North Sur Resources Inc.

North Sur Resources Inc.

August 19, 2015 12:21 ET

North Sur Resources Inc. Enters Into Letter of Intent and Announces Private Placement

CALGARY, ALBERTA--(Marketwired - Aug. 19, 2015) -


North Sur Resources Inc. ("North Sur" or the "Corporation") (TSX VENTURE:NST) is pleased to announce that it has entered into a non-binding letter of intent dated August 11, 2015 and accepted on August 13, 2015 (the "Letter of Intent") which outlines the general terms and conditions of a proposed arm's length transaction pursuant to which North Sur proposes to acquire the 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 legal cannabis industry) and such other rights and assets (the "Assets") that relate to such technology (the "Transaction"). It is expected that prior to the execution of a definitive agreement setting forth the detailed terms of the Transaction (the "Definitive Agreement"), the Assets will be owned by a corporate entity ("Targetco"). The Corporation is also pleased to announce the Initial Financing (as defined below).

In connection with the execution of the Letter of Intent, the Corporation has paid fees, including for financial advisory services, in the aggregate amount of approximately $40,000. In addition, the Corporation will provide a secured bridge loan for a minimum of $100,000 and up to $325,000 to Targetco (the "Secured Loan") to assist in the development and fabrication of machines to initially grow the business. Completion of the Secured Loan will be subject to approval of the TSX Venture Exchange ("TSXV"). The Secured Loan is anticipated to be funded in part by way of an initial private placement of up to 6,000,000 common share of the Corporation ("North Sur Shares") at a price of $0.05 per North Sur Share for gross proceeds of up to $300,000 (the "Initial Financing"), which is anticipated to be completed prior to the execution of the Definitive Agreement.

In certain instances, the Corporation may pay finder's fees in cash to certain registrations or eligible persons exempt from registration ("Finders") on a portion of the Initial Financing. Completion of the Initial Financing is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals including the approval of the TSXV.

The net proceeds of the Initial Financing will be used in connection with the Secured Loan and for general corporate purposes. All North Sur Shares issued pursuant to the Initial Financing shall be subject to a four (4) month statutory hold period from the closing of the Initial Financing.

There are currently 14,150,000 North Sur Shares issued and outstanding. In connection with the Transaction, it is expected that North Sur will consolidate its shares on a 6:1 basis (the "Consolidation") and complete a private placement of North Sur Shares for minimum of $5 million (the "Transaction Financing"). Targetco will be issued an aggregate of 24,283,330 post-Consolidation North Sur Shares in exchange for the Assets. It is expected that the Transaction will result in existing holders of North Sur Shares holding approximately 3,358,333 post-Consolidation North Sur Shares (assuming completion of the Initial Financing), representing approximately 12.1% of the outstanding post-Consolidation North Sur Shares prior to giving effect to the Transaction Financing.

The transaction terms outlined in the LOI will be superseded by the Definitive Agreement to be signed by the Corporation and Targetco. The Transaction is subject to regulatory approval, including the approval of the TSXV and customary closing conditions, including the approval of the Definitive Agreement by the directors of each of the Corporation and Targetco, shareholder approval and completion of due diligence investigations to the satisfaction of each of the Corporation and Targetco, as well as the conditions described below. The legal structure for the Transaction will be determined after the parties have considered all relevant tax, securities law, and accounting considerations. There is no assurance that a Definitive Agreement will be successfully negotiated or entered into and there is no assurance that the Initial Financing or the Transaction Financing as described above will be completed.

As the Transaction may be considered a reverse takeover pursuant to the policies of the TSXV, in accordance with the TSXV policies, the 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.

Further Information

If and when a Definitive Agreement between the Corporation and Targetco is executed, the Corporation will issue a subsequent press release in accordance with the policies of the TSXV containing the details of the Definitive Agreement and additional terms of the Transaction.

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 of the Consolidation, the closing of the Transaction, the Initial Financing and the Transaction Financing, expected terms of the Transaction, the Initial Financing (including the use of proceeds) and the Transaction Financing, the terms and funding of the Secured Loan, the number of securities of North Sur that may be issued in connection with the Transaction, the Initial Financing and the Transaction Financing, the ownership ratio of North Sur post-closing, 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 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. 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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