| ||Sat May 26, 2018|
BLACK BULL RESOURCES INC. ANNOUNCES UPDATE TO PROPOSED CHANGE OF BUSINESS AND UPDATE ON TERMS OF OFFERING
| ||Shelburne, NS -- May 26, 2018 -- Black Bull Resources Inc. (NEX: BBS.H) ("Black Bull" or the "Company") is pleased to announce that the Company has signed an amendment (the "Amending Agreement") to the previously announced Definitive Agreement dated September 19, 2017, with a group of investment and business professionals to effect an arm's length Change of Business (the "Transaction") as defined in Policy 5.2 of the TSX Venture Exchange (the "Exchange" or "TSXV"). The Transaction which, is subject to regulatory and final closing conditions, will see Black Bull transition from a Resource Issuer to an Investment Issuer within the meaning of such terms as defined in the policies of the TSXV. As the Transaction satisfies the requirements of Section 4.1 of TSXV Policy 5.2, including that the Transaction is an arm's length transaction involving an issuer listed on the NEX ("NEX" is a separate trading board of TSX Venture Exchange), as well as there being no requirement for shareholder approval under applicable corporate or securities laws, it is anticipated that no shareholder approval will be required. As a condition of Closing (defined below), the Company and Vendors are required to jointly complete a brokered private placement financing (the "Financing") for not less than $3.0 million CAD of gross proceeds. To date, commitments with respect to the Financing are excess of approximately $1.0 million CAD.|
Under the Financing, the Company will issue up to $1.5 million in subscription receipts for up to 15,000,000 common shares ("Common Share Receipts"), priced at $0.10 per Common Share Receipt, and a minimum of $1.5 million in subscription receipts for up to 150,000 Preferred Shares ("Preferred Share Receipts", and together with Common Share Receipts the "Subscription Receipts") priced at $10.00 per Preferred Share Receipt (the "Offering"). The gross proceeds of the Offering, less certain fees and expenses of the agent (the "Agent"), will be placed in escrow on behalf of the purchasers of Subscription Receipts and will be released to the Company upon satisfaction of certain escrow release conditions, which will include the completion of the Transaction. Should the escrow release conditions not be satisfied, the Subscription Receipts will be cancelled and all proceeds from the sale of Subscription Receipts will be returned to subscribers. Proceeds from the Offering will be used for investment and general corporate and working capital purposes. A subsequent news release will be issued with further details on the fees and compensation payable to the Agent.
Each Common Share Receipt entitles the holder to receive, upon satisfaction of the escrow release conditions on or before the escrow release deadline, and without payment of additional consideration, one common share of Black Bull. Each Preferred Share Receipt entitles the holder to receive, upon satisfaction of the escrow release conditions on or before the escrow release deadline, and without payment of additional consideration, one Preferred Share (defined below) of Black Bull.
The Financing is subject to regulatory approvals, including approval of the TSXV.
Under the amended terms of the Transaction, the Company will acquire certain shareholdings (the "Purchase Assets") from Mr. Kevin Spall, Mr. Ian Wild and Mr. Andrew Osis (collectively referred to as the "Vendors") in exchange for the issuance of 38,000,000 common shares of the Company, being an additional 10,000,000 common shares more than pursuant to the Definitive Agreement dated September 19, 2017, at a deemed price of $0.05 per common share, as well as the creation and issuance to the Vendors of 1,000,000 Preferred Series B Shares ("Preferred Shares" or "Preferred Share") of the Company at a deemed price of $1.00 per Preferred Share, for aggregate deemed consideration of $2,900,000. After the closing of the Transaction there will be 56,552,287 common shares outstanding assuming the issuance of the maximum number of Common Share Receipts under the Offering. There are currently no Preferred Shares issued and outstanding.
The Purchase Assets will be comprised of all of the Vendors' equity interests in Bioshield Corp. ("Bioshield"), Ignite Collaboration Services Group, Inc. ("Ignite"), Power Symmetry Inc. ("Power Symmetry") and Previcare Corp. ("Previcare") (collectively referred to as the "Investee Companies"). The Vendors have been involved with each of the Investee Companies since their inception, providing strategic, operational, and financial advice, and working with each of the Investee Companies to help shape their business plans. Bioshield, formed in 2016, is a specialty chemical company and is incorporated under the laws of Ontario. Founded in 2011 and incorporated under the laws of Alberta, Ignite is a telecommunication services provider that focuses on video collaboration and audio/visual integration solutions to organizations across Canada, and is now expanding into the United States. Power Symmetry, incorporated under the laws of Ontario in 2013, is in the business of providing power grid and energy storage applications. Previcare, formed in 2017, is a specialty chemical company and is incorporated under the laws of Ontario.
