EMI.v News Release... RTO Electric Metals to merge with Moimstone
2012-09-28 15:16 PT - News Release
Mr. Tony Ricci reports
ELECTRIC METALS INC. AND MOIMSTONE CORPORATION ANNOUNCE SIGNING OF DEFINITIVE AGREEMENT
Electric Metals Inc. has entered into an arrangement agreement with Moimstone Corp., pursuant to which Moimstone and Electric Metals will amalgamate by way of a court-approved plan of arrangement to form a new corporation, governed under the Business Corporations Act (British Columbia) (Amalco). Electric Metals and Moimstone intend to apply to list the common shares of Amalco for trading on the TSX Venture Exchange and completion of the amalgamation will be subject to receiving conditional listing approval from the exchange. The amalgamation will constitute a reverse takeover of Electric Metals, pursuant to exchange Policy 5.2. The amalgamation is also subject to court approval, shareholder approval and the satisfaction of certain conditions in the arrangement agreement. Upon completion of the amalgamation, the name of Amalco will be Moimstone.
About Moimstone
Moimstone was formed and exists under the Canada Business Corporations Act. It is a Canadian technology company principally engaged in the design, development, marketing, and sale of communications equipment and software. It has a wholly owned Korean subsidiary with an eight-year history of supplying voice over Internet protocol (VoIP) telephone equipment and other products to major Korean and international telecommunications carriers. In the six months ended June 30, 2012, Moimstone had revenues of over $15-million. The company's head office is located in Richmond, B.C., Canada.
The amalgamation
Pursuant to the arrangement agreement, each issued and outstanding common share of Moimstone will be cancelled and exchanged for one Amalco share, and each issued and outstanding common share of Electric Metals will be cancelled and exchanged for 0.1 Amalco share. In addition, holders of issued and outstanding options to purchase common shares of Moimstone will receive one replacement option to purchase one Amalco share under Amalco's proposed stock option plan for each Moimstone option held, and holders of issued and outstanding options to purchase common shares of Electric Metals will receive 0.1 replacement option to purchase Amalco shares under Amalco's proposed stock option plan for each Electric option held. In addition, holders of issued and outstanding common share purchase warrants of Electric Metals will receive 0.1 replacement common share purchase warrant of Amalco for each Electric warrant held.
In order to effect the amalgamation, Moimstone will continue from the Canada Business Corporations Act to the Business Corporations Act (British Columbia).
The board of directors of Electric Metals has determined that the amalgamation is in the best interests of Electric Metals and that shareholders of Electric Metals should vote in favour of the amalgamation. Electric Metals' shareholders will also be able to participate in the future growth potential of Moimstone.
Concurrent Financing
Concurrently with the Amalgamation, Electric Metals and Moimstone have engaged Union Securities Ltd. ("Union") to conduct an offering of units (the "Units") of up to $2,000,000 on a commercially reasonable efforts basis (the "Financing"). Each Unit will be comprised of one common share and one-half warrant. Each warrant will entitle the holder to purchase one common share for a period of 18 months from the date of closing of the Financing.
Moimstone and Electric have agreed to pay Union a cash commission equal to 7% of the aggregate proceeds raised under the Financing. Union will also be issued options equal to 7% of the number of Units sold under the Financing (the "Compensation Options"), with each such Compensation Option being exercisable, for a period of 18 months following closing of the Financing, for one common share. Union has also agreed to act as a sponsor in connection with the transaction, if a sponsor is required.
Finder's Fee
In connection with the transaction, a finder's fee of 1,500,000 Amalco Shares will be issued to Mauris Financial Corp. ("Mauris") or such other party as may be designated by Mauris prior to the closing of the Amalgamation.
Board of Directors of Amalco
Upon completion of the Amalgamation, the board of directors of Amalco will be comprised of the following individuals: Chang Woo Lee, Rob Bakshi, Timothy James Howley, Peter W. Roberts, Mark Jackson, Fred Di Blasio and Tony M. Ricci, each of whom is currently a director of Moimstone other than Tony M. Ricci who is currently a director of Electric Metals. Their brief corporate biographies are provided below.
