Atlantis Systems Corp.
TSX VENTURE : AIQ.H

Atlantis Systems Corp.
Bluedrop Performance Learning Inc.
TSX VENTURE : BPL

Bluedrop Performance Learning Inc.

November 11, 2013 08:15 ET

Bluedrop Performance Learning Inc. to Acquire Atlantis Systems Corp.

ST. JOHN'S, NEWFOUNDLAND and HALIFAX, NOVA SCOTIA--(Marketwired - Nov. 11, 2013) - Bluedrop Performance Learning Inc. ("Bluedrop") (TSX VENTURE:BPL) and Atlantis Systems Corp. ("Atlantis") (NEX:AIQ.H) jointly announce that they have entered into a definitive arrangement agreement (the "Arrangement Agreement") pursuant to which Bluedrop will indirectly acquire all of the issued and outstanding common shares of Atlantis (each, an "Atlantis Share") for CDN$1.0 million in cash by way of plan of arrangement under the Canada Business Corporations Act (the "Arrangement").

The exact per-share consideration to be paid to Atlantis shareholders will be based on the total number of Atlantis Shares issued and outstanding immediately prior to the consummation of the Arrangement. Based on an anticipated effective date for the closing of the Arrangement (the "Effective Date") of December 31, 2013, there is expected to be 36,241,578 Atlantis Shares issued and outstanding as of that date (following the issuance of 26,007,895 Atlantis Shares to ComVest Capital LLC ("ComVest") upon the conversion of a convertible note issued to ComVest in October 31, 2011 (in the aggregate amount of USD$7,646,107 in principal and interest as of October 31, 2013) (the "CV Convertible Note") at a conversion rate of USD$0.30 per Atlantis Share) and the per-share consideration to be paid to Atlantis shareholders would therefore be approximately CDN$0.02760 per Atlantis Share. The per-share consideration will be moderately reduced if the Effective Date occurs after December 31, 2013 as the number of Atlantis Shares issuable to satisfy the principal and accrued interest under the CV Convertible Note will be higher.

ComVest, Atlantis' controlling shareholder which holds 66.1% of the issued and outstanding Atlantis Shares, has entered into a lock-up agreement with Bluedrop pursuant to which ComVest has, among other things and subject to certain conditions, agreed to irrevocably vote its Atlantis Shares in favour of the Arrangement. ComVest has also agreed to reorganize the terms of its existing debt with Atlantis on terms acceptable to Bluedrop, including the conversion of the CV Convertible Note and the amendment of an existing term note in the amount of USD$6,675,365 as of October 31, 2013 (the "CV Term Note"). The total indebtedness under the CV Term Note will be reduced to CDN$3,000,000 and will be evidenced by three secured notes, which will be convertible in certain circumstances into common shares of Bluedrop ("Bluedrop Shares").

The Arrangement is expected to close in late December 2013, subject to the fulfillment of a number of customary conditions precedent, including the approval of the Supreme Court of Nova Scotia and the absence of any material adverse effect with respect to Atlantis. The Arrangement will also be subject to approval by: (i) at least two-thirds of the Atlantis Shares represented in person or by proxy at a special meeting of Atlantis shareholders (the "Special Meeting") to be called to consider the Arrangement, and (ii) at least a majority of Atlantis Shares represented in person or by proxy at the Special Meeting, other than Atlantis Shares held by ComVest or the Garvy Trust, a private trust that has an interest in the CV Convertible Note. A management proxy circular will be mailed to Atlantis shareholders in late November in connection with the Special Meeting. The Special Meeting is expected to be held in mid-December 2013.

A copy of the Arrangement Agreement will be available on SEDAR at www.sedar.com.

Atlantis' Board of Directors, after consultation with its financial and legal advisors, and based on the recommendation of a special committee of the Atlantis' Board of Directors (the "Special Committee"), has unanimously determined that the Arrangement is fair to Atlantis' shareholders, other than ComVest and the Garvy Trust, and will recommend that Atlantis' shareholders (other than ComVest and the Garvy Trust) vote in favour of the Arrangement. PricewaterhouseCoopers LLP, acting as financial advisor to the Special Committee, has provided an opinion that, based upon and subject to the assumptions, limitations, and qualifications in such opinion, the Arrangement is fair, from a financial point of view, to Atlantis' shareholders, other than ComVest and the Garvy Trust.

