Exito Energy II Inc.
TSX VENTURE : EXI.P

October 08, 2016 14:14 ET

Exito Energy II Inc. Announces Arrangement Agreement With Good Life Networks Inc. for Proposed Qualifying Transaction

CALGARY, ALBERTA--(Marketwired - Oct. 8, 2016) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Exito Energy II Inc. ("Exito"), a capital pool company (TSX VENTURE:EXI.P), is pleased to announce that it has entered into an arrangement agreement dated October 7, 2016, with Good Life Networks Inc. ("GLN"), a Vancouver-based, digital media company, with respect to a proposed business combination intended to constitute Exito's qualifying transaction, as such term is defined under the policies of the TSX Venture Exchange (the "TSX-V"). Upon completion of the qualifying transaction, it is anticipated that the resulting issuer will be listed as a Technology Issuer, subject to TSX-V approval.

The Proposed Transaction

The transaction will be structured as a share exchange by way of plan of arrangement under the provisions of the Business Corporations Act (British Columbia) (the "Arrangement"). Immediately prior to the completion of the Arrangement, Exito intends to complete a consolidation of its issued and outstanding common shares on the basis of one post-consolidation share for every two pre-consolidation shares (the "Consolidation") and continue from Alberta into British Columbia under the name "Good Life Networks Inc." (the "Continuance"), or such other name as may be approved by GLN.
Pursuant to the Arrangement, among other things:

  1. holders of common shares of GLN will receive 0.2601 of a post-Consolidation common share of Exito in exchange for each common share of GLN held. If the Consolidation is not completed prior to the effective time of the arrangement for any reason, then the exchange ratio will be adjusted such that GLN shareholders will receive 0.5202 of an Exito common share for each common share of GLN held.
  2. Exito (on a post-continuance basis) will become the sole shareholder of GLN following the foregoing share exchange.
  3. Exito and GLN will complete a vertical short form amalgamation and the combined entity (the "Resulting Issuer") will have as its directors and officers, the individuals set out under the heading "Directors and Officers" below.

Upon completion of the Arrangement, it is anticipated that GLN shareholders will receive 26,679,786 common shares of the Resulting Issuer with a deemed value of $0.25 per share for total deemed consideration of approximately $6,669,946. Excluding the effect of the Offering (as described below) on the relative percentages of ownership, it is anticipated that Exito shareholders will hold approximately 13% of the voting common shares of the Resulting Issuer and GLN shareholders will hold approximately 87% of the voting common shares of the Resulting Issuer.

The transaction will not be a non-arm's length transaction for the purposes of the policies of the TSX-V. As permitted by the policies of the TSX-V, Exito has made a $25,000 unsecured loan to GLN concurrently with signing the arrangement agreement. Exito and GLN intend to complete the Arrangement on or before December 15, 2016, with an outside date for completion of the Arrangement of January 31, 2017.

About GLN

GLN is a technology company incorporated in British Columbia with a head office in West Vancouver, B.C. GLN has developed a programmatic marketing platform powered by proprietary machine learning technology that allows advertisers to target and connect intelligently with their audiences across online display, video, social and mobile campaigns. GLN's technology provides visibility and scale, affording a unique opportunity to scale revenue. The platform is the cornerstone of GLN's business, providing industry leading insights and data. This allows GLN to match its clients to buyers in a way that provides significant and sustainable value to both. This data model means GLN can forecast algorithmically the needs and wants of the brands it represents, maximizing the efficiency for its partners. GLN combines decades of award winning management experience with innovative technology designed and developed by its team.

Jesse Dylan, the CEO of GLN states "When you surround yourself with the best people and meet in the intersection of media, ad-technology and timing - magical things can happen for a company."

GLN is not currently a "reporting issuer" in any jurisdiction of Canada and none of its securities have traded on any stock exchange. Summary financial information on GLN will be provided in a subsequent comprehensive news release.

Officers and Directors

Upon completion of the Arrangement, it is currently proposed that the directors and officers of the Resulting Issuer will include the following:

Jesse Dylan - CEO and Director (Vancouver, British Columbia) - Mr. Dylan is a multiple award-winning show host (The Good Life Show) Sirius/CBS, the author of the best-selling book The Good Life with Jesse Dylan and the founder of GLN. Jesse has been featured in a documentary as one of the top five on-air personalities in the world. He's been named personality of the year in Canada and won the prestigious Actra award for the same. He's also won international awards including Gold at the International Festival of Radio in NYC. Jesse is a leading producer of transformational entertainment. His success is built on over 40 years of broadcast experience combined with the renowned relationships he has forged with the greatest authorities in the world of media, entertainment and technology.

Eugene Valaitis - Director (Vancouver, British Columbia) - Mr. Valaitis is a multiple award winning broadcaster and marketing expert. During his over 25 years in radio and television Mr. Valaitis earned multiple ACTRA awards and recognition from the New York Radio Festival. Mr. Valaitis is a seasoned executive with over a decade of experience in VP level positions guiding the marketing and sales teams of multinational corporations in the U.S., Hong Kong, Mexico and Dubai.

Cornel Fota - Director (Vancouver, British Columbia) - Mr. Fota is referred to as one of North America's leading technology architects. Mr. Fota is a seasoned technical executive with over ten years experience in VP and C-Suite level positions. He has considerable experience and a proven track record in building software development organizations from the ground up, and bringing enterprise software products to market.

