TORONTO, ONTARIO -- (Marketwire) -- 03/29/13 -- Lynnwood Capital Inc. ("Lynnwood") (TSX VENTURE: LCI.P), a capital pool company as defined under Policy 2.4 of the TSX Venture Exchange (the "TSXV"), is pleased to announce that it has entered into an agreement (the "Revised Letter Agreement") dated March 18, 2013 and executed March 20, 2013 for the arm's length acquisition of 100% of the common shares (the "Tantalex Shares") of Tantalex Corporation ("Tantalex"). The Revised Letter Agreement supersedes and replaces the letter agreement (the "Letter Agreement") dated May 9, 2012 between Lynnwood and Tantalex, previously announced on May 9, 2012, June 11, 2012, July 9, 2012 and October 4, 2012, which was meant to qualify as Lynnwood's "qualifying transaction" as defined by the TSXV.
About the Proposed Transaction
Consistent with the terms of the Letter Agreement, Lynnwood and Tantalex still intend on combining 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 Tantalex by Lynnwood indirectly through a wholly owned federally incorporated subsidiary of Lynnwood (the "Amalgamation Entity") in a transaction in which the shareholders of Tantalex will receive shares of Lynnwood (the "Lynnwood Shares") and, if applicable, convertible securities of Lynnwood. As a result of the Amalgamation of Amalgamation Entity and Tantalex (the "Amalgamated Corporation"), Lynnwood will become the sole beneficial owner of all of the outstanding shares of Amalgamated Corporation. The Amalgamation will result in Lynnwood issuing to Tantalex shareholders one Lynnwood Share for each Tantalex Share held, and the convertible securities of Tantalex will be exchanged for convertible securities of Lynnwood on the same terms and conditions attached to such convertible securities prior to the Amalgamation.
Pursuant to the terms of the Revised Letter Agreement and subject to completion of the concurrent Private Placement (defined below), satisfactory due diligence, receipt of all necessary regulatory and shareholder approvals, and other conditions which are typical for a business combination transaction of this type, the proposed acquisition of Tantalex will result in Lynnwood (i) delisting its common shares from the TSXV (the "Delisting") resulting in the cancellation of 3,600,000 Lynnwood Shares pursuant to the policies of the TSXV and resulting in an aggregate of 2,050,000 Lynnwood Shares (assuming no existing convertible securities of Lynnwood are exercised) following completion of the Delisting, (ii) consolidating (the "Consolidation") its securities resulting in an aggregate of approximately (subject to rounding) 1,118,731 Lynnwood Shares (assuming no existing convertible securities of Lynnwood are exercised) following completion of the Consolidation, (iii) seeking approval to list the Lynnwood Shares on the Canadian National Stock Exchange (the "CNSX").
Upon completion of the Delisting and Consolidation, there will be 1,118,731 Lynnwood Shares issued and outstanding and convertible securities (options) exercisable for 405,199 Lynnwood Shares. Currently there are 25,455,880 Tantalex Shares issued and outstanding and convertible securities exercisable for, or convertible into, 13,680,213 Tantalex Shares, not taking into account the Tantalex Shares to be issued pursuant to the Private Placement.
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