/NOT FOR DISTRIBUTION IN THE U.S.
OR TO U.S. NEWSWIRE SERVICES./
NEX-CZQ.H
TORONTO, Aug. 16, 2019
/CNW/ - Continental Precious Minerals Inc. ("Continental" or
the "Company") is pleased to announce that, pursuant to a
previously announced letter of intent, it has entered into an
amalgamation agreement (the "Amalgamation Agreement") with
Metamaterial Technologies Inc. ("Metamaterial"), a
Nova Scotia-based developer of
smart materials and photonics, and Continental Precious Minerals
Subco Inc. ("Subco"), a wholly-owned subsidiary of the
Company, to complete a going-public transaction for Metamaterial
(the "Transaction"). Subject to the conditions set forth in
the Amalgamation Agreement, the Transaction will take the form of a
three-cornered amalgamation, which will result in Metamaterial
becoming a wholly-owned subsidiary of the Company by amalgamating
with Subco and the security-holders of Metamaterial becoming
security-holders of the Company. For convenience, the Company, as
it will exist after the completion of the Transaction, is referred
to herein as the "Resulting Issuer".
About Metamaterial
Metamaterial specializes in designing and producing
nanocomposite transparent materials with properties not found in
nature that can manipulate light, either by enhancing, absorbing or
blocking it. The company is best known for its partnership with
Airbus on the development of metaAIR®, which is a holographic
optical filter that provides pilots with vision protection against
laser attacks. The five key markets that Metamaterial
serves include: Energy, Consumer
Electronics; Medical Devices; Automotive;
and Aerospace & Defense. Metamaterial has a growing patent
portfolio and is pioneering holographic and lithographic
nanofabrication tools, designed for high volume applications.
Metamaterial is headquartered in Dartmouth, Nova Scotia with offices in
London, England and Pleasanton, California.
Metamaterial has accounted development revenue of $1,585,191 and a net loss of $5,106,648 for the twelve-month period ended
December 31, 2018. As at December 31, 2018, Metamaterial had total assets
of $13,172,716, total liabilities of
$13,349,227 and total shareholders'
equity of ($176,511). These numbers
are taken from Metamaterial's audited consolidated financial
statements for 2018.
Metamaterial was incorporated in New
Brunswick on August 15, 2011
as Lamda Guard Canada Inc. It amended its articles on March 27, 2013 to take on its current name and,
on April 30, 2013, continued as a
corporation organized under the Canada Business Corporations
Act.
Transaction Summary
The Transaction will be completed by way of three-cornered
amalgamation, whereby Metamaterial will amalgamate with Subco and
holders of Metamaterial shares will receive common shares of the
Resulting Issuer ("Resulting Issuer
Common Shares") as consideration.
Pursuant to the Amalgamation Agreement, the
holders of common shares of Metamaterial ("Metamaterial Common
Shares") and holders of Class A-1 preferred shares of
Metamaterial will receive Resulting Issuer Common Shares in
exchange for their Metamaterial Common Shares at a ratio of 2.75
Resulting Issuer Common Shares for each Metamaterial Common Share
or Class A-1 preferred shares of Metamaterial held. The terms of
the Amalgamation Agreement also provide for the exchange of Class
A-2 preferred shares of Metamaterial, whereby holders will receive
4.125 Resulting Issuer Common Shares for each Class A-2 preferred
share of Metamaterial held. Following the completion of the
Transaction, all of Metamaterial's outstanding options, deferred
share units and other securities exercisable or exchangeable for,
or convertible into, and any other rights to acquire Metamaterial
Common Shares will be exchanged for securities exercisable or
exchangeable for, or convertible into, or other rights to acquire
Resulting Issuer Common Shares on economically equivalent
terms.
It is expected that approximately 67,004,266 Resulting Issuer
Common Shares will be issued to the shareholders of Metamaterial as
consideration for 100% of the then issued and outstanding shares of
Metamaterial. Upon completion of the Transaction, the security
holders of Metamaterial are expected to own approximately 86% of
the Resulting Issuer Common Shares, on a fully diluted basis.
Pursuant to the Amalgamation Agreement, Metamaterial may issue
convertible promissory notes for aggregate gross proceeds of up to
$600,000 per month, equity under a
private placement for aggregate gross proceeds of up to
$6,000,000 and a senior secured
convertible debenture from a leading Canadian bank for aggregate
gross proceeds of up to $5,000,000.
In connection with the
Transaction, the Company entered into
voting support agreements with shareholders of
Metamaterial that hold an aggregate of
approximately [66⅔%] of the issued and outstanding
Metamaterial Common Shares.
