NOT FOR RELEASE IN THE UNITED STATES OR TO U.S. NEWS WIRE SERVICES
Eurocontrol Technics Inc. (TSX VENTURE:EUO) ("Eurocontol" or the "Company"), a
Canadian public company specializing in the acquisition, development and
commercialization of innovative energy security, authentication and verification
technologies, is pleased to provide an update with respect to the letter
agreement entered into with Athlone Global Security Inc. ("AGS") dated October
16, 2009, whereby the Company will acquire all of the issued and outstanding
common shares of AGS in exchange for common shares and warrants of Eurocontrol
Technics Ltd. (the "Transaction") (See Press Release dated October 19, 2009).
As Eurocontrol and AGS have a director in common, being Stan Bharti and a common
officer, being Patrick Gleeson, the Transaction will be considered to be a
non-arm's length transaction for the purposes of the TSX Venture Exchange. Mr.
Bharti currently holds directly or indirectly, 1,987,574 Eurocontrol shares and
2,600,000 AGS shares. Mr. Gleeson currently holds 15,000 AGS shares.
Pursuant to the Transaction, AGS shareholders will receive 2.4 common shares of
the Company for each common share of AGS (the "Exchange Ratio"). Based on the
October 15, 2009 closing price of Eurocontrol on the TSX Venture Exchange of
$0.30 per share, the deemed price per AGS share is $0.72. In addition, holders
of common shares of AGS will receive one-half of one common share purchase
warrant (each whole warrant a "Warrant") for each common share of the Company
issued. Each Warrant shall entitle the holder thereof to acquire one common
share in the capital of the combined company at an exercise price of $0.30 for a
12 month period following completion of the Transaction. In addition, the
shareholders of the Company will receive one-half of one common share purchase
warrant (each whole warrant a "Euro Warrant") for each common share of the
Company held. Each Euro Warrant shall entitle the Eurocontrol shareholders of
record on the day of closing to acquire one common share in the capital of the
combined company at an exercise price of $0.30 for a 12 month period following
completion of the Transaction. The issuance of the Euro Warrants are subject to
receipt of all security and regulatory approvals.
The Boards of Directors of both Eurocontrol and AGS unanimously support the
proposed business combination.
Highlights of the Transaction
Upon completion of the Transaction, the combined company will have:
- A strong balance sheet;
- A uniquely diversified technology platform with complementary security
technologies in Homeland Security (HLS), Energy Security, Authentication
and Verification;
- The combined company will be well positioned to integrate and further
develop its advanced security technologies in order to capitalize on the
growing demand for such technologies in the international marketplace;
- Each of the AGS technologies in which AGS has an interest in have
applications outside of the energy industry and serve multiple large
markets. In particular:
- Larotec Inc., a wholly-owned subsidiary of AGS is a software
development company located in Israel and its flagship Web2M(TM)
platform is a scalable, high-performance and fully web-based
solution for advanced monitoring and management of large-scale
multiple remote devices and machines (100% owned by AGS);
- Emza Visual Sense Ltd., headquartered in Israel, has developed a
low-cost, fully integrated outdoor recognition sensor, which is
called WiseEye(TM). It is a "smart" surveillance system in a single
palm-sized unit that encapsulates camera, processing unit and
communication interface (62% owned by AGS);
- DefenSoft Ltd., located in Israel has developed an innovative
digital mapping engine and planning tool, which is called
Lighthouse(TM). This technology enables users to plan and deploy
automatically perimeter and border security systems (45% owned by
AGS);
- Bluebird Aero Systems, located in Israel, is a developer and
producer of tactical unmanned aerial vehicles and support equipment
for a variety of civilian, military and HLS applications (40% owned
by AGS);
- Icaros Inc., a US company with offices located in Israel, has
developed an advanced aerial photography and mapping product, which
is called NEVO(TM). Nevo enables high resolution multi-dimensional
map creation in hours as compared to current commercialized
technology that takes months (35% owned by AGS);
- PerSay Inc., a US company with offices located in Israel and New
York, NY, provides leading edge voice-based authentication systems.
PerSay's biometric speaker verification products provide increased
security while maintaining a natural and convenient access method
(30% owned by AGS); and
- Sensics Inc., located in Maryland, has developed a head-mounted
virtual reality display that offers dramatically higher performance,
in terms of field of view and resolution, than any other available
alternative (15% owned by AGS)
- Proven management and board of directors with expertise in technology
R&D, international market development, HLS, energy security and finance;
and
- Upon completion of the Transaction the combined company will be
positioned to become an integrator through the facilitation of end to
end solutions with respect to its technologies.
- In accordance with the unaudited interim financial statements of AGS for
the period ended June 30, 2009, AGS has cash and cash equivalents in the
amount of US$7,030,603 and investments in various homeland security
technology companies valued at USD$14,396,000.
Transaction Details
The Transaction remains subject to the execution of definitive agreement by
November 30, 2009, regulatory approvals, court approvals (if required) and the
requisite shareholder approvals, including disinterested shareholder approval,
as applicable.
Pursuant to the letter agreement, the directors of both Eurocontrol and AGS have
agreed to support the Transaction and each of the directors and officers of
Eurocontrol and AGS will enter into lock-up agreements to vote their shares in
favour of the Transaction, subject to certain conditions. Upon closing of the
Transaction it is anticipated that a nominee of AGS will be appointed to the
board of directors of Eurocontrol. In addition, the letter agreement provides
that in the event that AGS receives a bona fides financially superior offer from
a third party to acquire more than 50% of the assets of AGS, AGS shall pay
Eurocontrol a termination fee in the amount of $500,000.
