Calgary, Alberta--(Newsfile Corp. - March 11, 2024) - FluroTech Ltd. (TSXV: TEST.H) ("FluroTech" or the "Company") and Great Slave Helicopters 2018 Ltd. ("GS Heli") are pleased to announce that further to the news release dated December 21, 2023, the parties have entered into an updated non-binding letter of intent (the "Letter of Intent") which provides for an updated acquisition price and changes to the proposed board of directors. Pursuant to the Letter of Intent, the Company will acquire all the issued and outstanding shares of GS Heli (the "GS Heli Shares") pursuant to a share purchase, business combination, plan of arrangement or similar structure (the "Transaction"). It is intended that the Transaction will constitute a "Change of Business" for the Company, as such term is defined in Policy 5.2 ("Policy 5.2") of the TSX Venture Exchange (the "TSXV"). Additionally, it is intended that the Transaction will constitute the Company's "Reactivation" under the policies of the TSXV and that upon completion of the Transaction (the "Closing") and satisfaction of all conditions of the TSXV, the Company as it exists upon completion of the Transaction (the "Resulting Issuer") will have its listing transferred from the NEX board of the TSXV ("NEX") to the TSXV.
Transaction Terms
The material terms and conditions outlined in the Letter of Intent are non-binding on the parties and the Letter of Intent is, among other things, conditional on the execution of a definitive share purchase, arrangement, business combination or other similar form of transaction agreement (the "Definitive Agreement") to be negotiated between the parties. There is no assurance that a Definitive Agreement will be successfully negotiated or entered into. The LOI was negotiated at arm's length and the terms and conditions outlined in the LOI are expected to be superseded by the Definitive Agreement.
In connection with the proposed Transaction, it is currently contemplated that all the issued and outstanding GS Heli Shares will be acquired by the Company for an acquisition price of $65,000,000, subject to customary adjustments (the "Purchase Price"). The Purchase Price is expected to be satisfied through a combination of bank and equity financing, in proportions to be determined by the Company and GS Heli, and a minimum of $8,000,000 of the Purchase Price shall be satisfied through the exchange of GS Heli shares for shares in the Resulting Issuer (the "Resulting Issuer Shares") at the deemed price of the Resulting Issuer Shares at the Closing, at an exchange ratio to be determined by the parties and in accordance with TSXV requirements.
Completion of the Transaction is subject to a number of conditions, including, but not limited to, receipt of applicable regulatory and stock exchange approvals, including the approval of the TSXV, completion of satisfactory due diligence and the execution of the Definitive Agreement and related transaction documents.
In connection with the Transaction, the Company is pleased to announce that it has appointed Research Capital Corporation as advisor to the Company for the proposed equity financing of subscription receipts (the "Concurrent Financing") at a price to be determined in the context of the market (the "Offering Price") and the Transaction.
Summary of Bridge Financing
In connection with the Transaction, FluroTech intends to complete a private placement of common shares of FluroTech ("Common Shares") for minimum proceeds of $500,000 and a maximum of $1,000,000 at a price of $0.075 per Common Share (the "Bridge Financing"). In accordance with Policy 5.2, the proceeds of the Bridge Financing will be used specifically for purposes of funding the costs associated with completing the Transaction, including costs related to audit fees, legal fees, preparation of necessary documentation for the Transaction and due diligence costs. The Bridge Financing remains subject to TSXV approval.
Consolidation
Prior to the closing of the Bridge Financing, FluroTech will complete a consolidation of the Common Shares on a 15:1 basis (the "Consolidation"), as approved by the shareholders of FluroTech at its last annual general and special meeting.
Debt Conversion
At Closing, it is anticipated that approximately $347,000 of FluroTech's existing debt will be converted into Resulting Issuer Shares at the Offering Price (the "Debt Conversion").
Change of Business
Upon Closing of the Transaction, it is anticipated that FluroTech will carry on the business of GS Heli, addressing the needs of helicopter aviation in the Northwest Territories, Yukon, Saskatchewan, Alberta and British Columbia, and focus on subsequent acquisition of businesses in the aviation and aerospace sector (the "Business") and will meet the Tier 1 Initial Listing Requirements for an Industrial Issuer, such that FluroTech will be graduated from the NEX to the TSXV. In connection with the Closing, it is anticipated that FluroTech will change its name to "Consolidated Aerospace Finance Corporation", or such other name as determined by the parties, in order to more accurately reflect its operations and the Business.
Pursuant to Section 4.1 of Policy 5.2, FluroTech will not be obtaining shareholder approval of the Transaction as: (i) the Transaction is not a "Related Party Transaction" and does not involve any "Non-Arm's Length Parties" (as such terms are defined in the policies of the TSXV); (ii) FluroTech is without active operations and is currently listed on the NEX; and (iii) FluroTech is not subject to, and, to the best of its knowledge will not be subject to, a cease trade order on completion of the Transaction. However, the structure of the Transaction is being finalized and, based on the final structure as reflected in the Definitive Agreement, shareholder approval may be required under applicable law. Trading in the Common Shares has been halted and will remain halted until the Transaction is completed and the TSXV receives the requisite documentation to resume trading.
