Foxpoint Capital Corp. Announces the Signing of a Letter of Intent to Enter
into a Proposed Qualifying Transaction
/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS/
TORONTO, Nov. 8 /CNW/ - Foxpoint Capital Corp. ("Foxpoint" or the "Corporation") (TSX-V: FXC.P), a capital pool company, is pleased to announce that it has entered into a non-binding letter of intent dated November 8, 2010 ("Letter of Intent") with Touchstone Investment Holdings Limited ("Touchstone"), a private company incorporated on June 29, 2009, with respect to a proposed business combination by Foxpoint and Touchstone.
Subject to final structuring and the execution of a definitive business combination agreement, the transaction is proposed to be structured as a merger (the "Merger") between Touchstone and a wholly-owned subsidiary of Foxpoint, whereby the common shares of Touchstone would be exchanged for common shares of Foxpoint, and the common share purchase warrants/options of Touchstone would be exchanged for common share purchase warrants/options of Foxpoint or adjusted to be exercised into common shares of Foxpoint, all in accordance with an exchange ratio to be agreed upon by the parties to the transaction.
Among other conditions, the transaction is subject to Touchstone completing a private placement financing of subscription receipts exercisable for units for a minimum of Cdn.$5 million on terms satisfactory to the Corporation (the "Private Placement").
Touchstone is incorporated under the laws of the British Virgin Islands and is the 100% indirect owner of the Rio Pescado gold property located in Colombia. Mr. Ilyas Khan has control or direction over 71.8% of the shares of Touchstone. In addition, Mr. Robert Buchan, a resident of Canada, is a director and a significant shareholder of the Corporation (holding 23.2%, of the Corporation's outstanding shares), is also a director of Touchstone and has control or direction over 10.5% of the shares of Touchstone. Mr. Fraser Buchan, a resident of Canada, is an officer and director and a significant shareholder of the Corporation (holding 23.2%, of the Corporation's outstanding shares) is also a director and officer of Touchstone and has control or direction over 2.6% of the shares of Touchstone.
The transaction is considered a related party transaction under Multilateral Instrument 61-101, and will be subject to majority of the minority shareholder approval.
Financial information for Touchstone will be provided in the management information circular of the Corporation to be prepared in connection with the transaction.
The Corporation intends for the proposed Merger to constitute the "Qualifying Transaction" of the Corporation as such term is defined in the policies of the TSX Venture Exchange (the "Exchange").
Further information concerning the Corporation can be found in the prospectus of the Corporation dated April 12, 2010 and other disclosure documents, which are available on SEDAR at www.sedar.com.
The Rio Pescado Property
Touchstone's interests in mineral properties that are considered to be material are its interests in two tenements at Las Pepas and El Seis & El Siete tenement exploration licenses in Colombia, together known as the Rio Pescado property. These properties are at various stages of exploration and are located at Centro Poblado, Rio Pescado, within the municipality of Segovia in Colombia, which is approximately 150 kilometers northeast of Medellin. The Rio Pescado property will serve as the qualifying property for the transaction, and as a condition for the completion of the Merger, the Letter of Intent provides that Touchstone will prepare an independent NI 43-101 compliant technical report satisfactory to Foxpoint and the Exchange.
Non-solicitation by Foxpoint
During the term of the Letter of Intent, provided that the Letter of Intent is not terminated in accordance with the Termination Provisions (as defined below) thereof, Foxpoint shall not solicit, encourage or conduct discussions with or engage in negotiations with any person, other than Touchstone, relating to the possible acquisition of Foxpoint (whether by way of merger, purchase of capital stock or otherwise) or any material portion of its capital stock.
Conditions to Closing
The transaction is subject to the execution and delivery of a definitive business combination agreement and other conditions, including the following: i) completion of satisfactory due diligence investigations; ii) delivery of a satisfactory title opinion and of an NI 43-101 compliant technical report with respect to the Rio Pescado property; iii) conditional approval of the Qualifying Transaction by the Exchange; iv) board and special committee (if any) approvals of each party to the transaction; v) receipt of all required or desirable shareholder, regulatory approvals, consents, waivers and compliance with all other applicable regulatory requirements and conditions; and vi) Touchstone completing the minimum Private Placement.
Termination Provisions
The Letter of Intent shall be terminated (the "Termination Provisions") upon the earliest of (a) 5:00 p.m., Ontario time, on January 30, 2011; (b) the date of execution of a definitive business combination agreement; or (c) such later or earlier date and time as Foxpoint and Touchstone may agree in writing.
Other Information and Updates
The Corporation is working on finalizing a definitive business combination agreement with respect to the transaction. The Corporation's shares are currently listed for trading on the Exchange. However, the Corporation's shares are currently halted from trading and will remain halted pending, among other things, release of more fulsome disclosure regarding the transaction and the satisfaction of the Exchange's requirements. There can be no assurance that trading in the Corporation's shares will resume prior to the completion of the transaction. The Corporation will provide further details in respect of the proposed transaction in due course by way of press release.
Cautionary Statements
Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Corporation's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, this release contains forward-looking information relating to the intention of the parties to enter into the Business Combination Agreement, completion of the Private Placement and the Merger and the completion of a technical report. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Corporation. The material factors and assumptions include the parties to the Option, Definitive Agreement and Business Combination Agreement being able to obtain the necessary director, shareholder and regulatory approvals; Exchange policies not changing; completion of satisfactory due diligence; no unforeseen circumstances with respect to the technical report that would cause delay while the parties rectified deficiencies. Risk Factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking information include, among other things: conditions imposed by the Exchange, the failure to obtain the required directors' and shareholders' approvals; changes in tax laws, general economic and business conditions; and changes in the regulatory regulation. The Corporation cautions the reader that the above list of risk factors is not exhaustive. The forward-looking information contained in this release is made as of the date hereof and the Corporation is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.
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, majority of the minority 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 Merger, any information released or received with respect to the Merger 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 TSX Venture Exchange, Inc. has in no way passed upon the merits of the proposed Merger and associated transactions and has neither approved nor disapproved of the contents of this press release.
For further information:
Foxpoint Capital Corp.
Fraser Buchan: President, CEO
(416) 640-1933
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