VANCOUVER, BRITISH COLUMBIA–(Marketwired – July 7, 2015) – DataMiners Capital Corp. (the “Company“)(TSX VENTURE:DMC.P) is pleased to announce it has entered into a Letter of Intent (“LOI“) dated June 25, 2015 with Steel Country Tubular Oilfield Inc.(“SCT“), a privately held company which supplies pipe heat treating technologies for the oil and gas industry in North America. The LOI provides for a proposed transaction whereby the Company will purchase 100% of the issued and outstanding common shares of SCT in exchange for the issuance of up to 25,000,000 common shares at a deemed issue price to be determined once the terms of the private placement, described below, have been finalized (the “Transaction“).
The Company intends that the Transaction will constitute a “Qualifying Transaction” for the purposes of Policy 2.4 of the TSX Venture Exchange Inc. (“Exchange“). The Transaction will be carried out by parties dealing at arm’s length to one another and therefore will not be considered to be a Non-Arm’s Length Qualifying Transaction, as such term is defined under the policies of the Exchange. Subject to any regulatory, director or other approvals that may be required, the completion of satisfactory due diligence by the Company and other conditions to be contained in the definitive agreement, it is anticipated that the Transaction will be structured as a share exchange with SCT. Pursuant to the share exchange, the Company shall issue up to 25,000,000 post-consolidation common shares to the shareholders of SCT, at a deemed issue price to be determined once the terms of the private placement, as described below, have been finalized. Immediately prior to closing the Transaction, the Company will complete a share consolidation of its common shares on a one for three basis (the “Consolidation“) and a corporate name change to “Steel Country Tubular Oilfield Inc.” or such other name acceptable to the parties and the Exchange, to reflect the Company’s new business (“Resulting Issuer“) and be listed on the Exchange as an Energy Technology issuer.
The LOI also provides for: (i) a $4 million brokered or non-brokered private placement or public offering of equity, convertible equity, or such other securities or combination of securities of the Company as agreed to by the parties (the “Private Placement“); (ii) the appointment of a new management team and board of directors (collectively, the “New Management Team“); and (iii) a consolidation of the Company’s outstanding common shares on a 1:3 basis.
In addition, all outstanding stock options to purchase common shares of the Company will be exchanged for replacement stock options to purchase Resulting Issuer shares with the number and exercise prices thereof adjusted to reflect the Consolidation. It is also anticipated that at closing the Resulting Issuer will grant options to acquire Resulting Issuer shares at a price equal to the shares issued under the Private Placement to the new directors, officers, employees and consultants of the Resulting Issuer. Further details will be provided in a subsequent news release.
About Steel Country Tubular Oilfield Inc.
SCT was incorporated on February 12, 2013 under the laws of the province of Alberta and is a private company. On April 30, 2013, SCT acquired all of the issued and outstanding shares of Steel Country Threaders of Upshur County, Inc. (“Upshur“). Since acquiring Upshur, SCT has been engaged in the business of heat treating drilling pipe for the oil and gas industry. The head office of SCT is located at 400, 3rd Avenue SW, Suite 3700, Calgary, Alberta T2P 4H2.
A summary of key financial information about SCT will be included in a subsequent news release.
The parties will begin to prepare the legal documentation necessary to effect the Transaction. Pursuant to the LOI, SCT has agreed to deal exclusively with the Company to enter into a definitive agreement on or before July 24, 2015 or such other date as the parties may agree to. The definitive agreement will include customary conditions to closing, plus the following specific conditions: (i) completion of satisfactory legal, financial and technical due diligence by the Company on SCT; (ii) completion of the Private Placement; (iii) appointment of the New Management Team; (iv) Exchange approval; and (v) approval from the respective boards and shareholders of the Company and SCT as applicable.
New Management Team
The New Management Team described below includes global energy and technology executives and board members with a track record of creating value in industrial technology businesses, including NASDAQ technology companies, and venture backed startups. The New Management Team will apply its past experience to grow the Resulting Issuer through a combination of organic growth and acquisitions. The New Management Team collectively has over two decades of working experience together and believe the heat treating drilling pipe industry represents an area with potential for growth.
