Aumento Capital IV Corporation
TSX VENTURE : ACV.P

November 28, 2014 16:54 ET

Aumento Capital IV Corporation Announces Proposed Qualifying Transaction With Life Choices Natural Food Corp.

TORONTO, ONTARIO--(Marketwired - Nov. 28, 2014) -

NOT FOR DISSEMINATION IN THE U.S. OR THROUGH U.S. NEWSWIRES

Aumento Capital IV Corporation ("Aumento" or the "Company") (TSX VENTURE:ACV.P), a capital pool company, is pleased to announce that it has entered into a non-binding letter of intent (the "LOI") dated November 25, 2014 with Life Choices Natural Food Corp. ("Life Choices") which outlines the general terms and conditions of a proposed transaction (the "Proposed Transaction") that will result in Aumento acquiring all of the issued and outstanding shares of Life Choices (the "Life Choices Shares") in exchange for shares of Aumento (each, an "Aumento Share"). The Proposed Transaction is currently expected to be completed by way of a three cornered amalgamation (the "Amalgamation") between Aumento and Life Choices or other similar transaction which will result in Life Choices becoming a wholly-owned subsidiary of Aumento.

The LOI is to be superseded by a definitive agreement (the "Definitive Agreement") between Aumento and Life Choices with such agreement to include representations, warranties, conditions and covenants typical for a transaction of this nature. The Proposed Transaction is subject to, among other things, receipt of the requisite shareholder approval of Life Choices, final approval of the TSX Venture Exchange (the "Exchange") and standard closing conditions, including the conditions described below. The parties have agreed that during the period from signing the LOI through to execution of the Definitive Agreement, each of Aumento and Life Choices will continue their respective operations in the ordinary course and will not solicit or accept alternative offers (subject to fiduciary duties). Subject to satisfactory completion of due diligence, the parties expect to execute the Definitive Agreement on or about January 30, 2015 (or such other date as may be mutually agreed in writing between Aumento and Life Choices) and have agreed to use their best efforts to complete the Proposed Transaction by March 31, 2015 (or such other date as may be mutually agreed in writing between Aumento and Life Choices).

The Proposed Transaction will constitute the Company's qualifying transaction (the "Qualifying Transaction") pursuant to Policy 2.4 - Capital Pool Companies (the "Policy") of the Exchange.

The Proposed Transaction is not a Non Arm's Length Qualifying Transaction pursuant to Section 2.1 of the Policy and, as such, the Company is not required to obtain shareholder approval for the Proposed Transaction. However, the Company intends to hold a special meeting of shareholders to approve certain matters ancillary to the Proposed Transaction, including a name change, change in the board of directors and a consolidation of the Aumento Shares on a 2 for 1 basis (the "Consolidation"), effective upon closing of the Proposed Transaction ("Closing"). The Company currently intends to call the special meeting as soon as practicable and to be held prior to January 31 2015.

Upon completion of the Proposed Transaction, Aumento will continue on with the business of Life Choices with Life Choices as its wholly‐owned, operating subsidiary (the Company after the Proposed Transaction being referred to herein as the "Resulting Issuer").

The Proposed Transaction

It is currently anticipated that the Proposed Transaction will be effected by way of the Amalgamation whereby Aumento will acquire all of the issued and outstanding Life Choices Shares such that, in accordance with the Amalgamation, each shareholder of Life Choices (including those becoming shareholders as a result of the Life Choices Financing, as defined below) (each, a "Life Choices Shareholder") will receive Aumento Shares (on a post-Consolidation basis) issued at a deemed issue price of $1.36 (the "Issue Price") in exchange for the Life Choices Shares held by such holder. The board of directors of each of the companies have agreed to relative pre-money valuations of each of Aumento and Life Choices of $1,094,324 and $20,000,000, respectively. The number of Aumento Shares (on a post-Consolidation basis) to be issued by Aumento to acquire Life Choices will be equal to the aggregate of $20 million plus the amount of the Life Choices Financing (as defined herein) divided by the Issue Price.

It is currently anticipated that all of the current officers and all but one of the current directors of Aumento will resign from their respective positions with Aumento. It is currently anticipated that the insiders of the Resulting Issuer will include each of Matthew von Teichman, Aaron Skelton and James M. Brown, who are expected to become directors and/or senior officers of the Resulting Issuer. Additional insiders of the Resulting Issuer will include directors and officers of each of Life Choices and its subsidiaries.

