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Everfront Ventures Corp. Enters into Letter of Intent to Acquire Global Gardens Group Inc.(Canada Newswire Via Acquire Media NewsEdge) TORONTO, Dec. 4, 2013 /CNW/ - Everfront Ventures Corp. ("Everfront") (EVC.P), a capital pool company, is pleased to announce that it has entered into a non-binding letter of intent dated November 28, 2013 (the "LOI") with Global Gardens Group Inc. ("Global Gardens" or the "Company"), a privately held Canadian company, pursuant to which Everfront will directly or indirectly acquire all of the outstanding common shares, options and warrants of Global Gardens in exchange for a number of common shares and options and warrants of Everfront (the "Business Combination"), as more particularly described below under the heading, "Terms of the LOI". The Business Combination is subject to TSX Venture Exchange ("TSXV") approval and is intended to constitute Everfront's Qualifying Transaction under the policies of the TSXV. The Business Combination will not be a Non-Arm's Length Qualifying Transaction (as that term is defined under the TSXV policies) and as such, unless the agreed-upon structure to effect the Business Combination otherwise requires, it is not expected that approval of the Everfront shareholders will be required. Additional information concerning the Business Combination, including the terms of the Private Placement related to the Business Combination referred to below and details relating to the directors, officers and other insiders of the resulting issuer, will be provided in subsequent communication from Everfront. Business of Global Gardens Global Gardens is a private corporation incorporated federally under the laws of Canada on October 4, 2011 and is extra provincially registered under the laws of British Columbia with its principle office located in Richmond, B.C. The Company was formed through the acquisition of the intellectual property of Food Steps International Inc. Global Gardens is a dairy-free natural food provider committed to bettering people's lives and the planet through enhancing health and well-being. The Company is driven to compete globally in a multitude of dairy-free categories and initially will launch a dairy alternative beverage in North America. There has been an unprecedented shift as consumers look for products with health and wellness benefits thus resulting in a $1.7 billion non-dairy beverage market in North America. This market has increased annually at double digit rates with this growth anticipated to continue for many years to come. Global Gardens will launch a proprietary product and create a new segment within the non-dairy beverage category. The Company's product delivers on taste and nutrition while being free of cholesterol, saturated and trans-fat, gluten, soy and nuts. The product will be vegan certified, kosher and all ingredients are free from any genetic modifications. The Company's financial statements for the fiscal year ended September 30, 2013 reflect total assets of approximately $70,000, total liabilities of approximately $266,000 and total shareholders' equity of approximately -$196,000, at year-end, and total net loss of approximately $1,103,000 (or a loss of $0.08) per share for the year. All of the above figures are presented on an unaudited basis and are subject to adjustment. Capitalization As of the date hereof, Everfront has issued and outstanding 6,240,550 common shares, 384,054 management options exercisable at $0.20 per share and 233,550 agent's options exercisable at $0.20. Following completion of the Consolidation (as defined below under "Conditions for Closing") and immediately prior to the Business Combination, Everfront is expected to have the following securities issued and outstanding: 3,120,275 common shares, 192,027 management options exercisable at $0.40 per share and 116,775 agent's options exercisable at $0.40 per share. Prior to the completion of the Business Combination, Global Gardens is expected to have the following securities issued and outstanding: up to 14,956,966 common shares, warrants to purchase 542,858 common shares, 1,260,000 management options and up to $2,000,000 principal amount of Notes (as defined below under "Proposed Private Placement"). Terms of the LOI The Qualifying Transaction will be effected pursuant to a Business Combination which contemplates the acquisition of all of Global Gardens' common shares, directly or indirectly, by Everfront in exchange for post-consolidation common shares of Everfront on the basis of one post-consolidation Everfront common share being issued for each Global Gardens common share outstanding at the time of such exchange. Each outstanding option, warrant, and other right to acquire common shares of Global Gardens will be exchanged for analogous options, warrants and similar rights to acquire common shares of Everfront. Global Gardens has