Primary Petroleum Provides Further Details on Propoposed
Transaction With Keek Inc.
CALGARY, ALBERTA--(Marketwired - Jan 21, 2014) - Primary
Petroleum Corporation "PIE" ("Primary" or the "Corporation")
(TSX-VENTURE:PIE)(OTCQX:PETEF) - Further to its press releases
dated November 19 and December 23, 2013, Primary is pleased to
provide additional information concerning its proposed transaction
with Keek Inc. ("Keek"). The transaction is structured as a
three-cornered amalgamation (the "Amalgamation") and, as a result,
the amalgamated corporation ("Amalco") will become a wholly-owned
subsidiary of Primary at the closing of the Amalgamation. Under TSX
Venture Exchange ("TSXV") policy, the Amalgamation will constitute
a reverse take-over ("RTO") and a change of business ("COB") for
Primary, as Primary will become the "Resulting Issuer" and carry on
the business of Keek. Primary has applied to the TSXV for
conditional acceptance to have the common shares of the Resulting
Issuer listed for trading on the TSXV following the Amalgamation
("Resulting Issuer Shares"). Depending upon the timing for receipt
of consent from the TSXV to mail a circular to its shareholders,
Primary anticipates closing the Amalgamation on or about March 31,
2014.
Primary's common shares were halted on November 18, 2013, in
connection with the announcement of the Amalgamation. Primary's
common shares are expected to resume trading on or about January
23, 2014.
About Keek
Founded in 2010, Keek is a global interactive video content
network, enabled over the Internet and on mobile devices around the
World. Keek launched its website in July 2011, and launched its
mobile interactive apps in July 2011 for IOS, August 2011 for
Android, March 2012 for Blackberry 10, and Windows Phone in June
2013. Mobile devices have become the primary driver of Keek's
business and is core to the value created for its users. Available
in up to 36 languages on Keek's platform developed for iPhone,
Android, Blackberry 10 and Windows 8, Keek's users engage on Keek
in all corners of the world.
Keek's interactive video content network is distinguished by its
simplicity: videos are limited to 36 seconds of video and 111
characters of accompanying text. Such constraints make it easy for
anybody to instantly create, distribute, discover and react to
content across web and mobile devices. Since launching its product
in 2011, Keek's community has grown to over 63.8 million registered
users across 6 global regions, with no particular geographic area
contributing more than 25% to the total user community. Users
include celebrities, brands, athletes, journalists, sports teams,
and media outlets. Keek's users currently create approximately 60
thousand keeks (i.e. short videos) and 600 thousand interactions
every day.
The Keek platform provides two tiers of connections - followers
and subscribers - to allow users to more easily create and discover
content they care about the most. A user can follow or subscribe to
whomever they like and users can be discovered and followed by
millions of other users, enabling their content to be widely
distributed to a broad audience. Content is distributed in real
time with the click of a button. Users can interact on Keek
directly with other users through "keekbacks", the platform's
unique ability to respond to a keek (short video) with a keek.
These interactions can occur in either a public or private view.
Private sessions can include up to 35 others. The Keek platform
also allows users to link to their other social platforms,
including Facebook, Twitter, Tumblr, Instagram, Google+, and Line
profiles.
Currently the Keek platform and community is a free service.
Having demonstrated through its 63.8 million registered users that
a global video-centric social network will attract audiences over
the past 30 months, the next milestones for Keek are to complete
its native ad products and to implement a sound revenue model. Keek
is currently working with media buyers, advertisers and service
providers to develop online and in-app advertising, sponsorship and
product sales. Future revenue opportunities are also being
evaluated, such as in-app music, movies, stickers and games. In
addition, the on-going development of the platform will address new
features based on innovation, user feedback, competitive pressures,
organizational goals and market trends. Keek's mobile strategy
stays current with the latest mobile and smartphone devices to
ensure that, whatever the device, Keek's video platform is at the
user's fingertips.
