share; and
2. Small Pharma effected a share-split whereby each existing Small Pharma Share was exchanged for 100 Small Pharma Shares.
On March 9, 2021, Small Pharma Financing Inc. (“Finco”), a special purpose financing vehicle incorporated solely for the purposes of completing a brokered private placement, issued 60,416,667 subscription receipts (the “Subscription Receipts”) at a price of $0.96 per Subscription Receipt for aggregate gross proceeds of $58,000,000. Canaccord Genuity Corp. and Eight Capital, as co-lead agents together with Haywood Securities Inc. (collectively, the “Agents”), acted as agents in relation to the brokered private placement. Immediately prior to closing the Reverse Takeover, each Subscription Receipt was converted into one common share in the capital of Finco (each, a “Finco Share”).
In conjunction with the Reverse Takeover, Finco completed a “three-cornered” amalgamation pursuant to the provisions of the Business Corporations Act (British Columbia) (the “Amalgamation”) with the Company and a wholly-owned subsidiary of the Company. Pursuant to the Amalgamation, all Finco Shares were exchanged for Common Shares on a one-for-one basis and Finco and the Company’s subsidiary amalgamated, with the resulting entity (“Amalco”) to become a wholly-owned subsidiary of the Company. Immediately prior to the closing of the Reverse Takeover, the escrow release conditions with respect to the Subscription Receipts were satisfied and the net proceeds from the sale of the Subscription Receipts, as detailed in the Company’s March 10, 2021 press release available on the Company’s SEDAR profile at www.sedar.com, were released from escrow. It is anticipated that Amalco will be wound-up and dissolved, pursuant to which all of the assets of Amalco will then be distributed to the Company.
Among other matters, the New Option Plan was unanimously approved at the special meeting of the shareholders of the Company held on March 29, 2021 (the “ASM”).
The Common Shares are expected to commence trading on the TSXV under the symbol “DMT”, on or about May 6, 2021, upon satisfaction of standard TSXV conditions to listing. A further press release will be issued in advance of the commencement of trading.
In connection with the Reverse Takeover, the Company issued a total of 315,496,144 Common Shares, including 255,079,477 in exchange for Small Pharma Shares and 60,416,667 in exchange for Finco Shares. Upon completion of the Reverse Takeover, the Company has a total of 316,800,488 Common Shares issued and outstanding as well as compensation warrants exercisable for up to 3,947,547 Common Shares at a price of $0.96 per share and options to purchase up to 18,731,835 Common Shares.
Following the Reverse Takeover, the leadership team of the Company is as follows:
Peter Rands — Chief Executive Officer and Director
David Steel — Chief Financial Officer
Marie Layzell — Chief Operating Officer and Director
Carol Routledge — Chief Medical and Scientific Officer
George Tziras — Chief Business Officer and Director
Lyne Fortin — Director
Michael Wolfe — Director
Richard Kimel — Corporate Secretary
Each of the directors other than Lyne Fortin and Michael Wolfe were elected to the board of the Company at the ASM, subject to completion of the Reverse Takeover. Upon closing of the Reverse Takeover, the board filled a vacancy and increased its size by one and appointed each of Lyne Fortin and Michael Wolfe as directors, pursuant to its authority under the Business Corporations Act (British Columbia).
As described in the Company’s filing statement dated April 23, 2021 available under the Company’s profile on SEDAR at www.sedar.com (the “Filing Statement”), certain of the Common Shares are subject to escrow requirements or seed share resale restrictions in accordance with TSXV Policy 5.4 – Escrow, Vendor Considerations and Resale Restrictions. Additional information related to the Company’s business and the Reverse Takeover (including the members of the management team and board of directors listed above) is available in the Filing Statement.
Aird & Berlis LLP acted as Canadian legal counsel to Small Pharma with Memery Crystal LLP acting as UK legal counsel to Small Pharma. Borden Ladner Gervais LLP acted as legal counsel to the Agents, Harper Grey LLP acted as legal counsel to the Company and Farris LLP acted as legal counsel to Finco.
As a result of the Reverse Takeover, Peter Rands has beneficial ownership of, or control or direction over, an aggregate of 91,117,974 Common Shares representing approximately 28.76% of the issued and outstanding Common Shares on a non-diluted basis, and representing approximately 26.84% of the issued and outstanding Common Shares on a fully-diluted basis.
The Common Shares were acquired for investment purposes and Mr. Rands has no current intention to acquire control or direction over additional securities of the Company as of the date of this news release, either alone or together with any joint actors. A copy of the early warning report providing further details of Mr. Rands’ holdings will be available on the Company’s SEDAR profile at www.sedar.com. A copy of this report can be obtained by contacting Peter Rands, Chief Executive Officer, at +44 (0)2071 129118.
About Small Pharma Inc.
The Company is a neuropharmaceutical company specialised in IP led development of novel treatments for mental health conditions, in particular depression. The Company initiated a clinical program into N,Ndimethyltryptamine (“DMT”) assisted therapy in February 2021. This program includes a Phase I/IIa trial on their lead candidate alongside development of a robust pipeline of proprietary preclinical assets.
For further information please contact:
Small Pharma Inc.
Chief Executive Officer
Tel: +44 (0)2071 129118
Cautionary Note Regarding Forward-Looking Statements
The TSXV has in no way passed upon the merits of the Reverse Takeover and has neither approved nor disapproved the contents of this press release.
Neither the 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.
This news release contains statements that constitute “forward-looking statements.” Such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements, or developments to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “potential” and similar expressions, or that events or conditions “will,” “would,” “may,” “could,” or “should” occur.
Forward-looking statements in this document include, among others, statements relating to expectations regarding the increase to the Company’s success in launching a clinical program into DMT-assisted therapy, timing of listing on the TSXV, the business plans of the Company and other statements that are not historical facts. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors and risks include, among others: (a) following completion of the Reverse Takeover, the Company may require additional financing from time to time in order to continue its operations which may not be available when needed or on acceptable terms and conditions acceptable; (b) compliance with extensive government regulation; (c) domestic and foreign laws and regulations could adversely affect the Company’s business and results of operations; (d) the stock markets have experienced volatility that often has been unrelated to the performance of companies and these fluctuations may adversely affect the price of the Company’s securities, regardless of its operating performance; (e) adverse changes in the public perception of DMT; and (f) the impact of COVID-19.
The Company makes no medical, treatment or health benefit claims about its proposed products. The Medicines and Healthcare products Regulatory Agency (“MHRA”) or other similar regulatory authorities have not evaluated claims regarding DMT-assisted therapies and other next generation psychoactive compounds. The efficacy of such therapies have not been confirmed by MHRA-approved research. There is no assurance that such DMT-assisted therapies and other psychoactive compounds can diagnose, treat, cure or prevent any disease or condition. Vigorous scientific research and clinical trials are needed. Any references to quality, consistency, efficacy and safety of potential therapies do not imply that the Company verified such in clinical trials or that the Company will complete such trials. If the Company cannot obtain the approvals or research necessary to commercialize its business, it may have a material adverse effect on the Company’s performance and operations.
The forward-looking information contained in this news release represents the expectations of the Company as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. The Company undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change.
This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. The Company’s securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.