VANCOUVER, British Columbia, July 31, 2018 (GLOBE NEWSWIRE) -- Mission Ready Solutions Inc.
(“Mission Ready” or the “Company”) (TSXV:MRS) announces that it has entered into:
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(a) |
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a non-binding letter of intent to acquire (the
“Acquisition”) Unifire, Inc., a company based in Spokane, Washington (“TargetCo”); |
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(b) |
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a non-binding term sheet (the “Term Sheet”)
pursuant to which Zenith Insured Credit, LLC, a New York-based trading and specialty finance company (the
“Creditor”), will provide TargetCo with a new USD$20 million asset-based credit facility (the “Credit
Facility”); |
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(c) |
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an engagement letter (the “Engagement Letter”) with
Bay Crest Partners, LLC, a New York-based FINRA registered broker-dealer and financial services firm (the
“Agent”), to complete a private placement of up to USD$15 million (the “Offering”); and |
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(d) |
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a fee agreement (the “Fee Agreement”) pursuant to
which Celadon Financial Group, LLC, a FINRA registered broker dealer (“Celadon”) identified qualified
investors and other broker-dealers in connection with the Acquisition. |
The Acquisition
On April 19, 2018, the Company entered into a non-binding letter of intent to acquire all of the issued and
outstanding shares in the capital stock of TargetCo. The Acquisition is to be completed as a reverse-triangular merger under
applicable Washington corporate law with TargetCo becoming a wholly-owned subsidiary of the Company. The purchase price of the
Acquisition is an estimated USD$9 million, subject to customary purchase price adjustments. Of the USD$9 million purchase price,
USD$4 million is to be paid and satisfied in cash and USD$5 million is to be paid and satisfied through the issuance by the Company
of approximately 26,315,790 common shares in the capital of the Company with a deemed issuance price equal to USD$0.19 per share
(CAD$0.25 per share using an exchange rate of 1.32). The cash portion of the purchase price is currently expected to be funded by a
portion of the net proceeds raised as part of the Offering.
TargetCo specializes in providing mission critical equipment and services to the US and international
militaries, law enforcement, tactical groups, fire and rescue, utilities, power generation nuclear and hydro power plants, as well
as the public. TargetCo’s trailing revenue for the 6-month period ending June 30, 2018 was approximately USD$18.3 million and
its net income for the same period was approximately USD$750,000.
The Acquisition, if completed, is a strategic transaction for Mission Ready, as it would significantly increase
Mission Ready’s sales and would provide privileged access to valuable contracts that are set aside for small business, which
contracts might not otherwise be available to Mission Ready. These contracts from the most recent 5-year renewal period,
which are valued at over USD$10 billion, continue to be awarded to a small number of eligible participants in advance of the next
renewal date, which is expected in 2019.
Jeffery Schwartz, President & CEO of Mission Ready, states: “The Mission Ready team is keenly focused on the
targeted growth and development of the Company’s expanding portfolio of leading personal protective solutions. To support
this growth plan, we have put in place an experienced senior management team and Board of Directors that possesses strong industry
relationships and contacts to translate into future sales and business development opportunities. We are now seeing the
benefits of this strategy both organically, by working directly with customers and distribution partners in order to grow our sales
channels, and now through this potential strategic acquisition, which would become additive to our overall long-term vision and
strategy. If completed, this acquisition would immediately provide Mission Ready with a high level of contract past-performance and
will open doors for the Company to participate in opportunities that would not otherwise be available to Mission Ready. We are
excited at the prospect of ultimately combining and leveraging our resources and connections with those of Unifire to grow their
revenues and expand the business as a wholly-owned subsidiary of Mission Ready Solutions Inc.”
The Acquisition, including the payment of the purchase price, is subject to approval of the TSX Venture Exchange
(“TSXV”). The Acquisition is also conditional upon receipt of all other applicable regulatory and third party
consents, completion of satisfactory due diligence by the Company and the execution of definitive legal documentation by the
parties. The Company believes that the Acquisition constitutes a Fundamental Acquisition, but will not constitute a Non-Arm’s
Length Transaction and will not result in a Change of Control as defined by the TSXV’s policies.
Additional detailed information about the Acquisition, including financial information of TargetCo, will follow
upon the entering into of definitive legal documentation.
The Credit Facility
The Company has entered into the Term Sheet for the provision of the Credit Facility, which is to be used
primarily to fund the operations of TargetCo following the completion of the Acquisition. In connection with the Credit
Facility, the Creditor is to have first lien security against all of the assets of TargetCo, and other security to be determined
following completion of the Creditor’s due diligence. The borrowing base for the Credit Facility will be equal to 80% of eligible
receivables and up to 100% of the costs of goods on purchase orders received. The fees associated with the Credit Facility
will include a factoring fee computed with respect to accounts receivable borrowed against and a purchase order fee computed with
respect to advances made against purchase orders, both of which are at competitive rates. The Credit Facility is expected to
require TargetCo to have orders of a minimum of USD$100 million within the first 15 months from the first date of accessing the
Credit Facility, failing which TargetCo will be required to pay a 0.5% penalty on the face value of the orders received during such
15-month period. The Credit Facility is subject to receipt of all necessary approvals, including the approval of the TSXV, as
well as satisfactory due diligence by the Creditor and the entering into of definitive legal documentation.