The resignation of the Company’s directors and the appointment of the New Management Team will occur contemporaneous with the closing of the Transaction.
Chairman and Director
|Mr. Freeman has been a Director with SCT since December 2013.
Mr. Freeman currently serves as Chairman and CEO of Corrosion and Abrasion Solutions Ltd. (CASL), a company he founded in 2012 in Edmonton, Alberta. CASL provides industrial coatings and linings to surfaces subject to corrosive and abrasive environments. Mr. Freeman has been a Director of McCoy Corporation Inc. since 2009 (TSX: MCB). McCoy builds a complete drilling equipment line for oilfield service contractors, drilling contractors, and rig manufacturers around the world.
Mr. Freeman spent the five years previous to the start-up of CASL as a Managing Director of Northern Plains Capital Ltd., a private equity firm specializing in oilfield services and energy industrial investments.
From 2007 – 2012, Mr. Freeman was the Chief Financial Officer of Flint Energy Services Ltd., a publicly listed integrated midstream production services provider to the energy and resource sectors. Mr. Freeman served on the Board of Flint Energy Services Ltd. until its purchase by URS in 2012.
Mr. Freeman is a Fellow of the Institute of Chartered Accountants of Alberta and earned his Bachelor of Commerce degree from the University of Alberta in 1982. Mr. Freeman is also a graduate of the Institute of Corporate Directors, Directors Education Program.
President, CEO, Corporate Secretary, Director
|Mr. Bedard has been the President and Chief Executive Officer of SCT since May 2013.
Mr. Bedard has spent his entire career in the pipe and steel industry. Prior to forming SCT,
Mr. Bedard has been based in Houston for seven years. Prior to Lakeside, Mr. Bedard was most recently a Division Manager for U.S. Steel Canada Inc.
Mr. Bedard holds a Management Studies Diploma, MBA and more recently Post Graduate Executive Education at Harvard University and The University of Texas.
|Mr. Simpson has been the Executive Vice President, Chief Financial Officer and Corporate Secretary of SCT since February 2013.
Mr. Simpson is a senior executive with 30 years’ experience with specific skills in investment banking, sales management, strategic planning, accounting and administration. Mr. Simpson is a former Director of the Toronto Stock Exchange and has advised a number of boards of both private & public companies.
Mr. Simpson is a Chartered Accountant and holds a Bachelor of Commerce with Honors degree.
|Mr. Price has been a Director of SCT since December 2013.
Mr. Price has more than 30 years of diverse global oil and gas experience North and South America, Europe, Africa, the Middle East, and the former Soviet Union.
Mr. Price has been Chairman of Marsa Energy Inc. since 2010 and the President of Prospect International Inc., a private international resource and investment company since 2002. Mr. Price has been a Founder, Director, and/or Officer of several internationally focused public and private companies, including Aventura Energy Inc. and Ocelot International Inc.
Mr. Price holds a BSc degree in Chemical Engineering and an MBA degree from the University of Calgary.
|David L. Wood,
|Since 1978, Mr. Wood has been President of Zenith Appraisal and Land Consulting Ltd., a private appraisal consulting company. Since 1994, Mr. Wood has been President of Double Check Consulting Inc., a private consulting entity. From 1999 to 2013, Mr. Wood Director was a Director of Iplayco Corporation Ltd., a playground equipment designing and manufacturing company listed on the TSXV and former Chairman from 2008 until 2011. From 2008 to 2012, Mr. Wood was a Director of Darford International Inc. (formerly White Rock Energy Inc.), a former TSXV listed marketing and manufacturing company. Mr. Wood was the President of Lander Energy Corporation, a TSXV listed company from 2007 until 2012 and a Director from 2007 until 2013. Since 1997, Director of Black Bull Resources Inc., a former TSXV listed mining company. Since 2014, Mr. Wood has been a Director of Hemostemix Inc., a TSXV listed biotech company|
The Company and SCT are currently negotiating the terms and conditions of a proposed Private Placement with an agent and further details will be provided in a subsequent news release. The proceeds from the Private Placement will be used to fund the operations of SCT and for general working capital purposes. The completion of the Private Placement is expected to occur concurrently with the closing of the Transaction.
