Vida Ventures Ltd.
TSX VENTURE : VDA.P

September 07, 2012 16:07 ET

Vida Ventures Ltd. Announces Letter of Intent With WineOnline Marketing Company Ltd. and Proposed Qualifying Transaction

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 7, 2012) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Vida Ventures Ltd. ("Vida") (TSX VENTURE:VDA.P), a capital pool company, is pleased to announce that it has entered into a letter of intent (the "LOI") dated August 24, 2012 with WineOnline Marketing Company Ltd. ("WineOnline"), for Vida's arm's length acquisition of 100% of the outstanding shares of WineOnline (the "Proposed Transaction"). The Proposed Transaction is intended to be Vida's Qualifying Transaction as defined under Policy 2.4 of the TSX Venture Exchange (the "Exchange") Corporate Finance Manual (the "Manual") and is subject to regulatory approval.

Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Manual.

Proposed Transaction

Pursuant to the LOI, Vida will acquire all of the issued and outstanding common shares of WineOnline in consideration for 14,700,000 common shares of Vida (the "Vida Payment Shares"), which will represent approximately 29% of the outstanding common shares of the Resulting Issuer as at the closing of the Proposed Transaction (the "Closing") immediately after the completion of the Concurrent Financing (as defined herein), on an undiluted basis. Some or all of the Vida Payment Shares will be subject to escrow provisions pursuant to Exchange policies. The Proposed Transaction, when completed, is intended to enable the Resulting Issuer to qualify as a Tier 2 Technology/Industrial Issuer on the Exchange. Contemporaneously with the Closing, it is intended that the Resulting Issuer will change its name. Such name change is subject to regulatory approval. As the Proposed Transaction is not a Non-Arm's Length Transaction, Vida does not expect that the approval of its shareholders will be required for it to complete the Proposed Transaction.

In connection with the Proposed Transaction, Vida expects to pay a finder's fee which may be up to the maximum allowable in accordance with the policies of the Exchange. Vida may, at its election, satisfy the finder's fee through the issuance of common shares which may be subject to a hold period expiring on the date that is four months and one day after the closing date of the Proposed Transaction.

Overview of WineOnline

WineOnline is a private company incorporated under the Business Corporations Act (Ontario) on June 23, 2008. WineOnline specializes in the distribution, marketing, and sale of grape wine products in Ontario and Alberta. Securities of WineOnline have never been listed or traded on any stock exchange.

The head office of WineOnline is located at 15 Adrian Avenue, Unit 166, Toronto, Ontario, M6N 5G4. The registered office of the Company is located at 15 Adrian Avenue, Unit 166, Toronto, Ontario, M6N 5G4. WineOnline does not have any subsidiaries.

WineOnline is jointly owned by The Bick Group Inc., an Ontario company, (as to 85% of its Class A special shares and 76% of its common shares), Jordan Barclay of British Columbia, BC (as to 2% of its common shares), 1407722 Ontario Inc. (as to 15% of its Class A special shares and 15% of its common shares), and LBLux Sicav FIS Junior Mining Fund (as to 7% of its common shares). The Bick Group Inc. is a company incorporated in Ontario, Canada and is owned by David Eaton of British Columbia, BC, Jonathan Bick of Madrid, Spain, and Daniel Bick of Toronto, Ontario. 1407722 Ontario Inc. is a company incorporated in Ontario, Canada and is owned by Kaleem Ahmad of Toronto, Ontario. LBLux Sicav FIS Junior Mining Fund is a fund based in Luxembourg and the beneficial owners are Tobias Tretter of Wil, Switzerland, Wilhelm Tretter of Erbendorf, Germany, Theresia Tretter of Erbendorf, Germany, and Sandra Tretter of Erbendorf, Germany.

WineOnline currently acts as a wine distributor in Ontario and a marketing agent in Alberta. WineOnline offers wine for sale through its corporate website www.wineonline.ca (the "WOL Website") in Ontario and Alberta. When customers access the WOL Website, they must specify whether they are ordering from Alberta or Ontario. In addition, WineOnline currently owns a distribution license in Quebec, although it does not conduct any operations in the province.