Keek's Selected Financial Information:
Selected financial information for Keek for the years ended Feb
28, 2013 and February 29, 2012, for the period ended February 28,
2011 (which has been audited) and for the six months ended August
31, 2013 (which has been prepared by Keek's management), is as
follows.
|
For the six months ended 31-Aug-13 |
|
For the years ended February 28, |
|
|
|
|
|
|
|
|
|
|
|
|
2013 |
|
2012 |
|
2011 (1) |
|
|
|
|
|
|
|
|
|
|
Net and comprehensive loss |
(13,079,219 |
) |
(15,018,642 |
) |
(4,161,679 |
) |
(753,532 |
) |
|
|
|
|
|
|
|
|
|
Total assets |
9,334,354 |
|
13,552,713 |
|
2,445,310 |
|
282,119 |
|
|
|
|
|
|
|
|
|
|
Long term liabilities |
434,030 |
|
892,462 |
|
45,750 |
|
126,071 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
5,360,512 |
|
2,805,456 |
|
153,021 |
|
445,549 |
|
|
|
|
|
|
|
|
|
|
Shareholder's Equity |
3,973,842 |
|
10,747,257 |
|
2,292,290 |
|
(164,430 |
) |
(1) From March 5, 2010 (date of incorporation) to
February 28, 2011 |
|
|
|
|
|
Proposed Board of Directors and Management
Subject to shareholder and TSXV approval, the proposed Board of
Directors for the Resulting Issuer will consist of the below five
members, four of whom are currently considered as independent of
management. A majority of the proposed directors have significant
experience with publicly listed companies.
John Jussup,
LLB
John Jussup has 30 years' experience as a corporate legal
advisor, with his most recent position as General Counsel &
Corporate Secretary to the Bank of Canada (since 2009). He has
extensive experience in advising boards and senior management on
various matters including risk management and corporate governance.
He graduated from the Royal Military College of Canada with a
Bachelor of Arts degree (Hons.) and obtained his LLB from Queens
University.
Jan Klein,
CPA
Jan Klein is currently Chief Financial Officer of MCT Worldwide
(since June 2013), a leading test equipment supplier to the
semiconductor industry. He was a Senior Vice President at Poynt
Corporation from October 2010 to August 2013, a company with a
local search mobile App as its main product, that was acquired by
Sprylogics International Corp. Prior to that he enjoyed an 8 year
teaching career at Stevens Institute of Technology's Howe School of
Technology Management. Jan spent 5 years as Vice President of
Equity Research as a sell-side analyst at Morgan Stanley Dean
Witter covering wireless and Internet firms. Prior to that he held
senior management roles in finance and/or business development at
AT&T Wireless, Geotek Communications, Inc., a company that
provided mobile logistics systems operated over its proprietary
network, US Wireless and Qualcomm Techologies Inc., both providers
of wireless technology and services. Jan holds a Bachelor of
Science in Aerospace Engineering from The Pennsylvania
State University, an MBA in Finance from George Washington
University, an Executive MBA from Cornell University and an
Associate Degree in Accounting from the University of Pittsburgh.
He is a Certified Public Accountant in New Jersey and holds a
Series 7/General Securities License issued by the Financial
Industry Regulatory Authority in the United States (formerly the
National Association of Securities Dealers).
Anthony
Lacavera
Anthony Lacavera, until recently was Chairman and CEO of the
Globalive Communications Corporation, a company that has invested
in numerous companies in the Internet, Communications and
Technology sectors since 2000, and a provider of wireless phone
services in Canada through Wind Mobile. Anthony founded Globalive
in 1998 and co-founded Wind Mobile in 2008. In January 2013,
Anthony founded Globalive Capital, an investment fund that will
focus on technology, media and telecommunications start-ups.
