TORONTO, ONTARIO -- (Marketwire) -- 02/08/13 -- Leo Acquisition Corp. (TSX VENTURE: LEQ.P) ("Leo") is pleased to announce that it has signed a letter of intent (the "LOI") with Conversion Marketing-Communication Inc., a corporation existing under the laws of Ontario ("Conversion"), which outlines the general terms and conditions pursuant to which Leo and Conversion would be willing to complete a transaction that will result in a reverse take-over of Leo by the shareholders of Conversion (the "Transaction"). The LOI was negotiated at arm's length and is effective as of February 5, 2013.
The LOI is to be superseded by a definitive merger, amalgamation or share exchange agreement (the "Definitive Agreement") to be signed on or before March 31, 2013 (or such other date as may be mutually agreed in writing between Leo and Conversion). The Transaction is subject to requisite regulatory approval, including the approval of the TSX Venture Exchange (the "TSXV") and standard closing conditions, including the approval of the directors of each of Leo and Conversion of the Definitive Agreement and completion of due diligence investigations to the satisfaction of each of Leo and Conversion, as well as the conditions described below. The legal structure for the Transaction will be confirmed after the parties have considered all applicable tax, securities law and accounting efficiencies, however, it is currently contemplated that the transaction will be structured as a securities exchange.
Leo is incorporated under the provisions of the Business Corporations Act (Ontario) with its registered and head office in Toronto, Ontario. It is a capital pool company and intends for the Transaction to constitute its "Qualifying Transaction" as such term is defined in the policies of the TSXV. Leo is a "reporting issuer" in the provinces of Ontario, British Columbia and Alberta.
Since the Transaction is not a non-arm's length transaction, Leo is not required to obtain shareholder approval for the Transaction. However, Leo intends to hold a special meeting of shareholders to approve certain matters ancillary to the Transaction, including a consolidation of its shares and changing its name to Conversion Inc.
Trading in the common shares of Leo has been halted. It is unlikely that the common shares of Leo will resume trading until the Transaction is completed and approved by the TSXV.
Subject to TSXV approval, Leo has also agreed to provide to Conversion a secured subordinate loan in the principal amount of $50,000 as soon as possible following TSXV approval of same and agreement on standard loan and security documentation acceptable to Leo and Conversion, each acting reasonably.
Conditions to Transaction
Prior to completion of the Transaction (and as conditions of closing):
-- Conversion must complete a private placement financing (the "Offering") for minimum gross proceeds of not less than $2,000,000. The pricing of such financing has not yet been determined and will be dependent on various factors, including market conditions.-- Leo shall seek shareholder approval to consolidate (the "Leo Consolidation") its existing common shares (the "Leo Shares") on a 2 for 1 basis.-- The parties will prepare a filing statement in accordance with the rules of the TSXV, outlining the terms of the Transaction.-- Conversion and Leo will enter into a Definitive Agreement in respect to the Transaction on or before March 31, 2013.-- Conversion will obtain the requisite shareholder approvals for the Transaction.-- All requisite regulatory approvals relating to the Transaction, including, without limitation, TSXV approval, will have been obtained.