Black Birch Capital Acquisition III Corp. announces letter of intent with
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TORONTO, Aug. 8, 2013 /CNW/ - Black Birch Capital Acquisition III Corp. (TSXV:
BBC.P) ("Black Birch" or the "Company") is pleased to announce that it has
entered into a letter of intent (the "LOI") dated July 30, 2013 with Daymak
Inc. ("Daymak"), a corporation existing under the laws of Ontario, which
outlines the general terms and conditions pursuant to which Black Birch and
Daymak intend to complete a transaction that will result in Black Birch
acquiring all of the issued and outstanding securities of Daymak. The
transaction will constitute Black Birch's qualifying transaction (the
"Qualifying Transaction") under the policies of the TSX Venture Exchange (the
"Exchange"). Following completion of the Qualifying Transaction, it is
anticipated that the resulting issuer (the "Resulting Issuer") will be a Tier
Terms of Acquisition
Under the terms of the LOI, Black Birch will acquire all of the issued and
outstanding securities of Daymak in exchange for equity in Black Birch, as
further described below (the "Transaction"). It is currently anticipated that
the Transaction will be effected through a "three-cornered amalgamation" (the
"Amalgamation"), whereby: (i) Daymak will amalgamate with a newly incorporated
company incorporated under the laws of Ontario and wholly-owned by Black
Birch, to form an amalgamated corporation ("Amalco"); (ii) the holders of
Daymak's common shares will receive 19,475,000 common shares of Black Birch
("Common Shares") at an ascribed value of $0.40 per Common Share and the
holders of Daymak's options and warrants will receive approximately 3,781,204
options and warrants of Black Birch; and (iii) Amalco will become a
wholly-owned subsidiary of Black Birch. The final structure of the Transaction
is subject to receipt of definitive tax, corporate and securities law advice
satisfactory to both Black Birch and Daymak.
Pursuant to the terms of the LOI, completion of the Qualifying Transaction
will be subject to a number of conditions, including receipt of gross proceeds
of not less than $3,000,000 pursuant to the QT Financing (as defined and
described below), completion or waiver of sponsorship, receipt of all required
regulatory approvals, including the approval of the Exchange of the Qualifying
Transaction, completion of all due diligence reviews, satisfaction of the
minimum listing requirements of the Exchange and all requirements under the
Exchange rules relating to completion of a Qualifying Transaction, and
execution of a definitive amalgamation agreement.
The proposed Qualifying Transaction is not a "Non-Arm's Length Qualifying
Transaction" within the meaning of Policy 2.4 of the Exchange and, as such,
shareholder approval is not required, unless otherwise required by the
Sponsorship of a qualifying transaction of a capital pool company is required
by the Exchange, unless exempt in accordance with Exchange policies. Black
Birch intends to apply for an exemption from sponsorship requirements,
however, there is no assurance that Black Birch will obtain this exemption.
A filing statement in respect of the proposed Qualifying Transaction will be
prepared and filed in accordance with Policy 2.4 of the Exchange on SEDAR at
www.sedar.com no less than seven business days prior to the closing of the
proposed Qualifying Transaction. A press release will be issued once the
filing statement has been filed, as required pursuant to Exchange policies or
any other material changes occur.
Black Birch currently has 5,109,850 Common Shares issued and outstanding, as
well as options and warrants to acquire Common Shares. There are 510,985
options that entitle the holders thereof to acquire an aggregate of 510,985
Common Shares at a price of $0.10 per share. There are 310,985 warrants that
entitle the holders thereof to acquire an aggregate of 310,985 Common Shares
at a price of $0.10 per share. Under the terms of the LOI, Black Birch will
undertake a 2.67:1 share consolidation such that it will have 1,916,194 Common
Shares issued and outstanding with a corresponding adjustment taking place to
the options and warrants. On a pre-consolidation basis, the Transaction is
being done at an ascribed value of $0.15 per share which equal $0.40 per share
on a post-consolidation basis.
Daymak currently has 165.03 common shares outstanding and approximately 32
options and warrants outstanding at strike prices ranging from approximately
$36,000 to $70,000. Prior to the Transaction, Daymak shall undertake an
118,009:1 stock split such that there will be 19,475,000 common shares of
Daymak issued and outstanding. Each Daymak post-split common share shall be
exchanged for one post-consolidation Black Birch Common Share. Daymak options
and warrants shall also be split accordingly.
Post-consolidation, and without taking into account the QT Financing (as
described below), the Resulting Issuer will have approximately 21,391,194
common shares and 4,089,442 options and warrants issued and outstanding.
It is a condition of the LOI that concurrent with the completion of the
Qualifying Transaction, Daymak and Black Birch shall complete a brokered
private placement (the "QT Financing"), for minimum proceeds of $3,000,000 and
maximum proceeds of $5,000,000. Daymak and Black Birch intend to engage a
broker in short order and will issue a press release updating the status of
the QT Financing when more information is available.
Daymak will use the proceeds of the QT Financing to continue to grow its
retail presence in Ontario; develop and grow dealer networks in the province
of British Columbia and Quebec; develop and grow the ADP certified mobility
scooter division in Ontario; develop and grow its on-line presence; continue
to grow and expand its US market through the US Shopping Channel; continue
spending on research and development; and, fund general corporate expenditures.
Daymak, a Toronto-based company incorporated in 2002, is a leading developer
and distributor of personal light electric vehicles with over 100 dealers
across Canada. Daymak's alternative personal light electric vehicles consist
of street legal electric bikes, ATVs, scooters and mobility scooters which are
now ADP approved.
