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Pediapharm Announces C$2,000,000 Bought Deal Private Placement And Change In Financial Year-End


1/31/2014 9:49:30 AM

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Pediapharm Inc. (the "Corporation") (TSX VENTURE:PDP) has today entered into an agreement with Laurentian Bank Securities Inc. (the "Underwriter"), pursuant to which the Underwriter has agreed to purchase, on a bought deal private placement basis, 5,555,556 common shares of the Corporation (the "Common Shares") at an issue price of C$0.36 per Common Share (the "Issue Price") for gross proceeds to the Corporation of approximately C$2,000,000 (the "Offering").

The net proceeds of the Offering will be used to expand product portfolio and for general working capital purposes.

The Underwriter will be paid an aggregate commission of 6.5% of the gross proceeds from the sale of the Common Shares. The Corporation will also grant to the Underwriter compensation options (the "Compensation Options") in an amount equal to 3% of the total number of Common Shares issued in connection with the Offering. Each Compensation Option may be exercised to acquire one Common Share at the Issue Price, during a period of twenty-four (24) months following the closing of the Offering.

The Offering is expected to close on or about February 19, 2014 (the "Closing Date") and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSX Venture Exchange. All shares issued pursuant to the Offering are subject to a statutory hold period of four months and one day from the Closing Date as prescribed by the TSX Venture Exchange and applicable securities laws and will be admissible under the Quebec Stock Saving Plan II.

Concurrently with this announcement, the Board of Directors of the Corporation has decided, following the amalgamation with Chelsea Acquisition Corporation completed on December 10, 2013, to change the Corporation's financial year-end from December 31 to March 31. Pursuant to section 4.8 of National Instrument 51-102 - Continuous Disclosure Obligations, the Corporation has filed on SEDAR a Notice of Change in Year End providing information about the length and filing dates of its annual audited financial statements and interim financial statements for both its transition year and subsequent financial years.

This news release is intended for distribution in Canada only and is not intended for distribution to the United States newswire services or dissemination in the United States. The securities being offered have not, nor will they be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

About Pediapharm Inc.

Pediapharm is the only Canadian specialty pharmaceutical company dedicated to serving the needs of the pediatric community. Its mission is to bring to the Canadian market the latest innovative pediatric products with the objective to improve the health and the well-being of children in Canada. Since its debut in 2008, Pediapharm has entered into numerous commercial agreements with partners from Canada and other countries around the world. The company's innovative product portfolio includes NYDA®; a breakthrough treatment for head lice; EpiCeram® a non-steroid emulsion for eczema; KoolEffect™ which reduces the symptoms of fever; and VapoLyptus™; a soothing vapour patch of Eucalyptus and Camphor.

Neither 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.

FORWARD LOOKING STATEMENTS

This news release contains forward-looking statements and other statements that are not historical facts including statements about the intended use of proceeds from the bought deal private placement. Such forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that could cause actual results to vary materially from target results and the results or events predicted in these forward-looking statements. As a result, investors are cautioned not to place undue reliance on these forward-looking statements.

The forward-looking statements contained in this news release are made as of the date of this release. Except as required by applicable law, the Corporation disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking information reflects the current expectations or belief of the Corporation based on information currently available and such information is subject to a number of assumptions, risks and uncertainties, including risks related to the ability of the Corporation to implement its growth strategy, to acquire license rights to new products, to have access to additional financing and capital, to obtain regulatory approvals, to obtain new product reimbursement, to protect and maintain its intellectual property and licensing arrangements, to hire and retain key personnel, product liability claims, insurance and recalls, unexpected product safety or efficacy concerns, new legislation or regulatory requirements, reliance on third parties for supply and manufacture of products, quarterly fluctuations in sales, product pricing regulation on certain patented drug product, concentration of credit risks and other risks associated with being a specialty pharmaceutical company.

Contact:
Sylvain Chretien
President and Chief Executive Officer
Pediapharm Inc.
514-762-2026 ext., 201
sylvain.chretien@pedia-pharm.com

Roland Boivin
Chief Financial Officer
Pediapharm Inc.
514-762-2026 ext., 202
roland.boivin@pedia-pharm.com

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