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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Bluemetric Environmental, Inc. | TSXV:SET | TSX Venture | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0 | - |
OTTAWA, Sept. 24, 2012 /CNW/ - Seprotech Systems Incorporated (TSX-V: SET; "Seprotech") and WESA Group Inc. "WESA" today announced that further to the previously announced non-binding letter of intent, they have entered into a binding share exchange agreement under which Seprotech will acquire 100% of privately-held WESA in a reverse takeover (the "Transaction"). Upon completion of the Transaction, the combined entity (the "Resulting Issuer") is expected to be a leading provider of earth science and environmental engineering services, and wastewater and water treatment systems. The intent is to build an integrated product and service organization that provides intelligent solutions to complex environmental problems both in Canada and abroad.
Transaction Summary
The Transaction is an arm's length transaction and will constitute a reverse-takeover pursuant to the policies of the TSX Venture Exchange ("TSX.V"). Completion of the Transaction ("Closing") is subject to several conditions, including, but not limited to the approval of a simple majority of Seprotech shareholders, the approval of the majority of the minority Seprotech shareholders, and final approval by the TSX.V. Seprotech has convened a special meeting of shareholders (the "Meeting") on October 24, 2012 to seek such shareholder approval and to approve a change of name from Seprotech Systems Incorporated to BluMetric Environmental Inc. The other conditions are summarized below.
Seprotech currently has issued and outstanding 66,446,926 common shares, and 5,330,000 options to purchase Seprotech common shares, at prices ranging between $0.10 and $0.26 per share.
At the Meeting, Seprotech also intends to seek the approval of its shareholders to consolidate its common shares on a 1 for 10 basis (the "Consolidation"). Assuming completion of the Consolidation, Seprotech would have issued and outstanding immediately prior to Closing (i) 6,644,692 post-consolidation Seprotech common shares and (ii) options to purchase 533,000 common shares, each exercisable at a price of from $1.00 - $2.60 per share.
Shareholders will also be asked to approve a reduction in the stated capital of Seprotech to a nominal amount, in order to meet the solvency requirements of the Canada Business Corporations Act.
The Transaction will be completed by way of a share exchange agreement pursuant to which Seprotech will acquire all of the issued and outstanding shares of WESA in consideration for the issuance to the shareholders of WESA of 14,157,433 post-consolidation common shares of Seprotech, each at a deemed value of $0.664 per share for aggregate consideration of $9,400,536. Upon Closing, WESA will become a wholly-owned subsidiary of Seprotech and WESA shareholders will control approximately 68.06 % of the common shares of the Resulting Issuer. Immediately following closing, Seprotech and WESA will be amalgamated.
Seprotech and WESA have also agreed on the additional consideration to be paid to WESA shareholders to reflect the value of inclusion of WESA's real estate assets which were added to the transaction subsequent to the originally agreed to valuations. The value of the equity in the real estate has been agreed at $1,880,000, resulting in total aggregate consideration of $11,280,536. This additional consideration is to be settled by the issuance to the WESA shareholders of 2,831,325 special shares of Seprotech (the "Special Shares"). Each Special Share will be automatically converted into common shares of the Resulting Issuer on the earlier of (i) completion of a qualified financing that occurs subsequently to the current transaction for gross proceeds of not less than $2,000,000, for an issue price of not less than $0.664 per common share, and (ii) July 2, 2013. In the case of conversion upon a qualified financing, the conversion ratio will be a fraction equal to $0.664 divided by the issue price. In the case of a conversion in the absence of a qualified financing, the conversion ratio will be a fraction equal to $0.664 divided by the volume weighted average trading price of the common shares on the TSX.V during the period from June 3, 2013 through June 28, 2013; provided that the conversion ratio will not be greater than 1:1, and the maximum number of common shares to be issued after giving effect to the Share Consolidation will be 2,831,325. Based on the floor conversion price of $0.664, the WESA shareholders' ownership of the Resulting Issuer would increase to 71.90 %.
Management and Board of Directors of Resulting Issuer
Effective upon Closing, the board of directors of the Resulting Issuer will include five members, consisting of Jordan B. Grant, former chairman and a director of Seprotech, William M. Touzel, Mark Stirling and Denis Douville, directors of Seprotech, and Roger M. Woeller, who will be appointed chief development officer of the Resulting Issuer.
