|
Chairman Capital Corp. announces new Qualifying Transaction
(Canada Newswire Via Acquire Media NewsEdge) TORONTO, July 2 /CNW/ - Chairman Capital Corp. ("Chairman") is pleased to announce that it has entered into a letter of intent (the "LOI") dated July 2, 2009 with Daymak Inc. ("Daymak") in connection with a proposed "Qualifying Transaction" that is to be completed in accordance with Policy 2.4 of the TSX Venture Exchange (the "Exchange") concerning Capital Pool Companies. To enable Chairman to proceed with a qualifying transaction with Daymak, Chairman has terminated the amalgamation agreement entered into with Rockport Mining Corp. ("Rockport") on August 6, 2008, as amended, and will not be proceeding with the Rockport qualifying transaction as previously announced.
Daymak is an importer, developer and distributor of fuel efficient vehicles incorporated under the laws of Ontario on May 14, 2002. Under the terms of the LOI, it is proposed that Chairman complete a qualifying transaction with Daymak where by Chairman would acquire all of the issued and outstanding securities of Daymak in exchange for equity in Chairman, as further described below (the "Transaction"). It is currently anticipated that the Transaction will be effected through a "three-cornered amalgamation" (the "Amalgamation"), whereby: (i) Daymak will amalgamate with a newly incorporated Ontario company wholly-owned by Chairman to form an amalgamated corporation ("Amalco"); (ii) the holders of Daymak's common shares will receive 258,278 common shares of Chairman for every one Daymak share held; and (iii) Amalco will become a wholly-owned subsidiary of Chairman. The final structure of the Transaction is subject to receipt of definitive tax, corporate and securities law advice satisfactory to both Chairman and Daymak.
The Transaction will be negotiated and carried out by parties dealing at arm's length to one another and therefore will not be a Non-Arm's Length Qualifying Transaction, as such term is defined under the rules and policies of the Exchange (the "Policies").
Capitalization
As of the date hereof, Chairman has 1,666,667 common shares ("Chairman Shares") issued and outstanding, and 166,667 stock options (the "Chairman Options") outstanding. There are currently 100 common shares of Daymak issued and outstanding ("Daymak Shares") and 3 compensation options ("Daymak Options"). Daymak currently has one shareholder - Yeganeh Baiocchi, Daymak's Founder and President.
Pursuant to the terms of the LOI, upon completion of the proposed Transaction (i) the holders of Daymak Shares will receive 258,278 Chairman Shares for every one Daymak Share held; (ii) Amalco will become a wholly-owned subsidiary of Chairman; and (iii) the current directors of Chairman will have resigned and the five nominees of Daymak identified below will have been appointed (the "New Directors").
Prior to completion of the Transaction, Daymak intends to undertake a non-brokered private placement of a minimum of 20 common shares and up to a maximum of 39 common shares (the "Daymak Financing Shares") at a price of $50,700 a share prior to the closing of the Transaction (the "Daymak Financing"). Deacon and Company Capital Markets Inc. ("Deacon") will be entitled to receive a finder's fee from Daymak comprised of a cash fee equal to 5% of the value of the Daymak Financing Shares and a number of Daymak compensation warrants ("Daymak Compensation Warrants") determined by multiplying the number of Daymak Financing Shares purchased by 5%. Each Daymak Compensation Warrant will entitle the holder to acquire one common share of Daymak for $50,700 for a period of the greater of (i) 12 months from the date on which the shares are listed on a recognized exchange and (ii) 24 months from the Closing Date of the Offering. All Daymak Compensation Warrants will be exchanged for share purchase warrants of Chairman upon completion of the Transaction.
Upon completion of the Transaction, Deacon will also receive a number of options in Daymak that, when exchanged for value-adjusted options of Chairman, will be equal to 2.5% of the total number of non-diluted shares outstanding immediately at the close of the Transaction ("Daymak Advisory Fee Options") and such options will be exercisable for three (3) years from the date of the close of the Transaction. It is anticipated that such value-adjusted Chairman options will have an exercise price of $0.20 a share.
