HALIFAX, Feb. 10, 2016 /CNW/ - Fortune Bay Corp. ("Fortune
Bay") (TSX: FOR) and Kneat Solutions Limited ("Kneat") are pleased
to announce that they have entered into a transaction agreement
pursuant to which Fortune Bay will: (i) spin-out its resources
properties by way of a court-approved plan of arrangement in
Ontario (the "Arrangement"); and
(ii) acquire 100% of the issued and outstanding ordinary shares of
Kneat by way of a concurrent scheme of arrangement in Ireland (the "Merger"). The Merger will
create a listed Canadian software company providing leading
compliance document and data management solutions for the life
sciences industry and other regulated industries. By merging
with Fortune Bay, Kneat acquires access to public markets and the
increased financial resources required to meet the growing demand
for its software solutions.
Pursuant to the Arrangement, Fortune Bay shareholders will
receive one (1) new common share of Fortune Bay (each a "New
Fortune Bay Share") and one and one half (1.5) of a common share (a
"Spinco Share") of a newly formed exploration company ("Spinco") in
exchange for each three (3) common shares of Fortune Bay held by
them. Upon closing of the Arrangement and the Merger, Fortune
Bay shareholders will hold 100% of the issued and outstanding
Spinco Shares and 31.3% of the issued and outstanding New Fortune
Bay Shares, with the former shareholders of Kneat holding the
remaining 68.7% of the issued and outstanding New Fortune Bay
Shares. In addition to acquiring all the issued and
outstanding shares of Kneat, Fortune Bay will retain net CAD
$8.2 million. SpinCo will hold
Fortune Bay's interests in the Goldfields project in Saskatchewan and the Ixhuatán and Huizopa
projects in Mexico. It is expected that an application will
be submitted to list the shares of Spinco on the TSX Venture
Exchange.
"Fortune Bay is pleased to enter into this transaction with
Kneat. This transaction enables Fortune Bay shareholders to
become part of a fast growing software development company with a
best in class solution for the life sciences industry, while still
enabling our shareholders to maintain their ownership in our
resource properties going forward," said Wade Dawe, Chief Executive Officer of Fortune
Bay. "We are looking forward to being part of Kneat's
exciting future and working with Edmund and his team at Kneat."
"We are excited to take the next step on our way to capturing
the rapidly growing market for compliance related document and data
management software for regulated industries," stated Edmund Ryan, Chief Executive Officer of
Kneat. "After several years of development, we launched our
first solution in 2014, initially targeting validation applications
for the biotech and pharmaceutical industries. Now we can
count several leading biotech and pharmaceutical companies as
clients. Existing clients are realizing the power of the
Kneat platform, expanding its use into areas beyond
validation. We view the opportunity to combine with Fortune
Bay as providing the financial resources and flexibility to
accelerate Kneat's progress in expanding our client base and our
unique software platform."
Kneat is a privately owned company operating from its head
office in Limerick, Ireland. Kneat designs, develops and
supplies software for data and document management within regulated
environments. Kneat's current product is Kneat GX, a
configurable commercial off the shelf application focused on
validation lifecycle management and testing within the life
sciences industry. Complete and comprehensively documented
validation of processes, products, equipment and software is a
significant and impactful regulatory requirement in the life
sciences industry. The Kneat GX application provides a compliant
e-solution that enables life science companies to become efficient
and compliant with an automated process that has traditionally been
manual, inefficient and 100% paper-based. Kneat is an ISO
certified company along with the Kneat GX software
application.
The Board of Directors of Fortune Bay and Kneat have unanimously
approved the transaction.
Arrangement Summary
The Arrangement will be effected
by way of a court-approved plan of arrangement and will require the
approval of at least 66.6% of the votes cast by Fortune Bay's
shareholders at a special meeting expected to take place in
April 2016 (the "Meeting"). The
transaction is also subject to applicable regulatory approvals,
including approval of the Toronto Stock Exchange (the "TSX"), and
the satisfaction of certain closing conditions customary in
transactions of this nature.
The Arrangement will result, through a series of transactions,
in:
- Fortune Bay shareholders receiving one New Fortune Bay Share
and one and one half of a Spinco Share for each three Fortune Bay
Shares currently held by them;
- Holders of Kneat Shares receiving that number of New Fortune
Bay Shares representing 68.7% of the issued and outstanding New
Fortune Bay Shares in exchange for the acquisition by Fortune Bay
of all the issued and outstanding Kneat Shares; and
- The change of Fortune Bay's name to "Kneat Solutions Inc.";
and
- Spinco to be named "Fortune Bay Corp.".
