Bling Capital Corp.
TSX VENTURE : BLI.P

November 02, 2007 17:22 ET

Bling Capital Corp. Announces Letter of Intent to Acquire All the Outstanding Securities of ON4 Communications Inc.

CALGARY, ALBERTA--(Marketwire - Nov. 2, 2007) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.

Bling Capital Corp. (TSX:VENTURE:BLI.P) (the "Corporation") is pleased to announce that it has entered into a letter of intent with ON4 Communications Inc., a company incorporated pursuant to the laws of Arizona ("ON4 US") and ON4 Communications, Inc., a company incorporated pursuant to the federal laws of Canada ("ON4 Canada") (collectively, the "Target") dated October 24, 2007 (the "Letter of Intent"), whereby the Corporation has agreed to acquire all of the issued and outstanding securities of the Target (the "Proposed Acquisition"), such that ON4 US and ON4 Canada will become directly or indirectly, wholly owned subsidiaries upon completion of the Proposed Acquisition.

ON4 US is a private wireless communications company that offers a suite of complementary services to telecoms, consumers and the enterprise segments. ON4 US has developed a voice enabled, waterproof, assisted Global Positioning System wireless device specifically optimized for use on pets but with applications in numerous other markets. The only significant asset of ON4 Canada is its approximately 59% ownership of the issued and outstanding shares of ON4 US. The Corporation is a capital pool company and intends for the Proposed Acquisition to constitute the "Qualifying Transaction" of the Corporation as such term is defined in the policies of the TSX Venture Exchange (the "Exchange"). The Proposed Acquisition was negotiated at arm's length.

The Proposed Acquisition

Terms of the Proposed Acquisition

Pursuant to the terms of the Letter of Intent, and subject to the fulfillment of certain conditions, the Corporation intends to acquire all of the common shares and preferred shares of ON4 US and all of the common shares of ON4 Canada, (collectively, the "Target Shares") and all options to purchase common shares of ON4 US (the "Options"), which are outstanding as at the date of the closing of the Proposed Acquisition. It is expected that the Proposed Acquisition will occur by way of business combination and will be subject to regulatory approval.

As of the date of the Proposed Acquisition it is anticipated that the Target Shares will consist of 22,000,000 common shares of ON4 US, 2,000,000 preferred shares of ON4 US, and 10,100,000 common shares of ON4 Canada and the Options will consist of stock options to acquire up to 2,445,000 common shares of ON4 US, subject to adjustment. As of the date hereof, Cameron Robb and Gordon Jessop, the principal shareholders of Target, hold collectively 9,238,000 Target Shares and NIL Target Options.

Under the terms of the Letter of Intent, the holders of Target Shares ("Target Shareholders") shall receive, as consideration for the Proposed Acquisition, an aggregate of 24,000,000 common shares of Bling (each a "Bling Share"), at a deemed price of $0.30 per Bling Share for a total deemed consideration of approximately $7,200,000, or such lower price as may comply with the policies of, and be accepted by, the Exchange. The Options will be exchanged for options of Bling on such terms and conditions, including exercise price, the basis acceptable to the parties and the Exchange.

The Corporation currently has 2,750,000 Bling Shares, 275,000 options and agent's warrants to acquire up to 100,000 Bling Shares ("Agent's Warrants") issued and outstanding. Upon completion of the Proposed Acquisition and the Private Placement discussed below, it is expected that the Corporation will have approximately 29,750,000 Bling Shares, up to 2,720,000 Bling Options and 100,000 Agent's Warrants issued and outstanding. The Bling Shares to be issued pursuant to the Proposed Acquisition will be subject to the escrow requirements of the Exchange, if applicable.

Upon completion of the Proposed Acquisition, the Corporation will carry on the business of the Target as currently constituted and it is expected that the Corporation will be classified as a Tier 2 Technology issuer under the policies of the Exchange.

The Private Placement

In conjunction with the Proposed Acquisition, the Corporation intends to complete a private placement of up to 3,000,000 Bling Shares at a price of $0.30 per Bling Share for aggregate proceeds of $900,000. In addition, ON4 US intends to complete a private placement of a minimum of US$1,000,000 by the issuance of ON4 common shares at a price of US$1.00 per share.

ON4 US and ON4 Canada

The business of the Target was initiated in June 2002 and the current head office is located in Scottsdale, Arizona. ON4 originated as a founder-backed wireless communications company focused on next generation location based products and services. ON4 US has developed a voice enabled, waterproof, assisted Global Positioning System ("GPS") wireless device specifically optimized for use on pets. It's multimedia content development and aggregation system will seamlessly deliver voice, video and data over most standards of both wired and wireless networks worldwide.

PetsCell, one of the products of the Target, is a 2 way voice/2 way speaker enabled, water proof, GPS cell phone optimized for animals. A pet can be located where traditional GPS will often not work, like in homes, garages or under foliage. The wireless tracking solutions offered by ON4 US are innovative and user friendly.

Sponsorship of Qualifying Transaction

Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies. The Corporation is currently reviewing the sponsorship requirements and possible exemptions from sponsorship requirements. However, there is no assurance that the Corporation will obtain this exemption.

Insiders of the Resulting Issuer and Summary Financial Information

Audited and interim financial statements of the Target are currently being prepared in accordance with the requirements of the Exchange and are not available at the time of this press release. However, the Corporation will in due course make available to the Exchange, all financial information as required by the Exchange and will provide, in a press release to be disseminated at a later date, summary financial information derived from such statements. In addition, details on the insiders of the resulting issuer, as required by the Exchange, were not available at the time of this press release. The Corporation will provide in a press release to be disseminated at a later date, the details on the insiders of the resulting issuer.

Description of Significant Conditions to Closing

Completion of the Proposed Acquisition is subject to a number of conditions, including, but not limited to, Exchange acceptance and the closing of the Private Placements of both the Corporation and ON4 US. As the Proposed Acquisition is an arm's length transaction, shareholder approval will not be required. In addition, other necessary conditions to close the Proposed Acquisition include obtaining all other necessary regulatory, and third party approvals and authorizations, the completion of a definitive agreement setting forth the terms and conditions set forth in the Agreement, the concurrent completion of the Private Placement referred to herein and the completion of due diligence. There can be no assurance that the Proposed Acquisition will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Proposed Acquisition, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

In accordance with Exchange policy, the Corporation's shares are currently halted from trading and will remain halted until further notice.

Cautionary Statements

This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the proposal to complete the Proposed Acquisition and associated transactions, including statements regarding the terms and conditions of the Proposed Acquisition and associated transactions. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Proposed Acquisition and associated transactions, that the ultimate terms of the Proposed Acquisition and associated transactions will differ from those that currently are contemplated, and that the Proposed Acquisition and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this news release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Corporation, ON4 Communications, Inc. ON4 Communications, Inc., or their respective financial or operating results or (as applicable), their securities.

The TSX Venture Exchange, Inc. has in no way passed upon the merits of the Proposed Acquisition and associated transactions and has neither approved nor disapproved of the contents of this press release.

Contact Information

  • Bling Capital Corp.
    Stuart Peterson
    President and Director
    (403) 234-0734
    or
    ON4 Communications, Inc. and ON4 Communications Inc.
    Cameron Robb
    Chief Executive Officer
    (480) 284-4260