Ontario

In Ontario, WineOnline sells and offers wine for sale on behalf of the Liquor Control Board of Ontario (the "LCBO"), representing Ontario and foreign wineries, pursuant to its manufacturers representative licence issued by the Alcohol Gaming Commission of Ontario (the "AGCO"). The LCBO and AGCO have full control over the alcohol industry within Ontario; all imported alcohol is shipped from its source of origin by the LCBO. Wines are stored in LCBO's controlled warehouses until retrieved by a licensed distributor, agent or importer. As a result, WineOnline does not need to carry inventory and therefore bears minimal inventory risk. The LCBO warehouses store all of WineOnline's imported wine until it is ordered and retrieved. A distributor such as WineOnline will pick up an order from an LCBO warehouse once it arrives. Consumers are permitted to pick up their own orders, but generally only distributors, agents and importers retrieve orders from the LCBO warehouses and deliver them to consumers.

WineOnline processes two different types of wine orders through the WOL Website, namely, Regular Orders and Private Orders.

Regular Order

Once an order has been placed through the WOL Website, WineOnline arranges to have the orders sent to the LCBO, or prepared for pick-up by the Ontario winery manufacturing the ordered products, for pick up from an LCBO warehouse, or from the Ontario winery. In order to be classified as a Regular Order, the LCBO, or Ontario winery, must have the specific wine being ordered in stock. WineOnline is notified once the order is ready to be picked up, at which point WineOnline picks the wine up and delivers it to the customer. The entire process can be completed within a day. The customer who orders through the Website pays 100% of the total order cost online when they place the order through the WOL Website. WineOnline pays the LCBO when it retrieves the order from the LCBO warehouse.

Private Order

If a customer orders wine that is not currently held in inventory at an LCBO warehouse or at an Ontario winery, the order is considered "private." In this case, once WineOnline forwards the order details to the LCBO, the LCBO must order the appropriate wine from the foreign winery itself. WineOnline cannot pick the order up and deliver it to the customer until it has been delivered to the LCBO warehouse by the winery, a process that could take up to eight (8) weeks. Unlike a Regular Order, in the case of Private Order, the customer only pays 25% of the online retail price to WineOnline at the time of ordering. The remaining 75% is paid to WineOnline when the shipment is delivered to the customer.

Alberta

In Alberta, WineOnline entered into a business agreement with Enoteca Liquor Store and Specialty Wine ("Enoteca") on March 31, 2011, whereby WineOnline acts as a marketing agent and sells Enoteca's wine through the WOL Website. The Alberta section of the WOL Website only sells Enoteca's wine. When an order is made, WineOnline forwards it to Enoteca, which then stocks the order from its own shelves and ships it to the customers.

Financial Summary

Based on WineOnline's unaudited financial statements, WineOnline generated C$1,426,101 in sales revenue and a net income of C$2,931 during the fiscal year ended June 30, 2011.

Concurrent Financing

In conjunction with the Proposed Transaction, Vida plans to conduct a non-brokered financing (the "Concurrent Financing") to raise up to C$6,000,000 by the issuance of subscription receipts (each "Subscription Receipt") of Vida at a price of C$0.30 per Subscription Receipt. Each Subscription Receipt will be converted, for no additional consideration, into one unit (the "Unit") upon the satisfaction of certain conditions to the completion of the Proposed Transaction. Each Unit is expected to consist of one (1) common share of Vida and one half of one (1/2) common share purchase warrant (each whole warrant a "Warrant"). Each whole Warrant will entitle the holder to purchase one (1) additional common share of Vida at a price of C$0.45 for a period of two (2) years from the Closing. The gross proceeds from the Concurrent Financing will be used for developing WineOnline's own wine brand, hiring sales representatives to promote products, developing online purchase in Quebec, expanding to Western Canada, and exploring the Asian market. Vida may pay finder's fees in connection with the Concurrent Financing up to the maximum fees allowable in accordance with the policies of the Exchange.

Sponsorship

Vida may be required to obtain a sponsor for the Proposed Transaction. If required, the terms of the sponsor's engagement will be negotiated at arm's length.

