Two Vancouver companies are embroiled in a dispute with one alleging the other reneged on an agreement to amalgamate.
The breach alleged in the suit outlines a situation that if true would provide a lesson to abide by merger agreements or risk court action.
Newmac Resources Inc. (TSX-Venture:NER) is suing SignalChem Lifesciences Corp. for "not less than US$32.7 million" in a lawsuit filed Dec. 8 in BC Supreme Court.
Newmac claims that it helped SignalChem find needed investors in advance of what it thought was an agreed upon amalgamation.
SignalChem, Newmac alleges, then terminated the amalgamation agreement and sold one of its subsidiary companies to Sino Biological Inc. for US$48 million.
“But for the efforts of Newmac and its representatives to secure the financing contemplated by the amalgamation agreement, SignalChem would not have been able to secure Sino Biological’s offer,” Newmac said in its notice of civil claim.
Newmac is a junior exploration company that owns an interest in a mining property near Kamloops. Its intent was to amalgamate with SignalChem and become a drug research and development company.
“Had the amalgamation agreement proceeded, Newmac would, effectively,have become a publicly traded drug research and development company,”it said in its lawsuit“The reverse takeover contemplated by the amalgamation agreement was a unique opportunity for Newmac in the sense that it was not readily replaceable. Newmac cannot readily amalgamate with another drug research and development company.”
The suit outlines how a letter of intent was signed in May 2021, and a definitive agreement was signed in February 2022. SignalChem then allegedly terminated the agreement "without prior notice" in December 2022.
SignalChem has yet to file a response to the notice of civil claim.
None of Newmac’s allegations has been proven in court.