Upon the closing of the Transaction, and subject to receipt of
all required approvals, the Company intends to change its name to
"Metamaterial Inc."
It is expected that Lamda
Guard Technologies Ltd., a company
owned by certain founders of Metamaterial,
and Innovacorp will each own more than 10% of the Resulting Issuer
Common Shares upon completion of the Transaction.
The Transaction is an arm's
length transaction.
In connection with the Transaction, and subject to the receipt
of all necessary shareholder and regulatory approvals,
the Company intends to voluntarily
de-list the common shares of
Continental from the facilities of the NEX board of the
TSX Venture Exchange ("TSXV") prior to the completion of the
Transaction. It is a condition of closing that the Resulting
Issuer obtain a listing of Resulting Issuer Common Shares on the
facilities of the Canadian Securities Exchange ("CSE"). As a
result, it is anticipated that the Transaction will be governed by
the policies of the CSE.
Completion of the Transaction will be subject to the closing
conditions set forth in the Amalgamation Agreement, which include
the approval of the listing of Resulting Issuer Common Shares on
the facilities of the CSE, the
approval of the Transaction by shareholders
of Metamaterial, approval of matters
ancillary to the Transaction by shareholders of the Company,
Metamaterial raising gross proceeds of not less than $1,000,000 in connection with a private placement
and certain standard closing conditions, including there being no
material adverse change in the business of Continental or
Metamaterial prior to completion of the Transaction. The
Transaction itself is not subject to shareholder approval of the
Company. The proposed de-listing of the common shares of
Continental from the facilities of the TSXV is subject to the
approval of a majority of the minority shareholders of
Continental.
Upon the completion of the Transaction, it is anticipated that
the executive officers of the Resulting Issuer will be Dr. George
Palikaras, whom will act as Chief Executive Officer, and Mayank
Mahakan, whom will act as Chief Financial Officer and Secretary.,
and the persons identified below will serve as directors of the
Resulting Issuer.
Allison Christilaw, MBA, ICD.D
Mrs. Christilaw is a seasoned consultant and business leader who
holds both an Honours in Business Administration and a Master of
Business Administration from the Ivey Business School at the
University of Western Ontario. She is a
graduate of the Directors Education Program through the Institute
of Corporate Directors and her board work
includes Secretary and Governance Chair on the Appleby
College Board of Governors, HR and Nominations Chair on the
Oakville Galleries Board of Directors, Director of the Haltech
Board and Director of the Bayshore Foundation.
Mrs. Christilaw brings a wealth of knowledge and experience in
strategy and organization effectiveness. She has led organizations,
ran and sold a successful consulting business to Deloitte, and has
developed a deep understanding of the intricacies of acquisition
and integration. She has worked with organizations throughout
North America and Europe in all
industries, from small businesses to
large public corporations.
Maurice Guitton
Mr. Guitton is the former chairman of the board for
Metamaterial, a current director of Metamaterial, and is the
chairman of Lamda Guard Technologies Ltd. He is one of Canada's most experienced CEOs with over 40
years of experience. He holds more than 16 patents and has won
several business awards, including the Nova Scotia
Export Achievement Award. He is the
former President of the Atlantic Network of
the French Chamber of Commerce in Canada, and is listed among Atlantic Canada's Top 50 CEOs. Mr. Guitton
began his career at Rossignol Skis in France. While working with Rossignol Skis, he
built five manufacturing plants in
North America. He was recruited
by Cellpack Aerospace in Switzerland to open their first aerospace
company in Canada, located in
Lunenburg, Nova Scotia. From 1993
to 2003, he was Executive Vice President and President of
Composites Atlantic Limited and, in 2004, he became Chief Executive
Officer of the company. Mr. Guitton belongs to many industry
associations, has years of board experience and mentors others by
sharing his experience and knowledge. He received the French Legion
of Honor, the French Order of Merit, and the James Floyd Aeronautic
Award of Canada.
George Palikaras, PhD, President & CEO, Founder
George is the founding President and Chief Executive Officer of
Metamaterial. Under his leadership, Metamaterial has completed two
acquisitions and has developed partnerships with global companies
like Airbus and Lockheed Martin Canada. Prior to Metamaterial,
George founded Medical Wireless Sensing Ltd. (MediWise) a research
and development med-tech company based in London, the United
Kingdom, which was acquired in 2019. Prior to becoming an
entrepreneur, he worked in industry at Wireless Technology
Laboratories (formerly Nortel Networks) leading a team of engineers
and managers through contract bidding and technology development
for large telecommunication OEMs in multi-million dollar programs.