Following the completion of the Transaction and assuming the Daymak Financing is fully subscribed, it is expected that 40,666,645 common shares of Chairman and 2,461,811 Chairman Options will be outstanding. Calculation of the number of Chairman Options outstanding assumes that (1) 774,834 will have been granted to holders of Daymak options (other than Deacon) to replace their Daymak options, (2) 503,642 will have been granted to Deacon to replace its Daymak Compensation Warrants and (3) 1,016,666 will have been granted to Deacon to replace its Daymak Advisory Fee Options. Based on the foregoing assumptions, shareholders of Daymak will hold Chairman Shares representing approximately 95.9% of the issued and outstanding common shares of Chairman on a non-diluted basis following completion of the Transaction.
Conditions of Closing
Completion of the Transaction will be subject to certain conditions including, without limitation: (a) satisfactory completion of a due diligence review by each of Chairman and Daymak; (b) receipt of all necessary approvals of the board of directors of both Chairman and Daymak; (c) receipt of all necessary third party consents; (d) approval of the Transaction by the Exchange; (e) approval of the Transaction by the shareholders of Daymak; (f) Chairman satisfying the minimum listing requirements set by the Exchange for a Tier 1 or Tier 2 issuer; and (g) the Private Placement being completed for gross proceeds of not less than $1,014,000.
Business of Daymak
Daymak is a Toronto-based importer, distributor and developer of alternative energy and fuel efficient street legal and off-road vehicles. Founded in 2001 by Yeganeh Baiocchi, a Canadian business entrepreneur, Daymak has grown from a 300 square foot garage space to its current 28,000 square foot head office location at 130 Oakdale Road, in Toronto, Ontario. In 2008, Ms. Baiocchi was named as one of the top 100 women entrepreneurs of the year according to Profit Magazine.
Daymak is one of the premier destinations for electric vehicles, motor-sports vehicles, accessories, parts and service in Ontario with dealers across Canada and is focused on offering unprecedented service and support to both its customers and distributors. Daymak's alternative energy vehicles consist of street legal electric bikes, electric ATVs, electric dirt bikes, electric golf carts, electric scooters and electric mobility scooters. The off-road or motor-sports product lines consist mainly of all terrain vehicles (ATV), dirt bikes, pocket bikes, motorcycles, gas scooters, mopeds, go-karts and golf carts. Daymak carries most major lines of electric and motor-sports vehicle safety equipments, which include helmets (DOT approved), goggles, gloves, chest protectors, elbow and kneepads. All Daymak's products are emblazoned with a "Daymak" logo at the factory to ensure that no matter where a product is sold, the Daymak brand is at the forefront.
Daymak is currently in the process of developing and commercializing electric vehicles based on its proprietary Daymak D-Drive technology. The Daymak D-Drive Controller is composed of two proprietary components: A Microprocessor that generates more power, speed and distance to existing electric vehicles; An Electric circuit board which is designed to increase and maximize the input/output capabilities of all electric components safely.
Daymak's Toronto headquarters contains a sales office, a vehicle showroom, accessories, as well as, a parts and services division. Daymak provides warranties, parts, and service for all its products.
Daymak currently has a network of 50 dealers based primarily in Ontario, as well as two corporate owned retail locations focused on electric bikes. Daymak also has a presence in the provinces of Alberta, British Colombia, Manitoba, Quebec, New Brunswick, Nova Scotia, and Saskatchewan.
Daymak Financial Information (based on unaudited financial statements)
In 2008, Daymak recorded revenues of approximately CDN$3,800,000. This was the company's third consecutive year of approximately 25% year over year growth. The company also recorded a net income for 2008 of CDN$130,000 which was its third consecutive year of positive net income. Daymak's balance sheet currently carries debt of $585,048 to the company's founder and sole shareholder. The entire debt will be converted into common shares of the company at the same valuation of the proposed private placement. As at May 30, 2009, Daymak's balance sheet had approximately $950,000 in product inventory and $200,000 in office equipment and vehicles. The majority of product inventory is made up of gas-scooters, electric bikes, dirt and pocket bikes, and parts and accessories.
Daymak will use the proceeds of the Daymak Financing to help grow and develop a dealer network in the province of British Colombia, grow and develop a dealer network in the province of Quebec, continue the development of its D-Drive technology market and the eBIKE-IN-A-BOX Kit, and for general corporate purposes.
