In-Touch Survey Systems Ltd. ("In-Touch") (TSXV: INX) today announced that it has executed a definitive agreement to sell certain intellectual property assets related to 'Privacy Marketing' solution to a new company codenamed Project September ("Project September"), subject to certain terms and conditions including final approval by the TSX Venture Exchange. The sale is expected to close on or about June 9, 2014. The new company will be led by former In-Touch CEO and current Executive Chair and director of In-Touch, Michael Gaffney.
In-Touch will sell approximately $150,000 worth of assets which included a business concept and draft business plan into Project September. Project September then, in conjunction with the sale of the assets, expects to receive a further investment of approximately $355,800 from seven other investors. In addition, In-Touch will make a further cash investment to cover working capital of $100,000 during fiscal 2014. In-Touch, for its assets and upon completion of its investment will retain approximately a 41% ownership in Project September. The remaining shareholders, including Michael Gaffney, will hold an ownership interest of approximately 59%. Mr. Gaffney will hold approximately a 38% ownership.
"The creation of Project September is consistent with the previously announced strategy of seeking opportunities to commercialize assets on a stand-alone basis. We are optimistic that this sale will provide the focus required to turn this intellectual property in to a valuable asset for In-Touch", said Cameron Watt, President & CEO.
Michael Gaffney is an insider of In-Touch (an "insider") and is participating in the transaction and as an insider is a related party within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The independent directors of the Company, namely, Eric Beutel and Rainer Paduch, have determined that an exemption is available from the formal valuation requirements and minority shareholder approval requirements under MI 61-101 as the fair market value of the transaction is not more than 25% of In-Touch's market capitalization, and independent directors approved the transaction unanimously. This information is being filed less than 21 days prior to the expected closing of the Related Party Transaction. The shorter period was necessary in order to permit In-Touch to close the transaction including the Related Party Transaction, and to receive the necessary approvals, in a time frame consistent with the usual market practice for transactions of this nature.
Certain statements included in this news release contain forward looking statements particularly in respect of the completion of the proposed sale of assets to Project September and the Company's ownership in Project September, which by their nature are necessarily subject to risks and uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such statements reflect the Company's current views with respect to future events, and are based on information currently available to the Company and on hypotheses which it considers to be reasonable; however, management warns the reader that hypotheses relative to future events which are beyond the control of management could prove to be false, given that they are subject to certain risks and uncertainties.
The TSX Venture Exchange has not reviewed the foregoing and has neither approved or disapproved the contents of this press release.
SOURCE In-Touch Survey Systems Ltd.
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