VANCOUVER, BC, Oct. 4, 2023
/CNW/ - Kalon Acquisition Corp. ("Kalon") (TSXV: KAC.P) and
Pharmachal Health Group Pty Ltd, an arms-length pharmaceutical,
medical device and veterinary company based in Melbourne, Australia ("Pharmachal"),
are pleased to announce that they have entered into a term sheet
dated September 29, 2023 (the
"Term Sheet").
About Pharmachal
Pharmachal is a Melbourne-based
pharmaceutical development company specialising in nano
drug-delivery. Pharmachal's Nano Drug Delivery System
("NDDS") is the only patent-certified, clinically-trialed
and approved formulae that releases an active nanoparticle drug
encapsulated in oil into the blood. Its 3% lidocaine NDDS
product NOPAYNE™, which was developed under the supervision of
renowned burns doctor Professor Fiona Wood AO, is in the final
stages of commercialisation and is expected to provide breakthrough
relief for burns, cuts, wounds and a range of other
indications. Pharmachal was incorporated on December 1, 2015, and its controlling
shareholders are Charlie Fridlender
and Alan Leeming.
Transaction Terms
Pursuant to the terms of the Term Sheet, Kalon and Pharmachal
will negotiate and enter into a definitive agreement incorporating
the principal terms of the Term Sheet (the "Definitive
Agreement"), whereby the parties will combine their respective
businesses by way of a share exchange, merger, amalgamation, plan
of arrangement, or such other similar form of transaction (the
"Proposed Transaction").
Upon completion of the Proposed Transaction, it is anticipated
that Kalon will have changed its name to "Pharmachal Health Group
Ltd." (the "Name Change") or such other name as
Pharmachal may determine (the "Resulting Issuer"). The
Proposed Transaction, if completed, will constitute Kalon's
Qualifying Transaction (as such term is defined in Policy 2.4 –
Capital Pool Companies ("Policy 2.4") of the TSX
Venture Exchange (the "TSX-V")). Upon completion of
the Proposed Transaction, the Resulting Issuer will carry on the
business of Pharmachal and intends to list as a Tier 2 life
sciences issuer on the TSX‑V.
It is currently anticipated that with a relative valuation of
CAD $20 million for Pharmachal and
approximately CAD $2.2 million for
Kalon, upon the closing of the Proposed Transaction (the
"Closing"), the number of common shares in the authorized
share capital of the Resulting Issuer (each, a "Resulting Issuer
Share") held by the former shareholders of Pharmachal,
including any Resulting Issuer Shares issuable on the conversion of
the outstanding Kalon stock options but without giving effect to
the Concurrent Financing (as defined below), will be 90% with the
remaining 10% held by current shareholders of Kalon.
Pursuant to the terms of the Term Sheet, until the earlier of
(i) the execution of the Definitive Agreement, and (ii) the
date that is 45 days following the date of the Term Sheet, neither
Kalon nor Pharmachal nor any of their affiliates, or any of their
respective officers, employees, directors, agents and
representatives will take any action of any kind which may
reasonably be expected to reduce the likelihood of success of the
Proposed Transaction or the satisfaction of any term or condition
contained in the Term Sheet.
The completion of the Proposed Transaction is subject to the
satisfaction of various conditions as are standard for a
transaction of this nature, including but not limited to (i) the
negotiation and execution of the Definitive Agreement; (ii)
completion of satisfactory technical, legal and general due
diligence by the parties; (iii) absence of a material adverse
change in respect of either party or the Pharmachal assets included
in the Proposed Transaction; (iv) the receipt of shareholder
approval for the Proposed Transaction to the extent required by
applicable law and policies of the TSX-V; (v) the filing with the
applicable securities regulatory authorities of a filing statement
or information circular regarding the Proposed Transaction;
(vi) the receipt of conditional approval from the TSX-V for
the Proposed Transaction and the listing of the Resulting Issuer
Shares upon completion of the Proposed Transaction; and (vii) the
completion of the Concurrent Financing. There can be no
assurance that the Proposed Transaction will be completed on the
terms proposed above or at all.
