TORONTO, CANADA — (Marketwired) — 12/15/14 — HTN Inc. (TSX VENTURE: HET.H) (“HTN” or the “Company”) is providing an update to its proposed acquisition of Double Door Communications Inc.
Double Door is a private company collectively owned as to 100% by Manish Dixit and Malay Dixit (the “Shareholders”). Since the initial press release of February 7, 2014, APT Software and Double Door have amalgamated to form one company, Double Door Communications Inc. (“Double Door”), which is the company that HTN proposes to acquire. It is intended that the acquisition will constitute a Change of Business Transaction (the “Transaction”) of the Company in accordance with Policy 5.2 of the TSX Venture Exchange (“TSX-V”).
The Proposed Acquisition
HTN and Double Door have executed a letter of intent which outlines the proposed terms by which HTN will acquire Double Door. As consideration for Double Door, HTN has agreed to issue 10,000,000 common shares of the Company (the “Consideration Shares”) to the Shareholders on closing of the Transaction. In addition, 5,000,000 common shares of the Company (the “Performance Shares”) will be issued and deposited into a performance escrow account, subject to release as follows:
The Shareholders will transfer 1,000,000 Consideration Shares plus ten percent (10%) of the Performance Shares to Michael Frank, the proposed CEO of the Company following completion of the Transaction.
The completion of the Transaction and the Offering, as such term is defined below, are subject to the approval of the TSX-V and all other necessary regulatory approvals. The completion of the Transaction is also subject to certain other additional conditions precedent, including, but not limited to: (i) the entering into of a definitive agreement by HTN and Double Door (the “Definitive Agreement”); (ii) completion of the Offering; (iii) the absence of any material change or change in a material fact which might reasonably be expected to have a material adverse effect on the financial and operational conditions or the assets of each of the parties to the Definitive Agreement; and (iv) certain other conditions typical in a Transaction of this nature.
The Transaction will form the basis for HTN–s reactivation from the NEX Board of the TSX-V to Tier 2 on the TSX-V, subject to HTN meeting all of the Tier 2 Initial Listing Requirements for technology issuers following completion of the Transaction.
The proposed Transaction will be at arm–s length.
A Filing Statement in respect of the proposed Transaction will be prepared and filed in accordance with Policy 5.2 of the TSX-V on SEDAR at prior to the closing of the proposed Transaction. In addition, HTN shareholders will be approving the proposed Transaction prior to its closing which will be obtained by the written consent of the majority shareholders of HTN following their receipt of a copy of the Filing Statement.
About Double Door
Double Door Communications Inc. was incorporated in November 2008. It provides outsourced digital media services and staff augmentation focusing on the advertising industry.
APT Software Canada Inc. (“APT”) was incorporated in June 2010. It develops, markets and provides software development services to technology firms.
On June 3, 2014, Double Door Communications Inc. and APT amalgamated. The amalgamated entity is named Double Door Communications Inc. and continues to operate the businesses of both Double Door Communications Inc. and APT.
Through the media division Double Door focuses on providing an integrated campaign execution facility to the advertising industry. Through its Software Consulting Division, Double Door provides a development capacity to the technology start-up companies. The team at Double Door brings expertise in UI/UX design, complex systems-level programming, mobile and connected devices application development.
Double Door has established working partnerships with several companies in Canada and the US.
Financial Summary
The following is a summary of the financial performance of Double Door for the years ending December 31, 2013, 2012 and 2011:
Board of Directors & Management
The Corporation–s current board and management will resign upon completion of the Transaction with the exception of Richard Zhou. The following are brief descriptions of the proposed directors and officers that will, collectively, bear management and stewardship of the Corporation upon completion of the Transaction.
