Carlaw Capital IV Inc.
TSX VENTURE : CLW.H

Carlaw Capital IV Inc.

October 22, 2013 19:13 ET

Carlaw Capital IV Inc. Announces Proposed Qualifying Transaction

TORONTO, ONTARIO--(Marketwired - Oct. 22, 2013) -

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

Carlaw Capital IV Inc. ("Carlaw") (TSX VENTURE:CLW.H) is pleased to announce that it has signed a non-binding letter of intent dated October 22, 2013 (the "LOI") with OneRoof Energy, Inc., a Delaware corporation ("OneRoof Energy" or the "Company"), which outlines the general terms and conditions pursuant to which Carlaw and OneRoof Energy are willing to complete a transaction that will result in a reverse take-over of Carlaw by the shareholders of OneRoof Energy and the corporation ("OneRoof Energy Finco") to be incorporated to facilitate the business combination (the "Proposed Transaction"). The LOI was negotiated at arm's length.

The LOI is to be superseded by a definitive agreement (the "Definitive Agreement") between Carlaw, OneRoof Energy and OneRoof Energy Finco to be signed on or before January 21, 2014 (or such other date as may be mutually agreed in writing between Carlaw and OneRoof Energy). The Proposed Transaction is subject to requisite regulatory approval, including the approval of the TSX Venture Exchange (the "TSXV"), and standard closing conditions, including the approval of the directors of each of Carlaw and OneRoof Energy of the Definitive Agreement and completion of due diligence investigations to the satisfaction of each of Carlaw and OneRoof Energy, as well as the conditions described below. The legal structure for the Proposed Transaction will be determined after the parties have considered applicable tax, securities law and accounting efficiencies, as appropriate.

Carlaw is a capital pool company and intends for the Proposed Transaction to be its qualifying transaction for purposes of the policies of the TSXV (the "Qualifying Transaction"). Concurrent with completion of the Qualifying Transaction, Carlaw will apply to list the common shares of the resulting issuer (the "Resulting Issuer") on the TSXV.

Since the Proposed Transaction is not a Non-Arm's Length Qualifying Transaction, Carlaw is not required to obtain shareholder approval for the Proposed Transaction. However, Carlaw intends to hold a special meeting of shareholders to approve certain matters ancillary to the Proposed Transaction, including a name change, election of new directors, a continuance under the laws of the State of Delaware and a consolidation of its shares. Carlaw intends to call the special meeting as soon as practicable prior to January 21, 2014.

Trading in the common shares of Carlaw will be halted pending the release of further disclosure regarding the Proposed Transaction, the satisfaction of the initial filing requirements of the TSXV and a preliminary review by the TSXV.

Conditions to Proposed Transaction

Prior to completion of the Proposed Transaction (and as conditions of closing):

  • OneRoof Energy Finco must complete a subscription receipt financing (the "Offering") for gross proceeds of approximately CDN$55,000,000 at an issue price to be determined in the context of the market (the "Issue Price"). OneRoof Energy has retained Desjardins Capital Markets (the "Lead Agent") to act as lead agent for the Offering. The Lead Agent will have the right to form a syndicate of agents, (together with the Lead Agent, the "Agents") and may determine the compensation of the members of such syndicate. It is expected that the gross proceeds of the Offering will be escrowed with a third party escrow agent, and the subscription receipts will convert into non-voting preferred shares of OneRoof Energy Finco ("Finco Preferred Shares"). The net proceeds of the Offering will be released to OneRoof Energy Finco immediately prior to or after closing of the acquisition by Carlaw of the shares of common stock of OneRoof Energy or will be cancelled if the Proposed Transaction is not completed on or before the date that is 90 days following the closing of the Offering, with the gross proceeds being refunded to investors in the Offering. The agents for the Offering will receive a 6.0% cash commission and broker warrants entitling them to receive that number of non-voting preferred shares of OneRoof Energy Finco that is equal to 3.75% of the number of subscription receipts issued in the Offering. The broker warrants will be exercisable for a period of 12 months following the closing of the Offering at a price equal to the Issue Price. OneRoof Energy will also pay the Lead Agent, a fixed advisory fee of $200,000 plus applicable taxes payable upon closing of the Offering. The net proceeds from the Offering will be used to repay outstanding debt, finance the construction of photovoltaic systems and general corporate purposes.
  • Upon successful closing of the Qualifying Transaction, OneRoof Energy will pay a finders' fee to certain parties to be determined by Carlaw.
  • Carlaw will, with appropriate shareholder approval, consolidate its common shares at a to be determined ratio.
  • Carlaw will, with appropriate shareholder approval, change its name to a name that is selected by OneRoof Energy.
  • Carlaw will, with appropriate shareholder approval, continue itself under the laws of the State of Delaware.
  • Carlaw will prepare a filing statement in accordance with the rules of the TSXV (the "Filing Statement"), outlining the terms of the Proposed Transaction. OneRoof Energy will provide assistance and details as to the business, assets, properties and operations of OneRoof Energy and will be responsible for any and all audited financial statements related to its business and operations (and for preparing the pro forma financial statements, based in part on information provided by Carlaw).