The Proposed Transaction is not expected to be a Non-Arm's
Length Qualifying Transaction (as defined in Policy 2.4), and
therefore approval from the shareholders of Kalon is not expected
to be required. No finders' fees are payable by Kalon in
connection with the Proposed Transaction, and Kalon does not
anticipate advancing any funds to Pharmachal prior to completion of
the Proposed Transaction. Trading in Kalon's common shares
has been halted at Kalon's request and the halt is expected to
continue pending the negotiation of the Definitive Agreement and
the TSX-V's review and acceptance of materials for the Proposed
Transaction.
This is an initial press release. Kalon and Pharmachal
intend to issue a further press release once the parties have
entered into the Definitive Agreement to provide, among other
things, the selected financial information related to Pharmachal
and additional commercial terms for the Proposed Transaction and
the Concurrent Financing.
Concurrent Financing
Immediately prior to or concurrently with Closing, Kalon or a
financing vehicle will complete a private placement financing (the
"Concurrent Financing") for gross proceeds of at least CAD
$2,500,000. The net proceeds of
the Concurrent Financing will be held in trust by an escrow
agreement and released immediately prior to Closing.
Sponsorship
Sponsorship of a Qualifying Transaction (as such term is defined
in Policy 2.4) is required by the TSX-V unless a waiver from the
sponsorship requirement is obtained. Kalon intends to apply
for a waiver from sponsorship for the Proposed Transaction.
There is no assurance that a waiver from this requirement
will be obtained.
Management and Board of Directors of Resulting Issuer
It is currently anticipated that management and the board of
directors of the Resulting Issuer will, subject to regulatory
approval, consist of the following individuals:
Charles Fridlender – Chief
Executive Officer and Director
Mr. Fridender has over 30 years' experience in pharmaceutical
innovation, development, manufacturing, and marketing. He
founded NS Technologies and Norimed International, is a former
Director of Komipharn International (Australia) and has held roles in global
pharmaceutical companies such as Leo Laboratories Pharmaceuticals.
Mr. Fridlender has qualifications in Medical Science,
Business Administration, Regulatory and GMP Code of
Manufacturing.
Tim Dean, Chief Financial
Officer, Chief Operating Officer and Director
Tim Dean has over 30 years'
experience in pharmaceutical roles focused on finance, general
management and international business development. He held
senior roles with Australia's
largest pharma company CSL, which included Head of Business
Development for its plasma fractionation business. Mr. Dean
has also held General Manager and CEO positions in the
pharmaceutical industry. His qualifications include a
Bachelor Degree in Accounting (CPA) and a Master in Business
Administration.
Andrew Mendelawitz, VP Corporate and Investor Relations and
Director
Andrew Mendelawitz has extensive experience in senior corporate
affairs and investor relations roles with private and listed
organisations in mining and energy, technology, and pharmaceutical
industries. He is the Honorary Consul to Guatemala in Melbourne and the Secretary of the Diplomatic
Corps. His qualifications include a Bachelor's Degree in
Marketing and Media and a Master in Business Administration.
Peter Shaerf, Chairman and Director
Peter Shaerf, is currently Chairman of Kalon. He is also
Chairman of Delta Corp Holdings Limited, a global logistics company
that is scheduled to be listed on the NASDAQ exchange. He is
a Director of Interlink Maritime a Bermuda based shipowner and Harbor Harvest who
operate a short sea cargo ferry service in the North East of the
U.S. He has served on numerous public company boards
including serving as Deputy Chairman of Vancouver based Seaspan Corporation. He
is a partner in the transportation investment bank, AMA Capital
Partners.
Dr. Aishwarya Paliwal,
Director
Dr. Aishwarya Paliwal is the
Co-founder of Delta Corp Holdings Limited, a global logistics
company that is scheduled to be listed on the NASDAQ exchange.
She has been instrumental in building the footprint of Delta
Corp in India particularly in
initiatives though its Foundation and the Sustainability efforts.
The outreach is directed towards child education and
affordable medical care, medical facilities, and equipment.
Dr. Paliwal has also authored several papers in cognitive
human psychology & human associative memory.
Jonathan Lotz, Director
Jonathan Lotz is the senior
lawyer and the founder of Lotz & Company. Prior to Lotz
& Company, Mr. Lotz worked as a partner at the
international law firm, Heenan Blaikie LLP, where he headed the
firm's Vancouver corporate
securities and mining practices. He has represented public
and private companies in all aspects of corporate and securities
matters, and has acted for a variety of clients in different
sectors in North and South
America, Europe,
Asia, Africa, and Oceania. Mr. Lotz is a
member of the Bars of British
Columbia and New York, and
holds a B.Comm and LL.B from the University of
British Columbia.