Anthony was named CEO of the Year in Canada for 2010 by the
Globe and Mail's Report on Business Magazine and was named one of
Canada's Top 40 Under 40 in 2006. Under Anthony's leadership
Globalive has received numerous best in business awards, including
ranking #1 on Profit Magazine's 2004 list of Canada's 100 fastest
growing companies, one of Canada's 50 Best Managed Companies for 9
consecutive years, and twice listed as one of Canada's 30 Best
Workplaces. Anthony was named an Honorary Fellow of St. Michael's
College at the University of Toronto in 2012, and named to the
University of Toronto's Engineering Hall of Distinction in
2013.
Gerry Feldman, CPA,
CA
Gerry Feldman, CPA, CA, is a Chartered Accountant. He has 30
years of merger and acquisition, corporate finance and financial
experience and sits on numerous public company boards. Currently
Gerry is Vice President of Corporate Development and Chief
Financial Officer of Pinetree Capital Ltd., Chief Financial Officer
of Brownstone Energy Inc., and Chief Financial Officer of Mega
Uranium Ltd. Before joining Pinetree, Mr. Feldman was a senior
Partner in a number of accounting firms where he provided services
to clients, specializing in audits for public companies, securities
dealers and mutual fund dealers. He is currently a senior partner
at DNTW Toronto LLP Chartered Accountants. Gerry holds a Bachelor
of Arts from York University and a Bachelor of Commerce from the
University Of Windsor. Gerry is the interim CEO and Director of
Keek.
Michele (Mike)
Marrandino (57) - President CEO & Director
Mike Marrandino has over 25 years' experience in the capital
markets within a variety of industries. His independent management
consulting services focused on fund raising, corporate
communications, marketing and M&A. Mike was one of the founders
in Chartwell Technology Inc., an online gaming software company
that was one of the first movers to license its software to the
online gaming industry. Mike's main responsibility was the
licensing of the online gaming software platform.
His most recent experience was the founding director, President
& CEO of Primary, a land based oil & gas company that was
successful in accumulating one of the largest land positions in the
new oil bearing discovery area called the Southern Alberta Basin.
Mike is also an independent director and sits on both the audit and
compensation committee of Niogold Mining Corp., a junior gold
mining company with its main projects located in the Cadillac -
Malartic - Val-d'Or region of the Abitibi gold mining district in
Quebec. Mr. Marrandino is a graduate of BCIT in both mechanical and
industrial engineering technology.
Management of the Resulting Issuer:
Following is a description of the proposed management of the
Resulting Issuer:
Michele (Mike)
Marrandino (57) - President CEO & Director
(See description above).
Warren Goldberg, CPA,
CA (46) - Chief Financial Officer
Warren Goldberg is a Chartered Accountant and licensed public
accountant and a partner in the Toronto based accounting firm of
Schwartz Levitsky Feldman, LLP ("SLF") which he joined in January
2000. Warren's practice at SLF involves audits of public companies,
both in Canada and United States. He has served as director of Leo
Acquisitions Corp. (TSXV:LEQ.H), a capital pool company, since
February 7, 2011 and as Chief Financial Officer of Sonoma Capital
Inc., a non-listed reporting issuer that is seeking business
opportunities, since June 21, 2010. Warren holds a Bachelor of
Business Administration degree from York University and a Chartered
Accountant degree from the Institute of Chartered Accountants of
Ontario (ICAO).
Troy Fraser (44) -
Chief Operating Officer
Troy Fraser is currently the Chief Operating Officer at Keek.
Troy has 16 years of software and services leadership experience.
Prior to joining Keek, Troy was with GS1 Canada, a not-for-profit
national product registry, barcode licensing and electronic data
standards organization, as the Vice President, Marketing, focusing
on digital marketing and communications to educate Canadian
business in the use of standards. Troy also held the role of
General Manager, eCommerce with Grand & Toy Limited, and
Executive Vice President of Operations with Novator Systems Inc., a
company which provides e-commerce platforms. Troy has delivered
complex, customized e-commerce websites and provided managed
services for companies such as American Express International,
Brookstone, FTD, Sirius/XM and many others. Troy has 15 years of
product management experience. He graduated with a BA in Political
Science from Laurentian University.
