Bitumen Capital Announces Amendments to the MOU with Epcylon Technologies Inc.
News Release
Bitumen Capital Announces Amendments to the MOU with Epcylon Technologies Inc.
Montreal , May 30th, 2016 Bitumen Capital Inc. (BTM.H-TSX:V) (the "Company" or “Bitumen”) announces that the previously announced Memorandum of Understanding (“MOU”) entered on October 15th, 2015, with Epcylon Technologies Inc. (“Epcylon”) whereby the Company and Epcylon would enter into an Asset Purchase Agreement which would have constituted Bitumen’s Qualifying Transaction as per Policy 2.4 of the TSX Venture Exchange (the “Exchange”), has been duly amended in order to include an intermediate phase with a newly, federally incorporated privately held corporation referred to as Bridgerock Technologies Inc.(“Bridgerock” ).
Newly Proposed Qualifying Transaction
Further to complications encountered with the proposed initial private placement in a US OTC Pink Exchange traded corporation, Bitumen realigned the terms and conditions of its proposed Qualifying Transaction. Accordingly, Bridgerock has been incorporated to enter into an asset purchase transaction with Epcylon. Further to this newly proposed asset purchase agreement, Bridgerock will enter into an MOU with Bitumen to complete the qualifying transaction by way of share exchange together with a private placement (the "Newly Proposed Private Placement"). For clarity and disclosure purposes, Epcylon filed a 14C document with the Securities and Exchange Commission (the "SEC") to disclose the terms and conditions of the newly proposed disposal of Epcylon’s current assets to Bridgerock. The disclosure documents to the SEC discloses to Epcylon shareholders that the board of directors of Epcylon together with a majority of shareholders accepted on May 2nd, 2016, to sell all the assets of Epcylon to Bridgerock pursuant to the terms of an asset purchase agreement to be entered into in accordance with the provisions of the MOU (the "Asset Purchase Agreement").
Purchased Assets
Subject to and upon the terms and conditions described below, Epcylon will sell, assign and transfer to Bridgerock and Bridgerock will purchase from Epcylon the undertaking, business and operation of the Business as a going concern and including without limiting the generality of the foregoing our following properties, assets, rights, title, benefits and interests or to we are entitled to in connection with such undertaking, business and operation (collectively the "Purchased Assets"):
(a) the software, which consists of all computer programs including, all utilities and communication software the “Stealth Platform” and relevant applications, file handlers, compilers, operating system programs, and all documentation, manuals and forms related;
(b) the Patents, which mean both the patent issued in the United States of America regarding the technology under the number US9142086 B2, US20110269436 and the patent issued in Canada regarding the technology under the numberCA2683026A1, CA2741232A1, WO2010045716A1;
(c) all of the other intellectual property,;
(d) any prepaid expenses, which includes all prepaid charges and expenses usually accounted for as prepaid expenses, in the course of Epcylon’s normal activities;
(e) all contracts of employment with employees and related benefit plans,;
(f) all assets and products development and under development by Epcylon’s Mobilotto unit including games as well as payment processing solution under development;
(g) the books and records,; and
(h) cash in all accounts.
The Asset Purchase Agreement contains customary conditions, representations and warranties, indemnifications and pre-closing covenants for the conveyance of the Business. Bitumen’s obligation to complete the Asset Purchase Agreement will be conditional on, among other things (i) Bridgerock obtaining shareholder approval regarding the Asset Purchase Agreement and underlying transaction; and (ii) Bridgerock obtaining regulatory approval regarding the transaction. The obligation of Bridgerock to complete the Asset Purchase Agreement is conditional on, among other things, the accuracy of Bitumen’s representations and warranties, there having been no material adverse damage or change in the condition of the Purchased Assets, Bridgerock’s satisfaction with its due diligence investigations related to Bitumen and the Purchased Assets, and the receipt of certain third party consents. The Asset Purchase Agreement includes an indemnification by the parties to each other in respect of all losses, costs, claims, damages, expenses and liabilities suffered or sustained, paid or incurred which would not have been suffered, sustained, paid or incurred had all the representations and warranties provided by each party to the other have been accurate and truthful.
Moreover, upon execution of the Asset Purchase Agreement, all parties agreed that Bridgerock will concurrently enter into an identical asset purchase agreement or share exchange agreement with.
Purchase Price
Bridgerock shall issue to Epcylon one share of its common stock for each share of our common stock issued and outstanding (on a one for one basis). As of the date of this press release, this represents an approximate issuance of an aggregate of 182,202,994 shares of common stock as consideration for acquisition of the Purchased Assets. Concerned parties agreed that prior and subsequent to the closing date, the Series A preferred shares shall remain issued and outstanding. It is intended that the 8,020,000 shares of Series A preferred stock issued and outstanding will subsequently be exchanged for shares of preferred stock of Bridgerock with the same terms and preferences.
Financing
Concurrently, Bridgerock shall continue to raise, by way of private placement either in equity, debt or a combination of both, a total of $1,500,000 (CAD) net of any costs, into Bridgerock by the issuance of units of Bridgerock, with each unit consisting of $25,000.00 convertible secured note convertible into shares of common stock of Bridgerock at a conversion price of CAD $0.30 per share plus one half (1/2) of one common share purchase warrant valid for 24 months exercisable at CAD $0.45 at any time from the date of issuance (the “Bridgerock Unit”). The placement of the Bridgerock Unit is subject to regulatory approval.
Following completion of the newly revised qualifying transaction, Richard T. Groome and Nikolas Perrault will both be named as executives and directors of the resulting issuer. For disclosure purposes the board of directors of Bitumen wish to disclose that Mr. Richard T. Groome holds 100 common shares in the capital stock of Bridgerock and that he is an Insider of Bitumen. Accordingly, the Newly Proposed Qualifying Transaction will be a non-arms length qualifying transaction.
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 and 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 management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the 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 TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. Neither TSXV nor its Regulation Services Provider (as that term is defined in policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
For further information: Mr. Richard Groome, President and Chief Executive Officer, Bitumen Capital Inc., (514) 402 4405, [email protected]