On March 22, 2021 iCo Therapeutics Inc. (TSXV: ICO) (OTCQB: ICOTF) ("iCo") and Satellos Bioscience Inc. ("Satellos"), a private Canadian corporation, reported to announce the execution of a definitive agreement, dated March 21, 2021 (the "Arrangement Agreement"), providing for the business combination of iCo and Satellos by way of a plan of arrangement (the "Arrangement") in accordance with Section 192 of the Canada Business Corporations Act (the "CBCA") (Press release, iCo Therapeutics, MAR 22, 2021, View Source [SID1234576951]). Pursuant to the Arrangement, Satellos will become a wholly-owned subsidiary of iCo, and the parties expect to complete an amalgamation of iCo and Satellos, with the resulting entity named "Satellos Bioscience Inc." (the "Resulting Issuer"), operating in the life sciences industry. Following the Arrangement, and the Concurrent Financing (described below) shareholders of iCo will hold an approximately 27.7% ownership interest, and the shareholders of Satellos will hold approximately 58.8.% of the outstanding common shares of the Resulting Issuer (the "Resulting Issuer Common Shares"). Prior to completion of the Arrangement, iCo, which is formed under the Business Corporations Act (British Columbia) is expected to continue under the CBCA and the Resulting Issuer will exist as a CBCA corporation. The completion of the Arrangement will result in a reverse takeover of iCo as defined in the policies of the TSX Venture Exchange (the "Exchange"). Completion of the Arrangement is subject to, among other things, the approval of the Exchange and approval from iCo and Satellos’ shareholders.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Recommendation of the Board of Directors and Support Agreements

The board of directors of each of iCo and Satellos have: (a) determined that the Arrangement is in the best interests of iCo and Satellos, respectively; (b) recommended that its respective shareholders vote in favour of the resolutions approving the Arrangement; and (c) authorized the execution of the Arrangement Agreement and the performance of iCo’s and Satellos’ respective obligations under the Arrangement Agreement.

The directors and officers of iCo and Satellos, and certain other shareholders of iCo and Satellos representing an aggregate of 1,692,756 (0.9%) iCo common shares ("iCo Shares") and 8,138,400 (66.7%) Satellos common shares ("Satellos Shares"), respectively, in each case on a non-diluted basis, entered into voting support agreements pursuant to which they agreed to vote their eligible securities in favour of the Arrangement.

Bloom Burton & Co. Inc. ("Bloom Burton") is acting as exclusive financial advisor to iCo on the Arrangement. Bloom Burton, through Bloom Burton Development Corp., owns approximately 31.4% of the outstanding Satellos Shares on a fully diluted basis and certain Bloom Burton employees are directors of Satellos. For the purposes of considering and approving the Arrangement, such Bloom Burton directors have declared their conflict and recused themselves from the activities of the Satellos board in accordance with the requirements of the CBCA.

In coming to its recommendation with respect to the Arrangement, the board of directors of iCo reviewed and considered a fairness opinion from Evans & Evans, Inc., financial advisors to the board of directors of iCo in connection with the Arrangement, which report provides that, as of the date of such opinion, and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by the iCo shareholders pursuant to the Arrangement is fair from a financial point of view.

In addition, in coming to its recommendation with respect to the Arrangement, the board of directors of Satellos also reviewed and considered a fairness opinion from Leede Jones Gable, financial advisors to the board of directors of Satellos in connection with the Arrangement, which report provides that, as of the date of such opinion, and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by the Satellos shareholders pursuant to the Arrangement is fair from a financial point of view.