Rajiv (Roger) Rai (44)
- Vice President, Business Development
Roger Rai is currently the Vice President, Business Development,
Keek Inc. and was employee #4 at Keek in 2010. Roger also works
with the owner/controlling shareholder of Rogers Communications
Inc. In this role Roger oversees and advises on many corporate
issues which range from operational to Board and corporate
governance affairs. In addition Roger assists in the sports
ownership affairs of Rogers Communications and was responsible for
the acquisition of the Toronto Blue Jays and is part of the
ownership group attempting to acquire and move the Buffalo Bills to
Toronto.
Roger was also the Director of Development at C.O.R.E. Feature
Animation who produced the children animation movie called "The
Wild". Previously Roger was the founder and VP, Business
Development of Fastvibe Inc., a web casting company that provides
rapid transmission of client content worldwide via the internet.
Roger also held various managerial positions at Rogers Cablesystems
and Rogers Wireless, Canada's largest communications company. Roger
currently is an advisor to Chobani, Inc., a retail food services
company, and is the founder and on the board of the ONEXONE
foundation, a child wellness focused charitable organization. Roger
holds a Bachelor of Arts from the University of Western
Ontario.
Ariane Young (46) -
Corporate Secretary
Ariane Young is a partner at the law firm of TingleMerrett LLP,
a Calgary-based corporate law firm. Ariane has 20 years experience
in the securities and corporate law industry and has acted for
numerous Canadian and International public and private
corporations, including oil and gas, software, bio-technology,
technology and industrial issuers. Ariane has been with
TingleMerrett LLP since 2006, prior to which she was an associate
with Burnet, Duckworth & Palmer LLP (2004 to 2006) and a
partner at Parlee McLaws LLP (from 2000) starting as an associate
in 1994. Ariane holds a Bachelor of Arts (Hons.) in Philosophy and
Political Science and obtained her LLB from the University of
British Columbia.
About the Amalgamation
Shareholder Approval
Subject to the obtaining the consent of the TSXV to mail its
circular to its shareholders, Primary has called an annual general
and special meeting of its shareholders for March 4, 2014, to
consider and approve, among other items: (a) the RTO and COB to the
business of Keek; (b) a name change to Keek Inc.; (c) the
appointment of the directors of the Corporation following the
closing of the Amalgamation (the "Resulting Issuer") and (d) a
resolution authorizing Primary's directors to sell all the oil and
gas assets of the Corporation. Keek will hold a meeting of its
shareholders on March 4, 2014 to approve the Amalgamation.
Consideration
Under the terms of the Amalgamation Agreement, each holder of
Keek Shares (to be defined as the Keek Common Shares and the Keek
Preferred Shares) (except for Keek shareholders that have validly
exercised their dissent rights in connection with the special
resolution approving the Amalgamation) shall exchange their Keek
Shares for Resulting Issuer Shares instead of common shares of
Amalco, on the basis of one (1) fully paid and non-assessable
Resulting Issuer Share for every one (1) Keek Share held. The
parties anticipate the Amalgamation will involve the issuance of
190,538,250 shares at a valued of $0.10 per Resulting Issuer Share,
resulting in total deemed consideration paid to the holders of Keek
Shares of $19,053,825.
Further, subject to receipt of all required regulatory
approvals, each holder of options or warrants issued by Keek ("Keek
Options" and "Keek Warrants", respectively) outstanding immediately
before the effective date of the Amalgamation shall exchange such
Keek Options or Keek Warrants, as the case may be, for options and
warrants, as applicable, of the Resulting Issuer on the same terms
as the original Keek Options or Keek Warrants.