agreed to negotiate exclusively with Everfront until December 24, 2013 in order to pursue the Business Combination. The parties have also agreed to negotiate in good faith and use reasonable commercial efforts to settle a definitive agreement (the "Definitive Agreement") in the near future and are targeting the execution of such Definitive Agreement by no later than December 24, 2013. The following persons currently hold more than 10% of the outstanding common shares of Global Gardens (on a fully diluted basis) and they will be exchanging their respective securities in Global Gardens for securities of Everfront under the Business Combination: Food Steps International Inc., a corporation incorporated under the federal laws of Canada; Institute B Development Corp., a corporation incorporated under the provincial laws of British Columbia; Brian Isherwood, a resident of British Columbia; and Robert Harrison, a resident of British Columbia. Upon completion of the Business Combination, the resulting issuer is expected to have the capitalization set forth in the table below: Security Holder - Type of SecurityNumber ofCommonShares1Number of Convertible Securities1 Escrowed Seed Shareholder(s) of Everfront 750,000 Options held by Everfront's Directors 192,0273 Warrant Issued to Agent in connection with Everfront's Initial Public Offering 116,7754 Public Shareholders of Everfront 2,370,275 Everfront Common Shares to be issued in exchange for Global Gardens Common Shares to be issued under the Private Placement 10,000,0008 Everfront Warrants to be issued in exchange for Global Gardens Warrants to be issued under the Private Placement 5,000,0005 Everfront Agent's Warrants to be issued in exchange for Global Gardens Agent's Warrants to be issued under the Private Placement 800,0006 Global Gardens Existing Options 1,260,0002 Global Gardens Existing Common Shares 14,956,966 Global Gardens Existing Warrants 542,8587 Total: 28,077,241 7,911,660 Notes: Post-Consolidation figures. Each option entitles its holder to purchase one Everfront common share for $0.25. Each option entitles its holder to purchase one Everfront common share for $0.40. Each Agent's Warrant entitles its holder to purchase one Everfront common share for $0.40. Each warrant will entitle its holder to purchase one Everfront common share and ½ common share warrant for $0.30. Each Agent's Warrant will entitle its holder purchase one Everfront common share and ½ common share warrant for $0.20. 400,000 warrants will be exercisable to purchase 400,000 Everfront common shares at $0.45 each and 147,572 warrants will be exercisable to purchase 142,858 Everfront common shares at $0.65 each. Notes will be converted to Global Gardens common shares upon certain events including completion of the Qualifying Transaction. Upon completion of the Business Combination and the Private Placement, Global Gardens will become a wholly-owned subsidiary of Everfront. Conditions for Closing The Business Combination is expressly subject to: (a) the completion of a due diligence review by each of Everfront and Global Gardens of the business and affairs of the other party to each parties sole satisfaction, including, without limitation, audited financial statements, documents used in connection with prior distributions of securities, filings with regulatory or governmental authorities with respect to prior distributions of securities and the continuing development of each respective business on a timely basis without significant delays; (b) the availability of exemptions from the prospectus requirements of applicable Canadian securities laws to facilitate the issuance of the Everfront securities to Global Gardens' security-holders pursuant to the Business Combination; (c) the Private Placement referred to below; (d) the approval of the Business Combination by the board of directors of each of the parties; (e) the agreement of the board of directors and officers of Everfront to resign their current director and officer positions in and to Everfront as a condition to the completion of the Business Combination; (f) the net working capital of Everfront immediately prior to closing of the Qualifying Transaction being at least $300,000; (g) the consolidation of the common shares of Everfront on the basis of one post-consolidation common share for every two pre-consolidation common shares (the "Consolidation"); (h) the approval of the Business Combination by the shareholders of Everfront and Global Gardens, if required; (i) the final approval of the Business Combination by the TSXV; and (j) Global Gardens will not sell or otherwise issue any additional securities prior to the closing of the Definitive Agreement except any distribution pursuant to the Private Placement referred to below or as otherwise contemplated in the LOI. Proposed Private Placement The Business Combination is conditional upon, prior to or concurrently with the closing