Rider Investment Capital Corp. Announces Potential Qualifying Transaction
Rider Investment Capital Corp. Announces Potential
Qualifying Transaction
Calgary, Alberta--(Newsfile Corp. - June 21, 2019) -
Rider Investment Capital Corp. (TSXV: RDR.P) (the "
Corporation
" or
"
Rider
"), is pleased to announce that it has entered into a non-binding letter of intent dated June 19, 2019 (the "
LOI
") with US
Cryotherapy Holdings Ltd. ("
US Cryotherapy
"), a private Delaware corporation. Pursuant to the LOI, the Corporation and US
Cryotherapy will complete an arrangement, amalgamation, share exchange or similar transaction to ultimately form the resulting
issuer (the "
Resulting Issuer
") who will continue on the business of US Cryotherapy (the "
Transaction
"). If completed, the
Transaction is expected to constitute the Corporation's "Qualifying Transaction" for the purposes of the applicable policies of the
TSX Venture Exchange Inc. ("
TSXV
").
In connection with the Transaction, Rider anticipates that the 4,500,000 shares in the capital of Rider (the "
Rider Shares
")
currently issued and outstanding will be consolidated ("
Consolidation
") on a 2:1 basis.
The LOI contemplates Rider and US Cryotherapy completing an arm's length business combination transaction, pursuant to
which Rider Shares, or Resulting Issuer shares (as the case may be), will be issued to holders of shares of US Cryotherapy,
assuming there are 40,000 US Cryotherapy common shares ("
USC Shares
") outstanding and 3,657,585 US Cryotherapy
preferred shares ("
USC Preferred Shares
") outstanding, on the basis of 1,158.56 post-Consolidation Rider Shares (or
Resulting Issuer shares as applicable) for every one USC Share and USC Preferred Shares be exchanged at a ratio of 1.00
Rider Share for each USC Preferred Share (the "
Exchange Ratio
"), provided that the Exchange Ratio may change. The
deemed value of the proposed transaction is $40,000,000 at a deemed price of $0.80 per share.
In addition, Rider will issue 716,667 Rider Shares to a certain shareholder of US Cryotherapy in settlement of US$430,000 of
the currently outstanding demand loan, the Rider Shares issued for settlement of this debt will increase if the demand loan
increases. It is intended that 50% of the demand loan at the time of closing will be settled through the issuance of Rider Shares.
On completion of the Transaction, the securityholders of US Cryotherapy would own a majority of the issued and outstanding
shares of the Resulting Issuer. The common shares of the Resulting Issuer will be listed for trading on the TSXV. A finders fee is
expected to be paid in relation to the proposed transaction.
US Cryotherapy is a United States-based provider of cryotherapy technology centers and equipment. Additionally, the Company
is developing a clinical pathway with a large US Hospital Network and a pre-submission package expected to lead to FDA
medical device approval.
Treatments allow sufferers of acute and chronic pain and inflammation to recover and rejuvenate faster
and naturally.
The target market includes over 100 million people with pain costing the healthcare industry over $5.5B annually.
Elite athletes, celebrities, and people seeking rejuvenation and recovery have gravitated to whole body cryotherapy treatments in
recent years.
The Company utilizes proprietary equipment in its corporate and franchise owned wellness and recovery centers.
It recently
opened the first of multiple planned military base retail locations at Fort Hood, TX in late 2018 under a CONUS award through
Army Air Force Exchange. The Franchising Division has opened 18 locations since Q1 2016 with new centers in development in
2019.
US Cryotherapy also sells equipment directly to professional and NCAA sports programs, independent wellness and
fitness centers nationwide. List of locations:
http://www.uscryotherapy.com/locations-list/
US Cryotherapy introduced Whole Body Cryotherapy (WBC) to the United States creating the market in 2011 offering whole
body, walk-in chamber technology with nitrogen-free cooling. There are documented advantages in areas of: safety, outcomes,
cost and convenience using electric refrigerated systems within over 300 published studies available on the National Institutes of
Health (NIH).
The Company has become a global leader in WBC having administered more than 1 million treatments since 2011
without any adverse events, averaging an estimated 20,000 customer visits per month and growing. US Cryotherapy contract
manufactures and services its proprietary equipment in the US.
Pursuant to the terms of the LOI, until the earliest of (i) the execution of a definitive agreement (the "
Definitive Agreement
"); (ii)
mutual agreement of Rider and US Cryotherapy; or (iii) the termination of the LOI in accordance with its terms, Rider and US
Cryotherapy have agreed not to solicit, negotiate, accept or discuss with any other entity, any transaction that would be in
opposition to or in competition with the Transaction
The completion of the Transaction is subject to the satisfaction of various conditions as are standard for a transaction of this
nature, including but not limited to (i) the negotiation of the Definitive Agreement; (ii) completion by Rider, US Cryotherapy and
their respective advisors of "due diligence" satisfactory to the parties; and (iii) US Cryotherapy provides audited financial
statements for the years ended December 31, 2017 and 2018. There can be no assurance that the Transaction will be
completed on the terms proposed above or at all.
Trading in the Corporation's common shares has been halted at the Corporation's request and the halt is expected to continue
pending the negotiation of the Transaction Agreement and the TSXV's review and acceptance of materials for the Transaction.
This is an initial press release. The Corporation plans to issue a further press release once it has entered into the Definitive
Agreement to provide the information prescribed by applicable policies of the TSXV including, among other things, selected
financial information respecting the private company, potential financing to be completed, and the Transaction.
For further information, please contact:
Rider Investment Capital Corp.
Dave Antony
403-531-1710
US Cryotherapy Holdings Ltd.
Kevin Kramer - CEO
707-301-7690
Reader Advisory
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain information set forth in this news release contains forward-looking statements or information ("
forward-looking
statements
"), including details about the Transaction. By their nature, forward-looking statements are subject to numerous
risks and uncertainties, some of which are beyond the Corporation's control, including the impact of general economic
conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, operational risks,
competition from other industry participants, stock market volatility and the risks that the parties will not proceed with the
Transaction. Although the Corporation believes that the expectations in its forward-looking statements are reasonable, its
forward-looking statements have been based on factors and assumptions concerning future events which may prove to be
inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to
known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual
results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. Accordingly,
readers are cautioned not to place undue reliance on the forward-looking statements, as no assurance can be provided as to
future results, levels of activity or achievements. Risks, uncertainties, material assumptions and other factors that could affect
actual results are discussed in our public disclosure documents available at
www.sedar.com
. Furthermore, the forward-
looking statements contained in this document are made as of the date of this document and, except as required by
applicable law, the Corporation does not undertake any obligation to publicly update or to revise any of the included forward-
looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements
contained in this document are expressly qualified by this cautionary statement.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance 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.
Investors are cautioned that, except as disclosed in the management information circular or 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. Trading in the securities of a capital pool company should be considered highly
speculative.
The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the
contents of this press release.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/45797