Toronto, ON / ACCESSWIRE / July 16, 2014 / Allegiance Equity Corporation ("ANQ") (TSX VENTURE:ANQ.V) is pleased to announce that it has entered into a non-binding letter of intent dated July 10, 2014 (the "LOI") which outlines the general terms and conditions of a proposed transaction pursuant to which ANQ proposes to acquire all of the issued and outstanding securities CGX Life Sciences Inc. ("CGX") in exchange for securities of ANQ (the "Transaction").
The LOI was negotiated at arm's length and is effective as of July 10, 2014.
The transaction terms outlined in the LOI are non-binding on the parties and the LOI is expected to be superseded by a definitive agreement (the "Definitive Agreement") to be signed between parties. The Transaction is subject to regulatory approval, including the approval of the TSX Venture Exchange (the "TSXV") and standard closing conditions, including the approval of the Definitive Agreement by the directors of each ANQ and CGX and completion of due diligence investigations to the satisfaction of each of ANQ and CGX, as well as the conditions described below. The legal structure for the Transaction will be determined after the parties have considered all applicable tax, securities law, and accounting efficiencies.
Trading in the common shares of ANQ has been halted in relation to this announcement. Reinstatement of the trading of ANQ shares will resume upon TSXV's confirmation that ANQ has satisfied the Requirements for Reinstatement of Trading as set forth in Section 3.4 of TSX Venture Exchange Policy 5.2 - Change of Business and Reverse Takeovers (the "RTO Policy").
The LOI provides that all of the shares of CGX (the "CGX Shares") will be transferred to ANQ in exchange for 24,780,653 common shares of ANQ to be issued from treasury (the "ANQ Consideration Shares"). As of the date hereof, ANQ has 9,164,957 issued and outstanding shares and 498,000 share purchase options providing for 9,662,957 ANQ shares on a fully diluted basis.
The ANQ Consideration Shares comprise the aggregate consideration payable by ANQ in relation to the Transaction.
Upon the consummation of the Transaction, it is expected that the former CGX shareholders will hold approximately 71.95% of ANQ's issued and outstanding shares (on a fully diluted basis). Consequently, the Transaction constitutes a reverse take-over of ANQ pursuant to the RTO Policy and it is expected that CGX will become a wholly-owned subsidiary of ANQ.
Conditions to Transaction
Completion of the Transaction is subject to a number of conditions, including but not limited to acceptance by the TSXV and, if applicable pursuant to TSXV 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 Transaction will be completed as proposed or at all. ANQ expects to hold a shareholders meeting in September, 2014 (the "Shareholders Meeting") in order to obtain shareholder approval for the Transaction (but this remains subject to confirmation by the TSXV).
Other conditions to completion of the Transaction include:
- Negotiation and execution of a Definitive Agreement in respect of the Transaction.
- Completion of a private placement of a minimum amount of $500,000 and a maximum amount of $750,000 (or such other increased amount as may be required to meet TSXV minimum listing requirements), if any.
- Preparation and filing of a filing statement outlining the definitive terms of the Transaction in accordance with the rules of the TSXV.
- Receipt of all director, shareholder and requisite regulatory approvals relating to the Transaction, including, without limitation, TSXV approval.
Changes to Directors and Officers
The LOI provides that the Management Information Circular relating to the Shareholders Meeting will include, as director candidates, two (2) nominees of ANQ (specifically, Marilyn Bloovol and Don Stott), the three (3) senior officers of CGX and two (2) independent director candidates to be nominated by CGX.
It is expected that upon her election as director, Marilyn Bloovol will be appointed Chairperson of the Board.
The LOI also provides that the existing officers of ANQ will resign and the officers of CGX will be appointed to their respective offices of ANQ. It is expected that Scott Boyes, a resident of Toronto, Ontario and the current President and Chief Executive Officer of CGX, will continue as President and Chief Executive Officer and Michael Arnkvarn, a resident of Stittsville, Ontario will assume the role of Executive Vice President following completion of the Transaction.
Information about the Vendors
The principal shareholders of CGX are Scott Boyes and Michael Arnkvarn.
ANQ is an Ontario corporation that has developed unique standardized mass-market nutraceutical products for the treatment of common ailments where present pharmaceutical treatments and Over the Counter (OTC) products fail to meet the needs of patients. ANQ has targeted markets having clearly identified product deficiencies and dissatisfied consumers afflicted with common conditions including memory loss, dementia, high blood glucose and inflammatory skin conditions. ANQ obtains regulatory approval and patents for these unique compounds and formulations and has licensed and proposes to license its products for royalty revenues, in particular, to CGX.
CGX is a Nevada corporation dedicated to the manufacture and distribution of high quality nutraceuticals to the North American marketplace. Its products, targeted to provide safe, alternative treatments or to assist in the prevention of specific medical conditions, contain active ingredients formulated from natural herbal and botanical components. CGX's principal brand is CinG-X(tm).
CGX has two (2) wholly-owned subsidiaries, being The CinG-X Corporation, an Ontario corporation and The CinG-X Corporation of America, a Nevada corporation.
CinG-X(tm) is a combination of standardized extracts acting synergistically to control glucose metabolism, improve cognitive function and reduce the risk of developing conditions associated with blood glucose metabolism and brain function. CinG-X(tm) has been approved by Health Canada and Master File OF12-21-26454-MF001 supports its claims. Patent applications are currently pending in the United States and in Canada.
ANQ is presently the licensor to CGX in relation to the CinG-X(tm) (as described below) pursuant to an exclusive License Agreement. Details of the License Agreement may be found, inter alia, among ANQ's public disclosure materials (under the company's page at www.sedar.com) in the September 17, 2013 News Release.
If and when the parties enter into a Definitive Agreement, further details about the proposed transaction will be provided in a comprehensive News Release and in the information circular to be prepared and filed in relation to the Shareholders Meeting.
Investors are cautioned that, except as disclosed in the 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.
ANQ will engage a Sponsor in connection with the Transaction if required in accordance with the requirements of the TSXV.
Completion of the Transaction is subject to a number of conditions, including TSX Venture Exchange acceptance and ANQ 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 for the ANQ shareholders meeting 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 ANQ should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this news release.
Cautionary Statement Regarding Forward-Looking Information
This news release includes certain "forward-looking statements" under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, statements with respect to the terms and conditions of the proposed Transaction; the Company's objectives, goals or future plans; the receipt of the requisite approvals with respect to the Transaction and the business and operations of ANQ following the completion of the Transaction. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause 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 and social uncertainties; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; delay or failure to receive board, shareholder or regulatory approvals; those additional risks set out in ANQ's public documents filed on SEDAR at www.sedar.com; and other matters discussed in this news release. Although ANQ believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, ANQ, CGX and the Vendors disclaim any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the Policies of the Exchange) accepts responsibility of the adequacy or accuracy of this release.
For further information please contact:
Marilyn Bloovol, President and CEO, Allegiance Equity Corporation
Scott Boyes, President, CGX Life Sciences
SOURCE: CGX Life Sciences
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