Seriatim Ventures Inc. ("Seriatim" or the "Company") (TSX VENTURE:STV.P) is
pleased to announce that it has entered into an arm's length letter of intent
dated effective April 11, 2008 (the "Agreement") to acquire all issued and
outstanding capital stock of Mountain Power Inc. ("MPI"), a privately-owned,
Delta, B.C. based producer of large capacity lithium ion battery modules for
high power and energy applications (the "Proposed Transaction"). MPI is
incorporated under the Business Corporations Act (British Columbia).
Under the terms of the Agreement, which is subject to completion of satisfactory
due diligence and receipt of applicable regulatory and shareholder approvals, if
required, and the entering into a definitive agreement, it is expected that MPI
will continue as a corporation under the Business Corporations Act (British
Columbia) and become a wholly-owned subsidiary of Seriatim. Upon completion of
the Proposed Transaction: 1) Seriatim will consolidate its capital on a 2.5:1
basis such that current holders of common shares in the capital of Seriatim
("Seriatim Shares") will receive one (1) post-consolidation common share of
Seriatim for every two and a half (2 1/2) Seriatim Shares currently owned; 2)
holders of common shares in the capital of MPI ("MPI Shares") will receive one
post-consolidation Seriatim share for every MPI Share; 3) holders of outstanding
warrants to purchase MPI Shares ("MPI Warrants") will receive one Seriatim
warrant for every one MPI Warrant; 4) holders of Seriatim directors options,
broker warrants and charitable options will retain their securities in
accordance with their original terms, after giving effect to the implied 2.5:1
rollback; 5) holders of MPI convertible debentures will convert all outstanding
debentures into 4,313,414 post-consolidation common shares of Seriatim
(inclusive of interest payments and penalties). It is expected that the Proposed
Transaction will take place pursuant to an arrangement governed by Alberta
Business Corporations Act. Following the completion of the Proposed Transaction,
Seriatim is expected to have 16,109,960 issued and outstanding common shares.
Closing of the Proposed Transaction is expected to be no later than November 15,
2008.
There are currently 9,276,546 MPI Shares and 9,244,310 MPI Warrants issued and
outstanding. There are currently outstanding MPI convertible debentures, the
principal and outstanding interest of which are convertible into 4,313,414 MPI
Shares. There are currently 6,300,000 Seriatim Shares, 630,000 Seriatim options,
63,000 Seriatim charitable options and 400,000 Seriatim warrants issued and
outstanding. Upon completion of the Proposed Transaction it is therefore
expected that the former shareholders of MPI will hold approximately 84% of the
Seriatim Shares and the current Seriatim shareholders will hold approximately
16% of the Seriatim Shares (on a pre-diluted basis). The Proposed Transaction
ascribes a price of $0.20 per Seriatim Share.
Seriatim is currently a capital pool company organized pursuant to TSX Venture
Exchange ("TSXV") Policy 2.4 (a "CPC") and the Proposed Transaction is intended
to constitute the Company's Qualifying Transaction within the meaning of TSXV
Policy 2.3. It should be noted that the final structure of the Proposed
Transaction could change from what is described above, as it is subject to
receipt of final tax, corporate and legal advice on behalf of both Seriatim and
MPI.
About Mountain Power Inc.
MPI produces large capacity battery modules using rechargeable lithium ion
cells, supplied by 3rd party battery manufacturers, which are protected and
controlled by a battery management system (BMS). MPI develops and owns
proprietary software and hardware which is used to control varying arrays of
cells in applications requiring high power density and/or high energy density.
MPI's current market focus is on the North American telecommunications sector,
an industry whose annual battery demand is estimated to exceed $2.2 billion.
(source: reportSURE 2006: Global Telecommunications, March 2006). MPI's lithium
ion battery packs offer potential advantages over existing lead acid battery
options including increased reliability, decreased weight and space
requirements, remote monitoring capability, and life-cycle cost competitiveness.
After numerous months of vigorous testing, MPI attained NEBS Level 3 (Network
Equipment Building Systems) certification on June 15, 2007. It is expected that
achievement will vastly increase MPI's potential world-wide market opportunities
in the telecommunications industry. Currently, MPI is well underway in lab and
field tests with several major U.S. based telecommunications companies. Mountain
Power was incorporated in 1997, focused its business efforts on the
telecommunications industry in 2003, placed under current management in 2005 and
entered into its first lab test relating to the telecommunications application
of the battery modules in April 2006, with a field trial activation in August
2006.