On completion of the Arrangement, Spinco will own and operate
the existing business of Fortune Bay, and Fortune Bay will own and
operate the existing business of Kneat. Fortune Bay
shareholders who receive New Fortune Bay Shares and Spinco Shares
under the Arrangement will hold 100% of the issued and outstanding
Spinco Shares and 31.3% of the issued and outstanding New Fortune
Bay Shares, with the former holders of Kneat Shares holding the
remaining 68.7% of the issued and outstanding New Fortune Bay
Shares.
After taking into consideration, among other things, the terms
of the Arrangement and the Merger, the unanimous recommendation of
a Special Committee of the Fortune Bay Board of Directors
established to review the Arrangement and discussions with its
legal advisors, Fortune Bay's Board of Directors has unanimously
concluded that the Arrangement is in the best interests of Fortune
Bay and has approved the Arrangement. Fortune Bay's Board of
Directors intends to recommend in the Management Information
Circular, to be mailed in connection with the Meeting, that Fortune
Bay's shareholders vote in favour of the Arrangement.
In conjunction with the Arrangement, it is expected that Mr.
Wade Dawe, the current Chief
Executive Officer of Fortune Bay Corp., will continue with Kneat
Solutions Inc. as a Director and Ms. Sarah
Oliver will continue as Chief Financial Officer. In
light of the change in nature of the business, Mr. Brent MacKinnon will not be continuing on as
President and Chief Operating Officer. We wish to thank Mr.
MacKinnon for his contribution to Fortune Bay over the past
year. Mr. Edmund Ryan, current
Chief Executive Officer of Kneat, will become the new President and
Chief Executive Officer of Kneat Solutions Inc.
Advisors
Fortune Bay's legal counsel is Fogler,
Rubinoff LLP and Mason Hayes &
Curran is Kneat's legal counsel.
Private Placement
Fortune Bay is pleased to announce
that it intends to complete a non-brokered private placement
financing for an estimated aggregate gross proceeds of up to
$2,000,000 (the "Offering").
Fortune Bay intends to issue up to 6,666,667 common shares at an
issue price of $0.30 per
share.
Closing of the Offering is subject to certain conditions,
including approval of the TSX. All securities issued pursuant
to the Offering will be subject to a statutory four-month hold
period in accordance with Canadian securities legislation.
About Fortune Bay Corp.
Fortune Bay is engaged in the
exploration and potential development of two primary mining
projects: the Goldfields project and the Ixhuatán project. The
Goldfields project is a property located in northern Saskatchewan and consists of two gold
deposits: the Box deposit and the Athona deposit. The Ixhuatán
project is located in the northern Chiapas State in Mexico.
About Kneat Solutions Limited
Kneat, headquartered in
Limerick, Ireland, is in the
business of developing and marketing the Kneat Gx platform software
that meets the stringent pharmaceutical industry regulatory
requirements for all forms of validation, equipment changeover
management, risk lifecycle management, change control and much
more. It has been designed to allow the customer to configure
and manage many regulated data and document processes in a
paper-less environment.
Cautionary and Forward-Looking Statements
Except for
the statements of historical fact contained herein, certain
information presented constitutes "forward-looking information"
within the meaning of applicable Canadian securities laws. Such
forward-looking information, includes, but is not limited to, the
approval of the Arrangement and the Merger by the respective
shareholders of Fortune Bay and Kneat, the listing of Spinco on the
TSX Venture Exchange and the completion of the Offering. While such
forward-looking statements are expressed by Fortune Bay, as stated
in this release, in good faith and believed by Fortune Bay to have
a reasonable basis, they are subject to important risks and
uncertainties. As a result of these risks and uncertainties, the
events predicted in these forward-looking statements may differ
materially from actual results or events. These forward-looking
statements are not guarantees of future performance, given that
they involve risks and uncertainties. Fortune does not undertake
any obligation to release publicly revisions to any forward-looking
statement, except as may be required under applicable securities
laws. Investors should not assume that any lack of update to a
previously issued forward-looking statement constitutes a
reaffirmation of that statement. Continued reliance on
forward-looking statements is at investors' own risk.
SOURCE Fortune Bay Corp.