Toronto, Ontario--(December 14, 2011) - Verdant Financial Partners I, Inc. ("Verdant") (TSXV: VFI.P) is pleased to announce that it has entered into a letter of intent dated November 29, 2011 (the "LOI") with Upper Canada Explorations Limited ("UCEL") to acquire all of the issued and outstanding shares of UCEL in exchange for common shares of Verdant on a one-for-one share exchange basis.
Verdant is a capital pool company and the acquisition of UCEL is intended to constitute Verdant’s qualifying transaction ("Qualifying Transaction") under Policy 2.4 of the TSX Venture Exchange (the "Exchange").
About Upper Canada Explorations Limited
UCEL, a private corporation incorporated under the laws of Ontario, is a junior mining exploration and development company engaged in the acquisition, exploration and development of mineral projects in Canada. UCEL holds an undivided 100% interest in and to certain minerals claims located in the Jacobson, Riggs, Abbie Lake and David Lake Townships in Ontario's Sault Ste. Marie Mining Division of Northern Ontario consisting of a group of claims collectively known as the “Rockstar Property” and another set of claims by Abbie Lake known as “Abbie Lake Extension”. In addition, UCEL has entered into an option agreement to acquire a 100% interest in certain mineral property adjacent to the Rockstar Property known as the “Rockstar Extension”. UCEL earned its 100% interest in the Rockstar Extension and Abbie Lake Extension properties as a result of meeting its exploration and cash commitments.
There are currently 51 shareholders of UCEL. Nick Tsimidis, a resident of Ontario and an officer and director of UCEL, directly and indirectly owns or controls 12.56% of the outstanding shares of UCEL, and Michael Tremblay, a resident of Ontario, owns 10.76% of the outstanding shares of UCEL. No other person owns or controls, directly or indirectly, more than 10% of the outstanding shares of UCEL.
Financial Information
On the basis of the unaudited financial statements for the period ended September 31, 2011, UCEL had total assets of $723,622, liabilities of $90,625, shareholders' equity of $575,078, and working capital of $5,748.
The Rockstar Property
The Rockstar Property is located approximately 25 km northeast of the town of Wawa in north-central Ontario. The Rockstar claim block is made up of 11 contiguous mineral claims, consisting of 130 units, which cover an area of 2,080 hectares. Past exploration work completed on or around the Rockstar Property has been for gold and base metal mineralization as a well as diamonds. UCEL is currently in the process of finalizing an update on its previously prepared National Instrument 43-101 Standards of Disclosure for Mineral Projects compliant report for the Rockstar Property.
Terms of the Transaction
Pursuant to the terms of the LOI, Verdant and UCEL have agreed to combine their businesses by means of a triangular amalgamation (the “Amalgamation”). The Amalgamation will effectively provide for the acquisition of all of the outstanding equity interests of UCEL by Verdant, indirectly through a wholly-owned Ontario incorporated subsidiary of Verdant (the “Amalgamation Entity”) in a transaction in which the shareholders of UCEL will receive one share of Verdant (the “Verdant Shares”) for each one share of UCEL held. As a result of the Amalgamation of Amalgamation Entity and UCEL (the “Amalgamated Corporation”), Verdant will become the sole beneficial owner of all of the outstanding shares of Amalgamated Corporation. The exchange ratio for the exchange of shares of UCEL (the “UCEL Shares”) and convertible securities of UCEL for Verdant Shares and convertible securities, as the case may be, will be one for one basis at a deemed price of $0.10 per share.
The Amalgamation will result in Verdant issuing an aggregate of approximately 11,398,331 Verdant Shares to the shareholders of UCEL (the “Consideration Shares”) and an aggregate of 6,000,000 Verdant Shares to purchasers in connection with the proposed Offering (as such term is defined below).
The deemed transaction price for the Amalgamation is $0.10 per Verdant Share. The Consideration Shares (11,398,331) will be issued to the shareholders of UCEL representing a deemed purchase price of $1,139,833.
