Unilock Capital Corp. Announces Proposed Acquisition Of Small Pharma LTD.

Quick Take:

Unilock Capital Corp. has entered into a definitive agreement dated Nov. 30, 2020, with Small Pharma Ltd. and certain shareholders of Small Pharma pursuant to which Unilock has agreed to acquire all of the issued and outstanding ordinary shares in the capital of Small Pharma upon the terms and conditions set out in the definitive agreement. The proposed transaction is expected to constitute Unilock’s qualifying transaction pursuant to the policies of the TSX Venture Exchange.

The qualifying transaction

Pursuant to the definitive agreement, Unilock has agreed to acquire all of the issued and outstanding Small Pharma shares by way of a scheme of arrangement or share exchange in accordance with the laws of England and Wales, being the corporate jurisdiction of Small Pharma. The final acquisition structure will be determined by the parties to accommodate efficiencies for various legal structures, tax and accounting treatment, and securities regulation. The proposed transaction will constitute a reverse takeover of Unilock by Small Pharma.

As consideration for the acquisition of all of the outstanding Small Pharma shares, the holders of the issued and outstanding Small Pharma shares will receive common shares of Unilock at an exchange ratio as set out in the definitive agreement, which is based on (i) the deemed price of the Unilock common shares of either 17 cents or 21 cents, depending on the premoney valuation of Small Pharma for the Small Pharma private placement (as defined herein); and (ii) the price ascribed to the Small Pharma shares pursuant to the Small Pharma private placement (as defined herein).

The current issued and outstanding share capital of Unilock consists of six million Unilock common shares and options to purchase an additional 600,000 Unilock common shares for a fully diluted share capital of 6.6 million Unilock common shares. There are currently 2,286,215 Small Pharma shares issued and outstanding, options to purchase an additional 151,876 Small Pharma shares, and certain convertible notes. It is anticipated that shareholders of Small Pharma will own approximately 98 per cent of the outstanding Unilock common shares at the closing of the proposed transaction based on current parameters of the Small Pharma private placement (as defined herein) envisioned by Small Pharma.

On or immediately prior to the closing of the proposed transaction, Unilock may consolidate its outstanding share capital at a ratio as may be accepted by the relevant regulatory authorities and approved by Unilock and Small Pharma.

Upon completion of the proposed transaction, it is the intention of the parties that Unilock will be renamed Small Pharma Inc. or such other name as may be determined by the parties and accepted by applicable regulatory authorities.

Unilock and Small Pharma will provide further details in respect of the proposed transaction in due course by way of press release.

Small Pharma was incorporated on Feb. 4, 2015, in the United Kingdom pursuant to the provisions of the Companies Act 2006. Small Pharma’s head office is located at 6-8 Bonhill St., London, U.K.

Small Pharma is a neuropharmaceutical company specialized in intellectual-property-led development of novel treatments for mental health conditions; in particular, depression. Small Pharma is preparing to launch a clinical program into DMT-assisted therapy in Q1 2021. This program includes a phase I/IIa trial on its lead candidate alongside development of a robust pipeline of proprietary preclinical assets.

Small Pharma private placement

Small Pharma is currently in discussions with agents to lead a private placement to be completed in conjunction with the proposed transaction. The terms of the Small Pharma private placement will be announced after the execution of the engagement letter with the agent(s).

Directors and officers of the resulting issuer

On completion of the proposed transaction, the current directors and officers of Unilock will resign, and it is currently expected that the proposed officers of the resulting issuer will include Peter Rands (chief executive officer), Marie Layzell (chief operating officer), Carol Routledge (chief medical and scientific officer) and Richard Kimel (corporate secretary). Further information concerning the proposed directors and officers of the resulting issuer will be contained in a subsequent news release.

Significant conditions to closing

The completion of the proposed transaction is subject to a number of conditions precedent, including, but not limited to, satisfactory due diligence reviews, negotiation and execution of definitive transaction documentation, approval by both boards of directors, approval of Small Pharma shareholders, approval of Unilock shareholders, obtaining necessary third party approvals, TSX Venture Exchange acceptance, and the completion of the Small Pharma private placement. There can be no assurance that the proposed transaction or the Small Pharma private placement will be completed as proposed or at all.

Arm’s-length qualifying transaction

The proposed transaction will not constitute a non-arm’s-length qualifying transaction or a related party transaction pursuant to the policies of the TSX-V.

Unilock is a capital pool company created pursuant to the policies of the TSX-V. It does not own any assets, other than cash or cash equivalents and its rights under the definitive agreement. The principal business of Unilock is to identify and evaluate opportunities for the acquisition of an interest in assets or businesses and, once identified and evaluated, to negotiate an acquisition or participation subject to acceptance by the TSX-V so as to complete a qualifying transaction in accordance with the policies of the TSX-V.

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