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Westcot enters definitive deal to acquire WPD Pharma

2019-07-17 16:09 ET - News Release

Mr. Liam Corcoran reports


Further to the news release dated May 2, 2019, Westcot Capital Corp. has entered into a definitive share exchange agreement dated July 17, 2019, with WPD Pharmaceuticals Sp Zoo, the holders of WPD shares and the holders of WPD's convertible securities. Pursuant to the definitive agreement, Westcot will, subject to certain conditions, acquire all of the issued and outstanding securities of WPD.

The transaction is an arm's-length transaction that is expected to constitute a change of business (COB) pursuant to TSX Venture Exchange Policy 5.2 (Changes of Business and Reverse Takeovers). It is anticipated that following the transaction, the resulting entity will be classified as a Tier 2 life sciences issuer on the exchange. Following completion of the proposed transaction, the resulting entity will hold all of the assets and continue the business of WPD.

About WPD Pharmaceuticals Sp Zoo

As disclosed in the initial news release, WPD is a privately held biotechnology research and development company. WPD operates in the pharmaceuticals industry with a focus on oncology, namely research and development of medicinal products involving biological compounds and small molecules. WPD has eight novel drug candidates with four that are in clinical development stage and four in preclinical development. These drug candidates were researched at institutions, including MD Anderson Cancer Center, Mayo Clinic and Emory University, and WPD currently has continuing collaborations with Wake Forest University and leading hospitals and academic centres in Poland.

WPD has entered into licence agreements with Wake Forest University Health Sciences and sublicence agreements with Moleculin Biotech Inc. and CNS Pharmaceuticals Inc., respectively, each of which grants WPD an exclusive, royalty-bearing sublicence to certain technologies of or licensed to the licensor. Such agreements provide WPD with, among other things, certain research, development, manufacturing and sales rights.

Audited financial information regarding WPD for the year ended Dec. 31, 2018, is now available, and discloses the following: (i) as at Dec. 31, 2018, WPD had assets of $276,030 (of which $220,109 is composed of intangible assets) and liabilities of $913,371; and (ii) for the year ended Dec. 31 2018, WPD had no revenues and expenses of $961,295 with a total loss for the period of $938,047.

The transaction

Pursuant to the definitive agreement, Westcot will acquire all of the issued and outstanding securities of WPD from its shareholders in exchange for 67 million common shares of Westcot at the closing of the transaction for aggregate deemed consideration of $23.45-million (based on the price of 35 cents per share, being the last closing price of the shares prior to the announcement of the transaction). Upon completion of the transaction, WPD will become a wholly owned subsidiary of Westcot.

Upon signing the definitive agreement, Westcot agreed to provide WPD with a secured bridge loan in the amount of $200,000, subject to exchange approval.

Closing will be subject to, among other things, the following conditions:

  • Various resulting entity shareholders will enter into escrow agreements in connection with their respective shares.
  • WPD will convert a portion of its outstanding debt into common shares of WPD.
  • Regulatory, corporate and all third party approvals, including from WPD's licensors, required for completion of the transaction, will have been obtained. All shareholder approvals required for completion of the transaction will have been obtained.
  • The exchange will have provided its acceptance of all transactions contemplated by the definitive agreement.

A finder's fee of 4.5 million shares of the resulting entity will be paid to Jason Sundar, an arm's-length party, subject to completion of the transaction.

Directors and officers of the resulting entity

As disclosed in the initial news release, Walter Klemp and Peter Novak will join the board of directors of the resulting entity at closing, alongside Westcot's current directors, Liam Corcoran and Yari Nieken. It is anticipated that Teresa Rzepczyk will no longer be a director of the company upon closing.

It is anticipated that Westcot's current chief executive officer, Mr. Corcoran, will resign and be replaced by Mariusz Olejniczak. Mr. Corcoran will serve as Canadian vice-president of legal and corporate secretary.

