TORONTO, April 26, 2019 /CNW/ - Imex Systems Inc. ("Imex" or the "Company") (TSX VENTURE: IMEX; OTC: IMSYF), is pleased to announce that on April 24, 2019, the Company entered into a non-binding letter of intent (the "Letter of Intent") with NxGen Communications Corp, an Ontario Corporation ("NxGen") pursuant to which the Company will combine its business operations with NxGen (the "Transaction"). NxGen was incorporated July 26, 2016. Pursuant to the Letter of Intent, the Transactions will result in a reverse take-over of the Company by NxGen and the listing for trading of the shares of the resulting issuer (the "Resulting Issuer") on the TSX Venture Exchange. The Transaction is anticipated to close on or before July 31, 2019.
Transaction
The Transaction will result in NxGen becoming a wholly-owned subsidiary of the Company or otherwise combining its corporate existence with a wholly-owned subsidiary of the Company. The Transaction is an arm's length transaction. NxGen is a reseller of Imex services, which Imex announced in a press release on November 15, 2018.
Upon the signing of the Letter of Intent, NxGen will provide Imex with a six (6) month CDN $150,000 secured loan with a General Security Agreement against all of the assets of Imex. IMEX will not be paying any bonuses or commissions for the loan from NxGen. The loan will be used for legal, audit and general corporate purposes. In addition, NxGen will provide IMEX with an additional CDN $50,000 towards transaction closing costs. This is a material agreement and subject to TSX.V approval.
In conjunction with the Transaction, NxGen will complete a brokered private placement (the "Private Placement") of securities (the "Offered Securities") at price per Offered Security of $0.25. The Private Placement shall be for minimum gross proceeds of $2,500,000 and maximum gross proceeds of $5,000,000 or such other amount as the Company and NxGen may agree.
Prior to the closing of the Private Placement (as defined below) and the Transaction, the Company will complete a consolidation (the "Consolidation") of its common shares on the basis of 2.5 to 3 pre-consolidated common shares for 1 post-consolidated common shares, as adjusted such that the shareholders of the Company will hold no more than 24% of the common shares of the Resulting Issuer on closing of the Transaction.
Pursuant to the Transaction, approximately 34,000,000 post-consolidated common shares of the Company, or as adjusted such that the owners of NxGen will own at least 52% of the Resulting Issuer on the closing of the Transaction, will be issued to the shareholders of NxGen in exchange for all of the issued and outstanding common shares of NxGen based on a valuation acceptable to the parties.
On closing of the Transaction, it is expected that: (a) the current holders of the Company securities will own, and have the right to acquire upon exercise of warrants and options, common shares representing approximately 24% of fully diluted common shares of the Resulting Issuer; (b) the former owners of NxGen will own common shares representing approximately 52% of fully diluted common shares of the Resulting Issuer; and (c) purchasers of Offered Securities issued in the Private Placement will own approximately 24% of the fully diluted common shares of the Resulting Issuer.
Prior to the closing of the transaction, Imex and NxGen will work together on settlement arrangement with all the existing creditors of Imex.
It is intended that the board of directors of the Resulting issuer immediately following the closing of the Transaction shall consist of six (6) directors, two (2) Imex directors, two (2) NxGen directors and two (2) independent directors.
The Completion of the Transaction is contingent on a number of conditions precedent including receipt of all requisite corporate, shareholder and regulatory approvals, completion of the Private Placement, the Consolidation and the execution of a definitive agreement between the parties. Further details relating to the Transaction will be announced upon execution of the definitive agreement.