Turquoise Capital Corp. Announces Proposed Qualifying Transaction

By Marketwired

Sep 18, 2014 11:58 PM EDT

TURQUOISE CAPITAL CORP. ("Turquoise") (TSX VENTURE:TQC.P), a capital pool company, is pleased to announce that it has entered into a letter of intent dated September 17, 2014 (the "Letter of Intent") with VIGIL TECHNOLOGIES INC. ("Vigil") whereby Vigil has agreed to grant Turquoise the right to develop, market, distribute, sell and use those products ("Development Rights") based on Vigil's Wireless Intrusion Detection Platform (the "Transaction"). Turquoise is a capital pool company ("CPC") and intends the Transaction to constitute a Qualifying Transaction under the TSX Venture Exchange (the "Exchange") Policy 2.4 - Capital Pool Companies. Upon successful completion of the Transaction, Turquoise will be a Tier 2 technology issuer.

About Vigil and the Wireless Intrusion Detection Platform

Vigil was incorporated in British Columbia on June 4th 2010 and is a Burnaby BC based research and development company specializing in the development of wireless sensor networks.

The Wireless Intrusion Detection Platform is a spatially distributed wireless sensor network technology that can be quickly and cost effectively deployed in all environments including "off the grid" locations. The wireless sensor network allows for real-time monitoring of sites, equipment and environmental conditions over a geographic area while providing real-time situational awareness. With this information, operational decisions can be made from the information provided by these sensors. The initial target market for the products will be the mining, petrochemical and resource industries.

Terms and Conditions of Proposed Qualifying Transaction

The Letter of Intent provides that Vigil will grant Turquoise an exclusive worldwide right to develop, market, distribute, sell and use those products ("Development Rights") based on Vigil's Wireless Intrusion Detection Platform. In consideration of the Development Rights, Turquoise will issue to Vigil such number of common shares based on the valuation of the technology on closing of the Transaction subject to Exchange acceptance (the "Consideration Shares"). Even though Turquoise anticipates that the Consideration Shares will be issued directly to Vigil, Vigil may elect to have the Consideration Shares distributed to its shareholders in proportion to their ownership in Vigil. The following sets out the current shareholders of Vigil and their beneficial ownership in Vigil: David Loban (66.85%), Marcin Jan Marzencki (30.08%) and Bozena Kaminska (3.06%).

The initial term of the Development Rights will be for a period of 20 years (the "Initial Term") and, at the option of Turquoise, the Initial Term may be extended for an additional 20 years.

On closing of the Transaction, Turquoise will pay to Vigil $500,000 (the "ROFR Payment") and, in consideration of which, Vigil will grant Turquoise the right of first refusal to acquire (i) Development Rights to any new technology developed by Vigil (the "New Technology") for a period of ten years from signing of the definitive agreement, and (ii) the intellectual property comprising the technology and New Technology for a period of ten years from signing of the definitive agreement.

Turquoise and Vigil are now beginning negotiations with a view to settling and signing a definitive agreement between themselves on or before October 31, 2014, which definitive agreement will set out in full the terms of the Transaction including the total number of common shares of Turquoise to be issued to Vigil.

The definitive agreement will incorporate the terms of the Letter of Intent together with such additional representations, warranties, covenants, terms and conditions respecting the Transaction and all related matters as are usual and customary in transactions of a similar size and character. Turquoise will issue a further news release when more information is known as to the terms of the Transaction.

Trading in the common shares of Turquoise will remain suspended until such time as it has satisfied the requirements of the Exchange with respect to completion of a Qualifying Transaction.

The Transaction is an arm's length transaction, and as such, will not be subject to Turquoise receiving shareholder approval. There can be no assurance that the Transaction will be completed as proposed or at all or that the Exchange will approve a definitive agreement, if and when one is reached between the parties.

Proposed Private Placement Financing

As a condition of the Transaction, Turquoise will be required to complete a proposed private placement offering of a minimum of 10,000,000 common shares and up to a maximum of 15,000,000 common shares of Turquoise at a minimum price of $0.10 per share for minimum gross proceeds of $1,000,000 and up to a maximum of $1,500,000 (the "Financing"). The proceeds of the Financing will be used to fund the development of products based on Vigil's Wireless Intrusion Detection Platform, general working capital purposes and for the ROFR Payment. Subject to Exchange approval, finder's fees may be payable in connection with the Financing.

Conditions to Closing the Transaction

The Transaction will be subject to the conditions precedent that will be set out in the definitive agreement, including the following: (i) approval of the Transaction by the Exchange; and (ii) completion of the Financing.

Directors, Officers and Insiders of Resulting Issuer

Upon completion of the Transaction, it is anticipated that the board of directors of Turquoise will comprise of a minimum of five individuals. As of the date of this news release, the following persons are anticipated to be the directors, officers and insiders of Turquoise following completion of the Transaction:

David Loban, Chief Executive Officer, President and Director

Mr. Loban is a former British Army Officer and ASIS Certified Protection Professional. He has a comprehensive knowledge of security, life safety and business operations systems coupled with extensive experience in mining, marine and transportation operations. He has successfully completed a number of large scale integrated systems and operations projects in North and South America, the most recent of which was the Teck Security Management System Program Manager. Mr. Loban has worked as a Security Consultant with a number of mining and resources companies including CNRL, Total, Oilsands Quest and Access Pipelines. Mr. Loban has proven track record in business development and management. Previously, Mr. Loban worked as a Business Development Manager for Siemens Building Technologies Ltd. where he was responsible for the business development and operational management of the Security Division of S.B.T. in British Columbia, Canada. His tenure involved in a number of large projects in Canada and the U.S.

Mr. Loban is a subject matter expert and has been invited to speak on security and counter terrorism at a number of major venues in Canada and the U.S.

Greg Ball, Chief Financial Officer, Secretary and Director

Mr. Ball has been a director of Turquoise since January 18, 2013. Mr. Ball has worked in the accounting field for the past 23 years. In the past 10 years, Mr. Ball. served as a controller at Black Top & Checker Cabs and Pacific Western Brewing Co. Since January 2005, Mr. Ball has been a senior accountant with the Da Costa Management Corp. Mr. Ball has a Bachelor of Science in Mathematics from the University of Alberta and received his CGA designation in August of 2005. Mr. Ball currently serves as Chief Financial Officer, Secretary and director of Fairmont Resources Inc., a company listed on the Exchange and engaged in the exploration of mineral properties located in Ontario, and Chief Financial Officer and Secretary of Highpointe Exploration Inc., a company listed on the Exchange and engaged in the exploration of mineral properties located in British Columbia and Nevada.

The parties will determine the balance of the proposed directors prior to signing the Defintiive Agreement. Backgrounds of the remaining proposed directors of the Resulting Issuer will be disclosed in a subsequent news release, in accordance with Exchange policies.


It is anticipated that a sponsor for the Acquisition will be required in accordance with the rules of the Exchange. Further details regarding sponsorship will be provided when available.

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