Completion of the Transaction is subject to a number of conditions, including, but not limited to, receipt of applicable regulatory and stock exchange approvals, including the approval of the TSXV, completion of satisfactory due diligence and the execution of the Definitive Agreement and related transaction documents.
Management and Board of Directors of the Resulting Issuer
Additional information regarding the anticipated management and board of directors of the Resulting Issuer will be provided in due course by subsequent press releases.
Sponsorship
Sponsorship of the Transaction is required by the TSXV unless an exemption from this requirement can be obtained in accordance with the policies of the TSXV. FluroTech intends to apply for an exemption to the sponsorship requirement. There is no assurance that an exemption from this requirement will be obtained.
Trading Halt
In accordance with Policy 5.2, the Common Shares of FluroTech are currently halted from trading and will remain halted until completion of the Transaction.
About Great Slave Helicopters 2018 Ltd.
Information regarding GS Heli
GS Heli is a privately held corporation existing under the Business Corporations Act (Alberta). Headquartered in Yellowknife, Northwest Territories, GS Heli is a helicopter company with a long-standing reputation for safety, a diverse range of specialized services and logistical support. GS Heli has over 36 years of successful operations, a fleet of single and twin-engine turbine helicopters and a team of experienced professionals that continue to meet the needs of its customers in the public and private sectors. The only shareholder that holds a controlling interest both directly and indirectly in GS Heli is Mr. Pat Campling.
Following the Closing, the Company expects to operate in the aviation industry, addressing the needs of helicopter aviation in the Northwest Territories, Yukon, Nunavut, Saskatchewan, Alberta, Northwest Ontario and British Columbia. With the largest local helicopter support infrastructure in northern Canada, the Company anticipates it will significantly expand the demand for its services, drawing on a senior executive team and board that bring experience in key target markets from aviation and aircraft sectors and its strong partnerships with First Nations throughout the Northwest Territories, Nunavut, British Columbia and Alberta.
Summary of Selected Financial Information of GS Heli
| Year ended October 31, 2022 (unaudited) | Year ended October 31, 2021 (unaudited) | |
| Gross profit | $8,046,623 | $7,665,512 |
| Net income | $584,933 | $1,247,858 |
| Total assets | $53,635,376 | $51,311,489 |
| Total liabilities | $24,878,719 | $23,139,765 |
| Total current assets | $9,848,541 | $8,922,319 |
| Total current liabilities | $9,456,849 | $8,812,230 |
About FluroTech
FluroTech was incorporated under the Business Corporations Act (Alberta) on May 24, 2018. FluroTech is currently inactive with limited operations and the Common Shares are currently listed on the NEX. FluroTech has no commercial operations and no assets other than cash and is a reporting issuer in the provinces of Alberta and British Columbia.
Additional Information
Additional information concerning the Transaction and any connected transactions of the Company, GS Heli and the Resulting Issuer, including details on the bank financing for the Purchase Price (the "Bank Financing"), Concurrent Financing, Transaction terms, board and management appointments, and other matters will be provided in subsequent news releases and in the Company's management information circular or filing statement to be prepared and filed in connection with the Transaction, which will be available under FluroTech's SEDAR+ profile at www.sedarplus.ca.
All information contained in this press release with respect to the Company and GS Heli was supplied by or from the respective party for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied on the other party for any information concerning the other party.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and, if applicable pursuant to TSXV requirements, majority of the minority shareholder approval, the completion of a Definitive Agreement and closing conditions customary to transactions of this nature. 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 a capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.
For further information contact:
Consolidated Aerospace Finance Corporation
c/o BLG LLP
Centennial Place, 520 3 Ave SW Suite 1900
Calgary, AB T2P 0R3
Attention: Michael Rodyniuk, President & CEO
E-mail: mrod@cafincorp.com
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward Looking Information
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "will", "estimates", "believes", "intends" "expects" and similar expressions which are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward looking statements and information concerning: the Transaction; the proposed structure by which the Transaction is to be completed; the Bridge Financing; the Concurrent Financing and the Offering Price; the completion of the Consolidation; the Debt Conversion; the proposed name change of the Company; that the Transaction will constitute the "Reactivation" of FluroTech under the policies of the TSXV; satisfaction of the Purchase Price (including the Bank Financing); and the officers and directors upon completion of the Transaction. FluroTech cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of FluroTech, including expectations and assumptions concerning FluroTech, the Transaction, the timely receipt of all required TSXV and regulatory approvals and exemptions (as applicable) and the satisfaction of other closing conditions in accordance with the terms of the Letter of Intent. 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 FluroTech. 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 press release are expressly qualified by this cautionary statement.
The forward-looking statements contained in this press release are made as of the date of this press release, and FluroTech does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.
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SOURCE: FluroTech Ltd.
