Pepcap Ventures Inc.
TSX VENTURE : WAV.P

April 07, 2015 12:02 ET

Pepcap Ventures Inc. Announces Conditional Acceptance of Qualifying Transaction, Filing of Filing Statement and Entering Into of Share Exchange Agreement

CALGARY, ALBERTA--(Marketwired - April 7, 2015) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.

Pepcap Ventures Inc. (TSX VENTURE:WAV.P) (the "Corporation" or "Pepcap"), a "capital pool company", as such term is defined in the policies of the TSX Venture Exchange (the "TSXV" or "Exchange"), is pleased to announce that the TSXV has conditionally accepted the previously announced transaction involving the Corporation and Asia Mining Management B.V. ("Asia Mining"), whereby the Corporation will acquire 51% of the total issued and outstanding shares of Asia Mining (the "Transaction") as the "Qualifying Transaction" of the Corporation, within the meaning of Policy 2.4 of the TSXV. Upon completion of the Transaction, the Corporation will hold an indirect controlling interest in PT. Krida Darma Andika ("Andika"), a 99.6% owned subsidiary of Asia Mining that owns mining concessions in Sumatra, Indonesia divided into two coal blocks, including three coal concessions that are located in the Napal Putih and Putri Hijau districts of North Bengkulu Regency of Bengkulu Province, Indonesia (the "Properties"), as more particularly described in the press releases of the Corporation dated July 11, 2013, September 29, 2014 and December 5, 2014. The Exchange has also granted the Corporation an exemption from the Exchange's sponsorship requirement and has approved the filing of Pepcap's filing statement dated March 31, 2015 (the "Filing Statement") prepared in connection with the Transaction. Further information concerning the Corporation, Asia Mining, the Properties and the Transaction are contained in the Corporation's Filing Statement which is available for review under the Corporation's SEDAR profile at www.sedar.com.

Share Exchange Agreement

The Corporation is also pleased to announce that it has entered into a formal definitive share exchange agreement with Asia Mining, Andika, and the principals of Asia Mining (the "Principals") dated effective March 31, 2015 (the "Share Exchange Agreement") in connection with the Transaction. Subject to certain conditions, as more particularly described in the Share Exchange Agreement and the Filing Statement, completion of the Transaction is anticipated to occur on or prior to April 30, 2015 (the "Closing Date"). The Share Exchange Agreement is available under the Corporation's SEDAR profile at www.sedar.com.

Pursuant to the terms of the Share Exchange Agreement, in exchange for common shares in the capital of Pepcap ("Pepcap Shares"), Pepcap will acquire 9,180 shares in the capital of AM ("AM Shares") in consideration for the issue to the Principals of 26,703,600 Pepcap Shares ("Payment Shares") at a deemed price of $0.11 per share for aggregate deemed consideration of $2,937,396.

Each party to the Share Exchange Agreement acknowledges thereunder that due to the stage of development of the Properties, the actual value of the Payment Shares may be more or less than the deemed value of the 9,180 AM Shares, and as such have assigned adjusted valuations to the Payment Shares in accordance with the terms and conditions of the Share Exchange Agreement as follows:

(a) if the National Instrument 43-101 - Standards of Disclosure for Mineral Projects compliant evaluation to be prepared with respect to the Properties (the "Future Technical Report") within three (3) years of the Closing Date exceeds the target aggregate value of the Properties of not less than $5,600,000 ("Target Value") on or immediately prior to the date of the Future Technical Report (the "Valuation Date"), the Corporation will issue to the Principals that amount of Pepcap Shares ("Bonus Shares") issuable at the market price of the Pepcap Shares (or at a discount as permitted under TSXV policies), valued at the time of issuance in accordance with the policies of the TSXV and subject to TSXV approval and compliance with all applicable laws, as a twenty-percent (20%) bonus on the incremental value of the Properties above the Target Value; and
(b) in the event that the Future Technical Report has not been finalized by the Valuation Date, no Bonus Shares will be issued.

On the Closing Date, the Corporation intends to issue 1,856,400 warrants ("Past Performance Warrants") to purchase Pepcap Shares to certain consultants in consideration for prior services provided to the Corporation in connection with the Transaction. The Past Performance Warrants will be deemed to be exercised a deemed price of $0.12 per Past Performance Warrant into Pepcap Shares upon the Closing Date for aggregate deemed consideration of $222,768. The Corporation also intends to issue 1,190,000 Pepcap Shares ("Finder Shares") to a finder in consideration for finders services provided to the Corporation in connection with the Transaction at a deemed price of $0.12 per share for aggregate deemed consideration of $142,800.

All Payment Shares, Finder Shares and Pepcap Shares issued upon the deemed exercise of the Past Performance Warrants will be subject to a four month hold period under applicable securities laws, and all Pepcap Shares issued upon the deemed exercise of the Past Performance Warrants by directors, officers and insiders of the Resulting Issuer (as defined under the policies of the Exchange) and all Payment Shares will be subject to a Tier 2 Issuer Value Security Escrow Agreement (as defined under the policies of the Exchange).

Additional Information

Completion of the Transaction is subject to a number of conditions including, but not limited to, completion of the "Offering" (as announced in the news release of the Corporation dated December 5, 2014) for minimum aggregate gross proceeds of $850,000, closing conditions customary to transactions of the nature of the Transaction, approvals of all regulatory bodies having jurisdiction in connection with the Transaction and final acceptance from the Exchange of the Transaction as the Qualifying Transaction of Pepcap.

The Pepcap Shares are currently suspended from trading and are to remain suspended from trading until completion of the Qualifying Transaction in accordance with the policies of the Exchange. Assuming the Exchange grants final acceptance of the Transaction, it is anticipated that the Pepcap Shares will resume trading on the Exchange shortly after the Exchange issues its final approval of the Qualifying Transaction under the trading symbol "WAV".

There can be no assurance that the Qualifying Transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the Filing Statement prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying 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.

Cautionary Statements

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the Transaction, the Offering and associated transactions. Although the Corporation believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Corporation can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those that are currently contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Qualifying Transaction, the Share Exchange Agreement, the Offering and associated transactions and that the Qualifying Transaction, the Share Exchange Agreement the Offering and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this news release are made as of the date of this release.

Neither the TSX Venture Exchange, Inc. nor its Regulation Services Provider (as that term is defined in the polices of the TSX Venture Exchange) has in any way passed upon the merits of the Qualifying Transaction and associated transactions and neither of the foregoing entities has in any way approved or disapproved of the contents of this press release.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Pepcap Ventures Inc.
    Clark Swanson
    (403) 451-0327