There are currently 51,029,949 common shares of the Company issued and
outstanding. Based upon the Exchange Ratio, upon completion of the Transaction,
the resulting company will have 144,004,751 common shares issued and outstanding
and the shareholders of Eurocontrol and the shareholders of AGS will hold
approximately 35.5% and 64.5%, respectively of the common shares of the
resulting company. As of the date hereof there are 38,739,501 common shares of
AGS issued and outstanding and no shareholders of AGS hold more than 10% of the
issued and outstanding common shares other than Goldman Sachs Investment
Partners Master Fund L.P, and RAB Capital Plc. who currently hold approximately
28% and 20% of AGS, respectively.
On November 10, 2009, AGS entered into a sponsorship agreement (the "Sponsorship
Agreement") with Macquarie Capital Markets Canada Ltd. ("Macquarie") the
financial advisor of AGS, pursuant to which Macquarie, subject to completion of
satisfactory due diligence, agreed to act as sponsor in connection with the
Transaction.
About Eurocontrol Technics Inc.
Eurocontrol Technics Inc. through its wholly owned subsidiary Global Fluids
International S.A. ("GFI") is one of the world's pioneers in developing and
implementing innovative molecular marking systems for the oil industry. Through
its proprietary Petromark(TM) integral system, GFI has developed a 4-part
solution consisting of a molecular marker, injection, monitoring and control
components. Such oil industry cost realities along with GFI's 5-year R&D efforts
to create its industry-leading marking solutions, along with access to capital
provided by Eurocontrol Technics Inc. allows management to pursue numerous
anticipated oil marking opportunities in fiscal 2010 and in years to come.
About Athlone Global Security Inc.
A pioneer in the Homeland Security marketplace, Athlone Global Security Inc.
focuses on acquiring and investing in emerging growth companies specializing in
the development and distribution of imperative Homeland Security ("HLS") related
solutions. AGS, incorporated pursuant to the laws of the British Virgin Islands,
operates principally from its offices in the U.S.A. and Middle East. AGS is
engaged in the acquisition of technologically oriented, privately owned, and
entrepreneurially managed HLS companies that have developed unique products that
can be readily adapted in major global markets where there is great demand for
these products in the global war on terrorism. AGS' primary focus in sourcing
its investment and acquisition opportunities is in Israel due to the wide
breadth of opportunities available and the strong team and infrastructure AGS
has already established in Tel Aviv. Due to the unique knowledge and expertise
of counter-terrorism and HLS technologies, Israel has become an attractive
source of emerging HLS technologies for North American and European markets.
Please visit the Company's web site at www.athloneglobalsecurity.com
Regulatory Footnotes
Completion of the Transaction is subject to a number of conditions, including
TSX Venture Exchange acceptance and potential disinterested shareholder
approval. 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 to be prepared by Eurocontrol in connection with the Transaction, any
information released or received with respect to the business combination may
not be accurate or complete and should not be relied upon. Trading in the
securities of Eurocontrol should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed
transaction nor approved or disapproved of the contents of this news release.
Macquarie, subject to completion of satisfactory due diligence, has agreed to
act as sponsor to AGS in connection with the Transaction. An agreement to
sponsor should not be construed as any assurance with respect to the merits of
the transaction or the likelihood of completion"; This agreement to sponsor
should not be construed as any assurance with respect to the merits of the
proposed Transaction or its likelihood of completion.
This press release shall not constitute an offer to sell or solicitation of an
offer to buy the securities in any jurisdiction. The securities will not be and
have not been registered under the United States Securities Act of 1933 and may
not be offered or sold in the United States absent registration or applicable
exemption from the registration requirements.
Cautionary Note Regarding Forward-Looking Information This press release
contains "forward-looking information" within the meaning of applicable Canadian
securities legislation. Forward-looking information includes, but is not limited
to, statements with respect to the future financial or operating performance of
each of Eurocontrol and AGS and its projects, statements regarding technological
prospects, statements regarding synergies and financial impact of the proposed
transaction, the terms and conditions of the transaction, the benefits of the
proposed transaction, costs of and capital for projects, expenditures, timing of
future technological developments, requirements for additional capital,
government regulation of industrial operations, environmental risks, title
disputes or claims, limitations of insurance coverage and the timing and
possible outcome of pending litigation and regulatory matters. 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 information is subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of activity,
performance or achievements of the Company (and the company resulting from the
successful completion of the proposed transaction) to be materially different
from those expressed or implied by such forward-looking information, including
but not limited to: general business, economic, competitive, political and
social uncertainties; the actual results of current exploration activities;
delay or failure to receive board or regulatory approvals; timing and
availability of external financing on acceptable terms; the business of AGS and
Eurocontrol and AGS not being integrated successfully or such integration
proving more difficult, time consuming or costly than expected; not realizing on
the potential benefits of the proposed transaction; conclusions of economic
evaluations; changes in project parameters as plans continue to be refined;
failure of plant, equipment or processes to operate as anticipated; accidents,
labour disputes and other risks of the industrial industry; and, delays in
obtaining governmental approvals or required financing or in the completion of
activities. 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.
Eurocontrol and AGS do not undertake to update any forward-looking information,
except in accordance with applicable securities laws.
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