In addition to its primary focus on the telecommunications industry, MPI has
identified numerous other fields for its proprietary technology. These include
industry, utility, medical, military, and alternative energy.
MPI Financial Information
MPI currently has 104 shareholders, none of whom hold greater than 10% of their
issued and outstanding shares.
The following is a summary of the audited financial information of MPI for the
years ended June 30, 2006 and 2007 and the unaudited (prepared by Management)
9-month period ended March 31, 2008.
STATEMENT OF REVENUE AND EXPENSES
For the 9-month
period from For the year For the year
July 1, 2007 to ended ended
March 31, 2008 30-Jun-07 30-Jun-06
(unaudited) (audited) (audited)
---------------- --------------- --------------
Gross revenue $ 285,774 $ 89,942 $ 16,150
Research & Development
expenses (A) $ 272,261 $ 284,467 $ 204,325
Total expenses $ 1,244,246 $ 1,293,643 $ 815,493
Pre-tax loss $ (952,071) $ (1,198,568) $ (783,623)
BALANCE SHEET
As at As at As at
31-Mar-08 30-Jun-06 30-Jun-06
(unaudited) (audited) (audited)
---------------- --------------- --------------
Current assets $ 295,977 $ 328,438 $ 226,640
Capital assets, net $ 175,902 $ 153,065 $ 39,867
Current liabilities $ 120,518 $ 292,426 $ 374,322
Long-term liabilities $ 1,060,354 $ - $ -
Share capital $ 3,549,932 $ 3,495,932 $ 2,348,117
Shareholders'
equity(deficiency) $ (708,993) $ 189,077 $ (107,815)
(A) Net of SR&ED grant of $217,600 received in 2007 and $177,500 received
in 2006.
Proposed Directors of Amalco
Steven Andersen (Delta, British Columbia) - Proposed President, CEO & Director.
Mr. Andersen is a Douglas College and Simon Fraser University-educated
entrepreneur with a broad network of international companies including ties to
Asian trading companies gained over 30 years of business management and
development experience. In 1976 Mr. Andersen started and ran Andersen Marketing
Services Ltd., a merchandising company specializing in providing store design
and specialized layouts to independent pharmacies. In 1988, Mr. Andersen formed
Andersen & Associates Seafoods Ltd., where he became more involved with the
seafood industry, initially on a custom processing basis then moving into the
buying and export development operations. In 2002, Mr. Andersen formed Andersen
Brown Financial Services Inc., a company focused on financing and fundraising
for new venture and small to medium-sized enterprises. Mr. Andersen has been
with MPI in the roles of President & CEO since June 2005.
Richard Hopp (Delta, British Columbia) - Proposed Vice President Corporate
Development & Director. Mr. Hopp has over 28 years experience in management,
energy marketing, project development, financing and business development. He
has an extensive background in energy policy development and direct energy
marketing. In 1995, he was co-founder of ETA Canada which became Maxim Power
Corp., a TSX listed company which today has a market capitalization of over $320
million and over 600MW of operating projects in its portfolio. Mr. Hopp left
Maxim Power Corp. in June 2006 prior to joining MPI. Mr. Hopp holds a B.Sc. in
Applied Economics from UBC (1978) and a Masters of Public Administration from
the University of Victoria (1981). He serves as Director on several boards:
Independent Power Producers Association of British Columbia, HTEC-Hydrogen
Technology & Energy Corporation, Run of River Power Inc., and Western Biomass.
Mr. Hopp has been with MPI in the role of Vice President, Corporate Development
since joining Mountain Power Inc. in July 2006.
David Horton (Vancouver, British Columbia) - Proposed Director. Mr. Horton has
been part of Canaccord Capital's Corporate Finance team since 1990, currently in
the position of Senior Vice President and Director. He has been instrumental in
growing the department's focus on early-stage opportunities into our present
Public Venture Capital group. Mr. Horton oversees the full spectrum of
activities required to service and provide financing to emerging growth
companies. Prior to joining Canaccord Capital, Mr. Horton gained extensive
experience in the venture capital merchant banking area as an entrepreneur,
owning and managing private and public companies. Mr. Horton holds a B.Comm.
from the University of British Columbia and a MBA from the University of Western
Ontario.