The chief executive officer of the Resulting Issuer will be William M. Touzel, who is presently president of WESA; the chief financial officer will be Ian W. Malone, presently chief financial officer of Seprotech. The other members of the senior management team of the Resulting Issuer will be Roger M. Woeller, Harry J. Marshall, president of the water and wastewater division and Nell van Walsum, president of the professional services division.
Conditions to the Transaction
The proposed Transaction is subject to a number of terms and conditions including the final approval of the TSX.V and other relevant regulatory authorities, and various other customary conditions that must be satisfied prior to closing, which is expected to take place no later than December 31, 2012. The Resulting Issuer will also be required to complete a concurrent brokered private placement of common shares for aggregate gross proceeds of not less than $1 million, or more than $2 million, at a price per share to be negotiated.
Other Information
Trading in Seprotech common shares will remain halted pending the satisfaction of all applicable requirements of the TSX.V. There can be no assurance that trading in Seprotech common shares will resume prior to the completion of the Transaction. Further details concerning the Transaction, WESA (including additional financial information) and other matters will be included in the management proxy circular being distributed to shareholders of Seprotech in advance of the special meeting of shareholders.
About WESA
WESA was founded in 1978 under the laws of Ontario. WESA is a professional services company focussed on environmental earth sciences, water resources, waste management, occupational health, safety and hygiene and renewable energy needs of industry and all levels of government. WESAtech, a wholly-owned subsidiary, supplies turn-key water treatment systems to industry. More information can be obtained at www.wesa.ca .
About Seprotech:
Seprotech is a provider of engineered water and wastewater treatment solutions to the municipal/land development, resource sector and military market place, including Reverse Osmosis water purification systems, ROTORDISK® biological sewage treatment package plants and CrystalBlue™ membrane-based water recycling systems. More information can be obtained at www.seprotech.com .
Forward-looking Statements
This news release contains certain "forward looking statements" within
the meaning of applicable securities laws. Seprotech has made numerous
assumptions regarding, among other things, the ability of Seprotech and
WESA to satisfy all the closing conditions to complete the Transaction.
Readers are cautioned that the plans, intentions or expectations
disclosed in any forward-looking statements and underlying assumptions
may not be achieved and that readers should not place undue reliance on
any forward-looking statement, each of which is expressly qualified in
its entirety by this cautionary statement. Although Seprotech believes
that the expectations conveyed by the forward-looking information are
reasonable based on information currently available to it, these
statements are not guarantees and involve a number of risks,
uncertainties and assumptions, both known and unknown. The results or
events depicted in these forward-looking statements may differ
materially from actual results or events. Many factors could cause
results to differ materially from those stated including, but not
limited to: the Transaction may not be completed upon the terms
contemplated herein, or at all; the possibility of not satisfying all
of the closing conditions to complete the Transaction; the possibility
that Seprotech's shareholders do not approve the Transaction at the
special meeting of shareholders; difficulties or delays in obtaining
regulatory approvals; the ability of WESA or Seprotech to retain
existing customer contracts; risks related to integration upon the
completion of the Transaction; and the ability to retain and obtain
qualified staff as well as various other factors which are discussed in
Seprotech's filings with applicable securities regulatory authorities
at www.sedar.com. Any forward-looking statement speaks only as of the date of this news
release and, except as may be required by applicable securities laws,
Seprotech disclaims any intent or obligation to update any
forward-looking statement, whether as a result of new information,
future events or results or otherwise.
Completion of the Transaction is subject to a number of conditions, including, but not limited to, acceptance by the TSX.V. 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 proxy circular of Seprotech 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 Seprotech should be considered to be highly speculative.
The TSX.V has in no way passed upon the merits of the proposed Transaction, and neither TSX.V nor its Regulation Services Provider (as that
term is defined in the policies of the TSX.V) accepts responsibility
for the adequacy or accuracy of this release. The TSX.V has neither
approved nor disapproved of the information contained herein.
SOURCE Seprotech Systems Incorporated
Copyright 2012 Canada NewsWire
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