The table below illustrates the number of Resulting Issuer
Shares outstanding and reserved for issuance following the
Amalgamation.
|
Number of Securities |
Percentage of total number of Resulting Issuer Shares
outstanding following the Amalgamation |
(undiluted) |
(fully-diluted) |
Primary Shares outstanding |
148,207,705 |
43.5% |
39.8% |
Resulting Issuer Shares to be issued as consideration for the Keek
Shares |
190,538,250 |
55.9% |
51.2% |
Total Resulting Issuer Shares(1)(undiluted) |
340,745,955 |
100% |
91.5% |
Resulting Issuer Shares issuable upon exercise of the Primary
Options(2) |
10,117,500 |
-- |
2.7% |
Resulting Issuer Shares issuable upon exercise of the Keek
Options(3) |
21,230,000 |
-- |
5.7% |
Resulting Issuer Shares issuable upon exercise of the Keek
Warrants |
261,690 |
-- |
0.01% |
Total Resulting Issuer Shares(1)(fully diluted) |
372,355,145 |
100% |
100% |
Notes:
- Includes 2,000,000 Primary Shares, issuable at a deemed price
of $0.10 per share, on Closing to Alpha North Asset Management, a
party at arm's length to Primary and Keek, as a finder's fee in
connection with the Transaction, which represents 0.6% undiluted
(0.5% diluted).
- Primary options have an exercise price ranging from $0.29 to
$0.66 and expire at dates ranging from July 16, 2015 to March 14,
2022.
- Keek options include 3,850,000 shares at a price of $0.10 per
share expiring January 23, 2019; options to purchase an aggregate
of 900,000 shares at a price of $0.20 per share expiring as to 25%
every 6 months starting on dates ranging from August 1, 2014 to
February 1, 2016 and ending on dates ranging from June 1, 2016 to
September 7, 2016; options to purchase an aggregate of 200,000
shares at a price of $0.50 per share expiring as to 25% every 6
months starting on dates ranging from March 14, 2015 to Apr 3, 2015
and ending on dates ranging from September 14, 2017 to October 3,
2017; and options to purchase an aggregate of 2,100,000 shares at a
price of $1.00 per share expiring as to 25% every 6 mos. starting
on dates ranging from Dec 27, 2015 to February 27, 2017 and ending
on dates ranging from June 27, 2017 to August 27, 2018.
Loans to Keek
As disclosed in the press releases dated November 19th and
December 23rd, 2013, Primary has issued $1.6 million in secured
loans to Keek and is expected to advance an additional $1 million
on the mailing of the management information circular of Primary to
the Primary shareholders. The Loans each bear interest at a rate of
12% per annum and are due on April 25, 2014. Each of the Loans is
secured by all of the assets of Keek and rank equally or in
priority to other secured debt of Keek.
Sponsorship
Primary was granted an exemption by the TSXV from the
sponsorship requirements in connection with the Amalgamation.
Principal Holders of Keek
The principal holders of Keek are Isaac Raichyk and Eve Kerzner,
both of Ontario. Mr. Raichyk currently holds 17,850,000 Keek common
shares (51% of the common shares) through his company Oddpot Inc.,
an Ontario company, and 7,650,000 Keek preferred shares (7.9% of
the Keek preferred shares) through his company 1748297 Ontario
Inc., an Ontario company. Eve Kerzner currently holds 17,150,000
Keek common shares (49% of the common shares) and 7,350,000 Keek
preferred shares through 2393271 Ontario Inc. an Ontario company,
and 3,600,000 Keek preferred shares through Telogin Inc., an
Ontario company (11.3 % of the Keek preferred shares). Mr. Raichyk
will receive an aggregate of 25,500,000 Resulting Issuer shares
(7.5% of the Resulting Issuer - non-diluted). Ms. Kerzner will
receive an aggregate of 40,100,000 Resulting Issuer shares
(including 12,000,000 shares issuable upon the automatic conversion
of Keek convertible notes held by 2393271 Ontario Inc. (11.8% of
the Resulting Issuer - non-diluted).