Cliff Dumas - VP Operations, Corporate Secretary and Director (Vancouver, British Columbia) - Mr. Dumas' significant broadcast career includes being named the winner of a CMA, ACM, and multiple CCMA Awards for Major Market Broadcaster of the Year in the U.S and Canada. Mr. Dumas is a 2013 Mark Award Winner for Excellence in Broadcast Marketing. His television career includes writing, co-producing and voicing close to 30 network shows, 18 Canadian Country Music Awards along with specials for Anne Murray, Terri Clark, Paul Brandt and countless specials for CMT.

Thad Scott - CFO (Vancouver, British Columbia) - Mr. Scott is a Chartered Professional Accountant and owner of Thad Scott & Company, CPA's. After beginning his career as an auditor for a national CPA firm in Los Angeles, California, Mr. Scott served over twelve years in accounting and audit services with a large local firm in Fresno, California. He now has been the owner of his local firm for over twenty-five years.

Conditions

In addition to customary conditions respecting regulatory and shareholder approvals and due diligence, the Arrangement is subject to and conditional upon the shareholders of GLN approving the transaction and the shareholders of Exito approving the Consolidation, the proposed name change and the Continuance. Other conditions to completion of the transaction include:

  • Receipt of all director, shareholder and requisite regulatory approvals relating to the Arrangement, including, without limitation, TSX-V approval and approvals of the British Columbia Supreme Court; and
  • GLN completing a non-brokered private placement of subscription receipts at a price of not less than $0.25 per subscription receipt to raise gross proceeds of not less than $4,500,000 (the "Offering"), with net proceeds of the Offering to be released from escrow upon completion of the Arrangement. It is anticipated that the net proceeds of the Offering will be used for sales and marketing of GLN's platform and for general working capital purposes.

Directors' Recommendations

The Board of Directors of GLN has approved proceeding with the Arrangement and will recommend that GLN's shareholders approve the same. The Board of Directors of Exito has approved proceeding with the Arrangement and will recommend that Exito's shareholders approve the Consolidation, the proposed name change and Continuance. Exito has received, and provided to GLN, Lock-Up Agreements in support of the transaction that represent 37.5% of the issued and outstanding shares of Exito.

Previously Announced Qualifying Transaction

Exito also wishes to announce that it will no longer be proceeding with its previously announced letter agreement with Andrew Osis and Kevin Spall to acquire private equity investments for its qualifying transaction.

About Exito Energy II Inc.

Exito is a Capital Pool Company governed by policies of the TSX-V. Exito's principal business is the identification and evaluation of assets or businesses with a view to completing a qualifying transaction within the meaning of the policies of the TSX-V. Exito's common shares are currently suspended from trading and will be reinstated for trading upon completion of a qualifying transaction.

Sponsorship

Pursuant to TSX-V policies, sponsorship is required for a qualifying transaction unless an exemption or waiver is available. Exito intends to apply for a waiver from the sponsorship requirement. There is no assurance that a waiver from the sponsorship requirement will be obtained.

Cautionary Statement

Completion of the proposed transaction is subject to a number of conditions, including but not limited to TSX-V acceptance and if applicable pursuant to TSX-V requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the 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 TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Forward Looking Statements:

This press release contains certain forward‐looking information within the meaning of Canadian securities legislation and forward‐looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or future performance and reflect the expectations or believes regarding future events of management of Exito and GLN (the "Companies"). This information and these statements, referred to herein as "forward‐looking statements", are not historical facts, are made as of the date of this press release and include without limitation, statements regarding discussions of future plans, estimates and forecasts and statements as to management's expectations and intentions with respect to, among other things, the completion of the transaction, continuance, consolidation and Offering. These forward‐looking statements involve numerous risks and uncertainties and actual results might differ materially from results suggested in any forward-looking statements. Important factors that may cause actual results to vary include without limitation, risks relating to the finalization of the terms of the Offering; risks associated with any delays or difficulties encountered in respect of the transaction and Offering; the timing and receipt of certain approvals; delays in the receipt of requisite approvals and changes in general economic conditions or conditions in the financial markets. In making the forward‐looking statements in this press release, the Companies have applied several material assumptions, including without limitation: (1) the successful completion of the Offering; and (2) the receipt of necessary consents and approvals and satisfaction of all conditions precedent for the completion of the transaction, continuance, consolidation and Offering in a timely manner. Neither Exito nor GLN assumes any obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements, unless and until required by applicable securities laws. Additional information identifying risks and uncertainties is contained in Exito's filings with the Canadian securities regulators, which filings are available at www.sedar.com.

The securities referred to in this news release have not been, 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 news release does not constitute an offer for sale of securities for sale, nor a solicitation for offers to buy any securities. Any public offering of securities in the United States must be made by means of a prospectus containing detailed information about the company and management, as well as financial statements.

Neither the 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.

Contact Information

  • Brad Docherty, President
    Chief Executive Officer and Director
    Exito Energy II Inc.
    (403) 472-5767

    Jesse Dylan, President
    Chief Executive Officer and Director
    Good Life Networks Inc.
    (604) 341-8300