Sprylogics Announces Financing of Approximately $5 Million and Provides Update on Poynt Acquisition
TORONTO, July 17, 2013 /CNW/ - Sprylogics International Corp. (TSXV: SPY), ("Sprylogics" or "the Company"), the international provider of innovative mobile search and messaging monetization services, announces that it has entered into an engagement letter with Beacon Securities Limited (the "Agent") in respect of a private placement of subscription receipts of Sprylogics on a best efforts basis (the "Offering"). The Offering consists of a private placement of approximately 12,500,000 subscription receipts (the "Subscription Receipts") at a price of $0.40 per subscription receipt for gross proceeds of approximately $5,000,000.
Each Subscription Receipt shall be automatically exchanged, without any further action by the holder of such Subscription Receipt, and for no additional consideration, for one (1) common share, on a post-consolidation basis, upon the satisfaction of the Escrow Release Conditions (as defined below) on or prior to the date which is 60 days from the closing of the Offering. The Escrow Release Conditions are as follows:
- Sprylogics completing the acquisition of Poynt Inc. ("Poynt"), as described below; and
- the consolidation of the issued and outstanding shares of Sprylogics on a one (1) new share for ten (10) old share basis.
Sprylogics has scheduled an annual and special shareholder meeting for September 3, 2013 at which shareholders will be asked, among other things, to approve the consolidation of the Company's common shares on a one (1) new share for ten (10) old share basis.
The Company shall pay to the Agent a commission (the "Commission") equal to 7% of the gross proceeds from the sale of the Subscription Receipts upon the release of the escrowed funds. As additional consideration for the services of the Agent, upon the release of the escrowed funds, the Agent will be granted compensation options ("Compensation Options") equal to 7% of the number of Subscription Receipts sold pursuant to the Offering. Each Compensation Option will be exercisable on a post-Consolidation basis for one common share of the Company for a period of twenty-four (24) months following the release of the escrowed funds at an exercise price of $0.40 per common share.
The Offering is scheduled to close on July 31, 2013.
The net proceeds of the Offering will be used for working capital and general corporate purposes.
Update on Poynt Acquisition
Further to the Company's press releases of May 31, 2013 and July 2, 2013, the acquisition is scheduled to close on July 31, 2013.
The following is a summary of the terms of the acquisition of Poynt by Sprylogics from the shareholders of Poynt (the "Vendors"):
- Sprylogics will be issuing the Vendors term notes with an aggregate principal amount of $2.5 million which will have the following repayment terms: maturity date of 2 years from closing; interest rate of 6.5% per annum payable in cash and/or shares at Sprylogics' option; $250,000 of the principal amount to be repaid within 120 days of closing, together with accrued interest from the closing date; if Sprylogics completes any equity and/or debt financings while any amount under the term notes remains unpaid in any part, not less than 25% of the gross investment amount raised, less broker fees if applicable, pursuant to such financings shall be used to reduce at closing thereof the principal amount and all accrued and unpaid interest thereon outstanding at such time under the term notes; and, all amounts owing will be secured against the assets of Poynt. Pursuant to the foregoing payment provisions, a portion of the proceeds of the Offering will be paid to the Vendors upon satisfaction of the Escrow Release Conditions.
- Sprylogics shall issue the Vendors an aggregate of 10 million common shares of Sprylogics, subject to adjustment.
- Sprylogics shall make a payment to the Vendors on closing which will represent the operational expenses of Poynt from March 1, 2013, to be offset against revenues for the same period, and subject to adjustment post-closing. This payment is expected to be approximately $350,000 on closing (which includes management expenses paid to representatives of the Vendors for managing Poynt during the period), but this amount will likely be offset post-closing by revenues of Poynt which were earned during the period and are expected to be collected post-closing by Sprylogics. To the extent not in included in this amount, Sprylogics shall also pay to the Vendors any tax refund for the period prior to closing.
- Sprylogics will assume a claim of approximately $150,000 which is owed by Poynt pursuant to services previously provided with respect to the Poynt assets.
- The Vendors shall receive a royalty equal to an aggregate of ten percent (10%) of the gross revenues earned by Sprylogics, Poynt and all of their affiliates as a result of the exploitation of and litigation arising from the Poynt patents, provided, however, these amounts shall not encompass, in any manner, any income from the ordinary course of business of Sprylogics, Poynt and all of their affiliates, of any nature, including the income earned as a result of sales of any technology, products and/or services of any manner which may in whole or in part incorporate one or more of the Poynt patents (including, without limitation, the Poynt mobile application).
- If the mutual conditions and conditions in favour of Sprylogics with respect to closing the acquisition of Poynt are satisfied on or prior to the closing date but closing is not completed, Sprylogics shall pay the Vendors a $350,000 break fee.
Sprylogics International develops advanced search and analysis technology. The patent pending technology platform uses Semantic and Machine Learning techniques to process, analyze and interpret unstructured data including real time conversation, in order to extract key sentiments, facts, user interests and intent. The technology platform is currently being used to develop innovative solutions related to search and discovery of products and places on mobile devices. Find out more at www.sprylogics.com or www.2ya.it
Neither 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.
Cautionary and Forward-looking Statements - Statements contained in this news release which are not historical facts are forward-looking statements that involve risk, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. All forward-looking statements included in this news release are based on information available to the Company on the date hereof. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors which could cause actual results of Sprylogics to differ materially from the conclusion, forecast or projection stated in such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, the Company completing the Offering as described herein or at all; shareholders of the Company approving the consolidation of the Company's common shares; all condition precedents to the completion of the acquisition of Poynt being satisfied, including third-party and regulatory approvals; and, other factors referenced in Sprylogics' other continuous disclosure filings which are available on SEDAR at www.sedar.com. Readers should not place undue reliance on these forward-looking statements. The Company assumes no obligation to update any forward-looking statements, except as required by applicable securities laws.
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