of the Business Combination, Global Gardens completing a private placement (the "Private Placement") of securities (each an "Offered Security") for gross proceeds of not less than the amount necessary to ensure that there are sufficient funds to satisfy any working capital requirements of the TSXV to obtain the final approval of the Business Combination by the TSXV, on terms whereby each Offered Security is currently expected to be offered at a minimum subscription price of $0.10 and will entitle the holder thereof to receive, without payment of any additional consideration, one common share in the capital of Everfront upon the satisfaction of certain conditions. Global Gardens has engaged Hampton Securities Limited, as agent on a best efforts basis, in connection with an offering of convertible notes ("Notes") for gross proceeds of up to $2,000,000 (or such other amount as the parties may agree upon). The Notes will be offered pursuant to the "accredited investor" exemption from prospectus requirements and other prospectus exemptions which may be available under applicable securities laws. The Notes will mature in 2 years following closing of the Private Placement and every $0.20 of the principal amount (or $0.10 of the principal amount if a "liquidity event" (as specified in the agency agreement, which includes the Qualifying Transaction) does not occur within 10 months of closing of the Private Placement) will be convertible to one (1) Unit. The Notes shall be converted upon the occurrence of a liquidity event and at any time at the election of the holder prior to a liquidity event. Each Unit shall consist of 1 Global Gardens common share and ½ of a common share warrant. Each whole warrant shall be exercisable for $0.30 and shall expire 24 months following closing of the Private Placement. Interest on the Notes shall accrue at 10% per year, payable quarterly in cash or stock at the discretion of Global Gardens. The net proceeds of the Private Placement will be used for Global Gardens to go into production to launch the first phase of its product line-up, and for sales and marketing expenses to secure retail shelf space and consumer demand. The Resulting Issuer - Tier Status On the closing of the Business Combination, Everfront anticipates that the resulting issuer will be classified as a "Tier 2" issuer that will meet the TSXV's initial listing requirements for a manufacturing company. Directors and Senior Management of the Resulting Issuer The composition of the Board of Directors of the Resulting Issuer has not been determined at this time but a further announcement will be made once a determination is made. It is expected that the senior management of the resulting issuer will be as follows: Rob Harrison, B. Comm. - President & CEO Rob Harrison has over 35 years of experience as an executive in the food business. Rob is a successful Canadian entrepreneur with a solid corporate background in the manufacturing and food processing industry. Having successfully run Neilson Dairy in the late 80's, Rob went on to create several other successful companies in the manufacturing and service industries. In addition to introducing Haagen Dazs to Canadian consumers, Rob was responsible for engaging and then securing the license to produce and market Ben & Jerry's Ice Cream of Vermont, in Canada. Rob has consulted to many Fortune 500 food companies including Heinz, Nabisco, Nestle and Slim Fast. He is an excellent presenter, negotiator and very charismatic leader. Paul Lott, MBA - Chief Financial Officer Paul Lott is a Senior Finance Executive with 28 years of experience in domestic and international operations in commodity fluid milk and branded products like yogurt, ice cream and confectionary. Paul's corporate career culminated as SR. VP Finance, Americas Region for Cadbury-Schweppes. Particular strengths include finance, strategic planning, process and reporting improvements, managing organizations through periods of change, mergers and acquisitions and ERP systems implementation. Recent activities have encompassed providing financial leadership to acquisitions by private equity and as Interim CFO for YMCA Canada. Paul has excellent leadership, team building, analytical and communication skills. Paul has an MBA from the University of Western Ontario. Wade Bayne, MBA - VP Marketing Wade Bayne is a senior sales & marketing executive with 24 years of experience in the consumer packaged goods sector. Wade has worked for three Fortune 500 companies encompassing 15 different categories of business with significant revenue ($380m) and profit responsibilities. Wade has strategic expertise in crafting brand and sales strategies and driving through to consumer via disciplined execution. Wade is a highly committed change agent with experience leading through organizational change. He spent four years with Molson Coors as Director of Sales, BC. Prior to that Wade was the