Medicenna Therapeutics Corp. (formerly A2 Acquisition Corp.) announces completion of qualifying transaction and related matters

/NOT FOR DISSEMINATION IN THE U.S. OR THROUGH U.S. NEWSWIRES/

TORONTO and HOUSTON, March 2, 2017 /CNW/ - Medicenna Therapeutics Corp. (formerly A2 Acquisition Corp.) ("Medicenna" or the "Company") (former symbol APD.P) is pleased to announce the: (a) acquisition of all of the securities of Medicenna Therapeutics Inc. ("MTI") as its Qualifying Transaction; (b) change of management and the Board of Directors of the Company; (c) consolidation of the pre-transaction common shares of the Company (the "A2 Shares") on the basis of one new common share of the Company (each, a "Company Share") for every 14 old A2 Shares; and (d) the name change of the Company to Medicenna Therapeutics Corp.

The Acquisition and Financing

On March 1, 2017, the Company acquired all of the securities of Medicenna Therapeutics Inc. pursuant to an amalgamation (the "Transaction").  The Transaction comprised the Qualifying Transaction of the Company in accordance with the TSX Venture Exchange (the "Exchange") policies. 

Medicenna Therapeutics Inc. also completed the previously announced private placement of $4,000,000 of gross proceeds of subscription receipts (at a price of $2.00 per subscription receipt) (the "Private Placement").  All of the subscription receipts have now been converted and exchanged for Company Shares.  The Private Placement was led by Richardson GMP Limited and included Bloom Burton Securities Inc. in the syndicate.

The Transaction constitutes MTI's liquidity event pursuant to its special warrant indenture dated March 4, 2016.  In connection with the Transaction, the Company has now issued an aggregate of: (a) 16,249,999 Company Shares to former holders of common shares of Medicenna Therapeutics Inc.; (b) 4,971,416 Company Shares to former holders of special warrants of Medicenna Therapeutics Inc.; and (c) 2,000,000 Company Shares to former holders of subscription receipts of Medicenna Therapeutics Inc.

The Company has also issued the following convertible securities in connection with the Transaction:

Options

1,100,000

Warrants

198,000

Incentive Warrants

2,667,083

Compensation Options

277,300

Agents' Compensation Options

156,512

 

In addition, 14,500 Company Shares have been issued at a deemed price of $2.00 per share to Richardson GMP Limited, an arm's length finder in connection with the Transaction.  In accordance with applicable securities laws, such securities issued in connection with the finder's fee are subject to a four-month hold period, expiring June 28, 2017.

As a result of the foregoing, the outstanding capital of the Company upon completion of the Qualifying Transaction consists of 24,307,343 Company Shares. 

An aggregate of 15,600,000 of the foregoing Company Shares will be subject to 36-month escrow restrictions, with ten percent (10%) of such escrowed shares being releasable upon receipt of final Exchange approval and a further fifteen percent (15%) being releasable on each of the six-month, twelve-month, eighteen-month, twenty-four month, thirty month and thirty-six month anniversaries of such approval.

Further particulars of the Transaction may be found in the news releases dated February 6, 2017 and February 27, 2017 and the filing statement of the Company dated February 27, 2017 (the "Filing Statement"), which are available under the Company's profile on SEDAR at www.sedar.com.

Principal Securityholders following the Transaction

Upon completion of the Transaction the following shareholders received common shares and hold more than 10% of the common shares (post consolidation). 

Name and Municipality of
Residence


Number of Company
Shares Owned


Percentage of Company
Shares Held


Type of
Ownership

Fahar Merchant
Toronto, Ontario


5,050,000(1)(2)


20.78% (non-diluted)


Direct

Rosemina Merchant
Toronto, Ontario


5,050,000(1)(3)


20.78% (non-diluted)


Direct

Aries Biologics Inc. ("Aries")


5,500,000(4)


22.63% (non-diluted)


Direct

 