Sponsorship of a Qualifying Transaction
Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies. The Company intends to apply for an exemption from the sponsorship requirements. There is no assurance that the Company will ultimately obtain an exemption from sponsorship.
Resumption to Trading
The Company’s shares will be halted pending receipt by the Exchange of certain required materials from the Company and until the Company engages a sponsor, if applicable. The Company will provide further details in respect of the Transaction, in due course by way of press release.
Additional Information and Description of Significant Conditions to Closing
The Transaction will be carried out by parties dealing at arm’s length to one another and therefore will not be considered to be a Non-Arm’s Length Qualifying Transaction, as such term is defined under the policies of the Exchange.
A filing statement or information circular in respect of the Transaction will be prepared and filed in accordance with Policy 2.4 of the Exchange. A press release will be issued once the filing statement or information circular has been filed or mailed to shareholders, as the case may be, as required pursuant to Exchange policies.
Completion of the Transaction is subject to a number of conditions including, but not limited to, the closing of the Private Placement, the satisfaction of the Company and of SCT in respect of certain due diligence investigations to be undertaken by each party, the completion of the Consolidation and name change, the completion of a definitive agreement setting forth the terms and conditions set out in the LOI, closing conditions customary to transactions of the nature of the Transaction, Exchange acceptance, and shareholder approval in accordance with applicable corporate law. The Transaction cannot close until the required shareholder approval is obtained and there can be no assurance that the Transaction will be completed as proposed or at all.
When a definitive agreement between the Company and SCT is executed, which is expected to occur shortly, in accordance with the policies of the Exchange, the Company will issue a subsequent press release containing the details of the definitive agreement and additional terms of the Transaction, including information relating to sponsorship, summary financial information in respect of SCT’s assets, and to the extent not contained in this press release, additional information with respect to the Private Placement, history of the assets, pro forma share capital of the Resulting Issuer, background information on Control Person(s) of SCT, and further information regarding potential appointments of additional directors and officers upon completion of the Transaction.
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 a capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Forward-Looking and Cautionary Statements
This news release may include forward-looking statements including opinions, assumptions, estimates, the New Management Team’s assessment of future plans and operations, and, more particularly, statements concerning the completion of the Transaction contemplated by the Agreement, the number of securities issued by way of the Private Placement, the business plan of the New Management Team, the change of name of the Company, the consolidation of the Company’s common shares, use of proceeds, and debt levels following completion of the Transaction.
When used in this document, the words “will,” “anticipate,” “believe,”, “intend,” “estimate,” “expect,” “intent,” “may,” “project,” “should,” and similar expressions are intended to be among the statements that identify forward-looking statements.
The forward-looking statements are founded on the basis of expectations and assumptions made by the Company and SCT which include, but are not limited to, the timing of the receipt of the required shareholder, regulatory and third party approvals, the future operations of, and transactions completed by the Company and SCT, as well as the satisfaction of other conditions pertaining to the completion of the Transaction.
Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Company or SCT, as the case may be, believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized.
Any number of important factors could cause actual results to differ materially from those in the forward -looking statements including, but not limited to, shareholder, regulatory and third party approvals not being obtained in the manner or timing set forth in the Agreement, the ability to implement corporate strategies, the state of domestic capital markets, the ability to obtain financing, changes in general market conditions and other factors more fully described from time to time in the reports and filings made by the Company with securities regulatory authorities.
Except as required by applicable laws, neither the Company nor SCT undertakes any obligation to publicly update or revise any forward-looking statements contained herein.
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 news release.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws and may not be offered or sold within the United States or to United States Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
DataMiners Capital Corp.
David L. Wood