Moonshoot Capital Corp.
TSX VENTURE : CVX.P

November 03, 2005 17:24 ET

Moonshoot Capital Corp. Announces Letter of Intent for Qualifying Transaction and Commencement of Trading

CALGARY, ALBERTA--(CCNMatthews - Nov. 3, 2005) - Moonshoot Capital Corp. (TSX VENTURE:CVX) (the "Corporation") is pleased to announce that its common shares will commence trading on Friday, November 4, 2005.

In addition, the Corporation is pleased to announce that it has entered into a letter of intent (the "Letter of Intent") dated October 4, 2005 with CEMATRIX (Canada) Inc. ("CEMATRIX") as the Corporation's proposed "Qualifying Transaction" (the "Proposed Transaction") under Policy 2.4 of the TSX Venture Exchange (the "Exchange"). Upon completion of the Proposed Transaction, the Corporation will be listed on the Exchange as a Tier 2 Industrial Issuer. Pursuant to the Letter of Intent, the Corporation and CEMATRIX will enter into a business combination by way of a "three-cornered amalgamation" involving the Corporation, a wholly-owned subsidiary of the Corporation ("Moonshoot SubCo") and CEMATRIX which will result in CEMATRIX becoming a wholly-owned subsidiary of the Corporation.

Under the Proposed Transaction, the Corporation will issue common shares of the Corporation ("Moonshoot Shares") at a deemed price of $0.30 (Cdn) per share in consideration for all of the issued and outstanding common shares of CEMATRIX ("CEMATRIX Shares"). Pursuant to the terms of the Letter of Intent, the final share exchange ratio will be negotiated by the parties having regard to the results of a third party valuation of CEMATRIX, which is currently being completed. At the time of closing of the Proposed Transaction, CEMATRIX is expected to have approximately 23,000,000 CEMATRIX Shares outstanding, which includes 5,625,000 CEMATRIX Shares to be issued upon conversion of approximately $1,130,000 in convertible debt of CEMATRIX prior to completion of the Proposed Transaction. The Corporation will issue a further press release announcing the share exchange ratio and consideration to be paid by the Corporation once the definitive amalgamation agreement is entered into.

CEMATRIX is an Alberta corporation with its head offices in Calgary, Alberta. CEMATRIX is a manufacturer and supplier of technologically advanced cellular concrete products with applications in a variety of markets, currently focusing on the oil and gas construction and infrastructure construction markets. CEMATRIX began introducing cellular (foamed) concrete into the civil engineering construction industry in October 1999 as a replacement for rigid and other insulating materials in frost-susceptible or permafrost conditions. Cellular concrete is also used in void filling situations and as a replacement for granular fills and weak or unstable soils. The company's cellular concrete technologies include material mix designs, foaming agents, processing equipment and applications engineering. CEMATRIX also has acquired world-wide rights to an advanced foaming agent technology. CEMATRIX's technologies enable it to vary the cellular concrete's properties for specific applications to address common construction problems as they relate to insulation and soil stability. Compressive strengths, flexural strength, density, permeability and flowability are some of the properties that can be varied using CEMATRIX's cellular concrete technology.

The following financial information relating to CEMATRIX is based on the company's audited financial statements for the year ended December 31, 2004 and the management prepared unaudited financial statements for the nine month period ended September 30, 2005, which information has been provided by CEMATRIX and has not been verified by the Corporation.



------------------------------------------------------------------------
As at September 30, 2005
As at December 31, 2004 (9 Months)
($) ($)
------------------------------------------------------------------------
Revenue 1,627,162 1,661,935
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Gross Margin 191,926 581,957
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Net Earnings (1,275,620) (475,470)
------------------------------------------------------------------------
Total Assets 2,707,135 3,433,521
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Shareholders' Equity 1,219,709 1,182,589
------------------------------------------------------------------------
Working Capital (179,613) (564,384)
------------------------------------------------------------------------
Long-Term Debt 387,345 456,080
------------------------------------------------------------------------
Debt to be Converted Prior to
Proposed Transaction
(Including Accrued Interest) 1,130,779 1,098,830
------------------------------------------------------------------------
------------------------------------------------------------------------


The Proposed Transaction is an arm's length transaction under Exchange Policy 2.4 in that the Corporation and CEMATRIX are not under common control. However, certain directors and officers of the Corporation have interests in CEMATRIX: Jeffrey Kendrick, President, Chief Financial Officer and Secretary of the Corporation is a director, officer and shareholder of CEMATRIX; and Kirby Cox, Minaz Lalani, and David Madsen, all directors of the Corporation, are shareholders of CEMATRIX Collectively, Messrs. Kendrick, Cox, Lalani and Madsen own or control approximately 14.5% of the outstanding share capital of CEMATRIX and are expected to own or control approximately 13.8% of the outstanding share capital of CEMATRIX at the time of completion of the Proposed Transaction.