Notes

  1. Does not include the Company Shares held through Aries. See note 4 below.
  2. Does not include 350,000 unvested stock options, each exercisable to acquire one Company Share at an exercise price of $2.00 per Company Share until February 13, 2027.
  3. Does not include 250,000 unvested  stock options, each exercisable to acquire one Company Share at an exercise price of $2.00 per Company Share until February 13, 2027.
  4. Dr. Fahar Merchant and Ms. Rosemina Merchant each own 50% of the voting shares of Aries.  In addition, each of Dr. Merchant and Ms. Merchant is a director and officer of Aries. Combined with their individual holdings, as set forth, above, they have ownership and control over 15,600,000 Company Shares and 600,000 unvested stock options representing approximately 64.18% of the Company Shares (non-diluted)
  5. These parties have a long term view of their investment and may acquire additional securities of the Company, dispose of some or all of the securities it now holds, or may continue to hold their current position in the future depending on market conditions, reformulation of plans and/or other relevant factors.
  6. An early warning report for each of these parties will be filed in accordance with applicable securities laws and will appear on the Company's profile on SEDAR at www.sedar.com and may also be obtained by contacting Mr. Merchant at the telephone number set forth below.

Consolidation and Name Change

On March 1, 2017 and prior to the completion of the Transaction, the Company implemented a consolidation of the A2 Shares on the basis of one new Company Share for fourteen old A2 Shares (1:14) and changed its name to Medicenna Therapeutics Corp. The consolidated Company Shares are expected to begin trading on the Exchange when markets open on March 8, 2017.  

Each fourteen (14) A2 Shares issued and outstanding immediately prior to March 1, 2017 will automatically be reclassified, without any action of the holder thereof, into one Company Share. The A2 Share consolidation will affect all of the A2 Shares outstanding immediately. As a result of the A2 Share consolidation, the number of issued and outstanding A2 Shares before the Transaction was reduced from 15,000,000 to 1,071,428 (subject to fractional treatment).

No fractional shares will be issued as a result of the A2 Share consolidation. Fractional interests of 0.5 or greater will be rounded up to the nearest whole number of shares and fractional interests of less than 0.5 will be rounded down to the nearest whole number of shares.  Shareholders who hold their shares in brokerage accounts or in "street name" are not required to take any action to effect the exchange of their shares.

Change of Management and Board

In connection with the Transaction all of the directors and officers of the Company have resigned effective March 1, 2017 and have been replaced with new directors and officers as follows:

Dr. Fahar Merchant, Co-Founder, Chairman, President and  Chief Executive Officer

Elizabeth Williams, Chief Financial Officer and Corporate Secretary

Rosemina Merchant, Co-Founder, Chief Development Officer and Director

Patrick Ward, Chief Operating Officer

Albert G. Beraldo, Director

Dr. Chandrakant Panchal, Director

Andrew Strong, Director

Trading Update and New Symbol

The Company will remain halted pending final materials being reviewed by the Exchange and expects to commence trading on March 8, 2017 under the new symbol "MDNA" and CUSIP/ISIN CA58490H1073.

About Medicenna

Medicenna is a clinical stage immuno-oncology company developing novel highly selective engineered versions of IL‐2, IL‐4 and IL‐13 cytokines called Superkines™ and first in class Empowered Cytokines™ (ECs). Its wholly owned subsidiary, Houston‐based Medicenna BioPharma, is specifically targeting the Interleukin‐4 Receptor (IL4R), which is over‐expressed by at least 20 different types of cancer affecting more than one million new cancer patients every year. Medicenna's lead IL‐4EC, MDNA55, which is supported by a grant from the Cancer Prevention and Research Institute of Texas, is enrolling in a Phase 2b clinical trial for recurrent glioblastoma (rGB), the most aggressive and common form of brain cancer. MDNA55 has completed three clinical trials in 66 patients with rGB, demonstrated compelling efficacy and obtained Fast‐Track Designation from USFDA and Orphan Drug Status from USFDA and EMA. For more information, please visit www.medicenna.com.

The Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this press release. 

This news release contains forward-looking statements relating to the conditionality and timing of the final Exchange approval and the resumption of trading of the Company Shares, the future operations of the Company and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "will", "may", "should", "anticipate", "expects" and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding the Transaction and the future plans and objectives of the Company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include the failure to secure final Exchange approval for the Transaction set forth above and other risks detailed from time to time in the Filing Statement and other filings made by the Company with securities regulations.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company.  The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and the Company will update or revise publicly any of the included forward-looking statements only as expressly required by Canadian securities law.

SOURCE Medicenna Therapeutics Inc.

For further information: For further information about the Company please contact: Fahar Merchant, President and Chief Executive Officer, 604-671-6673, fmerchant@medicenna.com, 200-1920 Yonge Street, Toronto, Ontario Canada M4S 3E2; Elizabeth Williams, Chief Financial Officer, 416-648-5555, ewilliams@medicenna.com


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