The Purchase Assets are comprised of 15 common shares (representing 15% of the issued and outstanding common shares) of Previcare, 15 common shares (representing 15% of the issued and outstanding common shares) of Bioshield, 500 shares (representing 1.2% of the issued and outstanding shares) of Ignite, and 40 shares (representing 40% of the issued and outstanding shares) of Power Symmetry Inc.
For more comprehensive detail on the Purchase Assets, the Company strongly recommends that investors review the filing statement or information circular to be prepared and submitted in connection with the Transaction.
Upon closing of the Transaction (the "Closing"), Mr. Kevin Spall and Mr. Andrew Osis will be appointed as joint Chief Executive Officer of the Company and Mr. Ian Wild will be appointed as Chairman of the Board of Directors. For more details on the board of directors, officers and senior management of the Company after Closing, refer to the Company's press release dated September 26, 2017.
Sponsorship of a "Change of Business" transaction is required by the Exchange unless exempt therefrom in accordance with the Exchange's policies or unless the Exchange provides a waiver. The Company intends to apply for an exemption from the sponsorship requirements pursuant to Section 3.4(a)(ii) of Policy 2.2 of the Exchange. If the exemption is not granted by the Exchange, then the Company would be required to engage a sponsor or will seek a waiver from the sponsorship requirement.
Black Bull Common Share Trading
Trading of Black Bull Common Shares was halted effective Tuesday September 19th, 2017. Effective April 30, 2018, cease trade order issued was revoked by the British Columbia Securities Commission, but it is unlikely that the Common Shares will resume trading until the Transaction is completed and approved by the Exchange. The Vendors have continued to source and develop Investee Companies that will contribute to the Transaction during this time.
Upon Closing, the Company intends to change its name to Magnetic North Acquisition Corp., ("Magnetic" or "Magnetic North"), or such other name as the management team may determine. It is anticipated that the Exchange would assign a new trading symbol at the time of the name change. Upon Closing, the Company intends to be listed on the TSXV as a Tier 2 Investment Issuer.
The business of the Magnetic North will become hands-on merchant banking. The existing management and Board of Directors of the Company will, upon Closing, resign from the Company, and Magnetic will appoint certain individuals to constitute the new management and Board of Directors (the "Magnetic Team"). The Magnetic Team is a working group of highly experienced professionals in finance, operations and strategy. The core principle of which is that "capital alone doesn't solve problems." Magnetic will provide capital, management and Board level representation to its Investee Companies in order to drive significant growth. The Magnetic Team believes that capital coupled with expertise and experience provides a superior return on investment to investors.
For Further Information, Please Contact:
For Black Bull Resources Inc. For Magnetic North Acquisition Corp.
Martin MacKinnon, CFO Andrew Osis, CEO
Tel: 902-499-7183 Tel: 403-470-4355
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable, disinterested shareholder approval. Where applicable, 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 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 the Company should be considered highly speculative.
The Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this news release.
This news release contains "forward-looking information" within the meaning of Canadian securities legislation. Forward-looking information generally refers to information about an issuer's business, capital, or operations that is prospective in nature, and includes future-oriented financial information about the issuer's prospective financial performance or financial position.
The forward-looking information in this news release includes disclosure about the terms of the proposed Transaction, its anticipated closing date, the proposed structure of the Transaction, the terms and timing of the concurrent financing and the business and operations of the Company after the completion of the Transaction.
The Company has made certain material assumptions, including but not limited to: prevailing market conditions; general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; the completion of the proposed financing; and the ability of the Company to execute and achieve its business objectives after the closing of the Transaction, to develop the forward-looking information in this news release. There can be no assurance that such statements 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 statements.
Actual results may vary from the forward-looking information in this news release due to certain material risk factors. These risk factors include, but are not limited to: adverse market conditions; the inability of the Company or the Vendors to complete the Transaction on the terms disclosed in this news release, or at all; the inability of the Company to obtain TSXV acceptance and the approval of its shareholders; the unavailability of exemptions from prospectus requirements for the issuance of shares under the financing; refusal of the proposed directors or officers to act for any reason, including conflicts of interest; reliance on key and qualified personnel; and regulatory and other risks associated with the industries in which the Company's portfolio companies operate, in general. The Company cautions that the foregoing list of material risk factors and assumptions is not exhaustive.
The Company assumes no obligation to update or revise the forward-looking information in this news release, unless it is required to do so under Canadian securities legislation.
You can view the Next News Releases item: Mon Jun 4, 2018, BLACK BULL RESOURCES INC. PROVIDES OPERATIONAL UPDATE 2018 REVENUES EXPECTED TO EXCEED $80 MILLION
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