Next Gen Metals Inc.
CNSX : N
OTC PINK : NXTTF
FRANKFURT : M5BN

Next Gen Metals Inc.

November 03, 2015 10:37 ET

Next Gen Signs Business Combination Agreement to Complete Three-Cornered Amalgamation with Market Leading Vape E-Tailer

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 3, 2015) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO U.S. NEWS WIRE SERVICES

Next Gen Metals Inc. ("Next Gen" or the "Company") (CSE:N)(OTC PINK:NXTTF)(FRANKFURT:M5BN) reports that further to its announcement on September 24, 2015, the Company has signed a Business Combination Agreement dated October 30, 2015 with Dollinger Enterprises Ltd. ("Dollinger Enterprises") and Dollinger Enterprises USA Inc. ("Dollinger USA") (the "Agreement"), collectively a market leading organization in the distribution and manufacturing of products including vaporizers, accessories and herbs with a presence in 25 countries (herein after referred to as "NamasteVapes").

Management Commentary

Mr. Harry Barr, Chairman and Chief Executive Officer of Next Gen, comments: "This signing of this Agreement, definition of the board and management, and determination of terms of financing, represent significant milestones in completion of this Transaction and our objective to transition Next Gen into an operating business with a solid base of revenue and considerable growth prospects. I would like to thank all those involved in this Transaction for their hard work and dedication and our shareholders for their continued support while we move forward with the objective of fulfilling the remaining conditions to closing this Transaction."

Mr. Sean Dollinger, President of NamasteVapes, comments: "The management team of NamasteVapes is pleased to have consummated this Agreement with Next Gen. This proposed Transaction will provide us with the funds necessary to further expand our product offerings, reduce our cost of sales by adding additional scale to our business and enable us to retain qualified professionals focused on expanding our company. I would also like to thank all those involved in this Transaction for their hard work, dedication and commitment to making Namaste a global leader in the vaporizer industry."

Commercial Terms and Conditions to Closing

Next Gen will acquire all of the issued and outstanding shares of an entity to be formed under the name of Namaste Technologies Holdings Inc. ("Namaste Holdings"), through a three-cornered amalgamation whereby Next Gen's wholly-owned subsidiary GreenRush Analytical Laboratories will amalgamate with Namaste Holdings upon Closing (as defined below) and the shareholders of Namaste Holdings will receive post-consolidated shares of Next Gen in exchange for their shares of Namaste Holdings, upon and subject to the terms and conditions set forth in this Agreement (the "Transaction"). The Transaction is deemed to be a Fundamental Change as that term is defined in the CSE's policies. The Agreement supersedes and replaces the Binding Letter of Intent entered into between the parties.

Material commercial terms of the Transaction include:

  • Consolidation of Next Gen's stock on a 3:1 basis;

  • 36,218,202 post-consolidated Next Gen shares (the "Acquisition Shares") to be issued in connection with the Transaction;

  • 8,692,368 post-consolidated Next Gen shares to be held in an escrow account for distribution to the post-Transaction management of Next Gen over a period of 3-years, subject to the attainment of certain revenue and profitability, corporate finance and administrative milestones to be monitored by the post-Transaction Compensation Committee of Next Gen (the "Earn-out Shares"); and

  • finder's fee equal to 4% of the Acquisition Shares from the Transaction.

Conditions to Closing include:

  • Receipt of all director, shareholder and requisite regulatory approvals relating to the Transaction, including, without limitation, CSE approval;

  • preparation and filing of a Listing Statement outlining the definitive terms of the Transaction in accordance with the policies of the CSE;

  • incorporation and organization of Namaste Technologies Holdings Inc. and completion of the share transfer of the Dollinger USA shares from Dollinger Enterprises to Namaste Technologies Holdings Inc.;

  • execution of consulting agreements for material members of the post-Transaction management team;

  • completion of one or more financings for minimum gross proceeds of $500,000;

  • change of corporate name to Namaste Technologies Inc.;

  • amendment of the current stock option plan of Next Gen to a 10% rolling plan;

  • execution of lock-up agreements for certain material shareholders of Next Gen; and

  • completion of documentation for a shareholder inventory loan of US$265,000 over 24-months and inventory investment recovery, as products are sold, for any inventory greater than US$325,000 as at the date of Closing.