Mariusz Olejniczak, chief executive officer

Mariusz Olejniczak, WPD's chief executive officer, has significant scientific and technical expertise. Mr. Olejniczak is an experienced clinical research professional with significant expertise in the oncology, infectious disease and electronic health record. He has over 12 years of extensive experience in facilitating clinical research, project development and implementation. He has expertise in co-operation with pharma and biotech companies in Poland and abroad, including consulting in strategy, and created two e-clinical start-ups.

He is a member of the board and supervisory board of several research and development companies. Mr. Olejniczak previously served as director of sales and feasibility for Pratia Inc., as director of development at Bioscience SA, and as a clinical development consultant to various other entities. He is a graduate in biotechnology at the University of Life Sciences in Pozna and is currently a PhD candidate at Kozminski University in Warsaw, Poland.

Christopher Cherry, chief financial officer

Mr. Cherry serves as an officer of WPD and is expected to become the company's CFO upon closing of the transaction. Mr. Cherry has over 14 years of corporate accounting and audit experience. Mr. Cherry is a CPA, having obtained the chartered accountant designation in February, 2009, and the certified general accountant designation in 2004. In his former experience as an auditor, he held positions with KPMG and Davidson and Company LLP in Vancouver.

Yari Nieken, director

Mr. Nieken current serves as a director of Westcot and has a wide range of public company and capital market experience. He founded Foremost Capital Inc., an exempt market dealer, and continues to consult for numerous issuers in the health care, mineral extraction and wellness sectors. He has served on the boards of several public and private issuers, and has raised substantial capital in his career. He was formerly an investment adviser at Union Securities Corp. Mr. Neiken holds an MBA from the Sydney Graduate School of Management and a bachelor of arts degree from the University of British Columbia.

Liam Corcoran, Canadian vice-president of legal, corporate secretary and director

Mr. Corcoran currently serves as chief executive officer and a director of the company. He has extensive legal and business experience, and is currently partner/owner of a multidisciplinary legal practice with an emphasis on property insurance and related litigation. Mr. Corcoran was formerly an associate at a large Vancouver-based law firm. He holds a law degree from Thompson Rivers University Law School and an undergraduate degree from McGill University.

Principals and insiders of the resulting entity

It is anticipated that at closing, Mr. Klemp, Mr. Novak, Mr. Olejniczak, Mr. Corcoran and Mr. Cherry will become insiders of the resulting issuer.

Additionally, it is anticipated that at closing, the following shareholders of the resulting entity will become insiders or principals of the resulting entity:

  • Waldemar Priebe will be a principal, insider and control person of the resulting entity.
  • ALS Investments LLC will be an insider of the resulting entity. ALS Investments was incorporated in Wyoming, the United States. The following individual directly or indirectly beneficially holds a controlling interest or otherwise controls or directs ALS Investments: Adrian James of Austin, Tex.
  • Triple G Ventures LLC will be an insider of the resulting entity. Triple G Ventures was incorporated in Wyoming, the United States. The following individual directly or indirectly beneficially holds a controlling interest or otherwise controls or directs Triple G Ventures: Kevan Casey of Houston, Tex.

Subscription receipt financing

As disclosed in the initial news release and subject to exchange approval, the company intends to use the proceeds from the company's previously completed non-brokered private placement of subscription receipts, announced on Aug. 28, 2018, to expand WPD's business and for working capital purposes.

Shareholder approval not being sought

As disclosed in the initial news release and subject to the consent of the exchange, Westcot will not seek shareholder approval to complete the transaction.


As disclosed in the initial news release and subject to exchange approval, Westcot intends to apply for a waiver from the sponsorship requirements of the exchange; however, there is no assurance that Westcot will obtain this waiver.

Further disclosure

Trading in the shares will remain halted until the transaction has closed. For additional information on the transaction, please refer to the initial news release. The company will issue further press releases regarding the transaction as information becomes available.

We seek Safe Harbor.

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