Officers and Directors Post-Transaction
Upon completion of the Transaction, it is anticipated that the following individuals will be the officers and/or directors, subject to individual and TSX-V approval, of Chairman:
Yeganeh Baiocchi - President & Director: Ms. Baiocchi is the founder of Daymak and is responsible for purchasing, marketing and sales. Ms. Baiocchi has worked for over 10 years in various management positions with the Bank of Montreal. In 2008 she was voted one of Canada's top 100 woman entrepreneurs. Ms. Baiocchi will be a director of Chairman upon completion of the transaction.
Aldo Baiocchi - V.P. Production & Director: Mr. Baiocchi is responsible for the development of new products and brings to Daymak over 20 years experience in sales, marketing and team management. Mr. Baiocchi was previously at Microforum and Aludra Inc. where he managed R&D teams that developed several award winning computer softwares that achieved millions of dollars in sales. Mr. Baiocchi is responsible in bringing the D-Drive to market. Mr. Baiocchi will be a director of Chairman upon completion of the transaction.
Mike Chow - COO & General Manager: Mr. Chow has been involved in business management for over 20 years. He worked with The City of Toronto, Recreation Division for over 10 years as a Business and Program Developer. He is currently responsible for the operations at Daymak.
CFO: Daymak is currently interviewing financial executives with over 10 years of public company experience encompassing a variety of industries such as the retail, manufacturing and technology industries. The candidate will have to be a Chartered Accountant and have been involved with advanced financial modeling, business reviews, security position assessments, due diligence, divestitures as well as acquisitions. The Transaction will not close until Daymak completes its search and hires a CFO that is acceptable to Chairman.
Darius Vakili, M.A.Sc, P.Eng. - V.P. Engineering - Mr. Vakili is in charge of developing the D-Drive technology for Daymak. He has over 30 years engineering experience. Mr. Vakili has a complete understanding of all electrical components from design to manufacturing of all Daymak products. He received his Ph.D. in Electronics from the University of Toronto. Mr. Vakili has work experience with IBM, Telepanel, Alcatel, Chubb Alarm, Ontario Hydro, and Optical Naval Helicopter.
Kin-Man Lee, C.A. - Director: Mr. Lee is currently Publisher & Chief Executive Officer of the Toronto Sun and Executive Vice President, Sun Media Corporation. He has had a successful executive management career focused in profit oriented businesses with a specific focus on increased productivity of employees/managers as well as realized cost saving programs. Mr. Lee has an extensive accounting and finance experience in public offerings, mergers and acquisitions, divestiture, auditing, financial reporting, taxes, budgeting and corporate compliance. Mr. Lee's business experience also includes board of directors, executive management committees as well as policy making. Mr. Lee will be a director of Chairman upon completion of the transaction.
Ron Iacobelli, P. Eng - Director: Mr. Iacobelli is currently Chief Technology Officer at Azure Dynamics Corporation, a leading developer of state-of-the-art green technologies for the commercial transportation industry. Mr. Iacobelli is responsible for Azure's product and technology development and strategic partnerships. He has been instrumental in the overall commercialization of AZD's core products and has managed the rapid growth of Azure's development team. Prior to joining Azure, Mr. Iacobelli worked at Ballard Power Systems where he developed and led a supplier management program. Prior to that, he spent 7 years at Ford Motor Company as Supplier Quality Manager, Senior Electrical Systems Engineer and Senior Chassis Systems Engineer. Mr. Iacobelli will be a director of Chairman upon completion of the transaction.
Daymak is currently in discussions with at least one additional candidate to serve as an independent Director of Chairman following the close of the Transaction. In the event that Daymak does not find a suitable candidate for a fifth director prior to closing, it will use one of the Chairman's current board members.
Statements in this press release regarding Daymak's and Chairman's businesses which are not historical facts are "forward-looking statements" that involve risks and uncertainties, such as terms and completion of the proposed transaction. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority 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 this 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 on the merits of this
proposed transaction and has neither approved nor disapproved the
contents of this press release.
ON BEHALF OF THE BOARD
CHAIRMAN CAPITAL CORP.
"Jonathan Aune"
Jonathan Aune, CEO
Additional information on Chairman Capital Corp. can be found at
www.sedar.com.
Additional information on Daymak Inc. can be found at www.daymak.com.
>>
[ Back To TMCnet.com's Homepage ]
|
INDUSTRIES
Activate Email 
Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO East, January 20-22, 2010. Miami, FL.
