Tilting Capital Corp.
NEX BOARD : TLL.H

November 06, 2015 17:38 ET

Tilting Capital Corp. Announces Amendment Agreement, Private Placement and Sponsorship Engagement

CALGARY, ALBERTA--(Marketwired - Nov. 6, 2015) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES

Tilting Capital Corp. (the "Corporation" or "Tilting") (NEX:TLL.H) announces that it has entered into an amendment agreement (the "Amendment Agreement"), which amends the amended and restated agreement and plan of merger dated August 19, 2015 among Tilting, ArcScan, Inc. ("ArcScan") and Tilting AcquisitionCo, Inc. Pursuant to the Amendment Agreement, the parties have agreed to extend the outside date of the proposed business combination involving Tilting and ArcScan (the "Transaction") to December 18, 2015 and that Tilting will provide a bridge loan (the "Bridge Loan") in the principal amount of up to CDN$650,000 to ArcScan.

In connection with the above, the Corporation also announces that it intends to complete a private placement (the "Private Placement") of aggregate gross proceeds of a minimum of CDN$2,000,000 and a maximum of CDN$4,000,000. The Private Placement will be comprised of debentures of Tilting (the "Debenture Placement") and common shares of Tilting ("Common Shares") (the "Common Share Placement").

Tilting may engage an agent or a syndicate of agents to act as agent for all or a portion of the Private Placement. The Corporation may pay a finders' fee or a commission to eligible parties in connection with the Private Placement and the Debenture Placement. Such fees will be comprised of: (i) an option to acquire 8% of the Common Shares issued in connection with the offering at the issue price of the Common Share Placement and exercisable for a period of twenty-four months; and (ii) 8% of the gross proceeds payable in cash or shares (in the case of the Debenture Placement) of the Corporation on subscriptions introduced to the Corporation by such finders.

The Debenture Placement is expected to be comprised of up to CDN$700,000 of convertible debentures ("Debentures"). The Debentures will mature November 30, 2016 and bear interest at a rate of 10% per annum paid semi-annually in cash. The principal amount of the Debentures is convertible at any time at the option of the holder into one Common Share at an issuance price of CDN$0.16 per Common Share (the "Conversion Price"), and upon giving effect to such conversion, all accrued and unpaid interest will be paid in cash within 60 days. The Debentures will automatically convert into 1.15 Common Shares at the Conversion Price upon completion of the Transaction (except in the circumstances where more than 25% of the Debentures are purchased by insiders, in which case the conversion ratio will be 1:1). The Corporation may at any time after the date of issue (upon 14 days' notice) repay all, or a portion, of the principal amount outstanding under the Debentures.

The Corporation has received aggregate gross proceeds of CDN$468,000 to date pursuant to the Debenture Placement. Tilting has used the net proceeds of the Debenture Placement to provide the Bridge Loan and to pay transaction costs in connection with the Debenture Placement and the Transaction. Any additional amounts received pursuant to the Debenture Placement are also committed to fund additional advances pursuant to the Bridge Loan and to pay transaction costs in connection with the Debenture Placement and the Transaction. The Bridge Loan will mature on November 30, 2016, bear interest at a rate of 10% per annum and be repayable by ArcScan at any time without penalty.

The Private Placement and Bridge Loan are subject to all regulatory approvals, including the acceptance of the TSX Venture Exchange ("TSXV").

In addition to the Bridge Loan, ArcScan has completed a private placement of preferred shares for aggregate proceeds of USD$250,000. Upon closing of the Transaction, the preferred shares will be exchanged for Common Shares in accordance with the terms of the Transaction.

The securities issued in connection with the Private Placement will be subject to a statutory hold period of four months.

The Corporation is also pleased to announce that it has engaged Haywood Securities Inc. ("Haywood") to act as sponsor in relation to the Transaction. As consideration for acting as sponsor, Haywood will receive a sponsorship fee. More information will be disclosed in the filing statement and made available on www.SEDAR.com.

For further information regarding the details of the Transaction please refer to the press releases dated July 2, 2015 and August 24, 2015, each filed on SEDAR at www.sedar.com under Tilting's profile.

Trading in the Common Shares on the TSXV is halted and may remain so until completion of the Transaction.

Reader Advisory

Haywood Securities Inc., subject to completion of satisfactory due diligence, has agreed to act as sponsor 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.

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and, if applicable pursuant to the Exchange requirements, a majority of the minority shareholder approval. Where applicable, 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.

Certain information set forth in this news release contains forward-looking statements or information ("forward-looking statements"), including details about the Transaction and the Private Placement. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Corporation's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, operational risks, competition from other industry participants, stock market volatility, the risks that the parties will not proceed with the Transaction or the Private Placement, that the ultimate terms of the Transaction or the Private Placement will differ from those that currently are contemplated, and the ability to access sufficient capital from internal and external sources. Although the Corporation believes that the expectations in its forward-looking statements are reasonable, its forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on the forward-looking statements, as no assurance can be provided as to future results, levels of activity or achievements. Risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our public disclosure documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, the Corporation does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and shareholder approval (if required). The Transaction cannot close until shareholder approval is obtained (if required). 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 management information circular or filing 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 on. Trading in the securities of Tilting Capital Corp. should be considered highly speculative.

Neither the NEX Board nor the TSX Venture Exchange Inc. has in any way passed upon the merits of the proposed transaction and has neither approved or disapproved the contents of this press release.

All information contained in this press release with respect to the Corporation and ArcScan was supplied by the Corporation and ArcScan, respectively, for inclusion herein.

This news release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States or to or for the account or benefit of U.S. persons (as such terms are defined in Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act")), absent registration or an exemption from registration. The securities offered have not been and will not be registered under the U.S. Securities Act or any state securities laws and, therefore, may not be offered for sale in the United States, except in transactions exempt from registration under the U.S. Securities Act and applicable state securities laws.

Neither the NEX Board, the 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 press release.

Contact Information

  • Tilting Capital Corp.
    Scott P. Hayduk
    (403) 444-7845