Ken Broom (Mission, British Columbia) - Proposed Director. Mr. Broom is
currently VP, BAK Batteries Ltd. and formerly Executive Vice President with Moli
Energy Corp where he spent 23 years. His duties have included manager of QA,
general manager of operations and VP of operations. Prior to E-One Moli Mr.
Broom worked for Duracell and Dow Chemical. He received his B.Sc. in chemical
engineering from the University of Western Ontario.
Hank Petranik (Calgary, Alberta) - Proposed Director. Mr. Petranik's career has
concentrated on commercial opportunities within the marketing and business
development segments of the energy sector. Mr. Petranik has held progressing
degrees and types of functional responsibility in producer, regulated utility,
and independent marketer environments. This background has provided the
foundation to demonstrate his strengths in the identification, development,
negotiation, and implementation of business opportunities. Recent positions
include VP of Liquified Natural Gas for TransCanada PipeLines Ltd. and President
of Maxima Energy Services, an independent strategic marketing and business
management advisor.
Edward J. Fry (Phoenix, Arizona) - Existing Director of Seriatim. Mr. Fry is a
self-employed businessman who specializes in private real estate development,
finance and syndication. He served as Chairman and Director of Safe Harbour Inc.
and has served as a director on various public company boards.
Doug Porter (Calgary, Alberta) - Existing Director of Seriatim. Mr. Porter is
Principal of Porter Valuations Inc., a specialty valuation firm providing
valuation and financial consulting services to a broad spectrum of private and
public companies throughout Western Canada. He also serves as Vice President,
Finance and CFO of Meridian Directional Services Inc., an oilfield services
company based in Calgary. From 1997 to 2005 he was the Managing Director of
Smith Cageorge Porter Inc. From 1990 to 1997 he held various positions with the
Calgary office of an international accounting firm, where he obtained his
Chartered Accountant Designation. He has a Bachelor of Commerce degree from the
University of Calgary (1990). He obtained his Chartered Business Valuator
designation in 1999. He is currently a director of Manson Creek Resources Ltd.
(TSXV-listed).
Financing
The Proposed Transaction will be completed in conjunction with a brokered equity
offering to be completed contemporaneously with the closing of the Proposed
Transaction. Under the terms of this financing, MPI will raise $3,000,000 by the
issuance of common shares of MPI ("MPI Shares"). However, upon Closing of the
Proposed Transaction, the MPI Shares will be exchanged for Seriatim Shares on
the same basis as existing MPI Shares, as described above. Proceeds will be used
for continued R&D, marketing and general working capital purposes.
Loan to be Advanced
Subject to TSXV and regulatory approval and certain specific due diligence
steps, Seriatim intends to advance the sum of $225,000 to MPI in the form of a
refundable unsecured advance ("Refundable Advance") prior to the completion of
the Proposed Transaction. MPI intends to utilize the loan proceeds for general
operating and working capital purposes. In the event that closing of the
Proposed Transaction does not occur by November 15, 2008, the Refundable Advance
will be repayable to Seriatim at that date.
Conditions of Closing
The Proposed Transaction is an arm's-length transaction as the directors and
officers of Seriatim have no ownership or other interest in MPI. As part of the
regulatory process, Seriatim anticipates convening an annual and special meeting
of shareholders and mailing a management information circular as soon as
practicable. The Seriatim Shares will remain halted until such time as the
submission of required information to the TSXV and permission to resume trading
has been obtained from the TSXV.
A general policy of the TSXV requires that a sponsor be retained to prepare a
Sponsor Report in compliance with TSXV Policy 2.2. If an exemption from such
sponsorship is not available to Seriatim, then Seriatim will seek a Sponsor
immediately following such determination.
Completion of the Proposed 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 Proposed Transaction cannot close until the required shareholder
approval is obtained. There can be no assurance that the Proposed 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 Proposed
Transaction, any information released or received with respect to the Proposed
Transaction may not be accurate or complete and should not be relied upon.
Trading in securities of a capital pool company should be considered highly
speculative.
All information contained in this news release with respect to MPI was supplied
by MPI for inclusion herein and, with respect to such information, Seriatim and
its board of directors and officers have relied on MPI.
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