GEA Technologies Ltd.
TSX VENTURE : GEA.H

January 05, 2017 18:11 ET

GEA Technologies Clarifies Proposed Intelliconn Transaction

CALGARY, ALBERTA--(Marketwired - Jan. 5, 2017) - GEA Technologies Ltd. (TSX VENTURE:GEA.H) ("GEA" or the "Company") provides the following clarification, at the request of IIROC, with respect its previously announced non-binding Letter of Intent ("LOI") to purchase all of the shares of Intelliconn Communication Solutions Inc. ("Intelliconn") of Saskatoon, Saskatchewan, executed as between GEA and Intelliconn on December 22, 2016. Intelliconn is a wireless communication, remote monitoring and control solutions company. Pursuant to the LOI, GEA proposes to enter into an arm's length transaction which would result in a combination of the two companies and GEA changing its business to the business of Intelliconn. The LOI contemplates GEA acquiring all of the outstanding shares of Intelliconn in exchange for shares of GEA. If completed, the transaction would result in a reverse take-over of GEA by Intelliconn under the policies of the TSX Venture Exchange (the "Exchange") and GEA changing its name to "Intelliconn Communications Solutions Inc.".

The LOI currently contemplates GEA entering into a definitive agreement prior to March 31, 2017, to complete an amalgamation, plan of arrangement, take-over bid, reorganization or similar transaction (the "Proposed Transaction") whereby GEA will acquire all of the issued and outstanding common shares of Intelliconn (each an "Intelliconn Share") on a five-for-one basis. In accordance with the Proposed Transaction, GEA is expected to issue approximately 23,750,000 GEA common shares ("GEA Shares") in exchange for all of the issued and outstanding Intelliconn Shares. As a result there is expected to be approximately 39,241,400 GEA Shares outstanding upon completion of the Proposed Transaction. Assuming that no additional Intelliconn Shares are issued other than as contemplated under the LOI, the former Intelliconn shareholders will own approximately 60.5% of the outstanding GEA Shares following completion of the Proposed Transaction. The Proposed Transaction is expected to be accounted for as a reverse take-over. The deemed value of GEA at closing is undetermined and any reference to such deemed value appearing in the Company's December 22, 2016 press release is retracted.

About Intelliconn

Intelliconn is a Saskatoon-based company that provides wireless communication and remote monitoring and control solutions for rural areas. The company has two key technologies that will have a major impact in rural areas.

The first technology, a next generation of ultra-long-range Wi-Fi products, that extend Wi-Fi out up to several kilometers, provide an economic solution that allows rural-based individuals and businesses to have significantly better Internet access. With Internet access becoming increasingly important for everything from communication to security, to management, to entertainment, the ability to have adequate, uninterrupted access is crucial. In most rural areas, this is not currently the case.

Intelliconn owns certain global distribution rights for the Wi-Fi technology in rural areas.

The second key technology, an automated grain sampling and tracking system, solves an industry-wide problem that is costing grain producers and shippers billions of dollars per year. The system provides a comprehensive solution for acquiring, splitting, storing and tracking grain samples, to ensure samples are representative of the grain being sampled. An additional benefit of the product is that the related grain quality and quantity data collected will allow producers to make more informed decisions regarding selling and planting.

In addition to the Wi-Fi products, Intelliconn sells a broad range of IoT (Internet of Things) products for remotely monitoring and controlling, the common denominator for which is, a Wi-Fi-based Internet connection. Products like cameras, bin and tank monitors, thermostats, smoke detectors, AC switches and outlets and locks are crucial to the security and management of rural properties and operations.

Intelliconn's primary focus is on the agriculture sector in North America and Australia. Producers and agri-businesses want to remotely monitor and control mobile and stationary assets, both in the yard and in the field. Intelliconn's remote monitoring and control products, when combined with the extended range Wi-Fi, allow you to monitor and interact with your assets from almost anywhere.

Intelliconn is located at Innovation Place in Saskatoon and is owned by a number of Saskatchewan and Alberta shareholders, including two public companies. It was formed to commercialize several technologies, with applications primarily in rural areas and has distribution throughout North America and Australia.

The Food and Agriculture Organization predicts that by 2050 the world will require 70% more food. The Tech Investing Report states that US investment in agriculture technology doubled from $2.36 billion in 2014 to $4.6 billion in 2015.