Conditions of Closing

The LOI will be superseded by a definitive agreement to be negotiated among the parties. Completion of the Proposed Transaction is subject to certain conditions, including the completion of the Concurrent Financing, the receipt of any necessary regulatory approvals in respect of the Proposed Transaction, the election/appointment of new board members for the Resulting Issuer, the satisfactory completion by each party of its respective due diligence investigations, and such other closing conditions as are specified in the LOI and as may be specified in the definitive agreement.

Overview of Management and the Board of Directors

It is proposed that, upon completion of the Proposed Transaction, a new board of directors for Vida will be nominated or elected and will consist of up to six (6) directors whom will be designated jointly by Vida and WineOnline.

Certain planned officers and directors of Vida upon the completion of the Proposed Transaction include:

Director and CEO - Iat Wai Chan

Mr. Chan is an accomplished businessman with experience in various industries. Mr. Chan was also president, chief executive officer and a director of Panoramic Mirrors Inc. (currently known as GLG Life Tech Corporation) until February 2007. Mr. Chan currently operates an import/export business.

It is also intended upon the completion of the Proposed Transaction, another director resident in Canada will be appointed as a director of the Resulting Issuer.

Chief Financial Officer and Corporate Secretary - Herrick Lau

Mr. Lau has over 15 years of experience in corporate finance and public company management. He is currently Managing Director of Baron Group Canada. Mr. Lau previously was Vice President, Corporate Finance in Global Maxfin Capital Inc. and Graydon Elliott Capital Corp. He has extensive experience in advising financial and corporate matters to listed companies in Canada and is currently acting as Chief Financial Officer and Director for several public companies listed on the TSX, TSXV and CNSX. Mr. Lau obtained his bachelor and master degrees in Business and Economics from Simon Fraser University. Mr. Lau is also a charter holder of the Chartered Financial Analyst designation.

The Bick Group Inc. is expected to become an Insider of the Resulting Issuer, as defined in Policy 1.1 of the TSX-V, by virtue of it holding more than 10% of the then issued and outstanding common shares of the Resulting Issuer.

Additional information will be disclosed in a subsequent news release prior to the resumption of trading.

Trading of the common shares of Vida on the Exchange has been halted in connection with the dissemination of this press release, and will remain halted until such time as the Exchange may determine, having regard to the completion of certain requirements pursuant to Exchange Policy 2.4.

ON BEHALF OF THE BOARD

Iat Wai Chan, CEO

VIDA VENTURES LTD.

This press release contains forward-looking statements about Vida and WineOnline (collectively referred to as the "Resulting Issuer") and their respective businesses and future plans, including the planned acquisition, Concurrent Financing and proposed business. Forward-looking statements are statements that are not historical facts and include the nature of the Qualifying Transaction, securities anticipated to be issued to WineOnline's shareholders, Tier 2 listing on the Exchange, and the amount of the proposed Concurrent Financing. The forward-looking statements in this press release are subject to various risks, uncertainties and other factors that could cause the resulting issuer's actual results or achievements to differ materially from those expressed in or implied by forward-looking statements. These risks, uncertainties and other factors include, without limitation, uncertainty as to resulting issuer's ability to achieve the goals and satisfy the assumptions of management; uncertainties as to the availability and cost of financing; the Exchange review and approval of the Proposed Transaction and proposed new directors and officers; general economic factors and other factors that may be beyond the control of the parties. Forward-looking statements are based on the beliefs, opinions and expectations of the management of Vida and WineOnline at the time they are made respectively, and neither Vida or WineOnline assumes any obligation to update its forward-looking statements if those beliefs, opinions or expectations, or other circumstances, should change, to be maximum extent permitted by law.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to Exchange acceptance and if applicable pursuant to other Exchange requirements. There can be no assurance that the Proposed 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 Proposed Transaction, any information released or received with respect to the Proposed 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.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release. Neither 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 release.

Contact Information

  • Vida Ventures Ltd.
    Iat Wai Chan
    CEO
    604-688-9588