The Proposed Transaction

It is expected that prior to the closing of the Proposed Transaction, OneRoof Energy Finco will become a wholly owned subsidiary of Carlaw and the Proposed Transaction will be effected by way of a three cornered merger whereby OneRoof Energy will merge with a newly incorporated subsidiary of Carlaw ("Mergeco"). Carlaw will acquire all of the shares of outstanding shares of Mergeco. It is expected that each shareholder of OneRoof Energy and of OneRoof Energy Finco will receive one share of Carlaw (on a post-consolidation basis) in exchange for each common share or preference share of OneRoof Energy or Finco Preferred Share, as the case may be (the "Exchange Ratio") held by them. Holders of Finco Preferred Shares will receive their consideration in Carlaw common shares. The precise number of securities to be issued by Carlaw to acquire OneRoof Energy and OneRoof Energy Finco is unknown at this time and will depend on (i) the consolidation ratio to be approved by shareholders of Carlaw (the shareholders of Carlaw will approve such consolidation ratio within a certain range), and (ii) the final size and terms of the Offering being undertaken by OneRoof Energy Finco. The exchange will be based on an assumed market capitalization for Carlaw of CDN$582,000 (being CDN$0.24 per Carlaw common share as constituted on the date hereof) and a valuation of the OneRoof Energy shares based on the price paid by arm's length investors pursuant to the Offering.

On closing, all directors and officers of Carlaw will resign and nominees of OneRoof Energy will be appointed.

Certain Carlaw common shares held by "Principals" (as defined in the Manual (as defined below)) of Carlaw subsequent to completion of the merger will be subject to escrow restrictions pursuant to Policy 5.4 of the Corporate Finance Manual of the TSXV (the "Manual").

About OneRoof Energy

OneRoof Energy was organized under the laws of the State of Delaware on October 19, 2009. OneRoof Energy finances and arranges residential solar energy systems in the United States. OneRoof Energy's financing offerings typically result in immediate savings on customers' monthly utility bills with no upfront costs. OneRoof Energy's technology platform automates most of the transaction process, from customer acquisition to installation and system monitoring. For more information about OneRoof Energy, please visit: www.oneroofenergy.com.

Management and Board of Directors

Subject to TSXV approval, on completion of the Proposed Transaction, the management team and the board of directors of the Resulting Issuer is expected to include the following individuals. Four of the directors are expected to be considered "independent" under relevant securities laws. In addition, GSE Investments, LLC, an affiliate of GDF Suez Energy North America, has the right to nominate an additional member of the board of directors and a non-voting observer, but no such nomination has been made or is expected to be made prior to the closing of the Proposed Transaction.

Directors

Michael W. Allman, Chairman, Board of Directors:

Michael Allman is expected to be the Chair (independent) of the Board of the Resulting Issuer. Mr. Allman is the former President and Chief Executive Officer of Southern California Gas Company, the largest natural gas distribution company in the United States and a subsidiary of Sempra Energy, a Fortune 500 energy company based in San Diego, California. From 2006 to 2010, Mr. Allman was the President and Chief Executive Officer of Sempra Generation, a leading provider of solar power in the Southwestern United States. From 1998 to 2006, Mr. Allman served in various executive roles for Sempra Energy, including Vice President of Corporate Planning and Development, President of Sempra Ventures, Vice President of Audit Services and Chief Internal Auditor, and Chief Financial Officer for Sempra Global. Prior to joining Sempra Energy, Mr. Allman spent 11 years as a consultant for LEK Consulting and The Alcar Group, with postings in Chicago, Johannesburg, London and Los Angeles. He holds a Master of Business Administration from the University of Chicago Booth School of Business with a specialization in finance, and a Bachelor's degree in chemical engineering from Michigan State University. He currently serves on the Board of Alion Energy and is an Advisor to Stem, Inc. Mr. Allman is a Certified Management Accountant, and earned the designation Certified Internal Auditor.

