9:33 | 20.07.2015
Quantum International Income Corp. Files Amended and Restated Preliminary Short Form Prospectus and Announces Internalization of Management Agreement
TORONTO, ONTARIO–(Marketwired – July 20, 2015) –
THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT AUTHORIZED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
Quantum International Income Corp. (“Quantum” or the “Corporation”) (TSX VENTURE:QIC) (TSX VENTURE:QIC.U) announces that it has filed an amended and restated preliminary short form prospectus (the “Prospectus”) with the securities regulatory authorities in each provinces of Canada (except Quebec) in connection with its previously announced public offering of 47,620,000 subscription receipts (“Subscription Receipts”) at a price of C$0.42 per Subscription Receipt, for gross proceeds of C$20,000,400 (the “Offering”). The Corporation has also granted the Underwriters an over-allotment option to purchase up to an additional 3,559,595 Subscription Receipts at the same price, exercisable in whole or in part, for a period of 30 days following the closing date.
Underwriting Agreement Amendment
In connection with the Offering, Quantum entered into an underwriting agreement with Mackie Research Capital Corporation and Canaccord Genuity Corp. (together, the “Underwriters”), for the purchase of the Subscription Receipts on a “bought deal” basis (the “Underwriting Agreement”). Such Underwriting Agreement has been amended (the “Underwriting Agreement Amendment”) to, among other things, (i) provide for the internalization of the management services provided to Quantum by Quantum International Asset Management Corp., an external third party (the “External Manager”), pursuant to a management agreement dated August 28, 2014 between the Corporation and the External Manager (the “Management Agreement”), (ii) extend the date by which the Corporation shall have obtained a receipt from the Ontario Securities Commission (as principal regulator) in respect of the final short form prospectus from July 15, 2015 to July 21, 2015, and (iii) extend the date by which the Corporation and Underwriters shall have closed the Offering from July 21, 2015 to July 28, 2015.
For additional information relating to the Offering and the External Manager Internalization (as defined herein), please refer to the Prospectus and Underwriting Agreement Amendment.
Internalization of Management Agreement
The Underwriting Agreement Amendment provides that it shall be a condition of the release of the proceeds of the Offering from escrow (other than the $4,000,080 which will be released to the Corporation on the date of the Offering) that the Corporation shall have acquired all of the outstanding equity securities of the External Manager from the holders thereof in exchange for an aggregate of 11,000,000 common shares (the “EM Shares”) of Quantum (the “External Manager Internalization”). The External Manager Internalization will enable the Corporation to internalize the management services currently being provided to the Corporation by the External Manager under the Management Agreement. Upon the completion of the External Manager Internalization, the Management Agreement will be terminated.
The EM Shares will be held by entities jointly controlled by two corporations, all of the outstanding shares of which are owned by separate trusts, the beneficiaries of which are members of the families of each of Grant White or Manu Sekhri, on a 50/50 basis, respectively. Grant White is the Chief Executive Officer and a director of the Corporation, and Manu Sekhri is the President and a director of the Corporation. As a result of the relationships noted above, the completion of the External Manager Internalization by the Corporation will constitute a “related party transaction” between the Corporation and the External Manager for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). In completing the External Manager Internalization, the Corporation intends to rely on Section 5.5(a) of MI 61-101 for an exemption from the formal valuation requirement of MI 61-101 and Section 5.7(1)(a) of MI 61-101 for an exemption from the minority shareholder approval requirement of MI 61-101 as neither the fair market value of the External Manager Internalization, nor fair market value of the Internalization Shares, will exceed 25% of Quantum’s market capitalization.
The completion of the External Manager Internalization is subject to the receipt of all required regulatory approvals, including the approval of the TSX Venture Exchange, which will be conditional on the Corporation receiving the approval of a majority of the disinterested shareholders of the Corporation to the issue of the Internalization Shares (the “Internalization Shareholder Approval”). The Internalization Shareholder Approval is expected to be obtained by written consent of shareholders.
Concurrent with the completion of the External Manager Internalization, each of Grant White and Manu Sekhri is expected to enter into an employment or consulting agreement with the Corporation that will provide for an annual salary payable in an amount consistent with such individual’s peer comparator group, as determined by a majority of the independent directors of the Corporation, acting reasonably.
About Quantum International Income Corp.
