North Sur Resources Inc.
TSX VENTURE : NST

North Sur Resources Inc.

February 03, 2016 20:31 ET

North Sur Resources Inc. Announces Conditional Acceptance of Reverse Takeover and Filing of Information Circular

CALGARY, ALBERTA--(Marketwired - Feb. 3, 2016) -

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

North Sur Resources Inc. ("North Sur" or the "Corporation") (TSX VENTURE:NST) is pleased to announce that further to the Corporation's press release dated December 31, 2015 regarding an arm's length agreement to acquire, by way of three-cornered amalgamation (the "Transaction") with Integrated Commerce Technology Holdco, Ltd. ("ICT Holdco"), certain intellectual property and know-how relating to a reverse ATM stand-alone "coupon based" machine that is used for cash, debit and credit card transactions (including secure auditable cash payment systems to the state legalized cannabis industry) and such other rights and assets (the "Assets") that relate to such technology, the Corporation has received conditional acceptance from the TSX Venture Exchange (the "Exchange") with respect to the Transaction and has filed its management information circular for the annual and special meeting of its shareholders to be held on March 3, 2016.

Pursuant to the Transaction, ICT Holdco shareholders, other than subscription receipt holders (see "Private Placement" below), will be issued an aggregate of 24,283,330 post-Consolidation common shares of North Sur as 'Resulting Issuer' ("North Sur Shares") at a deemed price of $0.30 per share, for a deemed aggregate value of $7,284,999 in exchange for shares of ICT Holdco held thereby. The Transaction is expected to constitute a Change of Business and Reverse Takeover of North Sur pursuant to the TSX Venture Exchange (the "Exchange") Policy 5.2 - Changes of Business and Reverse Takeovers, and upon completion thereof North Sur will be a Tier 2 Technology Issuer.

In connection with and as a condition of the Transaction, North Sur will consolidate its shares on a 6:1 basis (the "Consolidation"). There are currently 23,390,000 North Sur Shares and options for 420,000 North Sur Shares outstanding which will result in approximately 3,898,333 post-Consolidation North Sur Shares and options for 70,000 post-Consolidation North Sur Shares.

Private Placement

It is a condition to the closing of the Transaction that a concurrent financing be completed for a minimum of $2,000,000 and a maximum of $5,000,000. The non-brokered financing shall consist of an offering of: (a) North Sur Shares at $0.055 per share ($0.33 on a post-consolidation basis); and (b) ICT Holdco subscription receipts at $0.35 per subscription receipt. Such North Sur Shares will be subject to a four (4) month statutory restricted resale period from the date of issuance. Shares of the Resulting Issuer issued pursuant to the conversion of ICT Holdco subscription receipts and exchange of underlying ICT Holdco shares in connection with the Transaction will not be subject to a restricted resale period from issuance.

Assuming that the concurrent financing consists solely of subscription receipts, a minimum of 5,714,285 subscription receipts and a maximum of 14,285,714 subscription receipts will be issued at a price of $0.35 per subscription receipt. Each subscription receipt shall evidence the right to receive one (1) share of ICT Holdco upon satisfaction of certain escrow release conditions, which shall automatically convert, without payment of any additional consideration and without further action on the part of a subscriber, into one (1) North Sur Share (as 'Resulting Issuer') on the closing of the Transaction.

Assuming that the concurrent financing consists solely of North Sur Shares, a minimum of 6,060,606 Common Shares and a maximum of 15,151,515 Common Shares will be issued at a price of $0.33 per share on a post-Consolidation basis.

Finder's fees of up to 7% of the gross proceeds of the concurrent financing may be paid to eligible parties.

The net proceeds from the concurrent financing, as well as, the existing cash resources of North Sur will be used by the Resulting Issuer to fund the operations of the Resulting Issuer.

Select Financial Information

The following is a summary of selected unaudited pro forma financial information of the Resulting Issuer following completion of the Transaction and the minimum concurrent financing of $2 million. The unaudited pro forma financial information set forth below are not necessarily indicative of the results of operations that would have occurred during the period ended October 31, 2015, had the Transaction been effective prior to such periods. The following is a summary only and must be read in conjunction with the information contained in the Information Circular including the unaudited pro forma financial statements of the Resulting Issuer attached thereto.

As at October 31, 2015
Total Assets $2,406,337
Total Liabilities $124,165
Share Capital $3,949,302
Shareholders' Equity $2,282,172

Sponsorship

Mackie Research Capital Corporation, subject to completion of satisfactory due diligence, has agreed to act as sponsor to North Sur 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.

Loan to ICT

As previously announced, North Sur has advanced ICT Holdco's subsidiary operating company ("ICT") $479,000 (the "Secured Loan"). The Corporation has advanced an additional $26,000 to ICT as part of the Secured Loan. The Secured Loan bears interest on the outstanding principal amount at a rate of 6% per annum, with maturity occurring on the earlier of: (a) one (1) year from the effective date of such loan, in the event the definitive agreement in respect of the Transaction has not been executed by the lender and the borrower; and (b) in the event such definitive agreement has been executed before one (1) year from the effective date of such loan, the earlier to occur of the following: (i) the date of termination of such definitive agreement, and (ii) the closing of the Transaction. In the event of default, unpaid amounts shall bear interest at a default rate of 8% per annum.

The Secured Loan is to be used to assist ICT in the development and fabrication of the Greeniosk system, which includes system software and a reverse ATM stand-alone "coupon based" machines for cash, debit and credit card transactions (including secure auditable cash payment systems to the state legalized cannabis industry).

Additional Information

In accordance with Exchange policy, North Sur Shares are currently halted from trading and will remain so until such time as the TSXV determines, which may not occur until completion of the Transaction.

North Sur's management information circular dated January 29, 2015 contains additional information with respect to the Transaction and is available on North Sur's SEDAR profile at www.sedar.com.

Completion of the Transaction is subject to a number of conditions, including TSXV acceptance and disinterested shareholder approval, if required. 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 disclosure document 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 North Sur should be considered highly speculative.

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

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws, unless an exemption from such registration is available.

Forward-Looking Information

Certain statements contained in this news release, including statements or information that contain terminology such as "anticipate", "believe", "intend", "expect", "estimate", "may", "could", "will", "the review and analysis of other business opportunities" and similar expressions constitute "forward-looking statements" within the meaning of applicable Canadian securities laws. All statements, other than statements of historical fact, that address activities, events, or developments that North Sur or a third party expect or anticipate will or may occur in the future, including our future growth, results of operations, performance and business prospects, outlook and opportunities are forward-looking statements. In particular, this news release contains forward-looking statements concerning the completion and timing of the Transaction and Private Placement, expected terms of the Private Placement (including the use of proceeds), the Secured Loan, the requirement for shareholder approval and the parties' ability to satisfy closing conditions and receive necessary approvals.

Forward-looking statements are based on a number of material factors, expectations or assumptions of North Sur which have been used to develop such statements and information but which may prove to be incorrect. Although North Sur believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because North Sur can give no assurance that they will prove to be correct. There can be no assurance that the Transaction and the Private Placement will occur or that, if the Transaction and Private Placement does occur, each will be completed on the terms described above. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results and developments may differ materially from the results and developments discussed in the forward-looking statements as certain of these risks and uncertainties are beyond our control.

Consequently, all of the forward-looking statements made in this news release are qualified by these cautionary statements and the other cautionary statements and risk factors and uncertainties contained in this news release. The reader is cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are made as of the date of this news release. Except as required by applicable Canadian securities laws, the Corporation assumes no obligation to update publicly or revise any forward-looking statements to reflect subsequent information, events, or circumstances.

Neither 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.

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