Emad Rizkalla, Bluedrop's founder and CEO, commented: "This is a transformational transaction for Bluedrop and our shareholders. Adding Atlantis' strong history in simulation and dedicated employees, and integrating Atlantis' customers and operations into Bluedrop, will create a new force in the Canadian training and simulation marketplace."

"This strategic union will enhance the companies' competitive positioning in an evolving market, creating new growth", said Ken Howard, CEO of Atlantis. "Atlantis brings over 35 years of legacy training solutions and strong customer relationships and together with Bluedrop we are excited about bringing our combined capability to market."

Bluedrop has received committed financing of CDN$3,000,000 from Difference Capital Financial Inc. ("Difference") in connection with the completion of the Arrangement. Under the terms of the financing commitment, Bluedrop will issue, immediately prior to the Effective Date of the Arrangement, unsecured debentures to Difference, which will be convertible into Bluedrop Shares at a conversion rate of CDN$0.15 per Bluedrop Share. The debentures will have a term of three years and will bear interest at the rate of 14% per annum.

Forward-Looking Information

Certain information contained in this news release, including any information relating to the Arrangement and Bluedrop's and Atlantis' future financial or operating performance may be deemed "forward-looking". These statements relate to future events or future performance and reflect Bluedrop's and Atlantis' expectations regarding the Arrangement, and the future growth, results of operations, business prospects and opportunities of the combined enterprise. These forward-looking statements also reflect the parties' current internal projections, expectations or beliefs and are based on information currently available to Atlantis and Bluedrop. In some cases forward-looking information can be identified by terminology such as "may", "will", "should", "expect", "intend", "plan", "anticipate", "believe", "estimate", "projects", "potential", "scheduled", "forecast", "budget" or the negative of those terms or other comparable terminology. Assumptions upon which such forward looking information regarding completion of the Arrangement is based include that Atlantis will be able to satisfy the conditions to the Arrangement, that the required approvals will be obtained from the shareholders of Atlantis, that all court, third party and other approvals to the Arrangement will be obtained and all other conditions to completion of the Arrangement will be satisfied or waived. Although Atlantis and Bluedrop believe that the expectations reflected in such forward-looking statements are reasonable, they can give no assurance that such expectations will prove to have been correct. Atlantis and Bluedrop caution that actual performance will be affected by a number of factors, many of which are beyond their control, and that future events and results may vary substantially from what they currently foresee. Accordingly, readers are cautioned against placing undue reliance on forward-looking information. Atlantis and Bluedrop expressly disclaim any intention or obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise, except in accordance with applicable securities laws. Discussion of the various factors that may affect future results are contained in Bluedrop's condensed interim financial statements for the nine months ended June 30, 2013 and the management's discussion and analysis thereon, which are available at www.SEDAR.com and Atlantis' audited financial statements for the year ended December 31, 2012 and the management discussion and analysis thereon dated April 25, 2013, which are available at www.SEDAR.com. Atlantis' and Bluedrop's forward-looking statements are expressly qualified in their entirety by this cautionary statement.

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

About Bluedrop

Bluedrop Performance Learning Inc. (TSX VENTURE:BPL) is an innovator in workplace training for individuals, corporations, defence and aerospace, and governmental clients. Launched in 2004, the company has six offices and over 120 employees. Bluedrop is transforming the workplace globally by designing, developing and delivering some of the most effective and scalable skills development programs. Bluedrop was recently recognized as one of the Top 3 eLearning companies in Canada by Backbone Magazine in their "Best of Everything in Canadian Tech" issue. For more information, visit www.bluedrop.com.

About Atlantis

Atlantis Systems Corp. (NEX:AIQ.H) uses its core capabilities in simulation-aided design and engineering and eLearning, combined with various technology tools, to help customers in military and commercial markets to ensure the feasibility, capability, and effective utilization of their complex assets. In more than 30 years of operation, Atlantis has developed a solid reputation for its creative workforce and innovative solutions in supporting global OEM customers and defence organizations. To learn more, please visit the company's web site at www.atlantissc.com.

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