David Moore, Corporate
Secretary
David Moore has extensive
experience as a CFO and Head of Finance across a range of
industries, including pharmaceuticals, media, manufacturing and
professional services and was Company Secretary for NetRatings
Australia. Mr. Moore is a Chartered Accountant with a
Bachelor of Business Degree (Accounting).
Kalon has the right to nominate two individuals to the board of
directors of the Resulting Issuer, of which it intends to nominate
Peter Shaerf and Dr. Aishwarya
Paliwal.
About Kalon Acquisition Corp.
Kalon is a capital pool company within the meaning of the
policies of the TSX-V that has not commenced commercial operations
and has no assets other than cash. Kalon's business is to
identify and evaluate businesses and assets with a view to
completing a Qualifying Transaction under the policies of the
TSX-V.
For more information, please refer to Kalon's prospectus
available on SEDAR+ (www.sedarplus.ca).
On Behalf of the Board of Directors of Pharmachal Health
Group Pty Ltd
Charlie Fridlender
Managing Director
On Behalf of the Board of Directors of Kalon Acquisition
Corp.
Peter Shaerf
Chairman and Director
Neither the TSX-V nor its Regulation Services Provider (as
that term is defined in the policies of the TSX-V) accepts
responsibility for the adequacy or accuracy of this
release.
Completion of the Proposed Transaction is subject to a number
of conditions, including but not limited to, TSX-V acceptance and
if applicable pursuant to TSX-V 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 Proposed
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
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 TSX-V has in no way passed upon the merits of the
Proposed Transaction and has neither approved nor disapproved the
contents of this press release.
Forward-Looking Statements:
This news release contains forward-looking statements and
forward-looking information (collectively, "forward looking
statements") within the meaning of applicable Canadian and U.S.
securities legislation. All statements, other than statements
of historical fact, included herein including, without limitation,
statements about the completion of the Proposed Transaction, the
entry into of a Definitive Agreement, the completion of the
Concurrent Financing, and the anticipated business plans and timing
of future activities of the parties, are forward looking
statements. Although each of Kalon and Pharmachal believes
that such statements are reasonable, it can give no assurance that
such expectations will prove to be correct. Forward-looking
statements are typically identified by words such as: "believes",
"will", "expects", "anticipates", "intends", "estimates", "plans",
"may", "should", "potential", "scheduled", or variations of such
words and phrases and similar expressions, which, by their nature,
refer to future events or results that may, could, would, might or
will occur or be taken or achieved. In making the
forward-looking statements in this news release, the parties have
applied several material assumptions, including without limitation,
that there will be investor interest in future financings, the
receipt of any necessary permits, licenses and regulatory approvals
in connection with the future development of Pharmachal's business
in a timely manner, the availability of financing on suitable terms
for the development of Pharmachal's assets, results of operations,
performance, industry trends and future growth opportunities.
Kalon and Pharmachal caution investors that any forward-looking
statements by the parties are not guarantees of future results or
performance, and that actual results may differ materially from
those in forward-looking statements as a result of various factors,
including, the inability of Pharmachal to obtain the necessary
financing required to conduct its business and affairs, as
currently contemplated, the ability of Pharmachal to execute their
proposed business plans, changes in general economic conditions,
changes in the financial markets, lack of investor interest in
future financings, accidents, labour disputes and other risks of
Pharmachal's industry, delays in obtaining governmental approvals,
permits or financing, risks relating to epidemics or pandemics such
as COVID–19, including the impact of COVID–19 on Pharmachal's
business, financial condition and results of operations, changes in
laws, regulations and policies affecting Pharmachal's operations,
the inability of Kalon or Pharmachal to obtain any necessary
permits, consents, approvals or authorizations, including of the
TSX-V, the timing and possible outcome of any pending litigation,
and other risks and uncertainties disclosed in Kalon's latest
Management's Discussion and Analysis and filed with certain
securities commissions in Canada.
All of Kalon's Canadian public disclosure filings may be
accessed via www.sedarplus.ca and readers are urged to review these
materials.
Readers are cautioned not to place undue reliance on
forward-looking statements. The parties undertake no
obligation to update any of the forward-looking statements in this
news release or incorporated by reference herein, except as
otherwise required by law.
SOURCE Kalon Acquisition Corp.