TORONTO, April 26, 2019 /CNW/ - Imex Systems Inc.
("Imex" or the "Company") (TSX VENTURE: IMEX; OTC:
IMSYF), is pleased to announce that on April
24, 2019, the Company entered into a non-binding letter of
intent (the "Letter of Intent") with NxGen Communications
Corp, an Ontario Corporation ("NxGen") pursuant to which the
Company will combine its business operations with NxGen (the
"Transaction"). NxGen was incorporated July 26, 2016. Pursuant to the Letter of Intent,
the Transactions will result in a reverse take-over of the Company
by NxGen and the listing for trading of the shares of the resulting
issuer (the "Resulting Issuer") on the TSX Venture Exchange.
The Transaction is anticipated to close on or before July 31, 2019.
Transaction
The Transaction will result in NxGen
becoming a wholly-owned subsidiary of the Company or otherwise
combining its corporate existence with a wholly-owned subsidiary of
the Company. The Transaction is an arm's length transaction.
NxGen is a reseller of Imex services, which Imex announced in
a press release on November 15,
2018.
Upon the signing of the Letter of Intent, NxGen will provide
Imex with a six (6) month CDN $150,000 secured loan with a General Security
Agreement against all of the assets of Imex. IMEX will not be
paying any bonuses or commissions for the loan from NxGen. The loan
will be used for legal, audit and general corporate purposes. In
addition, NxGen will provide IMEX with an additional CDN
$50,000 towards transaction closing
costs. This is a material agreement and subject to TSX.V
approval.
In conjunction with the Transaction, NxGen will complete a
brokered private placement (the "Private Placement") of
securities (the "Offered Securities") at price per Offered
Security of $0.25. The Private
Placement shall be for minimum gross proceeds of $2,500,000 and maximum gross proceeds of
$5,000,000 or such other amount as
the Company and NxGen may agree.
Prior to the closing of the Private Placement (as defined below)
and the Transaction, the Company will complete a consolidation (the
"Consolidation") of its common shares on the basis of 2.5 to
3 pre-consolidated common shares for 1 post-consolidated common
shares, as adjusted such that the shareholders of the Company will
hold no more than 24% of the common shares of the Resulting Issuer
on closing of the Transaction.
Pursuant to the Transaction, approximately 34,000,000
post-consolidated common shares of the Company, or as adjusted such
that the owners of NxGen will own at least 52% of the Resulting
Issuer on the closing of the Transaction, will be issued to the
shareholders of NxGen in exchange for all of the issued and
outstanding common shares of NxGen based on a valuation acceptable
to the parties.
On closing of the Transaction, it is expected that: (a) the
current holders of the Company securities will own, and have the
right to acquire upon exercise of warrants and options, common
shares representing approximately 24% of fully diluted common
shares of the Resulting Issuer; (b) the former owners of NxGen will
own common shares representing approximately 52% of fully diluted
common shares of the Resulting Issuer; and (c) purchasers of
Offered Securities issued in the Private Placement will own
approximately 24% of the fully diluted common shares of the
Resulting Issuer.
Prior to the closing of the transaction, Imex and NxGen will
work together on settlement arrangement with all the existing
creditors of Imex.
It is intended that the board of directors of the Resulting
issuer immediately following the closing of the Transaction shall
consist of six (6) directors, two (2) Imex directors, two (2) NxGen
directors and two (2) independent directors.
The Completion of the Transaction is contingent on a number of
conditions precedent including receipt of all requisite corporate,
shareholder and regulatory approvals, completion of the Private
Placement, the Consolidation and the execution of a definitive
agreement between the parties. Further details relating to the
Transaction will be announced upon execution of the definitive
agreement.
Disclosure
The completion of the transaction is
subject to a number of conditions, including but not limited to,
Exchange acceptance and if applicable, disinterested 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 filing 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 Imex should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed transaction and neither approved nor
disapproved the contents of this news release.
About NxGen
NxGen Communications provides efficient and cost-effective
bandwidth optimization and connectivity products and services,
helping to solve the imminent issues regarding bandwidth
inefficiency and the worldwide issues of bandwidth scarcity. NxGen
Communications is a private Canadian corporation that is deploying
local data center infrastructure to address SMART, city, town,
county initiatives globally and is actively establishing a
corporate presence in each market through partnerships with local
ISPs and bandwidth providers.
About Imex Systems
Imex Systems Inc. is a Canadian
software products and solution provider to Governments,
Municipalities and Public Authorities in Canada and internationally. Imex primarily
focuses on EGovernment and the Smart Cities market that also
include the integration to payment processing. The company helps
public sector entities to provide "Any Time, Any Where, Any Device
and Any Channel" convenience for citizens to access government
services and help with digital transformation of government
operations and streamline revenue. Imex's various product and
service offerings include: i-Gov - a Digital Government Platform
for all levels of governments, which provides all the pre-built
components for building an effective Digital Government and
supporting payment processing through multiple channels; iCity - a
Smart City Solution; and miGov - a Mobile Government Framework.
Forward-Looking Statements
This news release contains
certain "forward-looking information" within the meaning of
applicable Canadian securities laws. Any statements that involve
discussions with respect to predictions, expectations, beliefs,
plans, projections, objectives, assumptions, future events or
performance (often but not always using phrases such as "expects",
or "does not expect", "is expected", "anticipates" or "does not
anticipate", "plans", "budget", "scheduled", "forecasts",
"estimates", "believes" or "intends" or variations of such words
and phrases or stating that certain actions, events or results
"may" or "could", "would", "might" or "will" be taken to occur or
be achieved) are not statements of historical fact and may be
forward-looking information and are intended to identify
forward-looking information.
This forward-looking information is based on reasonable
assumptions and estimates of management of the Company at the time
it was made, and involves known and unknown risks, uncertainties
and other factors which may cause the actual results, performance
or achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking information. Forward-looking information in
this news release include, but are not limited to, statements with
respect to: increased sales from existing customers and new
customers. Forward-looking information necessarily involve known
and unknown risks, including, without limitation : the need for
approvals from the relevant government body; future capital needs
and uncertainty of additional financing; the competitive nature of
the industry; the effects of product development and need for
continued technology change; and those risks set out in the
Company's public documents filed on www.sedar.com.
Although the Company has attempted to identify important factors
that could cause actual results to differ materially, there may be
other factors that cause results not to be as anticipated,
estimated or intended. There can be no assurance that such
statements will prove to be accurate as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward-looking information. The Company undertakes no obligation
to revise or update any forward-looking information other than as
required by law.
Neither the TSXV nor its Regulation Services Provider (as that
term is defined in policies of the TSXV) accepts responsibility for
the adequacy or accuracy of this release.
CEO: Imex Systems Inc.,
SOURCE Imex Systems Inc.
