SearchGold Resources Inc. agrees to a business combination with Ubika Corp. and related private placement
TORONTO, March 5, 2013
/NOT FOR DISTRIBUTION IN THE UNITED STATES OR THROUGH UNITED STATES WIRE
All amounts in Canadian Dollars
TORONTO, March 5, 2013 /CNW/ - SearchGold Resources Inc. ("SearchGold" or the "Company") (TSXV: RSG) is pleased to announce that it has entered into a letter
of intent dated March 5, 2013 with Ubika Corp. ("Ubika") to acquire (the "Acquisition") from the shareholders of Ubika, 100% of the issued and outstanding
shares (the "Ubika Shares") in the capital of Ubika (the "Proposed Transaction"). It is expected that the combined entity, after completion of the
Proposed Transaction (the "Resulting Issuer"), will qualify as a Tier 2 Industrial Issuer pursuant to the
requirements of the TSX Venture Exchange (the "Exchange").
The Proposed Transaction will be an arm's length transaction as the
directors and officers of SearchGold presently have no interest in
Ubika. It is intended that the Proposed Transaction shall take place
by way of an amalgamation, arrangement, share exchange or other similar
form of transaction. The Proposed Transaction will be considered a
Change of Business for SearchGold, as such term is defined in Exchange
ABOUT UBIKA CORP.
Ubika is a private, fast growing financial services, research and
analytics company providing knowledge solutions to private and public
company clients, predominately in the mining sector. Through its portal
www.smallcappower.com, it also provides information to corporate and individual investors.
Ubika was incorporated on March 3, 2004 under the federal laws of
Canada and has 2,483,333 common shares issued and outstanding (the "Ubika Shares"). Ubika conducts its operations from its head office in Toronto and
a marketing office in Vancouver, Canada. Assuming the successful
closing of the Proposed Transaction, Ubika intends to utilize the
public company platform and enhanced access to capital to grow its
existing business and to provide new and enhanced products to its
clients. As reported in Ubika's audited financial statements for the
fiscal years ended December 31, 2010 and 2011, Ubika had revenue of
$1,405,384 for year ending Dec 31, 2011 and $501,953 for year ending
Dec 31, 2010. For the year ending Dec 31, 2011 Ubika Corporation
reported a net earnings (earnings after taxes) of $384,147 and for Dec
31, 2010 Ubika reported a loss (earnings after taxes) of $149,239. As
per the unaudited interim results for 9 months ending Sept 30, 2012,
Ubika had revenue of $960,612 and reported earnings after taxes of
Through the Acquisition, the Resulting Issuer will move away from the
high risk, hard to finance business of African gold exploration into a
more sustainable, financial services platform that management of
SearchGold believes will add value to and be in the best interests of
SearchGold is a public company whose common shares are listed on the
Exchange. SearchGold is organized under the federal laws of Canada.
SearchGold's primary mission was to target, explore and advance gold
properties of merit. The Company currently has mineral interests in
Burkina Faso, Gabon and Guinea.
The Proposed Transaction
Pursuant to the proposed transaction, SearchGold will be issuing 35
million common shares (the "RSG Shares") from treasury to the holders of the Ubika Shares in exchange for all
of the issued and outstanding Ubika Shares. As a result of the
transaction, the Ubika Shares underlying Ubika's outstanding securities
exercisable or exchangeable for, or convertible into, or other rights
to acquire Ubika Shares will be exercisable into RSG Shares on the same
terms and conditions as such original outstanding securities.
SearchGold intends to make an application to the Exchange for an
exemption from the sponsorship requirements in connection with the
Proposed Transaction. There is no assurance that such exemption will
be granted. Trading in RSG Shares is presently suspended. It is
uncertain whether the shares of SearchGold will resume trading until
the Proposed Transaction is completed and approved by the Exchange.
It is intended that the Resulting Issuer will grant incentive stock
options ("Stock Options") on closing of the Proposed Transaction, subject to the approval of
the Exchange, to employees, consultants, directors, officers of the
Resulting Issuer and its subsidiaries, if any. The number of Stock
Options will equal 10% of the issued and outstanding shares of the
Resulting Issuer. The Stock Options will be issued at a price which is
the greater of the Brokered Private Placement or the price per share of
the Proposed Transaction.
It is intended that the Resulting Issuer will be named "Gravitas
Financial Inc." or such other name as the parties may reasonably agree
upon, and the Resulting Issuer will be governed by the Canada Business Corporations Act.
PROPOSED PRIVATE PLACEMENT
As a condition of closing the Acquisition, a private placement (the "Offering") will be conducted of Ubika Shares and or Ubika debt securities for
gross proceeds of a minimum of $2 million or such other form of equity
or debt securities as is determined by Ubika, in each case to be
concluded on terms and conditions satisfactory to the market and
subject to negotiations between Ubika and the Company. Proceeds from
the Offering will be used for growth, acquisition and general working
Capitalization of the Resulting Issuer
Following the completion of the Proposed Transaction but prior to any
shares issued in connection with the Proposed Offering there will be
approximately 68 million shares of the Resulting Issuer issued and
outstanding. Further updates will be made public as soon as the terms
of the Proposed Offering are finalized.