The only persons directly or indirectly holding more than 10% of the outstanding shares of CEMARIX are Kirby Cox, Canadian Jorex Limited and 1063623 Alberta Ltd. Kirby Cox holds approximately 10.5% of the outstanding capital of CEMATRIX. After conversion of the convertible debt noted above, Mr. Cox will own less than 10% (7.9%). Canadian Jorex holds approximately 15.4% of the issued and outstanding shares of CEMATRIX and holds a convertible promissory note that will add an additional 2.5% to its shareholdings when fully converted in advance of the Potential Transaction. Canadian Jorex Limited, an Alberta corporation, is controlled by Azim Lakhoo and three other individuals, each holding a 25% interest. 1063623 Alberta Ltd. holds approximately 17.5% of the issued and outstanding shares of CEMATRIX and has a convertible loan that will add an additional 13.9% to its shareholdings when fully converted in advance of the Potential Transaction. 1063623 Alberta Ltd. is owned by six individuals, each owning a 16.67% interest. Dennis Zentner and Robert Bezemer, two of the 1063623 Alberta Ltd. shareholders, also collectively hold approximately 4% of the outstanding shares of CEMATRIX, which will decrease to 3% after the above-noted conversions. Both Canadian Jorex Ltd. and 1063623 Alberta Ltd. are expected to hold more than 10% of the Corporation after completion of the Proposed Transaction.

Subject to Exchange acceptance, the following are the names of the expected directors, officers and promoters of the Corporation upon completion of the Proposed Transaction, their expected positions and offices and their principal occupations during the last 5 years. An additional director may be appointed to the board at the time of the closing of the Proposed Transaction.

Jeffrey N. Kendrick - Calgary, Alberta - President, Chief Financial Officer and Promoter

Jeff Kendrick is Acting President, Vice President of Finance and Administration and a director of CEMATRIX and President, Chief Financial Officer and Secretary of the Corporation.

Kirby W. Cox - Calgary, Alberta - Director

Kirby Cox is a realtor with 20 years of experience with Royal LePage, a real estate services company in Canada and is a director of the Corporation.

Mehboob B. Janmohamed - Calgary, Alberta - Director

Mehboob Janmohamed is a self-employed business consultant with over 20 years' entrepreneurial experience. Mr. Janmohamed was formerly employed as an enterprise resource planning leader at Nortel Networks Corporation and is a director of the Corporation.

Minaz H. Lalani - Calgary, Alberta - Director

Minaz Lalani is a principal consulting actuary for Towers Perrin, a global professional services firm providing services in human resources consulting, reinsurance intermediary services and actuarial and management consulting. Mr. Lalani has over 25 years of experience in the actuarial field. Mr. Lalani is a director of the Corporation.

David T. Madsen - Calgary, Alberta - Director

David Madsen is a partner at the law firm of Borden Ladner Gervais LLP. Mr. Madsen has over 17 years of experience in the legal profession. Mr. Madsen is a director of the Corporation.

Michael R. Rempel - Calgary, Alberta - Director

Mr. Rempel is a partner with Borden Ladner Gervais LLP, Barristers and Solicitors, Calgary, Alberta, with a practice focusing on corporate and securities law. Prior to this, Mr. Rempel was an associate and subsequently a partner with Armstrong Perkins Hudson LLP which merged with Borden Ladner Gervais LLP in July 2002. Mr. Rempel obtained his Bachelor of Arts from the University of Lethbridge and his Bachelor of Laws and Master of Business Administration from the University of Alberta. Mr. Rempel is currently a director of Naples Capital Corp., a capital pool company listed on the TSX Venture Exchange. Mr. Rempel has previously served as director and/or officer of various public companies listed on the Exchange.

In addition to the above, the Corporation hereby reserves a price of $0.30 for the exercise price of stock options to be issued in conjunction with the Proposed Transaction. The specific number of options to be issued will depend on the number of Moonshoot Shares issued on the Proposed Transaction and final determination by the Moonshoot board of directors.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance. In addition, other conditions include, but are not limited to, all other necessary corporate and regulatory approvals and authorizations, the completion and execution of a definitive amalgamation agreement setting forth the terms and conditions as set forth in the Letter of Intent and discussed above, the exercise or cancellation of existing stock options of CEMATRIX and the completion of due diligence, either prior to or contemporaneous with the closing of the Proposed Transaction. There can be no assurance that the Proposed Transaction will be completed as proposed or at all. Approval for the Proposed Transaction by the Corporation's shareholders is not required and will not be sought.

Blackmont Capital Inc., subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.

Investors are cautioned that, except as disclosed in the 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.


The TSX Venture Exchange has in no way passed on the merits of the Proposed Transaction and has neither approved or disapproved the contents of this press release.

Contact Information

  • Moonshoot Capital Corp.
    Jeffrey N. Kendrick
    President, Chief Financial Officer and Secretary
    (403) 219-0484