TORONTO, Dec. 13, 2013 (GLOBE NEWSWIRE) -- Gemoscan Canada, Inc. ("Gemoscan" or the "Corporation") – (TSX-V:GES) (MUN:1GE) wishes to announce that further to its press release dated November 4, 2013 it has entered into a definitive agreement, with the shareholders and certain debt holders (the "Debt Holders") of Physiomed Yorkdale Inc., a multidisciplinary paramedical clinic, located in Toronto, Ontario Canada ("PYI"), to manage and consolidate the operation of the PYI business, for Gemoscan's own account ("Management Contract").
In consideration for the Management Contract and the acquisition of $163,853.44, owed to the Debt Holders, (the "Debt"), the Corporation will satisfy the Debt by way of shares of Gemoscan, priced at $0.09 per share presenting 1,817,594 Class A Common Shares of Gemoscan (the "GCI Shares"). All securities issued pursuant to this acquisition are subject to a hold period ending April 14, 2014.
Under the terms of the Management Agreement, Gemoscan has the right and expects to acquire all of the shares of PYI, on or before May 31, 2015. The purchase price of the shares of PYI will be calculated based on 5 times the audited annualized net cash flow of PYI from the first date of the Management Contract to not later than March 31, 2015. The purchase of PYI's shares are satisfied through a combination of cash, cash and/or Class A Common Shares of Gemoscan, priced upon determination of the purchase price, and a 24 month 7% per annum interest bearing vendor take back mortgage.
"We are very pleased to have concluded this agreement to manage, grow and consolidate the Physiomed Yorkdale business into Gemoscan. As we continue to cultivate our retail health care business for the benefit of our customers, employees and shareholders; Physiomed Yorkdale provides us with good accretive income now, while representing the potential for first-rate incremental and synergistic revenue in the future," said Brian Kalish CEO of Gemoscan.
Scott Wilson, a director of Gemoscan, owns one-third of the shares of PYI through a related company. He is beneficial owner of $57,983.95 of the Debt through his ownership of 50% of one of the Debt Holders. He will therefore have a beneficial interest in 644,266 of the GCI Shares. As a result, the transactions described herein are related party transactions as such term is defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The acquisition of the Debt and the entering into of the management contract by the Corporation is exempt from the valuation and minority shareholder approval requirements of MI 61-101 by reason of the exemptions contained in sections 5.5(a) and 5.7(1)(a) as the total consideration being received by Mr. Wilson does not exceed 25% of Gemoscan's market capitalization. With respect to the acquisition of the shares of PYI, the Corporation will assess its obligations under MI 61-101 once the purchase price has been determined.
About Gemoscan Canada, Inc.
Gemoscan is an industry leader in food intolerance management and maintains a first-to-market position with Canada wide distribution through select retail partners. Founded in 2003, using its proprietary patented technology, Gemoscan develops, owns and markets comprehensive food sensitivity and dietary management solutions for consumers, including the HEMOCODE™ Food Intolerance System and the MenuWise™ Food Intolerance Plan, personalized naturopathically supervised nutritional programs that promote well-being. Gemoscan is the first and only provider to commercialize a food intolerance management solution directly to consumers in partnership with retailers, and today offers the most comprehensive services available.
Gemoscan also owns and operates Physiomed Kennedy Inc., a multidisciplinary paramedical clinic, located in Toronto, Ontario.
Gemoscan Canada, Inc. trades its shares on the Toronto Venture Exchange under the symbol GES and is quoted on the Munich, Frankfurt and Stuttgart Stock Exchanges under the symbol 1GE.
This news release contains certain "forward-looking information". All statements, other than statements of historical fact that address activities, events or developments that Gemoscan believes, expects or anticipates will or may occur in the future. These forward-looking statements reflect the current expectations or beliefs of Gemoscan based on information currently available to Gemoscan. Forward-looking statements are subject to a number of signify cant risks and uncertainties and other factors that may cause the actual results of Gemoscan to differ materially from those discussed in the forward- looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on Gemoscan. Any forward -looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, Gemoscan disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although Gemoscan believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
Neither the 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.