As a result of the Amalgamation, Life Choices will become a wholly-owned subsidiary of Aumento and Aumento will continue on with the business of Life Choices. Upon Closing, the name of the Resulting Issuer will be changed to "GreenSpace Brands Inc." or such other name as may be acceptable to Life Choices and the Exchange.

All Aumento Shares issued pursuant to the Proposed Transaction, except those certain Aumento Shares issued to U.S. persons who are affiliates (as defined in Rule 144(a)(1) under the United States Securities Act of 1933, as amended (the "U.S. Securities Act")) of Life Choices at the time the Proposed Transaction is submitted for vote or consent by the shareholders of Life Choices, will be freely tradable under applicable securities legislation but may be subject to an Exchange imposed restriction on resale.

Certain of the Aumento Shares to be issued to the Life Choices Shareholders pursuant to the Proposed Transaction, including up to 100% of the securities to be issued to "Principals" (as defined under applicable laws), may also be subject to escrow provisions imposed pursuant to the policies of the Exchange.

None of the securities to be issued pursuant to the Amalgamation have been or will be registered under the U.S. Securities Act, or any state securities laws, and any securities issued pursuant to the Amalgamation are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

Proposed Private Placement

Life Choices expects to complete a private placement (the "Life Choices Financing") of a minimum of $3,000,000, the terms and conditions of which are to be determined in the context of the market. The net proceeds from the Life Choices Financing will be used for general corporate purposes and to provide working capital to the Resulting Issuer. Further details with respect to the Life Choices Financing, including the amount and the involvement of an agent or broker, will be provided by way of a subsequent news release prior to any resumption of trading.

Conditions to Proposed Transaction

Prior to completion of the Proposed Transaction (and as conditions of closing), among other things:

  • Life Choices shall complete the Life Choices Financing;
  • Aumento shall, with appropriate shareholder approval, complete the Consolidation;
  • Aumento shall, with appropriate shareholder approval, change its name to "GreenSpace Brands Inc.", a name substantially similar to such name or another name as agreed to by Life Choices and Aumento, each acting reasonably;
  • completion of satisfactory due diligence investigations by each of Life Choices and Aumento;
  • approval of the Proposed Transaction by the board of directors of each of Life Choices and Aumento;
  • Life Choices shall obtain shareholder approval of the Proposed Transaction;
  • receipt of all required consents, waiver and approvals from the Exchange, any securities regulatory authority and any other third party having jurisdiction, including approval from the Exchange for the Proposed Transaction as its Qualifying Transaction and the listing of the Resulting Issuer Shares on the Exchange; and
  • Aumento having in place an incentive stock option plan.

Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies. The parties will be seeking a waiver of any requirement for a Sponsor, but in the event a waiver is not available, will seek a sponsorship relationship for this transaction with an Exchange member firm, and will update the markets accordingly.

About Life Choices

Life Choices was incorporated under the laws of the Province of Ontario on May 31, 1999. Matthew von Teichman of Toronto, Ontario, and/or entities related to him, is currently the largest shareholder of Life Choices and, together with any entities related to him, is currently expected to be the only shareholder holding more than 10% of the outstanding common shares of the Resulting Issuer. Life Choices offers premium convenience meat products to Canadian consumers, featuring grass fed and/or pasture raised meat that is raised without the use of added hormones and antibiotics. Life Choices' products include hot dogs, burgers, sausages, breaded chicken, breaded fish, pizzas and more and are currently available for purchase in British Columbia, Manitoba, Ontario, Quebec, New Brunswick, Newfoundland, Nova Scotia and Prince Edward Island. All Life Choices beef, chicken and pork products feature meat from pasture raised animals that have not been subject to feedlot conditions. Life Choices also owns Rolling Meadow Dairy, a newly launched grass fed milk business, Yamba Yogurts, a newly launched Australian style Yogurt business and Holistic Choice, a newly launched natural pet food business. All the brands are wholly owned by Life Choices and are selling in a variety of natural and mass food retail locations across Canada.

