TORONTO,
May 14, 2013 /CNW/ - Longford Energy
Inc. (NEX - LFD.H) ("Longford") and Earth Video Camera Inc.
("UrtheCast") are pleased to announce that their joint information
circular (the "Circular") with respect to the previously announced
plan of arrangement involving Longford and UrtheCast (the
"Arrangement") has been filed with Canadian securities regulators
and is being mailed to Longford and UrtheCast shareholders of
record as of May 13, 2013.
UrtheCast's mailing of the Circular follows its receipt of an
interim order from the Supreme Court of British Columbia on May
10, 2013 which provides for the calling of a special meeting
of UrtheCast shareholders for the purposes of considering the
Arrangement.
The Arrangement
As previously disclosed, under the terms of the
Arrangement, Longford will acquire all of the issued and
outstanding Class A common shares of UrtheCast ("UrtheCast Shares")
in exchange for Longford common shares ("Longford Shares") based on
an exchange ratio (the "Exchange Ratio") that will be determined at
the effective time of the Arrangement in accordance with a formula
set out in the plan of arrangement. The Exchange Ratio will
be based on agreed equity valuations of Longford and UrtheCast
immediately prior to the effective time which, subject to certain
adjustments:
- in the case of Longford, is expected to be approximately
$24 million; and
- in the case of UrtheCast, is expected to be approximately $63.5
million plus the gross proceeds received by UrtheCast prior to the
Effective Time from the UrtheCast Financing and the Additional
UrtheCast Financing (each as described below).
Assuming that UrtheCast raises gross proceeds
under the Additional UrtheCast Financing of $20 million prior to, or concurrently with,
completion of the Arrangement, Longford and UrtheCast currently
expect that the Exchange Ratio will be approximately 13.55 Longford
Shares for every UrtheCast Share.
Immediately following the completion of the
Arrangement, it is proposed that the Longford Shares, including
those issued to UrtheCast shareholders under the Arrangement, will
be consolidated on the basis of a consolidation ratio equal to the
Exchange Ratio. After giving effect to this share consolidation,
the Arrangement will result in each UrtheCast Shareholder receiving
one consolidated Longford Share in exchange for each UrtheCast
Share formerly held by them.
Following completion of the Arrangement and the
share consolidation, Longford currently expects to have
approximately:
- 59.5 million issued and outstanding common shares, of which
approximately 23% would be held by Longford's existing shareholders
and approximately 77% would be held by UrtheCast's
shareholders; and
- outstanding stock options and warrants and other equity
compensation arrangements to issue up to an additional 10.6 million
common shares.
UrtheCast Financing
Under the Arrangement Agreement, UrtheCast was
permitted to raise additional capital of up to $20 million prior to the completion of the
Arrangement (the "UrtheCast Financing").
Concurrently with the execution of the
Arrangement Agreement, UrtheCast completed an initial tranche of
the UrtheCast Financing for gross proceeds of approximately
$5.8 million at a price of
$1.85 per unit to a group of
investors that included Longford. In April
2013, UrtheCast completed a second and third tranche of the
UrtheCast Financing for further gross proceeds of approximately
$1.9 million at a price of
$1.85 per unit. Each unit issued as
part of the UrtheCast Financing was comprised of one UrtheCast
Share and one right to receive additional UrtheCast Shares if the
value of the UrtheCast Shares under the Arrangement is less than
$1.85 per share. If the Arrangement
is not completed, the investors that purchased units in the
UrtheCast Financing, including Longford, will have certain rights
to require UrtheCast to repurchase their UrtheCast Shares and, in
certain circumstances, to appoint one member of UrtheCast's board
of directors.
In connection with the UrtheCast Financing,
UrtheCast raised total gross proceeds of $7,717,390 by issuing 4,171,562 units (including
1,621,621 units issued to Longford for total gross proceeds of
$3 million) at $1.85 per unit.
UrtheCast does not anticipate issuing any
further units pursuant to the UrtheCast Financing. However, with
Longford's approval, UrtheCast expects to complete prior to, or
concurrently with, completion of the Arrangement, a brokered
private placement for gross proceeds of up to $20 million through
the issuance of units of UrtheCast on the same terms as those
issued in the UrtheCast Financing (the "Additional UrtheCast
Financing").
The Shareholder Meetings
A special meeting of the UrtheCast shareholders
to consider the Arrangement will be held at the English Bay Room of
the Hyatt Regency at 665 Burrard Street, Vancouver, British Columbia at 10:00 a.m. (Vancouver time) on June
14, 2013.
An annual and special meeting of the Longford
shareholders to, among other things, consider a number of matters
relating to the Arrangement, will be held at 333 Bay Street, Suite
3400, Toronto, Ontario, M5H 2S7 at
10:00 a.m. (Toronto time) on June
13, 2013.
The record date for voting at the UrtheCast
shareholders' meeting and at the Longford shareholders' meeting is
May 13, 2013.
The Circular
The Circular contains a detailed description
of the Arrangement and the matters to be considered at the
special meeting of UrtheCast Shareholders to be held June 14, 2013 and the annual and special meeting
of Longford Shareholders to be held June 13,
2013. Also included in the Circular is a detailed
description of UrtheCast and its business (including audited
historical financial statements) and a description of Longford
after giving effect to the Arrangement (including pro forma
financial and capitalization information). The Circular is
being mailed to UrtheCast shareholders, optionholders and
warrantholders and Longford shareholders and is available on the
SEDAR website (www.sedar.com).
Completion of the Arrangement
Completion of the Arrangement is expected to
occur in June 2013 and is conditional
upon, among other things, receipt of all required court, stock
exchange and shareholder approvals, including the shareholders of
both Longford and UrtheCast.
Forward-Looking Statements
This release contains certain "forward looking
statements" and certain "forward-looking information" as defined
under applicable Canadian securities laws. Forward-looking
statements and information can generally be identified by the use
of forward-looking terminology such as "may", "will", "expect",
"intend", "estimate", "anticipate", "believe", "continue", "plans"
or similar terminology. Forward-looking statements and information
include, but are not limited to, statements with respect to the
transactions contemplated under the arrangement agreement and
Arrangement, the UrtheCast Financing, the Additional UrtheCast
Financing, the expected Exchange Ratio and receipt of the requisite
regulatory, court and shareholder approvals in respect of the
Arrangement and related matters. Forward-looking statements and
information are subject to various known and unknown risks and
uncertainties, many of which are beyond the ability of Longford to
control or predict, that may cause Longford's actual results,
performance or achievements to be materially different from those
expressed or implied thereby, and are developed based on
assumptions about such risks, uncertainties and other factors set
out here in, including but not limited to: the risk that the
Arrangement will not be approved by the applicable stock exchange,
the court or the shareholders of Longford and/or UrtheCast, as
applicable; risks and uncertainties related to the arrangement not
being completed in the event that the conditions precedent thereto
are not satisfied and other related risks and uncertainties.
Longford undertakes no obligation to update forward-looking
information except as required by applicable law. Such
forward-looking information represents management's best judgment
based on information currently available. No forward-looking
statement can be guaranteed and actual future results may vary
materially. Accordingly, readers are advised not to place undue
reliance on forward-looking statements or information.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE Longford Energy Inc.