Nikhil Garg, Director:

Nikhil Garg is expected to be a Director (non-independent) of the Resulting Issuer. Mr. Garg is a Vice President of Black Coral Capital, a clean technology focused private equity investment firm. He also currently serves on the Board of Clean Energy Collective and previously with Next Step Living. Previously, Mr. Garg was a member of Climate Change Capital's carbon finance investment team. Prior to Climate Change Capital, Mr. Garg consulted for a leading carbon fund focused on opportunities in Russia and the CIS. In addition, Mr. Garg has worked in corporate venture capital and business development for Comcast Corporation and AOL Inc. where he invested in and developed early-stage technology-based businesses. Mr. Garg began his career as a management consultant with Bain & Co., where he advised industrial and technology clients. Mr. Garg holds a Master of Business Administration from the MIT Sloan School of Management where he was recognized with the McKinsey Award and a Bachelor of Science in industrial engineering from Stanford University.

Timothy Haig, Director:

Timothy Haig is expected to be a Director (independent) of the Resulting Issuer. Mr. Haig was a founder, Chief Executive Officer and President of BIOX Corporation, a renewable energy company, from 2000 to 2011 and continues to consult with BIOX. Prior to co-founding BIOX Corporation, Mr. Haig held several senior management positions with high profile organizations both in Canada and the United Kingdom including Marketing Director of Ove Arup & Partners, as well as Director of Strategy and Development for Tarmac, Black and Veatch. Mr. Haig served as a Director of BIOX Corporation from 2000 to 2012. Mr. Haig also served in the Canadian Forces (Army) for 10 years as an officer. He received his Master of Business Administration in London, England and his degree as an Industrial Engineer from the Royal Military College of Canada.

David C. Kerr, Director:

David C. Kerr is expected to be a Director (independent) of the Resulting Issuer. Mr. Kerr is the Chief Executive Officer of Thorium Power Canada Inc. and currently is a Director of each of Magellan Fuel Solutions Inc., Algonquin Power Management Inc., Renewable Energy Developers Inc. and Crius Energy Trust. Mr. Kerr is a founder and was an executive of Algonquin Power Income Fund in his capacity as head of safety and environmental compliance from 1996 to 2010. Mr. Kerr holds a B.Sc. Honours from the University of Western Ontario.

Patrick Shim, Director:

Patrick Shim is expected to be a Director (non-independent) of the Resulting Issuer. Mr. Shim has been with Hanwha Group, one of the largest business enterprises in South Korea and one of the top 10 photovoltaic manufacturers in the world, since 2008 being responsible for corporate strategic planning and new business development. He is currently focusing on the North America solar residential market for Hanwha. He also currently serves as a Director on the Board of OneRoof Energy. Previously, Mr. Shim worked for Kookmin Bank, the largest commercial bank in Korea. Mr. Shim holds a Master of Business Administration from the Anderson School of Management, University of California, Los Angeles and a Bachelor of Arts in civil engineering from Yonsei University.

James A. Kelly, Director:

James A. Kelly is expected to be a Director (independent) of the Resulting Issuer. Mr. Kelly retired in 2011 as Senior Vice President of Transmission & Distribution for Southern California Edison (a subsidiary of Edison International and one of America's largest utilities). Since 1973, Mr. Kelly has served in a variety of engineering, financial, environmental and regulatory positions at California Edison. Mr. Kelly is currently advising or directing a number of firms in the energy industry. Mr. Kelly holds a Bachelor's degree from California State University, Long Beach, and a Master's degree from California State Polytechnic University in mathematical economics.

Management

David Field, Director, President and Chief Executive Officer

David Field is the President, Chief Executive Officer and founder of OneRoof Energy. Before joining OneRoof Energy, Mr. Field led the reorganization and turnaround of Applied Solar, LLC as its President and CEO from 2008 to 2009. During this time, he transformed the company from a manufacturer of Building Integrated Photovoltaic (BIPV) products into a developer and licensor of BIPV product IP. While at Applied Solar, he partnered with some of the largest corporate names in both solar and building products. Mr. Field also founded and was CEO of Clarus Energy Partners, a leading developer, owner and operator of distributed generation projects, which was acquired by Hunt Power. Prior to Clarus, he founded Kiewit Fuels, part of Kiewit Diversified and Peter Kiewit Construction. In addition to a career in sustainable energy development, Mr. Field has an extensive background in water technology and infrastructure development with companies such as Bechtel, Peter Kiewit, and Poseidon Water, as well as a substantial period with Citicorp/Citibank, where he held various positions in corporate finance. Mr. Field holds a Master of Business Administration from the Thunderbird School of International Management.

