CALGARY, ALBERTA--(Marketwired - Jan. 5, 2016) -
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 closed ("Closing") the second tranche of the previously announced debenture private placement (the "Debenture Placement"). The Closing comprised of CDN$279,000 of convertible debentures of the Corporation ("Debentures"). The Debentures will mature November 30, 2016 and bear interest at a rate of 10% per annum paid semi-annually in cash (or shares at the election of the Corporation). Each $1,000 principal amount of the Debentures will be convertible at the option of the holder, at any time after Closing and prior to the maturity date into 6,250 common shares of the Corporation ("Common Shares"), representing a conversion 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 (or shares at the election of the Corporation). The Debentures will automatically convert into Common Shares at the Conversion Price upon completion of the merger with ArcScan Inc., ("ArcScan") (the "Transaction"). 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 issued an aggregate principal amount of CDN$678,000 of Debentures.
Tilting has used the majority of the net proceeds of the Closing to provide an additional CDN$250,000 bridge loan to ArcScan (the "Bridge Loan"), pursuant to the bridge loan announced in the Corporation's press release dated November 6, 2015. Any additional amounts received pursuant to further tranches of the Debenture Placement, up to an additional CDN$250,000, may be used to fund additional advances pursuant to the Bridge Loan and to pay transaction costs in connection with the Transaction. The Bridge Loan will mature on November 30, 2016, bear interest at a rate of 10% per annum paid in cash semi-annually and be repayable by ArcScan at any time without penalty. Following Closing, the Corporation will have advanced a total of CDN$649,000 to ArcScan pursuant to the Bridge Loan.
In addition to the above, Tilting and ArcScan have 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, and Tilting AcquisitionCo, Inc. Pursuant to the Amendment Agreement, the parties have agreed to extend the outside date of the Transaction to January 29, 2016 and that Tilting may provide a further advance to ArcScan of up to CDN$250,000 pursuant to the Bridge Loan.
The Debenture Placement (and finder's fee discussed below) is subject to the final acceptance of the TSX Venture Exchange ("TSXV"). The Debentures will be subject to a statutory hold period of four months.
Pursuant to the Closing, Paloduro Investments Inc. (a company controlled by Robert Cross) acquired CDN$129,000 principal amount of Debentures. Following the Closing, Paloduro Investments Inc. and Robert Cross collectively own 2,647,060 Common Shares and CDN$228,000 principal amount of Debentures (convertible into 1,425,000 Common Shares), representing approximately 12.8% of the issued and outstanding voting securities of the Corporation on a non-diluted basis and 15.9% of the issued and outstanding securities of the Corporation, assuming exercise of the Debentures held by Paloduro Investments Inc.
The Debentures were acquired for investment purposes and Paloduro and Mr. Cross may increase or decrease their beneficial ownership or control depending on market or other conditions.
A copy of the Early Warning Report may be found on www.SEDAR.com
The Corporation has agreed to pay a finders' fee to St. Peter Invest Group Inc. in connection with the Closing in respect of certain subscribers who are not insiders to the Corporation or ArcScan. Such fees will be comprised of: (i) an option to acquire 8% of the Common Shares issuable upon conversion of the Debentures and exercisable for a period of twenty-four months at a price of $0.16 per Common Share; and (ii) 8% of the gross proceeds payable in Common Shares (at a deemed price of $0.16) on subscriptions introduced to the Corporation by such finder. Half of the finder's fee is payable following TSXV acceptance and the remaining half upon closing of the Transaction.
In connection with the Closing, the Debentures issued in the first tranche closing of the private placement (the "First Tranche Debentures") have been amended to provide for the conversion of the principal amount of the First Tranche Debentures into one Common Share at an issuance price of CDN$0.16 per Common Share (rather than 1.15 Common Shares per CDN$0.16).
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 additional Debenture Placement closings. 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 additional Debenture Placement closings, that the ultimate terms of the Transaction 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:
Scott P. Hayduk
(403) 560-4951