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TORONTO,
Feb. 27, 2014 /CNW/ - Oriana
Resources Corporation (TSXV: OUP.P) ("Oriana") is pleased to
announce that it has entered into a letter of intent (the
"LOI") dated February 25, 2014
with MLM1 Corp., doing business as The Madcap Learning Adventure
("Madcap"), a corporation existing under the laws of
Ontario, which outlines the
general terms and conditions pursuant to which Oriana and Madcap
intend to complete a transaction that will result in Oriana
acquiring all of the issued and outstanding securities of Madcap.
The transaction will constitute Oriana's qualifying transaction
under the policies of the TSX Venture Exchange (the
"Exchange").
Terms of Acquisition
Under the terms of the LOI, Oriana will acquire
all of the issued and outstanding securities of Madcap in exchange
for equity in Oriana, as further described below (the
"Qualifying Transaction"). It is currently anticipated that
the Qualifying Transaction will be effected through a
"three-cornered amalgamation" (the "Amalgamation"), whereby:
(i) Madcap will amalgamate with a newly incorporated company
incorporated under the laws of Ontario and wholly-owned by Oriana, to form an
amalgamated corporation ("Amalco"); (ii) the holders of
Madcap's common shares will receive 20,651,250 common shares of
Oriana ("Common Shares") at an ascribed value of
$0.40 per Common Share, post
consolidation of the Common Shares as described herein; and (iii)
Amalco will become a wholly-owned subsidiary of Oriana. The final
structure of the Qualifying Transaction is subject to receipt of
definitive tax, corporate and securities law advice satisfactory to
both Oriana and Madcap.
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
$5,000,000 pursuant to the QT
Financing (as defined and described below), completion of the Debt
Conversion (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 or other definitive transaction documents.
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 Exchange.
Sponsorship of a qualifying transaction of a
capital pool company is required by the Exchange, unless exempt in
accordance with Exchange policies. Oriana intends to apply for an
exemption from sponsorship requirements; however, there is no
assurance that Oriana 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.
Name Change
Concurrent with the closing of the Qualifying
Transaction, Oriana intends to change its name and will also apply
to change its stock symbol after the closing of the Qualifying
Transaction.
Capitalization
Oriana currently has 13,000,000 Common Shares
issued and outstanding, as well as options and warrants to acquire
Common Shares. There are 1,100,000 options that entitle the holders
thereof to acquire an aggregate of 1,100,000 Common Shares at a
price of $0.10 per share. There are
300,000 warrants that entitle the holders thereof to acquire an
aggregate of 300,000 Common Shares at a price of $0.10 per share. Under the terms of the LOI,
Oriana will undertake a 4:1 share consolidation such that it will
have 3,250,000 Common Shares issued and outstanding with a
corresponding adjustment taking place to the options and warrants.
On a pre-consolidation basis, the Qualifying Transaction is being
done at an ascribed value of $0.10
per share which equals $0.40 per
share on a post-consolidation basis.
Madcap currently has 88.32 common shares
outstanding and no options or warrants. Each Madcap common share
shall be exchanged on the Amalgamation for 233,823.03 Common
Shares, such that post Amalgamation the shareholders of Madcap will
hold, in the aggregate, 20,651,250 Common Shares.
Post-consolidation, and without taking into
account the QT Financing (as described below), the Resulting Issuer
will have approximately 350,000 options and warrants issued and
outstanding.
Debt Conversion
In conjunction with the closing of the
Qualifying Transaction, it is a condition that the holder of
$1,500,000 principal amount of
convertible promissory notes issued by Madcap will convert all of
such notes into approximately 20% of the common shares of the
Resulting Issuer at a conversion price of approximately
$0.154 per common share (on a
post-consolidation basis), based on a QT Financing (as defined
below) of $6,000,000 (the "Debt
Conversion"). In addition, a trade creditor has agreed to
accept 128,750 common shares of the Resulting Issuer at an issue
price of $0.40 per common share to
satisfy a trade payable of Oriana in the amount of $51,500.
QT Financing
It is a condition of the LOI that concurrent
with the completion of the Qualifying Transaction, Madcap and
Oriana shall complete a brokered private placement (the "QT
Financing"), for minimum proceeds of $5,000,000 and maximum proceeds of $7,500,000. Madcap is in the process of engaging
an agent to assist in the QT Financing.
Madcap will use the proceeds of the QT Financing
to continue to fund the development costs to produce 24 new modules
of its educational software and for general working capital
purposes.
MLM1 Corp. ("The Madcap Learning
Adventure")
Madcap was amalgamated pursuant to the laws of
the Province of Ontario on
April 1, 2013, pursuant to an
amalgamation between ML/Madcap Corp. and its wholly owned
subsidiary, MLM1 Corp. The amalgamated entity continued to
carry on the business of Madcap under the name MLM1 Corp.
David Devine of Toronto, Ontario is the sole control person of
Madcap. Madcap produces and develops digital and interactive
non-linear educational software for grades kindergarten to twelve.
Through the use of such digital and interactive software, Madcap
intends to change the learning lives of students and teachers by
implementing ground-breaking immersive ways to achieve higher order
thinking skills and competencies for students of the digital
age.
Further Information
Oriana has requested a halt in the trading of
the Common Shares until the Qualifying Transaction is
completed.
A comprehensive press release with further
particulars relating to the Qualifying Transaction will follow in
accordance with the policies of the Exchange.
All information contained in this news release
with respect to Oriana and Madcap 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,
completion of satisfactory due diligence, completion of the QT
Financing, completion of the Debt Conversion, execution of a
definitive agreement in respect of the Qualifying Transaction,
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 Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange ) has in any way passed upon
the merits of the proposed Qualifying 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.
Notice on forward-looking statements:
This release includes forward-looking
statements regarding Oriana, Madcap and their respective
businesses. Such statements are based on the current
expectations of the management of each entity. The forward-looking
events and circumstances discussed in this release, including
completion of the Qualifying Transaction and the QT Financing, may
not occur and could differ materially as a result of known and
unknown risk factors and uncertainties affecting the companies,
including risks affecting the companies, economic factors and the
equity markets generally. No forward-looking statement can be
guaranteed. Except as required by applicable securities laws,
forward-looking statements speak only as of the date on which they
are made and Oriana and Madcap undertake no obligation to publicly
update or revise any forward-looking statement, whether as a result
of new information, future events, or otherwise.
SOURCE Oriana Resources Corporation