Charlotte Resources Ltd.
CNSX : CHT

Tranzeo Wireless Technologies Inc.
TSX : TZT.H

Tranzeo Wireless Technologies Inc.

July 04, 2014 07:30 ET

Tranzeo and Charlotte Complete Business Combination

VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 4, 2014) -

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

Tranzeo Wireless Technologies Inc. (the "Company" or "Tranzeo") (TSX:TZT.H) and Charlotte Resources Ltd. ("Charlotte") (CSE:CHT) announce that Tranzeo and Charlotte have completed their business combination (the "Business Combination") pursuant to the plan of arrangement (the "Plan of Arrangement") adopted pursuant to the business combination agreement (the "Business Combination Agreement") between Tranzeo and Charlotte dated March 3, 2014, as amended. The Business Combination was described in the Joint Information Circular of Tranzeo and Charlotte dated April 25, 2014. Shareholders of Tranzeo and Charlotte approved the Business Combination at the respective meetings of shareholders on May 26, 2014. The final order of the British Columbia Supreme Court to the completion of the Plan of Arrangement required to give effect to the Business Combination was granted on June 4, 2014.

Arrangement

Pursuant to the Plan of Arrangement, Tranzeo amalgamated with a wholly owned subsidiary of Charlotte that was incorporated to give effect to the Business Combination. The amalgamated company is named "Tranzeo Wireless Technologies Inc." and continues as a wholly owned subsidiary of Charlotte. Tranzeo's business operations will continue to be carried on by the amalgamated company.

Share Exchange

Pursuant to the Plan of Arrangement, each shareholder of Tranzeo has been issued one common share of Charlotte for each 7.5 common shares of Tranzeo owned. In aggregate, Charlotte issued approximately 9,676,460 common shares in exchange for the previously outstanding 72,573,450 common shares of Tranzeo.

An additional 1,200,000 common shares were issued to a finder in connection with the acquisition.

Private Placement

Charlotte completed a private placement concurrent with the completion of the Business Combination pursuant to which it has issued an aggregate of 10,643,331 units (each a "Unit"). Each Unit is comprised of one common share of Charlotte and one Charlotte share purchase warrant. Each Charlotte share purchase warrant (each a "Charlotte Warrant") entitles the holder to purchase one additional common share of Charlotte at a price of $0.225 per share for a period of three years expiring July 3, 2017. Aggregate gross proceeds of $1,596,500 were raised by Charlotte as a result of completion of the private placement, of which $400,000 was attributable to the conversion of the $400,000 loan previously advanced to Tranzeo by certain investors in connection with the Business Combination Agreement into private placement units.

Charlotte paid finder's fees aggregating $62,055 and issued 413,700 Charlotte Warrants to finders in connection with the completion of the private placement.

Charlotte has determined to leave the private placement open for an additional 45 days to raise additional gross proceeds of up to $403,500.

Debt Conversion

Charlotte issued an aggregate of 38,188,814 Units to creditors of Tranzeo concurrent with the completion of the Business Combination Agreement. The Units were issued to the creditors in consideration of the acquisition by Charlotte of the debt owed by Tranzeo to the creditor on the basis of one Unit per $0.15 of debt acquired. As a result of the debt acquisition, Charlotte has acquired an aggregate of $5,728,324.59 of debt owed to former Tranzeo creditors and the creditors are now security holders of Charlotte.

Option and Warrant Exchanges

Under the plan of arrangement, Charlotte has issued warrants to purchase 1,417,331 common shares of Charlotte and options to purchase 128,926 common shares of Charlotte to the former warrant holders and option holders of Tranzeo. Each warrant holder and option holder received a number of warrants or options, as applicable based on the 7.5 exchange ratio and the exercise price of the warrants and options, as applicable, has been correspondingly adjusted.

Debt Deferred Payment Agreements

As a result of the completion of the Business Combination Agreement, the debt deferred payment agreements entered into between Tranzeo and its creditors in respect of an aggregate of approximately $7.3 million of debt owed by Tranzeo to the creditors are now effective. Under the debt deferred payment agreements, Tranzeo is obligated to repay the debt in full in installment payments over terms ranging from four to six years, as disclosed in further detail in the Information Circular.

Board of Directors

In accordance with the shareholder approval of Charlotte, the following are now the directors of Charlotte effective as of the completion of the Business Combination:

  • James A. Tocher
  • George Zhu
  • Gordon Becker
  • Patrick Smith
  • Virginia Olnick
  • John G. Proust
  • David Hughes
  • Jason Bednar

Officers

As disclosed in the Joint Information Circular for the Business Combination, the officers of Charlotte will be as follows:

  • James A. Tocher - Chief Executive Officer
  • Dev Mukerji - Chief Financial Officer
  • Claude G. Waters - President

TSX Venture Exchange Delisting

Tranzeo has received confirmation of delisting of common shares of Tranzeo from the NEX Board of the TSX Venture Exchange. For more information, please refer to the delisting bulletin issued by the TSX Venture Exchange on July 3, 2014.

Overview of Securities Issued

The issued and outstanding common shares of Charlotte now consists of approximately 87,010,402 common shares. Prior to the Business Combination, there were 27,301,797 common shares of Charlotte issued and outstanding. The following is an overview of the securities issued, as described in detail above:

Securities Issued to: Common Shares Issued Warrants Issued Options Issued
Tranzeo Shareholders 9,676,460 - -
Private Placement 10,643,331 10,643,331 -
Investors
Former Tranzeo 38,188,814 38,188,814 -
Creditors
Former Tranzeo - 1,417,331 -
Warrant holders
Former Tranzeo Option - - 128,926
Holders
Finders 1,200,000 413,700 -

None of the securities issued or issuable by Charlotte have been registered in the United States under the Securities Act of 1933, as amended, or under any state securities laws and such securities may not be offered or sold in the United States absent registration or any applicable exemption from the registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the securities in any state in which such officer, solicitation or sale would be unlawful.

About Charlotte Resources Ltd. and Tranzeo Wireless Technologies Inc.

Charlotte Resources Ltd. is a publicly traded company incorporated in British Columbia and listed on the CSE and trading under the symbol "CHT".

Tranzeo Wireless Technologies Inc. (TSX:TZT.H) leads the wireless broadband industry as a premier manufacturer of high-performance wireless network equipment that allows communities and businesses to communicate without boundaries. Tranzeo's full spectrum of point-to-point and point-to- multipoint radios, WiMAX equipment, and mesh network solutions are designed for wireless internet service providers, governments, campuses, military, carriers, enterprise customers, and systems integrators around the globe. Tranzeo is headquartered in Pitt Meadows, British Columbia. Visit http://www.tranzeo.com or phone 1.866.872.6936 for more information.

Forward-Looking Information

Certain disclosure in this release, including statements regarding the Business Combination constitute forward-looking statements. In making the forward-looking statements in this release, the Company has applied certain factors and assumptions that are based on the Company's current beliefs as well as assumptions made by and information currently available to the Company. Although the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect, and the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. The Company does not intend, and 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 required by law.

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

Completion of the private placement for additional proceeds is subject to CSE acceptance.

The CSE has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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