Term sheet for reverse takeover transaction
for one of the leading helium and hydrogen production and carbon
sequestration hubs in North
America
PORTLAND, Ore., July 20,
2022 /PRNewswire/ -- Schmitt Industries, Inc.
(NASDAQ: SMIT) (the "Company" or "Schmitt") today announced that it
entered into a non-binding term sheet ("Term Sheet") which
contemplates the reverse merger ("Merger") with Proton Green, LLC
("Proton Green") and the spin-off of Schmitt's Ample Hills business
(the "Spin-Off").
Highlights:
- Under the merger agreement, Proton Green would become a wholly
owned subsidiary of Schmitt
- The Company would be renamed "Proton Green Corporation" and the
common stock would continue to trade on the Nasdaq under a new
symbol
- The transaction would include a Spin-Off of Schmitt's Ample
Hills business to pre-Merger shareholders of Schmitt's common
stock
The Term Sheet contemplates the execution of a merger agreement
(the "Merger Agreement") whereby the security holders of Proton
Green would receive Schmitt securities in the Merger, in exchange
for securities held in Proton Green. In addition, the Term Sheet
contemplates the Spin-Off of Schmitt's Ample Hills business to the
pre-Merger shareholders of Schmitt's common stock subsequent to the
closing of the anticipated Merger (the "Closing"). The contemplated
business combination would give Schmitt investors exposure to the
promising helium, hydrogen and clean energy industries in which
Proton Green has established footholds and operating assets, while
allowing Proton Green to fund its strategic initiatives through the
public capital markets.
Based on the initial valuations (without adjustment), Schmitt
anticipates that the security holders of Proton Green and Schmitt
would hold approximately 95% and 5%, respectively, of the combined
company. Such ratio could be subject to proportional dilution for
any anticipated financing in connection with the Closing, which
dilution could be impacted by the Company's intent to transfer
$10 million to its Ample Hills
business in connection with the Spin-Off, as referenced in the
following paragraph.
Completion of the Merger is subject to the negotiation of a
definitive Merger Agreement and related documentation, approval of
the Merger and issuance of shares related to the Merger by
Schmitt's Board of Directors and shareholders, approval of the
continued listing by Nasdaq of Schmitt common stock on the Nasdaq
Capital Market on a post-Merger basis (which is anticipated to
require raising additional financing in connection with the closing
of the Merger), the completion of due diligence to the satisfaction
of the parties, financing and satisfaction of other conditions that
are to be negotiated as part of the Merger Agreement. Accordingly,
there can be no assurance that a Merger Agreement will be entered
into or that the proposed Merger will be consummated. Further,
readers are cautioned that those portions of the Term Sheet that
describe the proposed Merger, including the consideration to be
issued therein, are non-binding and provide no guarantee that a
transaction will be completed. Accordingly, there can be no
assurance that Schmitt's efforts to consummate the transactions
contemplated by the Term Sheet will be successful.
Assuming Schmitt and Proton Green enter into the Merger
Agreement, the parties will look to seek shareholder approval from
Schmitt's shareholders in the fourth calendar quarter of 2022,
subject to SEC staff review of the proxy statement to be filed by
Schmitt for the proposed transaction.
About Schmitt Industries
Schmitt Industries, Inc., founded in 1987, designs, manufactures
and sells high precision test and measurement products, solutions
and services through its Acuity® and Xact® product lines. Acuity
provides laser and white light sensor distance measurement and
dimensional sizing products, and our Xact line provides
ultrasonic-based remote tank monitoring products and related
monitoring revenues for markets in the Internet of Things
environment. The Company also owns and operates Ample Hills
Creamery, a beloved ice cream manufacturer and retailer based in
Brooklyn, NY.
About Proton Green
Proton Green, LLC, is a producer of helium and hydrogen, and is
building out its position as a large carbon sequestration operator
in North America. With operating
control over the St. Johns Field, a 152,000 acre property in Apache
Country, Arizona, Proton Green
controls a helium reservoir and carbon storage basin. Helium
remains in short supply and is used to cool magnets in MRI systems,
as the temperate of silicon during semiconductor manufacturing, for
space and satellite system applications, as well as in many other
critical technologies. Carbon capture and sequestration is fast
becoming a climate imperative, and Proton Green has the ability to
inject up to 22 million metric tons of CO2 per year at its primary
basin, and over one billion tons of total storage
capacity. For more information, please see Proton Green's
website at: www.protongreen.com.
Safe Harbor Statement
This document may contain
forward-looking statements made pursuant to the Private Securities
Litigation Reform Act of 1995. These statements are not guarantees
of future performance and involve risks and uncertainties that are
difficult to predict. Actual outcomes and results may differ
materially from what is expressed or forecasted in such
forward-looking statements due to numerous factors. A complete
discussion of the risks and uncertainties that may affect Schmitt's
business, including the business of its subsidiary, is included in
"Risk Factors" in the Company's most recent Annual Report on Form
10-K as filed by the Company with the Securities and Exchange
Commission.
Media & Investor Contacts:
Schmitt
Industries
Michael R. Zapata,
President and CEO
Philip Bosco, CFO and
Treasurer
(503)
227-7908
|
Proton Green,
LLC
Alpha IR
Group
Joe Caminiti or Samuel
Cohen
312-445-2870
PROT@alpha-ir.com
|
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SOURCE Schmitt Industries, Inc.