As of the date hereof, Next Gen has 21,730,921 common shares issued and outstanding. There are also 1,883,750 warrants and 1,495,000 stock options to acquire common shares. The current outstanding options and warrants will be cancelled prior to Closing. Unless these conditions to closing have been fulfilled by the parties, there can be no assurance that the Transaction will be completed as proposed or at all. The Transaction is currently scheduled to close on December 15, 2015 (the "Closing"). The shares of Next Gen will remain halted from trading on the CSE until Closing.

Post-Transaction Management

Sean Dollinger, President, Chief Executive Officer and Director

Mr. Sean Dollinger is an experienced entrepreneur having successfully founded, developed and monetized multiple business ventures. As co-founder of NamasteVapes, Mr. Dollinger is the visionary responsible for the strategic direction of a start-up company that has achieved over $4.5 million of sales in the last twelve month period. His core areas of expertise include concept and market creation through international e-commerce marketing channels and the formation of strategic supply and distribution partnerships to secure and develop products, open logistics channels, and improve customer service. As an expert in vaporizers, accessories and aromatherapy, he has done business with companies and customers in nearly every continent around the world. Mr. Dollinger previously played baseball with one of the top 10 NJCAA Division One baseball programs in the United States.

Kory Zelickson, Chief Operating Officer

Mr. Kory Zelickson is an experienced engineer focused on designing, developing, manufacturing and distributing new products and concepts internationally. As co-founder of NamasteVapes, Mr. Zelickson has been responsible for execution of the business plan by developing a market for the company's products in more than 25 countries, bringing to market multiple vaporizers and accessories, providing industry recognized reviews to consumers, and engineering fresh new product ideas, such as the Guru, a dry-herb vaporizer that adapts to work with resins and liquids. Mr. Zelickson is also highly experienced in online marketing and e-commerce and has been involved in developing multiple companies from scratch. He holds a Bachelor of Engineering in electrical and electronics from University of Manitoba. While representing the University of Manitoba, Mr. Zelickson and his team won an international engineering competition hosted by the Massachusetts Institute of Technology (MIT).

Blair Henderson, CGA, Chief Financial Officer

Mr. Blair Henderson is an accountant with a diverse array of experience in multiple industries. His areas of expertise include financial reporting and analysis, business planning, internal control implementation and monitoring, internal and external audits, and corporate financial planning and tax. Mr. Henderson is currently the principal of Virtus Consulting, a consulting and accounting firm offering a full-suite of services to small and medium sized businesses, and was previously a Senior Auditor with the Investors Group Financial Services Inc., a large financial organization with a presence across Canada. While at Investors Group, Mr. Henderson oversaw the completion of multiple large scale projects aimed at improving business efficiency and ensuring regulatory and reporting compliance. He holds a Bachelor of Commerce (hons) degree in accounting and entrepreneurship from the University of Manitoba and is a Certified General Accountant.

Darren Collins, Executive Vice President, Corporate Development

Mr. Darren Collins is a financial professional focused on developing growth companies globally and has over eight years of experience as an advisor and executive of public companies. Mr. Collins was previously professionally engaged by a number of advisory and investment firms, including Alegro Capital, LP in London, England, and Dalvay Capital Inc., Scotia Capital Inc. and Quest Capital Corp. (currently Sprott Resource Lending Corp.) in Toronto, Canada. While engaged by these companies, Mr. Collins has been involved in upwards of a billion dollars of transactions, spanning mergers and acquisitions, debt and equity financings, and joint venture partnerships. Mr. Collins holds a Bachelor of Commerce in finance from Dalhousie University.

Adam Potts, Industry Advisor

Mr. Adam Potts is an experienced sales professional and is recognized by physicians as one of the leading field representatives for medical cannabinoids in Canada. In his more than 15 years of professional sales experience, Mr. Potts has worked with multiple global corporations, including pharmaceutical companies such as Pfizer and Bayer, as well as office supply companies such as Xerox. While at these companies, he has developed external sales and marketing skills that have driven revenue growth and forged long term client relationships. Mr. Potts is currently a Sales Manager at Tilray, a leading licensed producer in Canada. He holds a Bachelor of Science from Queen's University. He is also an active volunteer with Camp Ooch, an organization and summer camp for children with cancer and their siblings.

Tina Whyte, Corporate Secretary

Ms. Tina Whyte is an experienced corporate secretary and has over 15 years of experience in the corporate and securities industry. Her expertise spans to areas of corporate governance, continuous disclosure, financing transactions and regulatory filings. Ms. Whyte has formerly held director and officer positions in publicly traded companies.