The Amalgamation is an arm’s length transaction and therefore is not a related party transaction. As a result, no meeting of Verdant shareholders is required as a condition to completion of the Amalgamation.
The Amalgamation is subject to a number of conditions including, but not limited to (i) due diligence reviews by each of Verdant and UCEL, (ii) negotiation of a definitive purchase and sale agreement, (iii) receipt of all required regulatory approvals, including Exchange approval, and (iv) completion of the Offering.
In connection with the Amalgamation, a finder’s fee of 200,000 of Verdant Shares will be issued to Macquarie Private Wealth Inc., subject to Exchange approval.
The Offering
In conjunction with and concurrent with the Amalgamation, the parties expect to complete a non-brokered private placement (the “Offering”) to raise gross proceeds of $600,000 through the issuance of units (a “Unit”) at $0.10 per Unit. Each Unit consisting of one Verdant Share and one-half of one warrant (a “Warrant”), with each whole Warrant entitling the holder thereof to acquire one Verdant Share at a price of $0.15 for a period of 18 months from the closing of the Offering.
The proceeds of the Offering will be used by Verdant to complete required exploration expenditures with respect to the Rockstar Property and for general administrative and working capital expenses.
In connection with the Offering, finder's fees in the form of cash commissions and/or broker's warrants may be payable to registered agents and brokers.
Immediately prior to the completion of the Amalgamation, there will be 3,534,500 Verdant Shares outstanding. Following completion of the Amalgamation the former shareholders of UCEL will own approximately 53.94% of the Verdant Shares, current shareholders of Verdant will hold approximately 16.73% of the Verdant Shares and purchasers under the Offering will hold approximately 28.39% of the Verdant Shares. Accordingly, the Amalgamation will constitute a reverse take-over of Verdant.
Proposed management of Verdant following completion of the Amalgamation
It is anticipated that the board of directors of the Verdant following closing of the Amalgamation will consist of five directors, comprised of three nominees of UCEL, and two nominees of Verdant. The nominees of UCEL are expected to be Nick Tsimidis, Gregory Lipton and Dino Markakis and the nominees of Verdant are expected to be Tom Wallace and Pierre Vella-Zarb.
Nick Tsimidis, the founder and Chief Executive Officer of UCEL, is a chartered accountant and the Chief Financial Officer, Compliance Officer, and a director and shareholder of First Canadian Capital Markets Ltd. He has been involved in several large acquisitions and capital projects domestically and internationally, and has experience in deal structuring, corporate governance and due diligence methodologies. Mr. Tsimidis specializes in providing strategic corporate finance advisory services and has administered transactions involving private placements and initial public offerings. His educational background includes graduating from the Faculty of Commerce at the University of Toronto. Nick Tsimidis started his career and spent six years with KPMG, providing auditing and assurance services to a wide variety of private and public companies. He is currently Chief Financial Officer and a director of Metals Creek Resources Corp. (TSXV:MEK), Chief Financial Officer and a director of Mooncor Oil & Gas Corp. (TSXV:MOO), a director of Parkside Resources Corp (an unlisted reporting issuer), and the Chief Financial Officer and a director of Bold Stroke Ventures Inc. (an issuer in the process of applying to be listed as a CPC with the Exchange). Nick is also the President and a mortgage broker with Mortgage Cents Inc.
Greg Lipton, currently a director of UCEL, is a registered Professional Geoscientist with the Association of Professional Geoscientists of Ontario (APGO), and a long time member of the Prospectors and Developers Association of Canada (PDAC). He has more than 30 years of field experience in international exploration for base metal, precious metal, diamond, and industrial mineral deposits, most of which was with BHP International and Utah International as a Senior Geologist. Mr. Lipton has worked many and varied geologic environments including porphyry, epithermal, volcanogenic massive sulphide, Mississippi valley type, broken hill type and sedementary exhalitive types in North, Central and South America, Africa, Australia, Southeast Asia and the Middle East. He has been a frequent speaker at professional conferences and at seminars, and has authored and co-authored numerous technical papers. Mr. Lipton is currently the President, Chief Executive Officer and a director Metallum Resources Inc. (TSXV:MRV).
