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Press release from Marketwire

Work Horse Capital & Strategic Acquisitions Ltd. Announces Completion of Qualifying Transaction to Acquire Personal Web Systems, Inc.

Wednesday, November 03, 2010

Work Horse Capital & Strategic Acquisitions Ltd. Announces Completion of Qualifying Transaction to Acquire Personal Web Systems, Inc.23:50 EDT Wednesday, November 03, 2010OTTAWA, ONTARIO--(Marketwire - Nov. 3, 2010) - (NOT FOR DISTRIBUTION TO THE UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES)Work Horse Capital & Strategic Acquisitions Ltd. ("WHC" or the "Corporation") (TSX VENTURE:WHC.P) is pleased to announce the closing of its qualifying transaction to acquire all of the securities of Personal Web Systems, Inc. ("PWS"), a private company based in Palo Alto, California (the "Qualifying Transaction") on October 29, 2010 for $5,800,000 and the concurrent completion of a private placement for $3,135,400. PWS carries on the business of developing a browser-based Internet platform with a managed system that provides consumer electronic devices with access to all the features, content, and functionality available on the Internet without the malware, security and support issues of a PC.WHC has reserved the name LeoNovus Inc. for registration under the Business Corporations Act (Ontario) with the intention that this will be the new name of WHC as soon as shareholders approve of the proposed change. Details of the Qualifying Transaction On the closing of the Qualifying Transaction, WHC: (i) acquired all of the issued and outstanding securities of PWS by way of a securities exchange agreement (the "Securities Exchange Agreement") and a debt liability conversion (the "Debt Liability Conversion") that, in effect, exchanged 35,380,000 WHC securities (comprised of 22,797,789 Common Shares, 9,000,000 exchangeable warrants and 3,582,211 purchase price Warrants) at a deemed price of approximately $0.164 per share or warrant, or $5,800,000 in the aggregate; and (ii) completed a private placement with aggregate gross proceeds of $3,135,400 (the "Private Placement"). Pursuant to the Securities Exchange Agreement, WHC acquired all of the issued and outstanding securities of PWS held by PWS shareholders on the exchange basis described herein. Based on the 4,191 PWS common shares, 860 PWS Series A Preferred shares, 550 PWS Series B Preferred shares, 2,425 PWS Series C Preferred shares and 1,788.853 PWS Series C Preferred warrants issued and outstanding at the closing of the Qualifying Transaction, PWS securities holders received Common Shares and/or exchangeable warrants at an approximate ratio of: (i) approximately 4,800 Common Shares and/or exchangeable warrants for each PWS preferred share; (ii) approximately 2,521 Common Shares and/or exchangeable warrants for each PWS common share; and (iii) approximately 2,002 purchase price warrants for each PWS Series C Preferred warrant. Concurrently with the closing of the Qualifying Transaction, pursuant to the Debt Liability Conversion WHC entered into shares for debt agreements with certain PWS creditors, pursuant to which WHC issued 625,875 Common Shares at a price of approximately $0.164 per Common Share in exchange for the retirement of certain PWS debt amounts in accordance with TSX Venture Exchange Policy 4.3. The number of Common Shares issued to PWS creditors pursuant to the Debt Liability Conversion are counted in the aggregate number of WHC securities issued pursuant to the Securities Exchange Agreement, which number is the 35,380,000 WHC securities described previously. After completion of the Qualifying Transaction and the Debt Liability Conversion and prior to the closing of the Private Placement, there were 28,897,789 WHC Common Shares issued and outstanding, of which current shareholders of WHC owned 6,100,000 (21.11%) and former PWS Shareholders and former PWS creditors owned 22,797,789 (78.89%). Accordingly, the transaction constituted a reverse takeover of WHC. Private Placement In conjunction with the Qualifying Transaction, WHC raised capital through a brokered private placement of 19,596,250 Units of WHC for gross aggregate proceeds of $3,135,400. The Units were sold at a price of $0.16 per Unit and each Unit is comprised of one Common Share and one half of one private placement warrant. Each whole private placement warrant entitles the holder to purchase one Common Share at an exercise price of $0.30 per Common Share for 12 months of the closing of the Private Placement.WHC retained the services of Fin-XO Securities Inc. (the "Agent") for the Private Placement. Pursuant to the Agency Agreement between WHC and the Agent dated on October 29, 2010 (the "Agency Agreement"), the Agent agreed to use its commercially reasonable efforts to sell the Private Placement and in return received a corporate finance fee of $25,000 plus applicable taxes, a marketing commission at the rate of seven and one half percent (7.5%) of the gross proceeds of the Private Placement (the amount of $235,155) and an Agent's Option for the purchase of 1,469,718 Common Shares (representing that number of Common Shares equal to seven and one half percent (7.5%) of the Units issued), exercisable at a price of $0.16 per Common Share for a period of twenty-four (24) months from the closing of the Private Placement. The Agent was also reimbursed for its expenses incurred pursuant to the Private Placement, including legal fees. The resulting number of Common Shares issued and outstanding on the completion of the Qualifying Transaction, the Debt Liability Conversion and the Private Placement is 48,494,039 Common Shares. This amount includes the 19,596,250 Common Shares issued pursuant to the Private Placement, the 22,797,789 Common Shares issued pursuant to the Securities Exchange Agreement and Debt Liability Conversion and the 6,100,000 Common Shares outstanding prior to the Qualifying Transaction. In addition, there are 2,479,718 options and Agent's Options and 22,380,336 warrants outstanding, which, if exercised completely, would increase the amount of WHC Common Shares outstanding to 73,354,093. About PWS ( www.pwsww.com ) PWS is now a wholly owned subsidiary of WHC with its head office at 1800 Embarcadero, Palo Alto, California. PWS was incorporated under the laws of the State of Delaware on November 19, 2007. PWS was formed by a team of experienced entrepreneurs. Gordon Campbell, a Silicon Valley pioneer, funded the initial project and became CEO of PWS in 2008. PWS has been privately funded to date. PWS is developing an innovative high performance browser-based Internet platform with a managed system approach that provides HDTVs and other consumer electronic devices with access to all the features, content, and functionality available on the Web without the malware, security and support issues of a PC. PWS seeks to change the way high-value Internet content is organized, monetized, and delivered on HDTVs, providing a true consumer electronics experience to the largest monitor in the house.The premise on which PWS' business plan is built is that the Web is rapidly replacing some of the most venerable information and entertainment delivery institutions of the past century – from daily newspapers and broadcast television to recorded music and Hollywood films. Even the most highly regarded editorial content and video entertainment – once doled out over tightly controlled, closed networks – is being forced to quickly migrate to the open access platform of the Web, radically changing long-established business models in the process. The PWS approach is expected to introduce a "profitability" component that has been missing from current attempts to expand the Web onto the TV and an integrated content management system that delivers targeted advertising and marketing campaigns linked to individual viewer preferences and interests. In addition, new services, applications and products can be offered through this IP based digital distribution channel. The level of metrics that are generated from the system is expected to bring a new level of specificity and accountability to online advertising and long tail distribution. All of these features are expected to offer improved advertising effectiveness and expanded revenue for all participants in the content delivery value chain. This is because the PWS platform has been designed to support flexibility for purposes of cooperating with third party developers and content suppliers. Initial customer targets are set top box ("STB") manufacturers, Telcos, retailers and service providers. PWS plans to also work with hardware companies to develop and deliver a next generation embedded solution for consumer products such as HDTVs and mobile devices. PWS has completed successful early trials with a Telco and expects to participate in additional trials with their beta product. Board of Directors and Management Team of WHC As part of the Qualifying Transaction, four directors (Sean Caulfeild, Martin Scullion, James Raymond and Bryan Smith) resigned from the Board and four new directors were appointed in their place. The directors of WHC now consist of Gordon Campbell (Chairman of the Board), Pete Abramenko, Gary Martin, Dave Bowman, Michael Inskip and Daniel Hilton. The Board has appointed senior management consisting of Gordon Campbell (CEO & President), Paul Master (CTO and VP Strategic Technologies), Dan Willis (Chief Architect and VP Software Engineering), David Fisher (VP Sales) and Jim Fredrickson (Chief Financial Officer and Secretary). The biographies of the newly appointed directors and officers have been previously announced and may also be found in the WHC filing statement dated October 18, 2010 filed by WHC in respect of the Qualifying Transaction on www.sedar.com. TSX Venture Exchange Acceptance The TSX Venture Exchange has accepted the Qualifying Transaction and WHC Common Shares will be listed for trading on the TSX Venture Exchange effective November 5, 2010, pursuant to the TSX Venture Exchange's Final Exchange Bulletin in respect of the Qualifying Transaction issued on November 4, 2010. Stock Options and other matters No amendments have been made to WHC's existing stock option plan and no options have been issued as part of the Qualifying Transaction.The Qualifying Transaction constitutes an arm's length Qualifying Transaction, as no party to the transaction is a "Control Person" (as defined in TSX Venture Exchange Policy 1.1) of both PWS and WHC. There is no requirement to obtain shareholder approval of the Qualifying Transaction from the shareholders of WHC, and no "Majority of the Minority" requirements are triggered under Policy 5.9. About WHC WHC shares have traded on the TSX Venture Exchange (under the symbol "WHC.P") since June 10, 2009. Trading in WHC shares was halted at the Corporation's request on May 27, 2010, on the announcement of the proposed Qualifying Transaction. Further information about WHC can be found in its prospectus dated June 10, 2009, its filing statement dated October 18, 2010 and other filings of the Corporation with the Canadian securities regulators, which filings are available at www.sedar.com.The Exchange has in no way passed upon the merits of the Qualifying Transaction and has neither approved nor disapproved the contents of this press release.Certain information in this press release may contain forward-looking statements. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. These and all subsequent written and oral statements containing forward-looking information are based on the estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. The Corporation assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Corporation. Readers are cautioned not to place undue reliance on any statements of forward-looking information that speak only as of the date of this release. Additional information identifying risks and uncertainties is contained in the Corporation's filings with the Canadian securities regulators, which filings are available at www.sedar.com.FOR FURTHER INFORMATION PLEASE CONTACT: Gordon Campbell, Chief Executive Officer and PresidentWork Horse Capital & Strategic Acquisitions Ltd.(650) 856-8500(650) 856-8510 (FAX)gordon@leonovus.comNeither 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 press release.