Post-Transaction Board of Directors

Harr Barr, Chairman of the Board

Mr. Harry Barr has over 30 years of public/private company experience in the mining, technology and real estate industries with a focus on acquisition, finance and development of projects on an international scale. He has guided his management teams to complete over 300 option joint venture agreements with major, mid-tier, and junior companies. Mr. Barr has raised over $250 million to advance their projects throughout 9 countries. Mr. Barr holds a diploma in agriculture from the University of Guelph.

Peter Simeon, Independent Director

Mr. Peter Simeon is an experienced corporate commercial and securities lawyer. As a partner in Gowlings' Toronto office, Mr. Simeon focuses his practice on corporate finance, mergers and acquisitions, and structured products. Working closely with issuers, underwriters, and other corporate clients, Mr. Simeon delivers practical, effective advice to help businesses move their transactions forward. He has acted for clients across a range of industries. Mr. Simeon is on the board of directors of Tolima Gold Inc. (TSX VENTURE:TOM) and Cluny Capital Corp. (TSX VENTURE:CLN.P). He holds an LLB from Osgoode Hall Law School at York University and a BA from Queen's University.

Sefi Dollinger, Independent Director

Mr. Sefi Dollinger is an experienced entrepreneur and business development professional with a track record of building profitable and sustainable business ventures. His core areas of expertise include sales management, new business development, contract negotiation, and product procurement. Mr. Dollinger is currently one of the principals of DZD Hardwood, a successful family owned business located in Montreal, Canada that specializes in hardwood lumber handling, drying and remanufacturing. He is a graduate of Concordia University.

Gary Moore, Independent Director

Mr. Moore's has an extensive background in finance and accounting. His core areas of expertise include corporate governance and regulatory compliance, risk management and internal control management, and corporate transactions including, but not limited to, the raising of debt and equity capital, joint ventures and mergers and acquisitions. He has held junior and senior executive positions with various companies, including Trionics Technology Ltd., Trivest Management Inc., Global Securities Corporation, Pacific International Securities Inc., and HTI Ventures Corp. He is a graduate from the University of British Columbia from the Faculty of Commerce and from the Masters of Business Administration program.

Non-Brokered Private Placements

Next Gen announces that it has arranged, subject to the acceptance of the CSE and on a Post-Consolidated basis, a non-brokered private placement financing of up to 10,000,000 subscription receipts (the "Subscription Receipts") at a price of $0.10 per Subscription Receipt for gross proceeds of up to $1.0 million (the "Post-Consolidation Private Placement"). The Subscription Receipts are being issued in connection with the proposed Transaction between Next Gen and NamasteVapes. Each Subscription Receipt will be automatically convertible, for no additional consideration, into one unit of the Company (a "Unit") upon satisfaction of certain conditions relating to the Company's completion of the Transaction. Each Unit will consist of one common share and one-half of one common share purchase warrant (a "Warrant"), each whole Warrant entitling the holder thereof to purchase one additional common share of the Company at a price of $0.15 for a period of 24 months. Should the Transaction not close by February 15, 2015, the Subscription Receipts shall be cancelled and the subscription funds shall be distributed to the holders of Subscription Receipts, without interest and deduction for reasonable accounting and legal fees. Upon closing of the Transaction and the conversion of the Subscription Receipts, the proceeds from the Post-Consolidation Private Placement will be used to fund inventory expansion, commercialization of new products, entering new markets, and for general corporate purposes. The common shares issued under the Post-Consolidated Private Placement will be subject to a contractual one year hold period pursuant to a pooling agreement and released from escrow each four months over a period of 12 months from the date of completion of the Transaction. Finder's fees comprised of 7% cash and 7% warrants may be paid in connection with the Post-Consolidation Private Placement. Any finders' fees will be payable in accordance with the policies of the CSE. The Post-Consolidation Private Placement is anticipated to close on or before December 15, 2015.

In addition to the Post-Consolidation Private Placement, Next Gen also announces the completion of a non-brokered private placement financing of 3,200,000 Unit on a pre-consolidated basis (1,066,667 Units post-consolidation) at a price of $0.025 per Pre-Consolidation Unit (a "Pre-Consolidation Unit") for gross proceeds of $80,000 (the "Pre-Consolidation Private Placement"). Each Pre-Consolidation Unit will consist of one common share and one-half of one common share purchase warrant (a "Pre-Consolidation Warrant"), each whole Warrant entitling the holder thereof to purchase one additional common share of the Company at a price of $0.05 for a period of 24 months. The common shares issued under the Pre-Consolidated Private Placement will be subject to a contractual one year holder period pursuant to a pooling agreement and released from escrow each four months over a period of 12 months from the date of completion of the Transaction. The proceeds from the Pre-Consolidation Private Placement will be used to fund transaction costs, settle historic payables of Next Gen and for general corporate purposes. The common shares forming part of the Pre-Consolidation Units shall be consolidated on a 3:1 basis upon completion of the Transaction. Insiders of Next Gen and close business associates have subscribed for the Pre-Consolidation Units.

