Arcland Announces Signing of Letter of Intent for a Business Combination with SW Tech Corporation and the Ord Mountain Project
Vancouver, British Columbia--(Newsfile Corp. - November 26, 2020) - Arcland Resources Inc. (TSXV: ADR.H) (the "Company" or "Arcland") is pleased to announce that it has entered into a non-binding letter of intent (the "Letter of Intent") dated November 25, 2020 for a proposed business combination (the "Transaction") between Arcland and SW Tech Corporation (the "Target"), an arm's length corporation existing under the laws of California, which owns a gold and copper property located in California (the "Ord Mountain Project") consisting of 284 mineral claims and 165.36 acres of patented land.
The Transaction will constitute a "reverse takeover" under the policies of the TSX Venture Exchange (the "TSXV") and the corporation resulting from the Transaction (the "Resulting Issuer") will carry on the business of the Target as currently constituted and its common shares will be listed and posted for trading on the TSXV as a Tier 1 or Tier 2 mining issuer under the name "Ord Mountain Mining Corp.", or such other name as directed by the Target (the "Name Change").
Pursuant to the terms of the Letter of Intent, it is anticipated that the Transaction will be an arm's length transaction completed by way of an acquisition, merger, amalgamation, plan of arrangement, reorganization, sale of all or substantially all of the assets, or exchange of assets or securities or a similar transaction structure, which will result in the Target becoming a wholly-owned subsidiary of Arcland. The final structure of the business combination is subject to receipt by the parties of tax, corporate, and securities law advice and will be agreed to and superseded by a definitive agreement (the "Definitive Agreement") between Arcland and the Target with such agreement to include representations, warranties, conditions and covenants typical for a transaction of this nature. There will be no finder's fees paid in connection with the Transaction other than commissions which may be paid in connection with the Private Placement (as defined below).
The Letter of Intent serves as an agreement in principle concerning a business combination between Arcland and the Target that will result in a reverse takeover of Arcland. Under the terms of the Letter of Intent, the following steps will be necessary, subject to the approval of the TSXV, provided that the parties may revise the structure of the Transaction by mutual agreement:
Arcland and the Target shall enter into the Definitive Agreement on or before January 31, 2021;
consolidation (the "Consolidation") of all of the issued and outstanding securities of the Arcland on the basis of 10-to-1;
completion of the Name Change;
continuation of Arcland under the laws of the Cayman Islands;
completion of the acquisition by Arcland of all of the issued and outstanding securities of the Target, and in consideration, Arcland will issue 74,218,750 post-Consolidation common shares to the shareholders of the Target, whereby the final consideration of the Transaction will be negotiated and settled in good faith by the parties prior to executing the Definitive Agreement; and
completion of a private placement by the Target of subscription receipts, which are convertible at the closing of the Transaction into post-Consolidation common shares of the Resulting Issuer, for minimum proceeds of US$30,000,000 (the "Private Placement"). The Target is expected to make payment of customary compensation, including the securities of Arcland, to one or more agents that may be engaged to act as agent of the parties for the Private Placement and in connection therewith.
The securities of Arcland are subject to a cease trade order dated April 8, 2020 (the "CTO") and the securities are currently halted from trading accordingly. The British Columbia Securities Commission issued a partial revocation order dated November 17, 2020 to permit the entering into Letter of Intent. The closing of the Transaction is subject to obtaining a full revocation of the CTO which the Company is presently pursuing. However, even after revocation of the CTO, the securities of Arcland will remain halted pending the completion of the Transaction.
Pursuant to the policies of the TSXV, the Company may be required to retain a sponsor with respect to the Transaction. However, the Company has not yet engaged a sponsor and intends to apply to the TSXV for an exemption from the sponsorship requirements under the policies of the TSXV.
The completion of the Transaction is also subject to several other conditions set out in the Letter of Intent, including approval by the directors of Arcland and the Target, satisfactory completion of due diligence, regulatory approval and shareholder approval. The parties have agreed to issue a comprehensive news release more fully detailing the Transaction, including financial information respecting the Target, the names and backgrounds of all persons who will constitute insiders of the Resulting Issuer, information respecting sponsorship, and other pertinent information as required pursuant to the policies of the TSXV as soon as practicably possible after the Definitive Agreement is executed, which shall likewise be disseminated and filed under the Company's profile on SEDAR.
Other than a non-refundable payment of $50,000 to Arcland by the Target for payment of Arcland's professional fees and out-of-pocket expenses in connection with the Transaction, Arcland and the Target agree that each shall bear its own respective costs and expenses associated with the Transaction.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV 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 the Company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed on the merits of the proposed Transaction and has neither approved nor disapproved the contents of this news release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
Cautionary Statement Regarding Forward-Looking Information
This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, without limitation, statements regarding the expected timing for completion of the Transactions and components thereof, and the future plans or prospects of the Company. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are necessarily based upon a number of assumptions that, while considered reasonable by management, are inherently subject to business, market and economic risks, uncertainties and contingencies that may cause actual results, performance or achievements to be materially different from those expressed or implied by forward-looking statements. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information 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. Other factors which could materially affect such forward-looking information are described in the risk factors in the Company's most recent annual management's discussion and analysis which is available on the Company's profile on SEDAR at www.sedar.com. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
For further information:
NOT FORDISTRIBUTION OR PUBLICATION IN THE UNITED STATES
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/69058
News Provided by Newsfile Corp.