DIRECTORS AND SENIOR MANAGEMENT OF THE RESULTING ISSUER
Subject to and following the closing of the Proposed Transaction, the
directors of the Resulting Issuer are expected to be the following
individuals, provided such persons are eligible to act as directors
pursuant to the requirements of the Canada Business Corporations Act and the Exchange does not object to such persons acting as directors.
Further information concerning the officers of the Resulting Issuer
will be released at a later date.
Ernie Eves, Chairman of the Board
Mr. Eves is the Former Premier of the Province of Ontario. Prior to
serving as Premier, he was Deputy Premier and Minister of Finance. Mr.
Eves has had a distinguished career in both the public and private
sectors. Currently, he serves as an advisor and board member for
several firms in Canada and the United States. Mr. Eves is a graduate
of Osgoode Hall Law School. He was called to the bar in 1972, and in
1983 was made a Queen's Counsel.
David Carbonaro, Director and Corporate Secretary
David Carbonaro is a partner at Heenan Blaikie LLP and practises
corporate finance and international law. He also advises public
companies, securities dealers and investment banks on corporate finance
matters in what has become a rapidly changing and demanding regulatory
landscape. As a member of a growing team of international lawyers at
Heenan Blaikie LLP, Mr. Carbonaro plays a senior role in developing the
International practice group.
Pierre Gagnon, Director
Pierre is the President and Managing Director of Chancery Investments
Inc. He was President of IP Devco Inc., a contract software developer
and Brukar Inc., a manufacturer of metal castings. He is a Member of
the Advisory Board at The Shotgun Fund, LP and The Succession Fund, LP
and a director of a number of publicly-listed companies and several
private companies. Mr. Gagnon was also the Chairman of Copernicus
Educational Products Inc. He is a Director of Halton Healthcare
Services Foundation and Oakville Galleries.
Vishy Karamadam, Director
Vishy has over 15 years of management experience in areas ranging from
Investment Research, Corporate Finance, Management Consulting and
Retail Banking Strategy. Vishy is a co-founder of Ubika Research, and
smallcappower.com. His previous experience includes work for blue chip
organizations in Toronto and Mumbai, India and has strong exposure to
the financial services industry. He holds a Bachelor in Technology
Degree in Electronics & Communication Engineering, Masters in
Management Studies (Finance) from University of Mumbai, India and an
MBA from McGill University.
Vikas Ranjan, Director
Vikas is a management and investment professional with over 15 years of
experience in diverse areas of investment management, finance and
investment research. Vikas is a co-founder of Ubika Research, and
smallcappower.com His previous experience includes various management
positions in companies such as Bank of Montreal. He holds a BA in
Economics (Hons.), Masters in Management Studies from University of
Mumbai, India and MBA in Finance from McGill University.
Philippe Giaro, Director
Philippe joined SearchGold as Vice-President Exploration in 2005 and was
President of the Company from 2006 until 2011. He founded Golden Share
Mining Corporation in 2007 and he has served as President since its
listing on the Toronto Venture Stock Exchange in 2008. He is a
Professional Geologist registered with the Ordre des Geologues du
Quebec and a member of the PDAC.
Robert Carbonaro, Director
Robert Carbonaro is a partner and the Head of Investment Banking at
Portfolio Strategies Securities Inc., a national investment dealer.
Mr. Carbonaro's practice has focused on advising and financing emerging
growth companies in various sectors.
The completion of the Proposed Transaction and the Offering are subject
to the approval of the Exchange and all other necessary approvals. The
completion of the Proposed Transaction is also subject to certain other
additional conditions precedent, including, but not limited to: (i) the
entering into of a definitive agreement by SearchGold and Ubika on or
before April 15, 2013 (the "Definitive Agreement"); (ii) completion of satisfactory due diligence by each of SearchGold
and Ubika; (iii) the approval of the Proposed Transaction by each of
Ubika's and SearchGold's respective board of directors; (iv) the
approval of the shareholders of Ubika and SearchGold; (v) completion of
the Offering; (vi) approval from the Exchange to list the Resulting
Issuer's shares; (vii) the absence of any material change or change in
a material fact which might reasonably be expected to have a material
adverse effect on the financial and operational conditions or the
assets of each of the parties to the Definitive Agreement; and (viii)
certain other conditions typical in a transaction of this nature.
All information contained in this news release with respect to
SearchGold and Ubika was supplied by the parties respectively, for
inclusion herein, and SearchGold and its directors and officers have
relied on Ubika for any information concerning it.
Statements in this press release may contain forward-looking information
including, operating costs, administrative costs, acquisitions and
dispositions, capital spending, access to credit facilities, income
taxes, regulatory changes, and other components of cash flow and
earnings. 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", "expects" and similar
expressions. 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 SearchGold. 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
The forward-looking statements contained in this press release are made
as of the date of this press release, and SearchGold 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
THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR
DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED
STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED
STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED
STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.
Completion of the Proposed 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 Proposed Transaction
cannot close until the required shareholder approval is obtained.
There can be no assurance that the Proposed 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 Proposed Transaction, any information released or received
with respect to the Proposed Transaction may not be accurate or
complete and should not be relied upon.
THE TSX VENTURE EXCHANGE HAS IN NO WAY PASSED UPON THE MERITS OF THE
PROPOSED TRANSACTION AND HAS NEITHER APPROVED OR DISAPPROVED THE
CONTENTS OF THIS PRESS RELEASE.
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 PRESS