NEX: CAQ.H
LONDON, ON, Aug. 19, 2015 /CNW/ - George Lunick, CEO of Carrington
Acquisition Corporation ("Carrington" or the
"Corporation") is pleased to announce that it has entered
into a letter of intent (the "Agreement") dated August 13, 2015 with Cozumo Inc.
("Cozumo"), pursuant to which Carrington will, subject to a
number of conditions, acquire all of the issued and outstanding
securities of Cozumo. The transaction will constitute the
Corporation's qualifying transaction (the "Qualifying
Transaction") under the policies of the TSX Venture Exchange
(the "Exchange").
About Cozumo
Cozumo is a private company that was incorporated on
May 30, 2006 pursuant to the
Canada Business Corporations
Act (the "Act"). Cozumo is in the business of
retail marketing. Through Cozumo's Acquire, Analyze, Act framework,
retailers can acquire customer and product data at the POS, analyze
the basket data to segment customers and generate actionable
insights, and act upon those insights through the distribution and
redemption of targeted promotions.
This is all possible with Cozumo's out-of-the-box solution. It
works with nearly any scanner and POS system, so from the first
scan, retailers have the ability to turn purchasing patterns into
customized offers that drive immediate benefits including
operational efficiency, increased store traffic and stronger store
loyalty.
Cozumo is run by experienced CEO Gary
Chaikin. Gary founded Sierra Creative Communications Inc., a
technology company he built to 40 employees in less than three
years before successfully selling to Quebecor. He has developed
numerous web applications for companies like Canadian Tire, TD
Canada Trust, and Bank of America Merril
Lynch.
Cozumo Corporate History and Structure
As indicated above, Cozumo was incorporated on May 30, 2006. Its registered head office is
located at 80 Richmond Street W, Suite 1200, Toronto, Ontario M5H 2A3
Cozumo is a private company with approximately 12
shareholders. It is not a reporting issuer and its shares are
not listed on any stock exchange.
Cozumo has 11,961,164 common shares issued and outstanding and
has 1,373,424 options, 1,665,000 warrants to acquire securities to
date. The principal stockholders are Gary Chaikin and Jonathon Hobbs who each directly or indirectly
owns or controls approximately 13.4% of the issued and outstanding
shares of Cozumo for a total of 26.8%. Both individuals
reside in Toronto, Ontario. In
addition, associates of the Jones Gable & Company Limited
founder own 33% of the issued and outstanding shares of Cozumo and
these associates reside in Toronto,
Ontario.
Based on preliminary unaudited financial statements for Cozumo,
the following are estimated results for the fiscal year ended
December 31, 2014: Cozumo had
revenues of $0 and expenses of
$2,949,122, resulting in a loss of
$2,949,122. In addition, as at
December 31, 2014, Cozumo had total
assets of $296,384, total liabilities
of $808,459 and a working capital
deficit of $512,075.
Summary of the Proposed Qualifying Transaction
Carrington and Cozumo entered into the Agreement on August 13, 2015, pursuant to which Carrington
will, subject to a number of conditions, acquire all of the issued
and outstanding securities of Cozumo.
Carrington currently has 4,150,000 common shares outstanding
which will be consolidated 19.8 common shares for one common
share.
Under the terms of the Agreement, Carrington has agreed to
acquire Cozumo by way of a share exchange agreement (the "Share
Exchange Agreement") whereby all of the shareholders of Cozumo
will exchange all of the common shares of Cozumo for common shares
of Carrington. Each Cozumo shareholder will receive one (1)
post-consolidated common share of Carrington for each share of
Cozumo that they hold. The purchase price for Cozumo
shares will be $20,000,000 and will
be satisfied by the issuance of approximately 11,961,164 Carrington
post-consolidated common shares at a deemed price of $1.67 per post-consolidated common share, before
giving effect to the Cozumo forming noted in 5 below. Upon the
issuance of Carrington common shares to Cozumo shareholders, Cozumo
shareholder will own approximately ninety nine percent (99%) of
Carrington, before giving effect to the Cozumo Financing (as
defined below).
The closing of the Qualifying Transaction with Cozumo is subject
to a number of conditions, including the following:
- receipt of all required regulatory approvals, including the
approval of the Exchange;
- completion of all due diligence reviews by each of Carrington
and Cozumo;
- receipt of all director and shareholder approvals as may be
required under applicable laws or regulatory policies, including
those of the Exchange; and
- execution of the definitive Share Exchange Agreement;
- completion by Cozumo of an equity financing (the "Cozumo
Financing") for a minimum of 2,000,000 units to a maximum
of 5,333,333 units ("Cozumo Units") at an issue price
of $1.50 per Unit for minimum gross
proceeds of $3,000,000 to a
maximum proceeds of $8,000,000. Each Cozumo Unit shall be
comprised of one (1) post-consolidated common share and one (1)
common share purchase warrant (each a "Cozumo Warrant"),
with each Warrant entitling the holder thereof to purchase a
post-consolidated common share of Cozumo at a price of $2.00 per common share for a period of 24
months.
Following completion of the Qualifying Transaction, the Board of
Directors of the Corporation will consist of Gary Chaikin, Philip
Kurlander, George Lunick,
Geoffrey Smith and one other
Director to be named by Gary
Chaikin.