Selection of Transaction Auditor

Next Gen reports that NamasteVapes has appointed and is currently working with MNP sencrl, srl as independent auditors of its audited annual financial statements as required by the CSE. MNP is a leading national accounting, tax and business consulting firm in Canada. MNP has offices across Canada and is headquartered in Calgary. The firm has approximately 4,000 staff.

About NamasteVapes

NamasteVapes™ is a global leader in vaporizer product distribution and manufacturing. The company has over 30 e-commerce retail stores in 25 countries and aims to provide the best in class and most professional customer experience possible. This is supported by the leading independent consumer review authority, TrustPilot, which presently ranks NamasteVapes™ as #1 in Vaporizer category, scoring a 9.7/10. NamasteVapes™ also owns and operates a separate retail site called GreenVapes.co.uk which is presently expanding internationally as well. The company's retail sites offer the largest range of brand name vaporizers products on the market, which includes distribution partnerships with over 30 manufacturers providing some of the latest and most innovative products in this fast-growing industry.

In addition to its e-commerce distribution business, NamasteVapes™ is actively manufacturing and launching multiple unique proprietary products for retail and wholesale distribution, including vaporizers, accessories and herbs. Recognized as a source of information and reviews on aromatherapy products, NamasteVapes™ has a unique market perspective and ability design and engineer products that align with the current direction of the market and customer needs. This business segment will be banded under the tradename GrizzlyOriginals™ and will include the upcoming launch of the Guru™, an enhanced vaporizer capable of seamlessly vaporizing liquids, concentrates and dry herds from a single portable unit.

NamasteVapes™ is managed by a group of industry experts focused on continued global expansion and providing the best products and service available. Further information on the company and its products can be accessed through the links below:

http://www.namastevapes.co.uk

https://www.trustpilot.com/review/namastevapes.co.uk

About Next Gen

Next Gen is a Canadian public company, whose shares trade on the Canadian Securities Exchange ("CSE") (CSE:N), the OTC pink sheets ("NXTFF") and the Frankfurt Exchange (FRANKFURT:M5BN) which focuses on investing in the Medical Marijuana, Industrial Hemp and Alternative Medicine sectors. Next Gen's vision is to be the leading provider of venture capital, management expertise, education, and a facilitator for these explosive new industries.

Next Gen owns 100% of GreenRush Financial Conferences ("GreenRush"). GreenRush is Canadian conference company focused on business to business opportunities, investment and education for the Medical Marijuana and Industrial Hemp Alternative Medical Sectors. For further information on the company, visit our website at www.nextgenmetalsinc.com.

To receive further information, please subscribe to our email list below:

http://www.nextgenmetalsinc.com/s/InfoRequest.asp

Further Information

Further details about the proposed Transaction and the combined entity will be provided in a comprehensive press release when the parties enter into a Definitive Agreement and in the Listing Statement to be prepared and filed in respect of the Transaction.

Investors are cautioned that, except as disclosed in the Listing 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 CSE listed company should be considered highly speculative.

The CSE has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

On behalf of the Board of Directors

Harry Barr, President & CEO

FORWARD LOOKING INFORMATION

This press release contains forward-looking information based on current expectations. Statements about the closing of the Transaction, expected terms of the Transaction, the number of securities of Next Gen that may be issued in connection with the Transaction, the ownership ratio of Next Gen post closing, the requirement to obtain shareholder approval and the parties' ability to satisfy closing conditions and receive necessary approvals are all forward-looking information. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. Although such statements are based on management's reasonable assumptions, there can be no assurance that the Transaction will occur or that, if the Transaction does occur, it will be completed on the terms described above. The terms described above are not binding unless and until a Definitive Agreement is signed. Next Gen assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by law.

Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. These statements speak only as of the date of this News Release. Actual results could differ materially from those currently anticipated due to a number of factors and risks including various risk factors discussed in the Company's disclosure documents which can be found under the Company's profile on www.sedar.com.

This News Release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The CSE has neither reviewed nor approved the contents of this News Release.

Contact Information