Sanction Capital Corp.
NEX BOARD : SRP.H

Marsa Energy Inc.

September 24, 2014 17:59 ET

Sanction Capital Corp. and Marsa Energy Inc. Complete Amalgamation

CALGARY, ALBERTA--(Marketwired - Sept. 24, 2014) -

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES.

Sanction Capital Corp. ("Sanction") (NEX BOARD:SRP.H) is pleased to announce that further to its news releases dated July 31, 2014 and August 22, 2014, it has successfully completed an amalgamation (the "Amalgamation") with Marsa Energy Inc. ("Marsa") to form a new company pursuant to the Business Corporations Act (Alberta) ("ABCA"), "Marsa Energy Inc." (the "Resulting Issuer"). The Amalgamation constitutes the Qualifying Transaction of Sanction pursuant to Policy 2.4 of the TSX Venture Exchange ("Exchange").

The Amalgamation was approved by the shareholders of Sanction and Marsa at their respective meetings of shareholders held on September 11, 2014 and became effective on September 24, 2014, the date the Certificate of Amalgamation was issued in respect of the Amalgamation under the ABCA. Pursuant to the Amalgamation, the Resulting Issuer issued 0.09259259 of a fully paid and non-assessable common share of the Resulting Issuer ("Resulting Issuer Share") in exchange for each one (1) issued and outstanding common share of Sanction ("Sanction Shares") and one (1) Resulting Issuer Share in exchange for each one (1) issued and outstanding common share of Marsa ("Marsa Shares"). Following both the concurrent financing described below and the Amalgamation, former holders of Sanction Shares ("Sanction Shareholders") hold 388,889 Resulting Issuer Shares and former holders of Marsa Shares ("Marsa Shareholders") hold 35,135,325 Resulting Issuer Shares, each representing 1.09% and 98.91%, respectively, of the outstanding Resulting Issuer Shares. Each Resulting Issuer Share issued to Marsa Shareholders and Sanction Shareholders pursuant to the Amalgamation was issued at a deemed price of $1.35 per Resulting Issuer Share.

As a result of the Amalgamation, the Resulting Issuer has 35,524,214 common shares issued and outstanding (and 37,694,214 on a fully diluted basis). Pursuant to the terms of an escrow agreement among the Resulting Issuer, Valiant Trust Company and certain escrowed security holders, an aggregate of 12,805,300 Resulting Issuer Shares have been placed in escrow, whereby 10% will be released on issuance of the Final Exchange Bulletin (as such term is defined in the policies of the Exchange), and the balance of such shares will be released in tranches over the next 36 months. In addition, an aggregate of 407,000 Resulting Issuer Shares will be subject to a resale restriction for a period of four (4) months pursuant to the Exchange's resale matrix.

Trading in Resulting Issuer Shares on the Exchange under a new trading symbol "MEP" will commence upon issuance of the Final Exchange Bulletin, which is expected on or before September 30, 2014.

Early Warning

Mr. J. Scott Price of Suite 300, 340 - 12th Avenue S.W., Calgary, AB T2R 1L5, a director of pre-Amalgamation Marsa and now a director of the Resulting Issuer, held 4,250,000 Marsa Shares. Upon completion of the Amalgamation, Mr. Price now beneficially owns and has control over 4,250,000 Resulting Issuer Shares representing 11.97% of the issued and outstanding Resulting Issuer Shares.

A copy of the early warning report filed pursuant to National Instrument 62-103 The Early Warning System and Related Take Over Bids and Insider Reporting Issues can be found at www.sedar.com.

Management of the Resulting Issuer

Prior to the completion of the Amalgamation, Jacqueline Sheppard resigned as a director of pre-Amalgamation Marsa.

The board of directors of the Resulting Issuer consists of Blair Anderson, J. Scott Price, Ray Antony, Peter Sider and Bradley Fedora. The management team of the Resulting Issuer is comprised of Blair Anderson as President and Chief Executive Officer, Ricardo Montes as Vice President Finance and Chief Financial Officer, Fadi Nammour as Vice President Operations and Business Development, Brian Boulton as Chief Operating Officer and Roy Hudson as Corporate Secretary.

Granting of Stock Options

An aggregate of 1,825,000 additional options to purchase Resulting Issuer Shares exercisable at a price of $1.50 for a period of five (5) years have been issued to directors, officers and certain employees of the Resulting Issuer in connection with the Amalgamation.

Closing of the Concurrent Financing

Concurrent with the completion of the Amalgamation, Marsa completed a brokered private placement of 1,370,667 subscription receipts ("Subscription Receipts") for gross proceeds of $2,056,000.50 at an issue price of $1.50 per Subscription Receipt (the "Offering"). In accordance with their terms, each Subscription Receipt entitled the holder to one (1) Marsa Share without payment of additional consideration immediately preceding the completion of the Amalgamation as all conditions precedent to the completion of the Amalgamation were met or waived. Upon completion of the Amalgamation, holders of such Marsa Shares received one (1) Resulting Issuer Share for each one (1) issued and outstanding Marsa Share held.

The Offering was led by Canaccord Genuity Corp. and included FirstEnergy Capital Corp. and Raymond James Ltd. (the "Agents"). As consideration for acting as agent for the Offering, the Agents received a cash commission equal to 6% of gross proceeds of the Offering excluding proceeds raised by Marsa directly.

Proceeds of the Offering will be used for general corporate purposes in respect of the Ortakoy Exploration Licence located in the Thrace Basin in the Republic of Turkey, to pay the costs associated with the Offering and for working capital and other corporate purposes.

About the Resulting Issuer

The Resulting Issuer will be a Calgary-based oil and gas company focused on the Middle East, North Africa and Mediterranean regions with oil and gas assets in Turkey. Additional information regarding the Resulting Issuer is disclosed in the joint management information circular of Sanction and Marsa dated August 14, 2014 and filed on www.sedar.com on August 15, 2014.

ADVISORY: This press release may contain "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein may be forward-looking information. Generally, forward-looking information may be identified by the use of forward-looking terminology such as "plans", " expects" or "does not expect", "proposed", "is expected", "budgets", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. This forward-looking information in respect of the Resulting Issuer the Resulting Issuer's current beliefs and is based on information currently available to the Resulting Issuer and on assumptions the Resulting Issuer believes are reasonable. These assumptions include, but are not limited to, management's assumptions about the Exchange's final approval for the Qualifying Transaction. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Resulting Issuer to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; commodity prices; delay or failure to receive board or regulatory approvals; changes in legislation, including environmental legislation, affecting the Resulting Issuer; timing and availability of external financing on acceptable terms; the drilling and completion of future wells; and limited available geological data and uncertainties regarding the actual production characteristics of, and recover efficiencies associated with, the reservoirs. Although the Resulting Issuer has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

The forward-looking statements contained in this press release represent the expectations of the Resulting Issuer as of the date of this press release and, accordingly, are subject to change after such date. However, the Resulting Issuer expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.

Final completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to final Exchange acceptance.

Investors are cautioned that, except as disclosed in the joint information circular of Sanction and Marsa prepared in connection with the Amalgamation, any information released or received with respect to the Amalgamation 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.

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

THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

Contact Information

  • Marsa Energy Inc.
    Blair Anderson
    President and Chief Executive Officer
    (403) 930-6200