Dino Markakis earned an undergraduate honours degree in Environmental Studies from the University of Waterloo in 1999; during this time he was employed by the University as a teaching assistant to the Dean. In 2001 he earned a Bachelor of Education degree from Brock University and has since been employed by the Peel District school board as a teacher; recently he earned his specialist designation in Geography. Dino heads up a number of committees integral to the school. Dino analyzes capital markets and has participated in a number of private placements with publicly traded companies.
Mr. Wallace is a chartered accountant and President, Chief Executive Officer and Chief Financial Officer of Verdant and an independent consultant. His prior positions include the Chief Financial Officer of Hy-Drive Technologies Ltd. (TSXV:HGS), a development company specializing in the development of greenhouse gas reduction solutions for the transportation and mining industries, from May 2007 to December 2008; the Chief Financial Officer of Luxell Technologies, Inc. (TSX:LUX), an engineering company specializing in flat panel display products, from August 2005 to July 2006; the Chief Financial Officer of Atlantis Systems Corp. (TSX:AIQ), an engineering company specializing of simulation-based training systems for military and commercial aircraft, from August 2004 to December 2005. Mr. Wallace earned an Bachelor of Arts degree from the University of Toronto (1978), a Chartered Accountant (CA) designation from the Canadian Institute of Chartered Accountants (1979), and a Certified Public Accountant (CPA) designation from the American Institute of Certified Public Accountants (1996, Illinois).
Mr. Vella-Zarb is a director and Vice-President of Verdant and President of Falcon Corporation, a corporate finance advisory services company which he founded in 1993. Falcon Corporation provides strategic advice on financings, mergers and acquisitions to both private and public companies and assists private companies through the process of becoming publicly traded, locating business targets, negotiating and documenting transactions. Mr. Vella-Zarb has been a director of Alix Resources Corp. (TSXV:AIX) (formerly NPN Investment Group Inc.) since February 2005; director of Caribou Copper Resources (TSXV:CKR) (formerly YOW Capital Corp.) from January 2008 – March 2011 and President and Chief Executive Officer of Caribou Copper Resources from September 2009 - March 2011; a director of Prospectus Group Inc. (TSXV) from September 1998 to October 2004 and the CFO of the company from February 2000 to September 2000. Mr. Vella-Zarb earned a Bachelor of Science degree from the University of Toronto (1982).
It is proposed that on closing of the Amalgamation management of Verdant will consist of Nick Tsimidis (Chief Executive Officer), Tom Wallace (Chief Financial Officer) and Robbie Grossman (Corporate Secretary).
Sponsorship of Qualifying Transaction
Verdant intends to make application to Exchange that the Qualifying Transaction should be exempt from sponsorship requirements in accordance with Exchange Policy 2.2. However, there can be no assurance that Verdant will obtain such exemption.
About Verdant Financial Partners I Inc.
Verdant Financial Partners I Inc. is the first in a planned series of CPCs focused on generating superior shareholder returns through the creation of unique CPCs. For further information, please contact:
Tom Wallace, CA, CPA, Chief Executive Officer and Chief Financial Officer
Verdant Financial Partners I Inc.
T: (647) 262-9255
Wallace194@sympatico.ca
COMPLETION OF THE QUALIFYING TRANSACTION IS SUBJECT TO A NUMBER OF CONDITIONS, INCLUDING BUT NOT LIMITED TO, EXCHANGE ACCEPTANCE AND IF APPLICABLE PURSUANT TO EXCHANGE REQUIREMENTS, MAJORITY OF THE MINORITY SHAREHOLDER APPROVAL. WHERE APPLICABLE, 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 OR FILING STATEMENT 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 A CAPITAL POOL COMPANY 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. NEITHER THE 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 RELEASE.
Source: Axis Auto Finance Inc.