Daymak has also developed and commercialized personal light electric vehicles
based on its proprietary Daymak D-Drive technology. The Daymak D-Drive
Controller is composed of two proprietary components, a microprocessor that
generates more power, speed and distance to existing electric vehicles and an
electric circuit board which is designed to increase and maximize the
input/output capabilities of all electric components safely. Daymak has
designed, developed and manufactured the world's first wireless electric
bicycle, the patent pending Shadow Ebike. Daymak's accolades include the Clean
Tech North Award, Profit Magazine's Top 100 & 200 Canada's Fastest Growing
Companies and Top Women Entrepreneurs Award in 2008.
In present market conditions, consumers are looking for affordable
recreational vehicles. Also, with an increasingly strong green environmental
movement around the world, Daymak believes that the need for fuel efficient
vehicles and innovative technologies will be in high demand globally.
Daymak Financial Information (based on unaudited financial statements)
In 2012, Daymak recorded revenues of $7,276,309, up 20% from $6,057,476 in
2011. Net income in 2012 was $240,269, up from $212,753 in 2011. Since 2008,
Daymak has been growing and profitable every single year. Both sales and
profit have almost doubled since 2008. At December 31, 2012, Daymak had total
assets of $5,412,029 and working capital of $3,258,294.
Proposed Management and Directors
As part of the completion of the Qualifying Transaction, Daymak's current
management will assume responsibility for the Resulting Issuer and the
Resulting Issuer's board of directors will be comprised of Paul Haber, Kin-Man
Lee, Anthony Pizzaro, Robert Tweedy and Aldo Baiocchi. The following are brief
descriptions of Daymak's management team and its proposed nominees that will,
collectively, assume management responsibility for the Resulting Issuer upon
completion of the Qualifying Transaction. Messrs. Haber, Lee and Pizzaro are
currently directors of Black Birch and their biographies are available on
SEDAR as part of the prospectus issued in relation to the initial public
offering of Black Birch.
Yeganeh Baiocchi - President: Ms. Baiocchi is the founder of Daymak and is
responsible for purchasing, marketing and sales. Ms. Baiocchi has worked for
over 10 years in various management positions with the Bank of Montreal. In
2008 she was voted one of Canada's top 100 woman entrepreneurs.
Aldo Baiocchi - V.P. Production & Director: Mr. Baiocchi is responsible for
the development of new products and brings to Daymak over 20 years of
experience in sales, marketing and team management. Mr. Baiocchi was
previously at Microforum and Aludra Inc. where he managed R&D teams that
developed several award winning computer softwares that achieved millions of
dollars in sales. Mr. Baiocchi was responsible in bringing the D-Drive to
market. Mr. Baiocchi will be a director of Black Birch upon completion of the
Kurt Mak - Chief Financial Officer: Mr. Mak has 20 years of extensive
operational and senior finance experience. He has experience with startup
operations and with large public enterprises. He has turned companies around
to be profitable and cash flow positive. He recently raised over $20 million
in private financing and executed a corporate restructuring to better align
corporate values and vision. His past experiences in various senior roles
include Ault Foods, SunBlush Technologies, Bayer Inc., Teknion Corporation and
the Chippery group of companies.
Robert Tweedy - Director: Mr. Robert Tweedy is a corporate director. He is the
Chairman of Useppa Holdings Limited, a private management company. Mr. Tweedy
is currently the Chairman of Aurcana Corporation and STT Enviro Corporation.
He is a trustee of Dundee REIT and an Advisor to MARS. Mr. Tweedy is a past
Director of TransAmerica Life Insurance Company of Canada, Rockwater Capital
Corp., the Toronto Hospital Foundation Board, and has served as President and
CEO of a number of private and public companies. He is a past Chairman of the
Young President's Organization, Ontario Chapter, and currently a member of the
World Presidents' Organization. He earned his Honours Bachelor of Arts degree
from the University of Toronto and his Master of Business Administration
degree from Stanford University. In 2003, he was awarded the H.M. The Queen's
Gold Jubilee Medal.
The Company has requested a halt in the trading of the Company's shares until
the Qualifying Transaction is completed.
The Company will provide further details in respect of the Qualifying
Transaction, in due course by way of press release.
All information contained in this news release with respect to Black Birch and
Daymak was supplied by the parties respectively, for inclusion herein, and
each party and its directors and officers have relied on the other party for
any information concerning the other party.
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 Qualifying Transaction cannot close until the required
shareholder approval is obtained. There can be no assurance that the
Qualifying 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
Qualifying Transaction, any information released or received with respect to
the Qualifying 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.
Neither the TSX Venture nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture) has in any way passed upon the
merits of the proposed transaction and has neither approved nor disapproved of
the contents of this release.
This press release does not constitute and the subject matter hereof is not,
an offer for sale or a solicitation of an offer to buy, in the United States
or to any "U.S Person" (as such term is defined in Regulation S under the U.S.
Securities Act of 1933, as amended (the "1933 Act")) of any equity or other
securities of the Company. The securities of the Resulting Issuer to be issued
in connection with the QT Financing have not been registered under the 1933
Act and may not be offered or sold in the United States (or to a U.S. Person)
absent registration under the 1933 Act or an applicable exemption from the
registration requirements of the 1933 Act.
regarding the Qualifying Transaction, please contact:
Black Birch Capital Acquisition III Corp.
Paul Haber, Chief Executive Officer, Chief Financial Officer and Corporate
Telephone: 416-318-6501 Facsimile: 416-915-4265
Aldo Baiocchi, Vice President
Telephone: 416-658-3993 ext. 201 Facsimile: 416-749-3424
SOURCE: Black Birch Capital Acquisition III Corp.
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