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Everfront to acquire DataMetrex as QT
2017-01-06 00:46 ET - News Release
Mr. Joshua Gerstein reports
EVERFRONT VENTURES CORP. ENTERS INTO LETTER OF INTENT TO ACQUIRE DATAMETREX LIMITED
Everfront Ventures Corp. has entered into a letter of intent dated Jan. 5, 2017, with DataMetrex Ltd., a corporation incorporated under the laws of Canada on Sept. 7, 2016, pursuant to which Everfront will directly or indirectly acquire all of the issued and outstanding securities of DataMetrex in exchange for equivalent securities of Everfront on a one-for-one basis.
The business combination will be structured as a share exchange, amalgamation or plan of arrangement and is subject to TSX Venture Exchange approval. It is intended to constitute Everfront's qualifying transaction under the policies of the TSX-V. The business combination will not be a non-arm's-length qualifying transaction (as that term is defined under the TSX-V policies), and as such, unless the agreed-upon structure to effect the business combination otherwise requires, it is not expected that approval of the Everfront shareholders will be required.
Business of DataMetrex
DataMetrex's principal activities pertain to the development and marketing of a data analytics device that captures and provides real-time access to sales information from retail merchants' point-of-sale terminals. Utilizing DateMetrex's patent-pending Data Tap device, merchants are able to experience the benefits of a cloud-based system without incurring the prohibitive costs associated with purchasing new systems. DataMetrix's principal office is located in Toronto, Ont.
DataMetrex intends to complete audited financial statements for the period ended Dec. 31, 2016, to be incorporated into the filing documents.
Terms of the agreement
The qualifying transaction will be effected pursuant to a business combination, which contemplates the acquisition of all of DataMetrex's common shares, directly or indirectly, by Everfront at the exchange ratio.
The parties have agreed to negotiate exclusively with each other until March 31, 2017, to pursue the business combination and have also agreed to negotiate in good faith and use reasonable commercial efforts to enter into a definitive agreement by March 31, 2017.
Capitalization
As of the date hereof, Everfront has 5,738,050 common shares issued and outstanding and 384,054 management options exercisable at 20 cents per share. DataMetrex currently has 23,776,420 common shares and 5,094,934 warrants exercisable at a price of 15 cents per share for the first year and 20 cents per share for the second year from the date of issuance issued and outstanding (not including securities issuable upon the private placement). DataMetrex intends to complete a two-for-one stock split of its outstanding common shares and warrants prior to the business combination and immediately prior to the private placement (as defined below).
Proposed financing
Prior to or concurrently with the closing of the business combination, DataMetrex will complete a brokered or non-brokered private placement of securities for gross proceeds of not less than the amount necessary to ensure that there is sufficient financing to satisfy any working capital requirements of the TSX-V to obtain the final approval of the business combination by the TSX-V.
The resulting issuer
On the closing of the business combination, Everfront, the resulting issuer, anticipates being classified as a Tier 2 issuer that will meet the TSX-V's initial listing requirements.
Management of the resulting issuer
It is expected that management of the resulting issuer would be as follows:
Andrew Ryu, chief executive officer and director
Mr. Ryu is a seasoned and experienced entrepreneur and operator in public and private companies. He was a founder and CEO of TLA Inc., president of business development of Archer Group, founder and CEO of Loyalist Group Ltd., which was nominated as the top TSX-V company in 2013, was ranked fourth in 2014 and was the top pick of the street in 2014, CEO of Cozumo Inc., and CEO of Yourtime Financial Services Inc. He was nominated by EY as entrepreneur of the year in 2014.
Jeff Stevens, president and chief operating officer
Mr. Stevens brings over 18 years of professional experience in the Canadian capital markets, largely focusing on raising capital for microcap and small-cap companies. He currently sits on the board of two public companies assisting with project selection and financing. He has worked on the retail, buy and sell sides of the industry, having held positions as assistant investment adviser and arbitrage trader, as well as having been the head of two sales and trading desks for an investment bank, based in the United States, in Toronto. During his tenure, he was involved in raising in excess of $500-million for public and private companies with a client base, including institutional money managers, hedge funds, mutual funds and family offices in Canada, United States and Europe.
Jonathan Hobbs, chief technology officer and director
Mr. Hobbs has been involved in the development and implementation of electronic information systems for over 30 years. As a serial entrepreneur and inventor, he has created many new technologies for the collection, processing and dissemination of electronic data. He is the inventor of the Data Tap technology.
Steve (Byungjoo) Kang, chief financial officer
Mr. Kang is a seasoned finance and accounting professional with certified management accountant (United States of America) and CPA and CGA (Ontario) designations. For the last 25 years, he has acquired a wealth of finance expertise and experience from working at Honeywell, LG Electronics, and various accounting and finance firms. Until most recently, he served as a vice-president of finance at Loyalist Group.
Charles Schade, director
Mr. Schade is a senior-level marketing executive in the insights industry, with a proven record for strategically identifying opportunities and launching new products. He led, motivated and attracted high performance teams by inspiring staff and committing to continuing coaching and mentoring. As a founder and former president of NPD Canada, and with over 25 years of sales and servicing background, he takes ownership of goals in both the company and clients. He embraces industry leadership roles through speaking engagements at industry functions.
Adam Somers, director
Mr. Somers is the president of Anderson Somers Johnston Search Group Inc., an executive search firm. He has over 17 years experience in the Canadian recruiting marketplace and has a financial services background with CIBC Wood Gundy.
Insider participation
DataMetrex is currently controlled by Mr. Hobbs of Dunrobin, Ont., and Mr. Ryu of Markham, Ont. (directly and indirectly through his holding company Seinecliffe Management Ltd.), and upon completion of the business combination, it is expected that each of Mr. Hobbs and Mr. Ryu will beneficially own greater than 10 per cent of the outstanding common shares of the resulting issuer.
Sponsorship
Sponsorship of a qualifying transaction of a capital pool company is required by the TSX-V unless an exemption from the sponsorship requirement is available.
Additional information will be made available in a further press release(s) as details are confirmed.
Trading halt
Everfront's common shares are currently halted, and Everfront anticipates they will remain halted until the documentation required by the TSX-V for the proposed business combination can be provided to the TSX-V.
Completion of the business combination is subject to a number of conditions, including, but not limited to, TSX-V acceptance and, if applicable, pursuant to TSX-V requirements, majority of the minority approval of the shareholders of Everfront. Where applicable, the business combination cannot close until the required shareholder approval is obtained. There can be no assurance that the business combination will be completed as proposed or at all.
We seek Safe Harbor.
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