He has worked at Queen Mary University in London in wearable and implantable sensors
projects for global medical device companies. As a tech
entrepreneur, he has led award-winning start-ups to the development
of strong intellectual property portfolios with over 100 patents
and has successfully raised in excess of $40M in institutional, angel and non-dilutive
capital. Mr. Palikaras holds 22 issued patents, a BEng. in Computer
Engineering, an MSc. in Digital Communication Systems, and a PhD in
metamaterial science. Mr. Palikaras
has received Executive Business
education from Stanford and
University College London.
Ram Ramkumar
Mr. Ramkumar is currently a director of Continental and past
Chairman of the board of Snipp Interactive Inc., a public company
offering promotional and loyalty platform and services to consumer
product companies. Mr. Ramkumar has also served on the boards of
numerous other public companies listed on the TSX and NASDAQ,
including Inscape Corporation where he was CEO until 2004. His
background includes extensive experience as President and CEO with
public companies in the manufacture of office furniture. Mr.
Ramkumar was part of a team that lead the growth of these companies
in the North American market with facilities in Canada and the US. Over the last 10 years, Mr.
Ramkumar has been an investor in a number of business ventures
ranging from flexographic printing to technology development
in the area of extracting
metals from minerals. Mr. Ramkumar
has a Bachelor of Technology (Metallurgical
Engineering) and Master of Business Administration from the
University of Toronto and was a
chartered accountant.
Eric Leslie
Mr. Leslie has extensive experience in the areas of management
consulting, venture capital advisory services, corporate
governance, operations and go forward structuring plans for early
stage companies. Since 1991, Mr. Leslie through his firm, Merchant
Equities Capital Corp., has been leveraging his experience and
contacts into securing and fulfilling contracts with multiple
clients over a broad spectrum of industries. Over the past 28
years, Mr. Leslie has served as an officer and or director of
numerous public and private companies.
Steen Karsbo
Mr. Karsbo has close to 40 years of experience in the aviation
industry and has held various senior management positions for
Satair, an Airbus company. He brings a wealth of knowledge in
business development, sales, product management, marketing and
communications. His most recent role was as Vice President and Head
of Business Development at Satair. As an aviation consultant, he
focuses on providing independent consulting and advisory services
to a wide range of OEMs, investors, private equity and venture
capital companies and start-ups. Areas of expertise include sales
strategies, merger and acquisition support and assessment, supplier
management, new business strategies, systems and power- plant
supply chain, and board advisory roles.
Forward-Looking Statements
This release includes forward-looking information within the
meaning of Canadian securities laws regarding Continental and
Metamaterial and their respective businesses, which may include,
but are not limited to, statements with respect to the completion
of the Transaction, the terms on which the Transaction is intended
to be completed, the ability to obtain regulatory and shareholder
approvals, the proposed name change and board composition of the
Resulting Issuer, and other factors. Often but not always,
forward-looking information can be identified by the use of words
such as "expect", "intends", "anticipated", "believes" or
variations (including negative variations) of such words and
phrases, or state that certain actions, events or results "may",
"could", "would" or "will" be taken, occur or be achieved. Such
statements are based on the current expectations and views of
future events of the management of each entity,
and are based on assumptions
and subject to risks and
uncertainties. Although the management of each entity
believes that the assumptions underlying these statements are
reasonable, they may prove to be incorrect. The forward-looking
events and circumstances discussed in this release, including
completion of the Transaction (and the terms upon which the
Transaction is proposed to be completed), may not occur and could
differ materially as a result of known and unknown risk factors and
uncertainties affecting the companies,
including risks regarding the
technology industry, market conditions,
economic factors, management's ability
to manage and to operate the
business of the Resulting Issuer and
the equity markets generally.
Although Continental and Metamaterial have
attempted to identify important
factors that could cause actual
actions, events or results to differ
materially from those described in forward-looking statements,
there may be other factors that cause actions, events or results to
differ from those anticipated, estimated or intended. Accordingly,
readers should not place undue reliance on any forward-looking
statements or information. 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 neither Continental nor Metamaterial undertake any
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
or otherwise.
Cautionary Statement
Completion of the transaction is subject to a number of
conditions, including, if applicable, TSXV acceptance and, if
applicable pursuant to TSXV requirements, majority of the minority
shareholder approval. Where applicable, 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 information circular or listing statement 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 Continental should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the Transaction and has neither approved nor disapproved
the contents of this news release. Neither TSX Venture Exchange nor
its Regulation Services Provider (as that term is defined in
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE Continental Precious Minerals Inc.