George Lunick –
Director
Mr. Lunick has been a Chartered Accountant with Lunick &
Company CA Professional Corporation, a private chartered accounting
firm, and Lunick & Company Ltd., a merchant banking firm, both
located in London, Ontario, since
1992. He is also president and CEO of Carrington. Mr. Lunick has
been the CEO, president and a director of Pearl River Holdings Ltd,
a public company in the business of manufacturing plastic products,
trading on the TSX Venture Exchange, since May 1995. He was also a director of The Loyalist
Insurance Group Limited, a public company in the business of
insurance, trading on the TSX Venture Exchange, from December 1996 to May
2004 and he was a director of Jackal Energy Inc, a capital
pool company, from February 2001 to
June 2002, which traded on the
Exchange. Mr. Lunick received his Honours in Business
Administration degree from the Richard Ivey Business School at the
University of Western Ontario in June
of 1981, and his professional designation as a chartered accountant
from the Institute of Chartered Accountants of Ontario in September of 1983.
Gary Chaikin –
Director
In his career Gary has been the visionary who identifies the
next big trend but he has also been the prime driver behind the
growth of several technology startups. Gary founded Sierra, a technology consulting firm and early web
developer, is now part of a global company with offices around the
world. Prior to founding Sierra, Gary
was CTO and Creative Director of Avaterra, a virtual reality Avatar
based gaming software company, which was at the forefront of the
entire immersive Virtual Reality industry. Gary has a plethora of
experience developing technology, custom projects and applications
for companies like Canadian Tire, Bank of Montreal, TD Bank, Merril Lynch, Air Canada, TSE, Aeroplan,
Candarel, McLeans, Cadiallac Fairview, Shoppers Drugmart, Cineplex,
ING Bank, Royal Lepage,
Webkinz/Ganz, Multiple Advertising agencies and many more. Gary
graduated Magna Cum Laude in Communications from Concordia University.
Philip Kurlander –
Director
Philip Kurlander, M.D. is a
healthcare services professional with over 20 years experience as
an anesthesiologist having practiced in hospitals and private
practice. Dr. Kurlander coupled his interest in business and
medicine by getting involved in the business operations of his
private practice group and was elected a board member, officer and
eventually president of the group. During his seven year
tenure as president, the group grew from 9 to 25 anesthesiologists,
revenue quadrupled from $9 million to
$36 million and profits also
quadrupled.
Dr. Kurlander has slowly gravitated increasingly to the business
community and is a direct investor in several private lower middle
market companies, currently serving as a board member on five of
them. Two companies have had a recent successful sale for
$70 million and $54 million respectively. The companies are in
the energy, consumer manufacturing, automotive, real estate and
health care markets, respectively. Dr. Kurlander has also
been involved in two startups. One company which serves the
food service industry that began operations in 2011 is on pace to
end 2013 with revenues of $5
million.
Dr. Kurlander sits on the advisory boards of a mezzanine lender
and a private equity firm. Dr. Kurlander earned his undergraduate
degree from the University at Albany
graduating with a B.S. degree, Summa Cum Laude and Phi Beta Kappa,
and his M.D. degree from Albany Medical
College. He did his anesthesia residency at Columbia
Presbyterian Hospital in New York,
serving as Chief Resident in his final year.
Geoffrey Smith –
Director
Geoffrey Smith is an entrepreneur
and a Special Advisor, Innovation at Ryerson
University. Currently he is Chairman of the Board of Cozumo.
He is an experienced entrepreneur who has worked in many areas of
expertise specializing in supporting and building startup companies
and has company structure and governance so that these companies
maximize the opportunity for success. The exposure has included
Technology, Medical technology, Real Estate, Food and Beverage,
Gaming and Entertainment. In addition he currently advised 3
additional private companies and is heading up the New Ryerson
Innovation Facility being opened at Bell Trinity Square in 2014.
Geoffrey started his career in real estate as a Commercial Real
Estate Broker and ran and maintained that Brokerage for 25 years
while successfully completing hundreds of transactions.
Following the completion of the Qualifying Transaction the
company will propose as officers, Gary
Chaikin and Andre Ryu as
Co-CEO's and the CFO is yet to be determined.
Upon completion of the Qualifying Transaction, the Corporation
will have approximately a minimum of 14,170,744 common shares
outstanding to a maximum of 17,504,077 commons share outstanding
depending on the level of current financing. Mr. Lunick will own or
control less than 0.1% of the issued and outstanding shares of the
Corporation post-closing of the Qualifying Transaction.
The Qualifying Transaction will be an arm's length transaction
as the current officers and directors of Carrington own no
interests in Cozumo and, as such, Carrington shareholders' approval
is not required, unless otherwise required by law or the
Exchange.
Caution Concerning Forward-Looking Statements
Some
statements in this press release contain forward-looking
information within the meaning of applicable Canadian securities
legislation. These statements include, but are not limited
to, statements with respect to the entering into of agreements, the
closing of transactions and the expenditure of funds. These
statements address future events and conditions and, as such,
involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of
the Corporation to be materially different from any future results,
performance or achievements expressed or implied by the
statements. Such factors include, among others, the timing of
transactions, the ability to fulfill certain conditions, the
ability to raise funds, general business, economic, competitive and
political uncertainties and the timing and amount of
expenditures. Neither the Corporation, nor Cozumo undertakes
to update any forward-looking information, except in accordance
with applicable securities laws.
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
Filing Statement of the Corporation to be prepared in connection
with the Qualifying Transaction, any information released or
received with respect to the Qualifying 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 upon
the merits of the Qualifying Transaction and has neither approved
nor disapproved the contents of this press release.
SOURCE Carrington Acquisition Corporation