Agoracom Blog

Peeks Social Ltd. $ Signs Binding LOI with Personas to Acquire Peeks Social Technology

Posted by AGORACOM-JC at 5:21 PM on Tuesday, November 14th, 2017

Peeks large

  • Entered into a binding Letter of Intent with Corporation  and Riavera Corporation for the acquisition of the technology assets of the Peeks Social livestreaming product
  • Launched in November 2016, along with certain other related technology assets

TORONTO, Nov. 14, 2017 — Peeks Social Ltd. (TSXV:PEEK) (OTCQB:PKSLF) (“Peeks Social” or “the Company”) is pleased to announce that it has entered into a binding Letter of Intent (“LOI”) with Corporation (“Personas”) and Riavera Corporation (“Riavera”) for the acquisition of the technology assets of the Peeks Social livestreaming product launched in November 2016, along with certain other related technology assets (the “Technology”).

By way of background, the Company initially entered into a technology licensing agreement with Personas on August 14, 2015, pursuant to which Personas agreed to pay the Company a licensing fee equal to 10% of the gross revenue earned by Personas through the use of the Company’s platforms (the “Licensing Agreement”).  The Licensing Agreement was subsequently amended in October 2016 to increase the licensing fee payable to the Company from 10% to 30%. The Licensing Agreement formed the foundation for the product initiative “Peeks Social”, a commerce enabled livestreaming service currently available for download in the iOS and Android app stores. Upon a successful completion of the proposed transaction, the Company would receive 100% of the gross revenue of the Peeks Social livestreaming product.

The LOI contemplates the Company acquiring the Technology in exchange for the issuance of 175,150,520 common shares at a negotiated price of $0.7308 per common share, an acquisition cost of $128,000,000 (the “Transaction”). The closing price of the Company’s common shares on the TSX Venture Exchange on November 10, 2017, was $0.37. It is anticipated that following the Transaction there will be 234,126,791 issued and outstanding common shares of the Company.

There are currently 61,976,271 issued and outstanding common shares of the Company. The Company has a fully diluted common share count of 79,454,933. Following the Transaction, the existing shareholders of Peeks Social Ltd. are anticipated to own 26.5% of the Company on an undiluted basis, and 31.6% of the Company on a fully diluted basis. Personas is an existing shareholder of the Company and currently owns 3,000,000 common shares which are anticipated to be returned to treasury for no additional consideration as part of the Transaction.

Description of the Transaction

It is anticipated that Personas and the Company will effect the Transaction by entering into a definitive agreement to complete an amalgamation, plan of arrangement, reorganization, or similar transaction, and subsequently carry on business as “Peeks Social Ltd.” The principal components of the Transaction are anticipated to be as follows:

  1. Immediately prior to the Transaction, the Technology will reside in Personas;
  2. Immediately prior to the Transaction, the Company will be continued as a corporation under the Business Corporations Act of Ontario (from Alberta);
  3. The parties will have received a final independent valuation report that confirms that the value of the Technology is at least $130,000,000; and
  4. Personas will use its good faith efforts to require its shareholders not to sell, transfer, or encumber their respective shares of the Company for a period of four months following the completion of the Transaction.

Relationship between the Company, Personas, and Riavera

Personas is a private company controlled by Mr. Mark Itwaru, Chairman & CEO of the Company. Riavera is an existing “Control Person” of the Company within the meaning of the rules and policies of the TSX Venture Exchange, and is a significant shareholder of the Company and a related party to Personas. Collectively, these parties own an aggregate of 18,602,388 common shares of the Company, representing 30.0% of the issued and outstanding shares of the Company (non-diluted). Accordingly, the proposed Transaction between the Company and Personas would be considered a “related-party transaction” pursuant to the rules of the TSX Venture Exchange and Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions, and the Transaction is subject to minority shareholder approval and valuation requirements, as well as TSX Venture Exchange approval.

The Company established an independent special committee of its Board of Directors in July 2017 to explore and negotiate the acquisition of the Technology. Mr. Itwaru recused himself from the negotiations as a result of his interest in Personas. The independent special committee has recommended the Company proceed with the Transaction, subject to the terms and conditions of the LOI.

Definitive Agreements, Conditions, and Proposed Closing

The LOI currently contemplates the parties entering into a definitive agreement (the “Definitive Agreement”) prior to November 30, 2017, and completing the Transaction by December 31, 2017, unless otherwise agreed by the parties.  The LOI may be terminated by either party in certain circumstances, including if the Definitive Agreement is not executed prior to November 30, 2017, or if either party is not satisfied with its due diligence review. The Transaction is subject to requisite regulatory approvals, including the approval of the TSX Venture Exchange, shareholder approval and standard closing conditions, including the approval of the Definitive Agreement by the boards of the respective companies and completion of due diligence investigations to the satisfaction of each of the parties. The legal structure for the Transaction will be confirmed after the parties have considered all applicable tax, securities law, and accounting efficiencies.

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.

For further information, please contact:

Peeks Social Ltd.
Mark Itwaru
Chairman & Chief Executive Officer
416-815-7000 x303
[email protected]

David Vinokurov
Director Investor Relations
[email protected]

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has reviewed or accepts responsibility for the adequacy or accuracy of this Release.

Forward-Looking Statements

This news release contains forward-looking statements relating to the timing and completion of the proposed Transaction and other statements that are not historical facts. Forward-looking statements are often identified by terms such as “will”, “may”, “should”, “anticipate”, “expects” and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding the proposed Transaction and the future plans and objectives of the Company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. As a result, the Company cannot guarantee that the proposed Transaction will be completed and that any forward-looking statement will materialize and the reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and while the Company may update or revise publicly any of the included forward-looking statements in the future, it undertakes no obligation to publicly update or revise any forward-looking information except as required by law.

Tags: , ,

Comments are closed.