Associate Marketing Director at Procter & Gamble in Toronto, Ontario. Wade has an Associate Degree, Marketing from British Columbia Institute of Technology and a MBA from Queen's School of Business in Kingston, Ontario. Geoff Acheson - VP Business Development Geoff Acheson has over 25 years of experience in the Canadian food industry in all channels of trade. Geoff's track record is one of driving significant growth on all businesses represented. Geoff is a former CEO & President of a multi-million dollar Canadian distribution company. He has also created and introduced brand new categories in the Canadian grocery industry. Geoff possesses particular expertise in crafting business plans, helping small companies grow, and finding goods and services to assist small companies in their growth aspirations. This was recognized by Geoff's nomination for the Ernst & Young Entrepreneur of the Year program in 2008. Currently he is the Managing Director at Diversified Management Services of Toronto, Ontario. Robert Somers - VP Distribution & Logistics Bob Somers has over 35 years in the Canadian food industry commencing with Nabisco Brands. Following this, Bob spent 15 years with a major food broker representing household name brands such as Dad's Cookies, Bick's Pickles, Swift Gainers meats, Dole, Jergens, Ferrero Chocolates, Old El-Paso and Primo Pastas, 3M, and Chef-Boyardee. Bob served as Director of the "Canadian Beef Export Federation" assisting Canadian packers develop export markets in Taiwan, Hong Kong, Japan, Korea, China and Mexico. Bob is the co-founder of Food Steps International (FSI). He currently serves as Director and CEO of FSI Inc. 10% Shareholders Upon completion of the Consolidation, the Private Placement and the Business Combination, the following are expected to hold 10% or more of the outstanding common shares of the resulting issuer: Food Steps International Inc., a corporation incorporated under the federal laws of Canada; and Institute B Development Corp., a corporation incorporated under the laws of British Columbia (of which each of Darrell Kopke, Kopke Family Trust and Manfred Vollmer (each resident or domiciled in British Columbia) will hold a 20% or greater equity interest). Sponsorship Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless an exemption from the sponsorship requirement is available. Everfront intends to apply for an exemption from the sponsorship requirement. There is no assurance that Everfront will be able to obtain such an exemption. Trading Halt and Cautionary Provisions Everfront's common shares are currently halted and Everfront anticipates they will remain halted until the documentation required by the TSXV for the proposed Business Combination can be provided to the TSXV. Completion of the Business Combination 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 approval of the shareholders of Everfront. Where applicable, the Business Combination cannot close until the required shareholder approval is obtained. There can be no assurance that the Business Combination 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 Business Combination, any information released or received with respect to the Business Combination 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 TSXV has in no way passed upon the merits of the proposed Business Combination and has neither approved nor disapproved the contents of this press release. 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. This press release contains forward-looking information within the meaning of Canadian securities laws. Such information includes, without limitation, information regarding the completion of the proposed Business Combination, the proposed Private Placement, and the anticipated business plan of Everfront subsequent to completion of the Business Combination. Although Everfront believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct. Forward looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. Everfront cautions investors that any forward-looking information provided by Everfront are not guarantees of future results or performance, and that actual results may differ materially from those in forward looking information as a result of various factors, including, but not limited to: Everfront's ability to complete the proposed Business Combination; the state of the financial markets for Everfront's equity securities; recent market volatility; Everfront's ability to raise the necessary capital or to be fully able to implement its business strategies; and other risks and factors that Everfront is unaware of at this time. The reader is referred to Everfront's most recent annual and interim Management's Discussion and Analysis for a more complete discussion of all applicable risk factors and their potential effects, copies of which may be accessed through Everfront's page on SEDAR at www.sedar.com. SOURCE Everfront Ventures Corp. |