Michael Frank – Proposed President, Chief Executive Officer, and Director
Michael Frank is President of Mifran Consulting focusing on early stage planning and business development for emerging companies. Mr. Frank served as the Chief Executive Officer of Sprylogics International Corp, a software company focused on semantic and local search from July 2007 to September 2011, and also served as a consultant until March 2014. In the past, Mr. Frank served as a Senior Consultant with Woods Gordon, where he managed a variety of accounts for clients using IBM mid-range systems. Mr. Frank also served as Vice President of Strategic Alliances at Medcomsoft Inc., where he developed and managed all key strategic partnerships to accelerate market penetration and to build market share in the healthcare industry. Mr. Frank has over 20 years of experience in the high technology sector in operations, business development, mergers and acquisitions, and raising funding in the capital markets. In the past he served as an Executive Vice President of Hutchison Avenue Software where he was instrumental in the sale of the company to Intuit Corporation, as well as Vice President of Business Development at BrandEra.com, an online marketplace for the advertising community. He has also held senior sales/marketing roles at Data General, and NCR. Mr. Frank is a graduate from McGill University.
Khurram Qureshi – Chief Financial Officer
Khurram Qureshi is a partner at CQK Chartered Accountants LLP, and has over 27 years of experience in the field of accounting and corporate finance. He is also the Chief Financial Officer of Slyce Inc., a TSX-V listed company. In addition, Mr. Qureshi is the Chief Financial Officer of Augustine Ventures Inc. and Lingo Media Corporation. Prior thereto, Mr. Qureshi acted as Chief Financial Officer for Estrella Gold Corporation. Mr. Qureshi obtained his CPA, CA from the Canadian Institute of Chartered Accountants in 1990.
Manish Dixit – Vice-President
Manish Dixit has over 17 years of industry experience managing large to mid-size enterprise software projects. He has spent extensive time growing and building successful teams across the globe (focused on North America and India) and has been part of several successful technology start-up companies. Prior to starting APT Software Canada Inc. and Double Door Communication Inc., he was head of Canadian operations for Basil Communications Inc. (a global creative production agency serving the media industry). He was a key force behind the growth of Basil team from 20 to over 100 people in two years. Manish spent several years of his career as a Member of Technical Staff at Wind River, a world leader in embedded and connected devices software platform developer (acquired by Intel Corporation). Manish was also a Member of Technical Staff at Accordion Networks (an embedded/telecommunication start-up in Silicon Valley). Manish is a graduate in Computer Science from California State University, East Bay, US and is passionate about innovation and technology.
Malay Dixit – Vice-President
Accomplished, with 15 years of experience in sales, marketing and business development, Malay has won projects generating over US$30 million in revenues throughout his career. Malay has an extensive experience working in Asian and North American markets (India, China, Thailand, US and Canada). Malay is a co-founder of Indo-Thai Technical Educational and Cultural Exchange Association (TECEA), a non-profit organization with the Government of Thailand. He also works as a strategy consultant to several successful firms in the US, India and China. Malay is currently pursuing an Executive MBA at the Richard Ivey Business School, Western University (to be completed in January 2015). Malay is proud to be a member of the vibrant Ivey Business community supportive of new ventures and business growth in Canada.
Millard Roth – Director
Millard Roth is a senior executive, business consultant and “M & A” intermediary (Portstyle Enterprises Inc., Abolutekleen Tek Inc.). He is a business builder/fixer/team enhancer who has executed profitable growth plans and developed exit initiatives for an array of medium size enterprises.
His career has encompassed serving as: Interim CEO (Atelier America Inc., CCC Information Services of Canada Inc., Canadian Motion Picture Distributors Association); Co-Chair Repositioning Committee (Baycrest Foundation); Member of Board of Directors (Vubiz Inc., Tengtu International Inc., Swing Stage Ltd., Kimball Aim Labels Inc.); Advisory Board (Earthfresh Farms Inc., Human Solutions International Inc.) and Presidents– Coach (Inniskillin Wines Ltd., Shaftesbury Films Ltd., Menu Foods Corp., TMS Marketing Ltd.). In the process he has developed and executed strategic plans; identified, negotiated and closed acquisitions; led corporate reorganizations; and realigned business models.
