XORTX Pharma to go public by way of RTO with APAC Resources

pcNewsWireAPAC Resources Inc. (CSE: APG) has entered into a non-binding letter of intent with XORTX Pharma Corp., an early development stage life science company to complete a reverse take-over transaction.

It is anticipated that following the share exchange and the proposed $2 million private placement, approximately 7.8% of the then total issued APAC Shares will be held by the existing shareholders of APAC, 78.6% will be held by the current shareholders of XORTX, and 13.6% will be held by new subscribers under the private placement.

News Release

APAC Resources Inc. Announces Proposed Reverse Take-Over Transaction with XORTX Pharma Corp.

Vancouver, BC – June 14, 2017 – APAC Resources Inc. (“APAC”) (CSE:APG:CNX) announced today that it has entered into a non-binding letter of intent (“Letter of Intent”) with XORTX Pharma Corp. (“XORTX”), an early development stage life science company to complete a reverse take-over transaction with the shareholders of XORTX (the “Proposed Transaction”). XORTX is a privately held Calgary-based company focused on developing drug therapies for rare “orphan” disease indications such as polycystic kidney disease, and the treatment of health consequences caused by chronic high serum uric acid (hyperuricemia), including Type 2 diabetic nephropathy, cardiovascular disease and diabetes.

XORTX holds and controls patents and patent applications that include U.S. and worldwide claims and rights for the development of certain uric acid lowering agents to treat diabetic nephropathy, hypertension, insulin resistance, metabolic syndrome and diabetes. XORTX’s patents and submitted patent applications have been validated by successful, investigator led, phase II clinical trials in peer reviewed publications. Recent, successful, investigator led phase II clinical trials that decreased and managed hyperuricemia in patients with autosomal dominant polycystic kidney disease or chronic kidney injury, showed clinically meaningful benefit. When approved by the FDA and other regulators, this new therapeutic approach for patients with progressive kidney disease may be an option, where no other options are currently available.

Share Consolidation

The Letter of Intent is non-binding with respect to commercial terms, but includes certain typical binding obligations relating to a period of exclusive dealing and confidentiality. Pursuant to the Letter of Intent, prior to the closing of the Proposed Transaction, APAC has agreed to consolidate its issued and outstanding common shares on the basis of four (4) shares for every one (1) new post-consolidated share, with fractional shares being reduced to the nearest lower whole number (the “Consolidation”). APAC’s post-Consolidation common shares are referred to hereafter as the “APAC Shares”. Following the Consolidation, there will be approximately 5,033,000 APAC Shares issued and outstanding.

Share Exchange

Under the Proposed Transaction, immediately following the Consolidation, APAC will acquire all of the issued and outstanding Class A common shares of XORTX (“XORTX Shares”), in exchange for the issuance of up to 49,383,093 post-consolidated APAC Shares, such that XORTX shareholders will receive 2.311 APAC Shares in exchange for each XORTX Share currently held. The structure of the Proposed Transaction is subject to corporate, securities, and tax advice; however, it is anticipated that all prior issued warrants and stock options of XORTX will either be converted or exercised in accordance with their terms, or cancelled on terms acceptable to APAC. It is anticipated that following the share exchange (and the proposed private placement mentioned below), approximately 7.8% of the then total issued APAC Shares will be held by the existing shareholders of APAC, 78.6% will be held by the current shareholders of XORTX, and 13.6% will be held by new subscribers under the private placement.

The Proposed Transaction is subject to, among other things, (i) the execution of a definitive agreement between APAC and XORTX, (ii) the satisfactory completion of the parties’ due diligence investigations, (iii) the completion of a $2.0 million private placement by XORTX, (iv) the receipt of all required board, shareholder, court and regulatory approvals, and (v) other conditions precedent and customary for the Proposed Transaction. When completed, the Proposed Transaction will constitute a “reverse takeover” under the applicable policies of the CSE (the “Exchange”). The Proposed Transaction is an arm’s length transaction and the Parties have agreed to negotiate in good faith on the terms and conditions of the definitive agreement and related documentation on or before June 30, 2017, or such other later mutually acceptable date.

Resulting Issuer

Trading in the common shares of APAC may remain halted, until the execution of the definitive agreement. There can be no assurance that trading in the APAC Shares will resume prior to the completion of the Proposed Transaction. Further details concerning the Proposed Transaction and XORTX (including financial information) will be set out in a further disclosure filings, if and when a definitive agreement is reached between the parties, in accordance with the policies of the Exchange.

Upon completion of the Proposed Transaction, it is anticipated that the name of APAC will be changed to “XORTX Pharma Ltd.” (or such other name as may be acceptable to APAC, XORTX and regulatory authorities), and the resulting issuer will carry on the business of XORTX (the “Resulting Issuer”). The Parties anticipate that the Resulting Issuer will continue to be listed on the Exchange as a Life Sciences Issuer following the completion of the Proposed Transaction.

Proposed New Board of Directors and Senior Management

It is anticipated that the board of directors of the Resulting Issuer will consist of Dr. Allen Davidoff, Dr. Alan Moore, and Mr. Bruce Rowlands. It is anticipated that the current executive officers of XORTX, including Dr. Allen Davidoff (the President and Chief Executive Officer of XORTX), together with Mr. John Meekison (Interim Chief Financial Officer), will become the executive officers of the Resulting Issuer.

Dr. Allen Davidoff – Proposed Director, President and Chief Executive Officer: Dr. Davidoff has over 14 years of experience in leadership positions of various public and private research and pharmaceutical companies, including a term as Chief Scientific Officer of Stem Cell Therapeutics (Trillium Therapeutics: NASDAQ). His experience includes over 10 years of drug development experience with broad clinical and regulatory leadership experience. Senior management experience in pharmaceutical R&D includes two investigational new drug (“IND”) applications or supplemental IND’s, two Phase I studies (four multi-country), seven Phase II studies, and one NDA. Dr. Davidoff has previously served as Director of Neurogenesis (predecessor of Stem Cell Therapeutics Corp.), and is currently a Director of My Path Metabolix Inc.

Dr. Alan Moore – Proposed Director: Dr. Moore has 23 years of senior management experience in pharmaceutical R&D with Procter and Gamble. Dr. Moore served as Chief Clinical and Regulatory Officer with Cardiome, as President and CEO of Stem Cell Therapeutics Corp. and CEO of Beta Stem Therapeutics and ChiRegen Therapeutics. During his career, he has completed 11 INDs or supplemental IND’s, 15 Phase I studies, 12 Phase II studies, seven Phase III studies and two new drug applications.

Mr. Bruce Rowlands – Proposed Director: Mr. Rowlands is the current Chairman and Chief Executive Officer of Eurocontrol Technics Group Inc. Prior to forming Eurocontrol, Mr. Rowlands worked in the biotechnology and investment banking industries as Senior Vice President with Lorus Therapeutics and Vice President and Director of Dominick and Dominick Securities Canada, a Canadian investment banking firm.

Robert Coltura
Chief Executive Officer
(604) 683-8610

XORTX Pharma Corp.
Allen Davidoff
President & Chief Executive Officer
(403) 607-2621