Non-Arms Length Parties
Pinetree Capital Ltd. ("Pinetree"), beneficially owns, directly
and indirectly, and has control or direction over 17,750,000
Primary Shares (12% non-diluted). Pinetree is an insider of
Primary. Pinetree will also hold a total of 14,000,000 Keek Shares,
comprised of 2,500,000 Keek Shares, it currently holds, an
additional 9,000,000 Keek Shares it will receive pursuant to
anti-dilution rights and 2,500,000 Keek Shares it will receive upon
the automatic conversion of the convertible notes it holds (7.3% of
Keek on a non-diluted basis, assuming issuance of all anti-dilution
rights and conversion of all Keek convertible notes, except for
notes held by Primary). Upon completion of the Amalgamation,
Pinetree will receive 14,000,000 Resulting Issuer Shares as
consideration for the Keek Shares held, bringing total ownership
and/or control, together with its existing position in Primary, to
31,750,000 Resulting Issuer Shares (9.3% of the Resulting Issuer,
non-diluted). The Primary shares and Keek Shares held by Pinetree
will be excluded from the calculations of the shareholder votes
conducted at the respective shareholder meetings held in connection
with consideration of the transaction.
Conditions to Completion of the Amalgamation
The closing of the Amalgamation is subject to satisfaction or
waiver of terms and conditions, customary or otherwise, including
but not limited to, acceptance by the TSXV of the Amalgamation,
requisite shareholder approval of both Primary and Keek and other
applicable approvals. There can be no assurance that the
Amalgamation will be completed as proposed or at all.
All information contained in this news release with respect to
Primary and Keek was supplied by the parties respectively for
inclusion herein and Primary and its directors and officers have
relied upon Keek for any information concerning Keek.
About Primary
Primary is a junior oil and gas company which currently holds
substantial land positions in both an unconventional and
conventional oil play in NW Montana. Upon completion of the
Amalgamation, Primary intends to dispose of its oil and gas
assets.
Completion of the Amalgamation is subject to a number of
conditions, including TSXV acceptance and disinterested shareholder
approval. The transaction cannot close until the required
shareholder approvals from both Keek and Primary are 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
Filing Statement to be prepared in connection with the transaction,
any information released or received with respect to the COB and
RTO may not be accurate or complete and should not be relied upon.
Trading in the securities of Primary 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 Statements
This news release contains forward-looking statements
relating to the timing and completion of the Proposed Transaction,
the future operations of Primary and other statements that
are not historical facts. Forward-looking statements are often
identified by terms such as "will", "may", "should",
"anticipate", "expects" and similar expressions. All statements
other than statements of historical fact, included in this release,
including, without limitation, statements regarding the Proposed
Transaction and the future plans and objectives of Primary, are
forward looking statements that involve risks and uncertainties.
There can be no assurance that such statements will prove to be
accurate and actual results and future events could differ
materially from those anticipated in such statements. Important
factors that could cause actual results to differ materially from
Primary's expectations are risks detailed from time to time in the
filings made by Primary with securities regulations.
The reader is cautioned that assumptions used in the
preparation of any forward-looking information may prove to be
incorrect. Events or circumstances may cause actual results to
differ materially from those predicted, as a result of numerous
known and unknown risks, uncertainties, and other factors, many of
which are beyond the control of Primary. As a result, Primary
cannot guarantee that the Amalgamation will be completed and that
any forward-looking statement will materialize and the reader is
cautioned not to place undue reliance on any forward-looking
information. Such information, although considered reasonable by
management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated.
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement. The
forward-looking statements contained in this news release are made
as of the date of this news release and Primary will update or
revise publicly any of the included forward-looking statements as
expressly required by Canadian securities law.
Primary Petroleum CorporationMike MarrandinoPresident &
CEO(403) 930-3224mike@primarypetroleum.comKeek Inc.Gerry Feldman,
CPA, CAInterim CEO(416) 606-7655gerry@keek.com
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