Richard Zhou – Director
Richard Zhou is the President of the Evergreen Association, which is responsible for assisting in the development of the relationship between the governments of China and Canada. Evergreen is partner with the government of China, leading the program of senior financial leaders training delegations to Canada, including Bank of China, China Investment Corporation, CITIC, National Grid, Greenland Development corporation, Fosun Group, etc. In addition, Mr. Zhou is the President of Green Panda Marketing Inc., a fundraising co-chair of the Liberal Party of Canada, and a Director of the Toronto Sick Kids Foundation Chinese Cabinet. He has a Bachelor of Science from the South China University of Technology and Science.
Private Placement
The Company intends to complete a convertible debenture financing of a minimum of $250,000 and a maximum of $500,000 (the “Convertible Debenture Financing”). The Convertible Debenture Financing will be comprised of the issuance of convertible debentures of the Company (the “Convertible Debentures”) which will have a maturity date of two (2) years from the date of issuance and pay interest at the rate of 12% per year, calculated and payable quarterly in arrears. All amounts owing under the Convertible Debentures will be secured by a fixed and floating charge against the assets of the Company.
The principal amount of the Convertible Debentures is convertible into units (the “Units”) of the Company at a conversion price of $0.05 per Unit for the first 12 months, and thereafter at a price of $0.10 per Unit until maturity, with each Unit comprised of one (1) Common Share of the Company and one (1) Common Share purchase warrant (a “Warrant”). Each Warrant will be convertible into a Common Share of the Company at an exercise price of $0.05 per share for a period of five (5) years from the date of issuance of the Convertible Debentures.
The Company will pay a fee to any qualified agent who introduces investors, comprised of 10% cash and 10% finders warrants. Each finder warrant is exercisable into a unit of the Company for a period of two (2) years from closing at an exercise price of $0.05 per unit, each unit being comprised of one Common Share of the Company and one warrant, such warrant being exercisable into a Common Share of the Company for a period of two (2) years from closing at an exercise price of $0.05 per share.
Sponsorship
The Company has entered into an engagement letter dated December 5, 2014 with Mackie Research Capital Corporation (“Mackie”) whereby Mackie has agreed to act as Sponsor (as defined in the policies of the TSX-V in connection with the Transaction. In consideration for acting as Sponsor, the Company has agreed to: (i) pay a fee of $15,000 plus HST to Mackie; and (ii) issue to Mackie 400,000 common shares in the capital of the Company (each, a “Share”) at a deemed price of $0.05 per Share with a 12-month restrictive legend, which are to be issued immediately following completion of the Transaction.
Reinstatement to Trading
The common shares of the Corporation will remain halted pending completion of the Transaction.
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.
COMPLETION OF THE TRANSACTION IS SUBJECT TO A NUMBER OF CONDITIONS INCLUDING EXCHANGE ACCEPTANCE. THERE CAN BE NO ASSURANCE THAT THE TRANSACTION WILL BE COMPLETED AS PROPOSED OR AT ALL. INVESTORS ARE CAUTIONED THAT 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 HTN INC. SHOULD BE CONSIDERED HIGHLY SPECULATIVE.
THE TSX VENTURE EXCHANGE HAS IN NO WAY PASSED UPON THE MERITS OF THE PROPOSED TRANSACTION AND HAS NEITHER APPROVED NOR DISAPPROVED THE CONTENTS OF THIS PRESS RELEASE.
Forward Looking Statements
Certain statements herein may contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Forward-looking statements or information appear in a number of places and can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate” or “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements and information include statements regarding the Transaction, expected revenues of the Target and mobile strategy of the Target. Such forward-looking statements and information are subject to risks, uncertainties and other factors which may cause the Company–s actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. There can be no assurance that a forward-looking statement or information referenced herein will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements or information. Also, many of the factors are beyond the control of the Company. We undertake no obligation to reissue or update any forward-looking statements or information except as required by law. All forward-looking statements and information herein are qualified by this cautionary statement.
Contacts:
HTN Inc.
Michael Kraft
President & CEO
416.927.7003
416.927.1222 (FAX)
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