Chang Woo Lee - Mr. Lee founded Moimstone in 2003, and is a director of Moimstone. He previously worked with the telecommunications division of 3M Korea. Mr. Lee has 22 years experience in the telecommunications and multimedia industry. He also has a degree in electrical engineering from Sungkyun Kwan University in Seoul, South Korea.
Rob Bakshi - Mr. Bakshi is the President and CEO of Moimstone. Mr. Bakshi is a Canadian-based entrepreneur and the founder and former CEO of Silent Witness Enterprises Ltd., a company founded in 1986 and listed on the Toronto Stock Exchange until being acquired by Honeywell International Inc. in 2003.
Timothy James Howley - Mr. Howley is the CFO of Mark Anthony Group Inc. He was a former partner at KPMG LLP and also held roles as CEO and CFO at A&B Sound from 1999 to 2005.
Peter W. Roberts - Mr. Roberts was the CFO and Corporate Secretary of Sierra Wireless from January 1999 to March 2004, guiding Sierra Wireless, Inc. through its IPO on the Toronto Stock Exchange, financings and subsequent listing on the NASDAQ in 2000. He is currently a director and Audit Committee Chair of Cardiome Pharma Corp. and a director of the Canadian Public Accountability Board. He is a Chartered Accountant (FCA), FCCA, CPA (Illinois) and a member of the Institute of Chartered Accountants of B.C., the Canadian Institute of Chartered Accountants and the Institute of Corporate Directors.
Mark Jackson - Mr. Jackson was formerly SVP Canadian Equity at Natcan Investment Management and has held a number of high profile fund management positions in Canada. He was VP Investments of Transamerica Life Canada from July 1994 to November 2001, as well as President, CEO and CIO of AEGON Capital Management Inc. from November 2001 to June 2008. Mr. Jackson is a Chartered Financial Analyst.
Fred Di Blasio - Mr. Di Blasio was formerly the Chief Strategy Officer of SMC Networks, Inc. Mr. Blasio has 12 years of leadership experience at the executive level in the telecommunications industry and 16 years experience within the global wireline and wireless communication industry. He was Director, Mergers and Acquisitions, at AT&T from 1997 to 2002, and then Vice-President, Strategic Development Group at AT&T Broadband from 2000 to 2002. He has also worked at Bell Cablemedia PLC, from 1995 to 1996, in TD Securities' media and telecommunications group in 1997, and as a consultant in the industry from 2003 to 2004 and again from 2008 to 2009.
Tony M. Ricci - Mr. Ricci is a chartered accountant with over 25 years of practice experience, mainly with public companies listed on Canadian and U.S. stock exchanges. Mr. Ricci was formerly a director and CFO of Keegan Resources Inc. (TSX: KGN, NYSE: KGN), a director and CFO of Norsemont Mining Inc. (TSX:NOM), and CFO of both Petaquilla Minerals Ltd. (TSX:PTQ) and Petaquilla Copper Ltd., companies with a combined market capitalization approaching $2 billion. He is also a director and officer of various other listed companies and was formerly with KPMG and AMEC Engineering Inc.
Required Approvals
In addition to court approval, the Amalgamation is subject to the approval of two-thirds of the votes cast at meetings of Moimstone shareholders and Electric Metals shareholders.
The Electric Metals shareholders' meeting is expected to be held in late November. In connection with the meeting, Electric Metals expects to mail a management information circular (the "Electric Circular") to its shareholders in early November. The Moimstone shareholders' meeting is expected to be held late November. In connection with the meeting, Moimstone expects to mail a management information circular (the "Moimstone Circular") to its shareholders in early November. The Electric Metals Circular will also form the Exchange listing application required to enable Amalco to receive approval from the Exchange to list its shares on the Exchange upon completion of the Amalgamation.
The Amalgamation is expected to be completed in early December, subject to receipt of court approval, shareholder and Exchange approval. There can be no assurance that the transaction will be completed as proposed or at all.
Trading in Electric Metals' common shares is currently halted in accordance with the policies of the Exchange and is expected to remain halted until after the Exchange accepts and confirms the completion of the Amalgamation.
More information with respect to the Amalgamation and Amalco will be provided by Electric Metals in a follow-up news release and before any resumption of trading of the Electric Metals common shares is permitted by the Exchange.
We seek Safe Harbor.