Quantum is a healthcare company focused on delivering national integrated health solutions in the United States. The Corporation seeks to back management teams with strong operational track records and deep healthcare experience. The Corporation intends for acquired businesses or assets to fit synergistically within a strategic framework, have a proven operating history, opportunities for standalone growth and, potentially in some cases, national expansion. Potential acquisition targets will be in various related areas of the United States healthcare industry in different geographic regions to allow for diversification.
Cautionary Statement Regarding Forward-Looking Information
Certain statements contained in this press release constitute forward-looking statements and forward-looking information (collectively, “Forward-Looking Statements”) and Quantum cautions investors about important factors that could cause Quantum’s actual results to differ materially from those expressed, implied or projected in any Forward-Looking Statements included in this press release. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as “will likely result”, “are expected to”, “expects”, “will continue”, “is anticipated”, “anticipates”, “may”, “could”, “believes”, “estimates”, “intends”, “plans”, “forecast”, “projection” and “outlook”) are not historical facts and may be Forward-Looking Statements that involve projections, estimates, assumptions, known and unknown risks and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such Forward-Looking Statements or otherwise materially inaccurate. No assurance can be given that these expectations or assumptions will prove to be correct and such Forward-Looking Statements included in this press release should not be unduly relied upon. These Forward-Looking Statements speak only as of management’s beliefs and expectations as of the date of this press release. In addition, this press release may contain Forward-Looking Statements drawn from or attributed to third party sources. Accordingly, any such statements are qualified in their entirety by reference to the information discussed throughout this press release.
In particular, this press release contains Forward-Looking Statements regarding the Offering; the date by which the Corporation shall have obtained a final receipt from the Ontario Securities Commission (as principal regulator) in respect of the final short form prospectus, if at all; the date by which the Corporation and the Underwriters shall have closed the Offering, if at all; the completion of the External Manager Internalization, if at all, including that approval of the TSX Venture Exchange and a majority of the disinterested shareholders of the Corporation shall have been obtained; the availability of an exemption from the formal valuation and minority approval requirements of MI 61-101; the expectation that each of Grant White and Manu Sekhri shall have entered into an employment or consulting agreement with the Corporation that will provide for an annual salary payable in an amount consistent with such individual’s peer comparator group; anticipated future financial, structural, growth and operating performance of Quantum, including as it pertains to the operations detailed in this press release and the deployment of capital into new acquisitions.
Actual results may differ materially due to a number of risks and uncertainties faced by Quantum, including, but not limited to: regulatory and legal approvals, including those beyond the control of the Corporation; general economic and business conditions; global financial conditions; third parties honouring their contractual obligations with Quantum and its subsidiaries; relationships with operating and/or joint venture partners; inaccuracy, incompleteness or omissions in any of the financial and other information upon which management bases its analysis of potential acquisitions; the failure to realize the anticipated benefits of Quantum’s current and future acquisitions; factors relating to the healthcare industry, including reliance on third-party payors for revenue; licensing, certification and accreditation risk; healthcare regulatory requirements; dependence on physician relationships; litigation, professional liability claims; insurance coverage limitations and uninsured risks; dependence on key personnel at the Quantum and operations level; competition from other healthcare providers; factors relating to the media content generation and distribution industry, including ability to deliver services in a timely manner; changes in technology, consumer markets or demand for media services; changes in federal, provincial and foreign content laws and regulations; dependence on third party content producers; competition for, among other things, capital, equipment and skilled personnel; the inability to generate sufficient cash flow from operations to meet future obligations; the inability to obtain required debt and/or equity financing for future acquisitions on suitable terms; competition for acquisition targets; seasonality and fluctuations in results; and limited diversification of Quantum’s business industries, structures and operations.
Quantum cautions that the list and description of Forward-Looking Statements, risks, assumptions and uncertainties set out above is not exhaustive. Quantum will update the Forward-Looking Statements as required by securities law. All Forward-Looking Statements contained in this press release are qualified by these cautionary statements. Unless otherwise specified in this press release, information contained in this press release is current as of the date of this press release. Unless otherwise specified, all dollar amounts herein refer to Canadian dollars. Additional information on these and other factors that could affect the operations or financial results of Quantum and its subsidiaries are included in disclosure documents filed by Quantum with the securities regulatory authorities, available under Quantum’s profile on SEDAR at www.sedar.com.
The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Quantum International Income Corp
Investor Relations: Kin Communications
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