Dale A. Vander Woude, Executive Vice President

Mr. Dale A. Vander Woude is the Executive Vice President-Capital Markets, Mergers and Acquisitions, and Strategy of OneRoof Energy. Reporting to the CEO, Mr. Vander Woude is responsible for raising capital for OneRoof Energy. Prior to joining OneRoof Energy, Mr. Vander Woude was a director within capital markets origination for Citigroup Global Markets, a U.S.-based brokerage and securities arm of banking company Citigroup, where he directed a wide range of investments. Mr. Vander Woude also served as the senior transactor for multiple renewable energy investments, including a residential solar fund and wind farm development company. Mr. Vander Woude graduated from Central College with a Bachelor's degree in economics and business management and also received a Master of Business Administration and International Certificate from Loyola Marymount University.

Dan Halvorson, Executive Vice President and Chief Financial Officer

Dan Halvorson is the Executive Vice President and Chief Financial Officer of OneRoof Energy, where he is responsible for finance, accounting and investor relations, as well as maintaining business relationships with institutional investors and the investment banking community worldwide. Prior to joining OneRoof Energy, Mr. Halvorson served as Executive Vice President, Operations and Chief Financial Officer for DivX, Inc., a multimedia digital technology company, with responsibility for risk management, global strategic planning and modeling, forecasting and cash flow analysis, SEC reporting and key oversight of DivX's disclosure committee. Mr. Halvorson also served as the principal interface with investment banks, auditors and the Audit Committee for the DivX Board of Directors. Prior to DivX, Mr. Halvorson was with Novatel Wireless from 2000 to 2007, most recently as its Chief Financial Officer. Mr. Halvorson is a certified public accountant (inactive) and holds a Bachelor of Science degree in business administration and accounting from San Diego State University.

Dalton W. Sprinkle, General Counsel

Dalton Sprinkle is the Vice President, Corporate Development and General Counsel of OneRoof Energy. where he oversees the Company's legal function. In his corporate development role, Mr. Sprinkle provides organizational, strategic and financing advice to the Company. Prior to joining OneRoof Energy, Mr. Sprinkle served as Executive Vice President and Chief Legal Officer for Carbon Motors Corporation where he oversaw all legal operations and took part in the development of the world's first purpose-built law enforcement patrol vehicle. Prior to this time, Mr. Sprinkle served as Senior Vice President of Business Development and General Counsel at Applied Solar, Inc. where he negotiated several complex financing structures and transactions and co-developed a project financing structure for residential solar installations. Mr. Sprinkle holds a Bachelor of Arts degree in political science from the University of Southern California and a Juris Doctorate from Georgetown University Law Center.

Sponsorship

Sponsorship of a Qualifying Transaction of a capital pool company is required by the TSXV, unless an exemption from the sponsorship requirement is available. Carlaw intends to apply to the TSXV for an exemption from the sponsorship requirement. There is no assurance that Carlaw will be able to obtain such an exemption.

Carlaw will make a subsequent news release of information regarding sponsorship, the board of directors, any additions to the management team, and details of the Offering.

Information contained herein pertaining to OneRoof Energy and the proposed members of Management and the Board of Directors of the Resulting Issuer has been furnished to Carlaw by OneRoof Energy.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed 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 Proposed Transaction, any information released or received with respect to the Proposed 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.

Certain information in this news release constitutes forward-looking statements under applicable securities law. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may" "should" "anticipate" "expect" "intend" and similar expressions. Forward-looking statements in this news release include, but are not limited to, statements with respect to the closing or completion of the Qualifying Transaction. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks that closing of the Proposed Transaction may not occur; risks related to the receipt of approval by the TSXV; the completion of the Qualifying Transaction; risks associated with general economic conditions; adverse industry events; marketing costs; loss of markets; inability to access sufficient capital from internal and external sources and/or inability to access sufficient capital on favourable terms; industry and government regulation; changes in legislation, income tax and regulatory matters; the ability of the Resulting Issuer to implement its business strategies; competition; currency and interest rate fluctuations; and other risks. Readers are cautioned that the foregoing list is not exhaustive.

Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance the plans, intentions or expectations upon which they are placed will occur. 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 represent the expectations of Carlaw and OneRoof Energy as of the date of this news release, and, accordingly, are subject to change after such date. Neither Carlaw nor OneRoof Energy undertakes any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.

The TSXV has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this news release.

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

Contact Information

  • Carlaw Capital IV Inc.
    Amar Bhalla, Chief Executive Officer,
    Chief Financial Officer and Corporate Secretary
    (416) 928-5104