Monday, June 10, 2013

UrtheCast Proceeds with Takeover and Funding for ISS Camera's

The deal is still mostly under the radar, but the privately held UrtheCast reverse takeover (RTO) of publicly traded Longford Energy Inc., intended to culminate in a publicly traded company focused on streaming high-definition video from the International Space Station (ISS) plus a $25Mln war chest to fund initial operations, does seem to be moving forward.

An "annual and special meeting" of Longford shareholders to consider a number of matters relating to the RTO will be held in Toronto on June 13th. UrtheCast owners and executives will assess the RTO the next day at a meeting in Vancouver on June 14th.

Canaccord Genuity has been retained to act as sponsor of the RTO and Longford share trading has been halted on the TSX Venture Exchange until the deal closes.
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Goodwood Inc. and Salida Capital LP, who collectively exercise control over approximately 32% of Longford's issued and outstanding shares, have entered into support agreements with Longford and UrtheCast. They have also agreed to vote in favour of the transactions to be considered by Longford shareholders relating to the arrangement.

As outlined in the May 24th, 2013 press release, "UrtheCast and Longford Energy Inc. Announce TSX Conditional Listing Approval," Longford and UrtheCast received conditional listing approval from the Toronto Stock Exchange (TSX) on May 24th to list the new combined stock under the ticker symbol "UR" representing "UntheCast Corp." when the deal closes.

The deal goes back, publicly at least, to the March 28th, 2013 PR Newswire press release, "UrtheCast to Complete Reverse Take-Over With Longford Energy Inc.," which announced that Longford, a small Canadian oil and gas exploration and production company, would "acquire all of the issued and outstanding common shares of (privately held) UrtheCast in exchange for shares of Longford."

This is normally done in a process called a reverse takeover (RTO), which is the acquisition of a public company (in this case Longford) by a private company (UrthCast) so that the private company can bypass the lengthy, expensive and complex process of going public. The downside of an RTO is that the process doesn't generate any new capital although it may cause the public company stock to rise if the transaction is perceived of as being a net positive.

Ex-Canadian Space Agency President Mac Evans is expected to remain on the UrtheCast board when the company competes an RTO.
A listing of the expected financing agreement and expected share consolidations have been outlined as part of the May 14th, 2013 document, "UrtheCast and Longford Energy Inc. Announce Interim Order, Special Meeting Dates and Mailing of Joint Information Circular." The new company expects to have a war chest of approximately $25Mln CDN to fund ongoing operations after the deal closes.

As part of the deal, UrtheCast's existing senior management team, including Scott Larson (Co-Founder and President), Wade Larson (Co-Founder and Executive Vice-President), Dr. George Tyc (Co-Founder and Chief Technology Officer), Jeff Rath (Corporate Finance, Mergers & Acquisitions), Dr. Serguei Bedziouk (Vice President, Russia Relations) and Issa Nakhleh (Chief Financial Officer), would continue with the business as Longford's senior management team.

The UrtheCast Corp board of directors would be reconstituted to include representatives from both the existing Longford board and UrtheCast boards, with the new reconstituted board expected to consist of Ian W. Delaney (Chairman), Tye W. Burt, William (Mac) Evans, Richard Holdaway, Dale Johnson, Wade Larson and Scott Larson.

Under the new structure, Delany (who was President and CEO at Sherritt International Corporation from 2009 to 2011) would be taking over the UrtheCast board chairmanship from Tony Lacavera, who is currently also the Chairman and CEO of Globalive Communications Corporation and Chairman of WIND Mobile.

With the help of prominent aerospace partners like RSC Energia, UrtheCast intends to build, launch, install, and operate two cameras on board the ISS, beginning in October 2013.

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