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David H. Brett, CEO, Inovent Capital Inc. (Inovent) is pleased to announce that it has entered into a letter of intent (LOI) with Canada Jetlines Ltd. (Jetlines) pursuant to which the parties agree to negotiate the terms of a business combination transaction (the “Proposed Transaction”). Inovent is a capital pool company in accordance with the policies of the TSX Venture Exchange (TSXV). Jetlines is a start-up airline aiming to become Canada’s first ultra-low cost carrier (ULCC). The Proposed Transaction will constitute Inovent’s qualifying transaction in accordance with the policies of the TSXV. Jetlines and Inovent are at arm’s length and the Proposed Transaction does not constitute a non-arm’s length qualifying transaction.
“Jetlines is well on its way to providing Canadians with an exciting and affordable new air travel alternative,” said Jetlines CEO Jim Scott. “Our proven and dedicated team has been very busy preparing to proudly serve Canada soon.”
Key Terms of the LOI
Pursuant to the terms of the LOI, the parties have agreed as follows:
- The Proposed Transaction is subject to the parties executing definitive transaction documents on or before August 29, 2014 (the “Transaction Documents”);
- The structure of the Proposed Transaction is to be determined upon the receipt of securities, tax and financial advice. Upon completion of the Proposed Transaction, it is anticipated that the share capital of the Resulting Issuer (as defined in the policies of the TSXV) will be as follows on an undiluted basis:
The Proposed Transaction values Jetlines at $3,000,000.
- The share capital of Inovent will be consolidated, either by way of consolidation or pursuant to an exchange ratio in the Transaction Documents on a three old for one new basis (the “Consolidation”);
The Proposed Transaction is subject to the following key conditions:
- The parties will excute the Transaction Documents by Aug. 29, 2014;
- Jetlines will complete a financing of a minimum of $300,000 and a maximum of $500,000 (the “Bridge Financing”) on or before July 18, 2014;
- Inovent will complete a financing of 20,000,000 shares at a price of $0.50 per share on a post-Consolidation basis for aggregate proceeds of $10,000,000 (the “Concurrent Financing”). The Concurrent Financing will close immediately prior to or concurrently with the Proposed Transaction. Further details regarding the Concurrent Financing will be announced in a further news release;
- The parties will complete due diligence investigations, each to their own satisfaction, on or before Aug. 29, 2014;
- The Proposed Transaction will have received approval of the TSXV and all necessary corporate and shareholder approvals. It is anticipated that the approval of Inovent’s shareholders will be required; and
- Receipt of a report of a sponsor in respect of the Proposed Transaction or waiver from the sponsorship requirement by the TSXV. Inovent anticipates applying for a waiver of the sponsorship requirement in reliance upon completion of Concurrent Financing.
- Upon execution of the LOI, Inovent advanced to Jetlines a deposit of $25,000;
- Upon receipt of approval of the TSXV and no later than July 31, 2014, Inovent will advance to Jetlines a refundable deposit in the amount of $140,000 (the “Refundable Deposit”). The Refundable Deposit will be secured and will be refundable if the LOI is terminated in certain instances. If Jetlines raises more than $350,000 under the Bridge Financing, the amount of the Refundable Deposit will be reduced to $130,000; and
- The parties have agreed to an exclusivity period ending on August 29, 2014.
Jetlines is in the process of engaging Euro Pacific Canada Inc. to act as their exclusive investment banker, led by Euro Pacific’s Vancouver-based managing director Blair Jordan. Jordan has had extensive experience working with airlines and asset financing globally.
