Logan Resources Ltd. (TSX-V: LGR) (“Logan” or the “Company”) is pleased to announce that it has entered into a letter of intent (the “LOI”) with Sebnets Technologies Inc. (“Sebnets”) with respect to the acquisition of Sebnets by Logan in a reverse take-over transaction (the “Transaction”). Sebnets holds a portfolio of intellectual property related to the wearable technology industry that it will commercialize. As consideration for the Transaction, shareholders of Sebnets will be issued 24,375,000 common shares of Logan on closing. Shareholders of Sebnets will be issued up to an additional 15,000,000 common shares of Logan based on certain revenue targets being attained over the first two financial years after closing.
The Transaction will transform Logan into a technology issuer and merge the considerable management and capital markets expertise of Logan’s management company, King & Bay West Management Corp. (“KBW”), with the assets and considerable engineering, design and sales expertise of Sebnets. Sebnets goal is to be a global leader in the wearable technology industry focused on improving lifestyles particularly in health, wellness and security.
Sebnets will use its intellectual property portfolio and technical expertise to develop a range of products that will have functionality with respect to sports, sleep, health, living, care giving and security. Its devices track a range of different parameters including steps, calories, sleep quality, physical body conditions, blood pressure, heart beat, blood oxygen, cardiogram, surrounding temperature, wetness, air quality and emergency calls. Sebnets’ go to market strategy involves distributing its products through OEMs and direct to consumers. The Sebnets team has relationships with key distributors and will utilize established e-commerce platforms in North America, Europe and Asia.
The Transaction is subject to the execution of a definitive agreement (the “Definitive Agreement”), approval of the TSX Venture Exchange (the “Exchange”), approval of the Logan and Sebnets’ shareholders and other conditions customary for a transaction of this nature. There can be no assurance that the Transaction will be completed as proposed or at all.
The following are the highlights of the terms and conditions of the LOI:
Sebnets is a corporation incorporated under the laws of the Province of British Columbia with its head office located in Vancouver, British Columbia.
Logan will acquire all of the issued and outstanding common shares of Sebnets and Sebnets will become a wholly-owned subsidiary of Logan.
In consideration for the acquisition of Sebnets by Logan, Sebnets shareholders will receive:
- 24,375,000 common shares of Logan on closing (the “Payment Shares”);
- An additional 15,000,000 common shares of Logan (the “Earn-out Shares”) based on an earn-out structure:
- 7,500,000 common shares will be issued if revenues of at least US$12 million are attained during the first completed financial year.
- 7,500,000 common shares will be issued if revenues of at least US$24 million are attained during the second completed financial year.
- The right to nominate three of a total of five directors to the Logan Board of Directors.
Logan will provide Sebnets with a secured bridge loan for up to $250,000. The Loan will be advanced in tranches based on a budget agreed to between Logan and Sebnets.
In conjunction with the Transaction, Logan will complete a private placement (the “Financing”) of units (“Units”) for gross proceeds of at least $2,000,000. Each Unit will consist of one common share of Logan and one half of one common share purchase warrant. Each whole warrant shall be exercisable into a common share of Logan for 24 months. Subject to Exchange approval, Logan may pay commissions or finder’s fees in connection the Financing and may appoint a broker to assist with the Financing.
Transaction Closing Conditions
Other conditions precedent to the closing of the Transaction include:
- satisfactory completion of customary due diligence;
- entering into the Definitive Agreement;
- Logan completing a consolidation of its outstanding common shares on the basis of one post-consolidation share for every two pre-consolidation shares;
- $300,000 of outstanding Logan debt will be converted into common shares of Logan at the Transaction price; and
- all necessary board, shareholder and regulatory approvals, including the approval of the Exchange, being received.
Oro Grande Capital Inc. ("OGC") will receive a finder’s fee in connection with the Transaction equal to 5% of the Payment Shares and such finder’s fee shall be payable in Logan common shares. OGC is arm’s length to Logan and the payment of the finder’s fee is subject to the approval of the Exchange.
Full details of the Transaction will be included in the Definitive Agreement and Management Information Circular to be filed with the regulatory authorities and mailed to Logan shareholders in accordance with applicable securities laws. It is anticipated that an annual general and special meeting of shareholders of Logan to approve the Transaction will be held in Q3 2015. The Transaction is being conducted entirely at arm’s length.
Following completion of the Transaction, Logan will be a fully financed, technology company focused on commercializing the Sebnets products. Logan intends to undergo a name change in connection with the Transaction to reflect its new focus.
Additional information as required will be provided by way of a subsequent news release. Trading in the common shares of the Company on the Exchange will remain halted until such times as the requirements of the Exchange are met.
This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the Unites States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.
Completion of the Transaction is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Logan should be considered highly speculative.
The Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Logan Resources Ltd. is a mineral exploration company that specializes in acquiring, exploring and advancing Canadian mineral properties. Logan has a diversified portfolio of precious metal, base metal and uranium projects. For more information on the property portfolio and Logan, please visit www.loganresources.ca.
Logan has a management services arrangement with King & Bay West Management Corp. (“KBW”), led by Mr. Mark Morabito. KBW is a Canadian company that provides administrative, management, regulatory, legal, corporate development and capital markets services to companies throughout North America. KBW specializes in identifying, funding, developing and managing growth opportunities in the resource and technology sectors. With an office that is fully Sarbanes-Oxley compliant, KBW is vertically integrated with in-house legal and corporate finance departments.
For further information regarding this press release, please contact:
Cautionary Note Regarding Forward-Looking Information
This news release discusses items that may constitute forward-looking statements within the meaning of securities laws and that involve risks and uncertainties. Such statements include those with respect to the completion of the Transaction and the future prospects and strategy of the Company. Although the Company believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in such forward-looking statements are based on reasonable assumptions, they can give no assurances that those expectations will be achieved and actual results may differ materially from those contemplated in the forward-looking statements and information. Such assumptions, which may prove incorrect, include the following: (i) the Transaction will obtain all required regulatory and shareholder approvals, (ii) the Company will succeed in obtaining any necessary future financing to fund its ongoing operations and work plans, (iii) no material obstacles, technical or otherwise, will hinder the Company’s operations following the Transaction and (v) the Company will be able implement its business plans in a profitable manner. Factors that could cause actual results to differ materially from expectations include (i) the Company’s failure to make effective use of its available funds following the Transaction, (ii) the failure of the Company’s commercialization strategy for technical, logistical, labour-relations or other reasons, (iii) the Company’s inability to obtain the necessary approvals for the Transaction, (iv) an increase in the Company’s operating costs above what is necessary to sustain its operations, (v) accidents, labour disputes or the materialization of similar risks, (vi) a deterioration in capital market conditions that prevents the Company from raising the funds that it requires on a timely basis, (vii) an inability or unwillingness of the Company or Sebnets to complete the Transaction for whatever reason, and (viii) generally, an inability of the Company to develop and implement a successful business plan for any reason. These factors and others are more fully discussed in the Company’s filings with Canadian securities regulatory authorities available at www.sedar.com. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue certainty to forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has reviewed or accepts responsibility for the adequacy or accuracy of this release.