Life Choices is considered a development stage company and has had total revenues from operations of $2,168,444 and $2,023,849 for the years ended March 31, 2014 and 2013, respectively. Life Choices had net losses for the year ended March 31, 2013 of $116,361. As of March 31, 2014, Life Choices had total assets of $2,573,484 and total liabilities of $888,891. All of the foregoing figures are unaudited and remain subject to further adjustments.

Proposed Management of the Resulting Issuer

Subject to Exchange approval, on completion of the Proposed Transaction, it is currently anticipated that the board of directors of the Resulting Issuer will consist of five directors. Information with respect to two of those directors, one of whom will also be member of the management team of the Resulting Issuer, and one other member of the management team is set forth below:

Matthew von Teichman - President, Chief Executive Officer and Director

Matthew von Teichman is the President, Chief Executive Officer, Director and founder of Life Choices. In 2008, before founding Life Choices, Mr. von Teichman started Grandview Farms, a certified organic property that strives to produce the highest quality meats in the country. Grandview Farms sells directly to individuals and to restaurants across Ontario. In 2011, Mr. von Teichman started the ethical online grocery store www.donatenaturally.com, which delivers organic and natural products to one's door, then donates a portion of the profits to the charity of the customer's choice. In 1997, Mr. von Teichman co-founded and was president of JobShark Corporation ("Jobshark"), which grew to become one of the largest online recruitment organizations in North America, boasting 100 employees in nine countries. Mr. von Teichman sold JobShark in 2002 and remained on the board of directors of JobShark until 2003. Mr. von Teichman holds a Bachelor of Arts degree from the University of Western Ontario (now Western University).

Aaron Skelton - VP - Brands and Business Development

Aaron Skelton is the VP - Brands and Business Development of Life Choices. Prior to joining Life Choices, Mr. Skelton spent approximately 10 years (from June 2004 to January 2014) with Loblaw Companies Limited ("Loblaws"). During his tenure at Loblaws, Mr. Skelton operated in a variety of increasingly senior roles focusing on natural value, health food, natural value non-food and other related food categories within Loblaws. Mr. Skelton is a graduate of University of Guelph (BSc Hon, Nutrition and Nutraceutical Sciences).

James M. Brown -Director

James M. Brown is a Managing Partner of a specialty finance company called Difference Capital Funding Inc. that advises and provides capital for growth companies. Mr. Brown is also a director of BC Hydro. He has spent over 15 years in corporate finance with significant transactional experience in both the Canadian and US capital markets. Mr. Brown is based in Boston and was the former President of Canaccord Genuity Inc., a leading independent investment bank. As head of the firm's US operations, he led the company to significant growth and oversaw 250 employees.

Mr. Brown is a graduate with distinction of McGill University (B.A.), is a Chartered Business Valuator (a member of the Canadian Institute of Chartered Business Valuators), has served on the National Advisory Committee for the Toronto Stock Exchange Group and is a member of the Young President's Organization.

As described above, Mr. von Teichman and Mr. Skelton are currently expected to be members of the management team of the Resulting Issuer. Further details with respect to the remaining members of the management team and additional members of the board of directors of the Resulting Issuer will be provided by way of a subsequent news release prior to Closing.

All information contained in this news release with respect to Aumento and Life Choices was supplied by the parties, respectively, for inclusion herein, and Aumento and its directors and officers have relied on Life Choices for any information concerning such party.

Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Qualifying Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, 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.

The Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this press release.

This news release contains forward-looking statements relating to the timing and completion of the Proposed Transaction, the future operations of the Company and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "will", "may", "should", "anticipate", "expects" and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding the Proposed Transaction and the future plans and objectives of the Company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations include the failure to satisfy the conditions to completion of the Proposed Transaction set forth above and other risks detailed from time to time in the filings made by the Company with securities regulations.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. As a result, the Company cannot guarantee that the Proposed Transaction will be completed on the terms and within the time disclosed herein or at all. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and the Company will update or revise publicly any of the included forward-looking statements as expressly required by Canadian securities law.

Contact Information

  • Aumento Capital IV Corporation
    David Danziger
    Chief Executive Officer, Chief Financial Officer, Secretary
    and Director
    (416) 641-4940
    david.danziger@mnp.ca