RE: RE: RE: Vicky do you have any proof of this? The transaction
Intertainment entered into a letter of intent dated Feb. 22, 2012, with Capstream Ventures Inc., a capital pool company listed on the TSX Venture Exchange, which contemplates:
- Capstream consolidating its share capital on a basis of 14 old for one new;
- Capstream acquiring all of the issued and outstanding shares of Ortsbo in consideration of the issuance of 30 million Capstream common shares, on a postconsolidation basis, at a price equal to the private placement price (as defined herein) of $7 per share, of which 20.1 million Capstream shares will be issued to Intertainment's Ortsbo subsidiary security holders (67 per cent of the prefinancing value for Ortsbo), and the remaining 9.9 million Capstream shares will be distributed to the security holders of Intertainment on a pro rata basis (33 per cent of the prefinancing value for Ortsbo).
In connection with the transaction, the parties are investigating the process of listing the common shares of the resulting entity on a senior exchange in Canada and a potential dual listing on a senior exchange in the United States following the completion of the transaction.
The parties expect the transaction will proceed by way of a plan or arrangement under which Capstream will continue as an entity listed on a senior exchange in Canada. The business of the resulting issuer will be that of Ortsbo, and it is expected the resulting issuer will change its name to Ortsbo Inc. Following the completion of the transaction, it is expected that Intertainment will continue to meet TSX Venture Exchange listing requirements, based on its remaining assets, and will remain listed on the TSX Venture Exchange.
Following the completion of the transaction and assuming the completion of the minimum private placement described herein, it is expected that Intertainment's Ortsbo subsidiary security holders will hold 20.1 million (57.8 per cent) shares of the resulting issuer, Intertainment security holders will hold 9.9 million (28.4 per cent) shares of the resulting issuer, subscribers under the private placement will hold 4,285,714 (12.3 per cent) shares of the resulting issuer and the current shareholders of Capstream will hold 561,771 (1.6 per cent) shares of the resulting issuer.
The transaction, when completed, is intended to be the qualifying transaction for Capstream pursuant to TSX Venture Exchange Policy 2.4.
The parties have agreed to use their best efforts to complete the transaction by the earliest possible date. Further information regarding the transaction will be disseminated in a subsequent news release as soon as further details are available regarding the definitive terms of the transaction.
Private placement
Ortsbo intends to pursue a private placement of subscription receipts of Ortsbo at a price of $7 per subscription receipt for a minimum of 4,285,714 subscription receipts for gross proceeds of $30-million with no specific maximum. The letter of intent provides that receipt of a minimum of $20-million in gross proceeds from the private placement is a condition precedent for the closing of the transaction.
The private placement will be on a best-efforts basis, with a lead order expected in the $20-million range, as previously announced on Jan. 20, 2012.
The company may pay finders' fees of up to 7 per cent cash and 7 per cent broker warrants, in accordance with TSX Venture Exchange policies. The completion of the private placement is subject to TSX Venture Exchange acceptance, standard conditions and other regulatory approval. Further details regarding participating investment banks and broker dealers will be forthcoming.
It is anticipated that each subscription receipt issued pursuant to the private placement will entitle the holder to receive one unit of Ortsbo, with each unit consisting of one Ortsbo share and one-half of one common share purchase warrant of Ortsbo, without payment of any additional consideration, on satisfaction of certain conditions. Each Ortsbo warrant will entitle the holder to purchase one Ortsbo share for a period of two years at a premium of 50 per cent of the final pricing of the unit. Upon the closing of the transaction, the Ortsbo shares and Ortsbo warrants will convert into Capstream shares and Capstream common share purchase warrants.