The Offering
The Company has entered into the Engagement Letter with the Agent, pursuant to which the Agent is to act as the
exclusive placement agent with respect to a private placement financing. The Engagement Letter contemplates that the private
placement will be of equity, equity-linked debt, convertible securities or other securities issued by the Company (the
“Securities”) at a price or conversion price, as the case may be, to be determined by the Company and the Agent,
which price will be finalized in accordance with the TSXV policies, for gross proceeds of up to USD$15 million. The Offering
is to be conducted on a “reasonable efforts” basis.
As compensation for its services, the Agent will be entitled to fees equal to 6.0% of the gross proceeds raised
in the Offering. The Agent will also be reimbursed for its reasonable expenses incurred as part of the Offering. Pursuant to
the Fee Agreement, the Company is to pay a commission equal to 2.0% of the gross proceeds raised in the Offering to Celadon.
All such fees and commissions are payable in cash upon closing of the Offering. Celadon shall also separately receive a fee
directly from the Creditor for assisting in obtaining the Credit Facility.
The Company anticipates that it will use the gross proceeds of the Offering to pay the cash portion of the
purchase price for the Acquisition (USD$4 million), to pay certain debts and obligations of TargetCo (approximately USD$6 million),
and to use the remainder primarily for fees, commissions, and working capital and general corporate purposes for the next several
months of operations of the TargetCo business (up to USD$5 million).
The Offering is subject to receipt of all necessary approvals, including the approval of the TSXV. All
securities issued in connection with the Offering shall be subject to a four month statutory hold period.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the
securities described herein, and these securities will not be offered or sold in any jurisdiction in which their offer or sale
would be unlawful. The securities have not been and will not be registered under the United States Securities Act of 1933, as
amended (the “1933 Act”), or any state securities laws of the United States. Accordingly, these securities
will not be offered or sold to persons within the United States unless an exemption from the registration requirements of the 1933
Act and applicable state securities laws is available.
Completion of the Acquisition, the Credit Facility and the Offering are subject to a number of
conditions, including but not limited to, execution of definitive documentation and receipt of all applicable regulatory and third
party consents. There can be no assurance that the Acquisition, the Credit Facility and/or the Offering will be completed as
proposed or at all.
About Unifire, Inc.
Unifire specializes in providing mission critical equipment and services to the US and international militaries,
law enforcement, tactical groups, fire and rescue, utilities and the general public through established relationships with over 500
vendors representing approximately 1.5 million products. Additionally, Unifire provides specialized training related to fire
rescue, military, emergency response, law enforcement, swift water rescue, high angle rope operation and building collapse.
About Mission Ready Solutions Inc.
Headquartered in Vancouver, British Columbia, Canada, Mission Ready innovates and manufactures leading
tech-centric defense and tactical solutions to prevent injuries and enhance the performance of military personnel, first-responders
and all those who protect us by equipping them with the next generation of personal protective technologies.
Mission Ready is committed to becoming a global leader in personal protective technologies through the strategic
growth of its three synergistic business segments; Innovations & Development, Prototyping & Manufacturing, and Product Sales.
Mission Ready trades on the TSX Venture Exchange under the symbol MRS.
For further information, visit MRSCorp.com
or contact:
Investor Relations
T: 1.877.479.7778 – Ext 500
E: IR@MRSCorp.com
Mission Ready Solutions Inc.
(signed “Jeffery L. Schwartz”)
Jeffery L. Schwartz,
President & CEO
This news release contains "forward-looking information" within the meaning of applicable Canadian securities
legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as
"anticipate", "believe", "plan", "expect", "intend", "estimate", "forecast", "project", "budget", "schedule", "may", "will",
"could", "might", "should" or variations of such words or similar words or expressions. Forward-looking information is based on
reasonable assumptions that have been made by Mission Ready Solutions Inc. as at the date of such information and is subject to
known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or
achievements of Mission Ready Solutions Inc. to be materially different from those expressed or implied by such forward-looking
information.
Forward-looking statements are based on assumptions management believes to be reasonable. Although Mission Ready
Solutions Inc. has attempted to identify important factors that could cause actual results to differ materially from those
contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on
forward-looking information. Mission Ready Solutions Inc. does not undertake to update any forward-looking information that
is included herein, except in accordance with applicable securities laws.
Neither 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 news release.