As crop production returns are at risk due to increased production costs and climate fluctuations, technology is assisting farmers to minimize those risks. Intelliconn, through its existing product line and patents pending, plans to be a leader in the agricultural technology sector. Although the Company is optimistic regarding anticipated sales of Intelliconn technology over the next 5 years, any reference to specific projections, as appearing in the Company's December 22, 2016 press release are hereby retracted.

It is proposed that the new entity will be led by Ken Jackson as CEO. Mr. Jackson is the present CEO of Intelliconn. GEA will maintain one member on the new board. The remainder of the board will be selected from industry experts at the appropriate time and may include others from the existing board of Intelliconn.

Deltatee Technologies Ltd., a Saskatchewan private company, owns or has control or direction over 625,200 Intelliconn Shares (14.11%) (approximately 7.97% of GEA upon completion of the Transaction), Quattro Exploration and Development Ltd. ("Quattro"), an Alberta public company (TSX VENTURE:QXP), owns or has control or direction over 600,000 Intelliconn Shares (13.5%) (approximately 7.65% of GEA upon completion of the Transaction) and Mr. Ken Jackson owns or has control or direction over 308,630 Intelliconn Shares (9.23%) (approximately 5.21% of GEA upon completion of the Transaction).

Mr. Jeff Decter is a director of Quattro and is also CEO and a director of GEA.

Financing

In addition to any working capital that GEA may have at the time of closing, it is a condition of the Proposed Transaction that GEA secure equity financing of at least $5 million in connection with the Proposed Transaction.

In addition, the LOI contemplates the completion of a loan by GEA to Intelliconn in the aggregate amount of $200,000 to be funded on or before the Due Diligence Waiver Date (as defined below). The loan is proposed to be be convertible into common shares of Intelliconn at a conversion price of $1.25 per share.

Sponsorship

GEA intends to make an application to the Exchange for an exemption from the sponsorship requirements in connection with the Proposed Transaction. There is no assurance that such an exemption will be granted.

Conditions to Completion of the Proposed Transaction

In addition to the foregoing, the Closing is subject to satisfaction or waiver of terms and conditions, customary or otherwise, including but not limited to, the completion of satisfactory due diligence by both parties to be completed or waived on or before January 31, 2017 (the "Due Diligence Waiver Date"), acceptance by the Exchange of the Proposed Transaction, requisite shareholder approval of both GEA and Intelliconn and other applicable approvals. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

GEA will provide further disclosure by way of press releases and updates as such additional information becomes available.

The LOI currently contemplates the execution of a definitive agreement on or before March 31, 2017. Should a definitive agreement be executed prior to that time, the Proposed Transaction is anticipated to close prior to the end of April 2017.

All information contained in this news release with respect to GEA and Intelliconn was supplied by the parties respectively for inclusion herein and GEA and its directors and officers have relied upon Intelliconn for any information concerning Intelliconn.

Exclusivity and Termination

Pursuant to the LOI, during the interim period prior to execution of a definitive agreement, GEA and Intelliconn have agreed to deal exclusively with each other in order to pursue the Proposed Transaction. The LOI may be terminated by either party in certain circumstances, including if the definitive agreement is not executed prior to March 31, 2017. The LOI also provides for certain payments in the event either party wishes to accept a superior transaction prior to execution of the definitive agreement.

About GEA

GEA is a technology company with licensed rights to a wireless technology able to provide high-speed, self-healing networks in remote locations. To learn more about us, please visit our website at: www.GEApetroleum.com.

Completion of the 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 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 GEA should be considered highly speculative.

Forward Looking Statements

This news release contains forward-looking statements relating to the timing and completion of the Proposed Transaction, the future operations of GEA 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 GEA, 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 GEA's expectations are risks detailed from time to time in the filings made by GEA 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 GEA. As a result, GEA cannot guarantee that the Proposed Transaction will be completed and that any forward-looking statement will materialize and 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 GEA will update or revise publicly any of the included forward-looking statements as expressly required by Canadian securities law.

Trading in the securities of GEA TECHNOLOGIES LTD. should be considered highly speculative. 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

  • GEA Technologies Ltd.
    Jeff Decter
    CEO
    (403) 818-5626

    GEA Technologies Ltd.
    Robert Thomas
    CFO
    (403) 862-7463

    GEA Technologies Ltd.
    Tony Ruggieri
    Director
    (403) 703-8395