VANCOUVER, B.C., Sept. 14, 2017 (GLOBE NEWSWIRE) — This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

Not for release in the United States.

ANY SECURITIES REFERRED TO HEREIN WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE “1933 ACT”) AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.

Further to the news release issued on April 25, 2017, Universal Ventures Inc. (“Universal“) (TSXV:UN) is pleased to provide an update with respect to the binding agreement dated April 21, 2017 (the “Agreement“) for the arm’s length business combination of Universal and mCloud Corp. (“mCloud“), pursuant to which Universal will acquire all of the issued and outstanding securities of mCloud (the “Transaction“). Upon completion, the Transaction will constitute a reverse take-over of Universal by mCloud, with the resulting company to be renamed “Universal mCloud Inc.” (the “Resulting Issuer“). In addition, mCloud has engaged Canaccord Genuity Corp. (“Canaccord“)  and Haywood Securities Inc. (“Haywood“), as co-lead agents, and Echelon Wealth Partners Inc. (“Echelon“, and together with Canaccord and Haywood, the “Agents“) to act as its agents in a financing to be completed in connection with the Transaction.

Update on Private Placement

In connection with the completion of the Transaction, mCloud intends to complete a private placement (the “Private Placement“) of subscription receipts (the “Subscription Receipts“) for aggregate gross proceeds of a minimum of C$3,000,000 and a maximum of C$5,000,000 at a price of C$0.35 per Subscription Receipt (the “Issue Price“), with an Agents’ option to sell an additional C$1,000,000 of Subscription Receipts at the Issue Price. Each Subscription Receipt will be automatically exchanged immediately prior to closing of the Transaction for an mCloud unit comprised of one mCloud share of common stock and one mCloud common share purchase warrant (each, an “mCloud Warrant“). Each mCloud Warrant will entitle the holder thereof to purchase one share of common stock of mCloud at a price of C$0.45 per common share for a period of 24 months following the closing of the Private Placement, subject to early redemption by the Resulting Issuer if the 10-day weighted average trading price of the Resulting Issuer’s common shares is at any time greater than C$0.80. Each mCloud share of common stock and mCloud Warrant issued in the Private Placement will automatically be converted into Resulting Issuer common shares and Resulting Issuer warrants upon the completion of the Transaction, with the Resulting Issuer warrants bearing the same terms as the mCloud Warrants.

In connection with the Private Placement, the Agents will receive a cash commission equal to 7.0% of the aggregate gross proceeds of the Private Placement. In addition, the Agents will be issued compensation options equal to 7.0% of the Subscription Receipts sold in the Private Placement at an exercise price equal to the Issue Price for a period of twenty four months following the closing of the Transaction (the “Compensation Options“). Each Compensation Option will ultimately entitle the Agents to acquire one common share of the Resulting Issuer. The Agents will also receive an aggregate corporate finance fee of C$100,000, 50% of which will be satisfied through the issuance of common shares of the Resulting Issuer to the Agents on completion of the Transaction at a price per share equal to the Issue Price.

The proceeds from the Private Placement (less 50% of the cash commission and the expenses of the Agents) (the “Escrowed Proceeds“) will be held in escrow until the satisfaction of certain escrow release conditions, including confirmation that all conditions precedent to the Transaction, other than the release of the Escrowed Proceeds, have been satisfied.

mCloud Acquisition of FDSI

On June 15, 2017, mCloud completed the acquisition of all of the issued and outstanding stock of Field Diagnostic Services, Inc. (“FDSI“). The consideration for the acquisition of FDSI is comprised of (i) US$500,000, which was paid through the issuance of 1,228,501 shares of common stock of mCloud; (ii) US$1,000,000 payable in cash on the completion of the Transaction; and (iii) up to US$3,200,000 payable in cash upon the satisfaction of certain post-closing performance-based earn out payments (collectively, the “FDSI Purchase Price“). As security for mCloud’s payment of the FDSI Purchase Price, mCloud has granted a pledge of the issued and outstanding stock of FDSI to the former stockholders of FDSI. The pledge will be released upon payment of any required post-closing cash payments.

FDSI was organized in 1994 under the laws of the Commonwealth of Pennsylvania. FDSI provides advanced enterprise software, handheld energy efficiency diagnostic tools and related training, and project management services that enable more rapid and accurate servicing of heating, ventilation, and air conditioning (“HVAC“) equipment decreasing energy and operational costs. FDSI provides expertise in HVAC diagnostics and building data energy analytics and provides testing tools, analysis outcomes and programmatic solutions for national retail and restaurant chains. FDSI’s diagnostics technology is embedded in energy management systems and HVAC units.

Selected Financial Statement Information

The following table sets forth selected historical audited financial information for FDSI for the financial years ended December 31, 2016, 2015 and 2014, in each case prepared in accordance with IFRS. Such information is derived from and should be read in conjunction with the financial statements and the notes thereto, copies of which will be included with the filing statement filed by Universal in connection with the Transaction.

Income Statement Data (US$) Year Ended Dec 31, 2016 Year Ended Dec 31, 2015 Year Ended Dec 31, 2014
Total Revenues   $2,004,509     $2,206,694     $3,211,710
Net Income (Loss)   $(323,903)     $(124,645)     $577,623
Balance Sheet Data (US$) As at Dec 31, 2016 As at Dec 31, 2015 As at Dec 31, 2014
Total Assets   $588,482     $646,954     $777,970
Total Liabilities   $336,431     $80,823     $117,030

 

Completion of the Transaction is conditional on obtaining all necessary regulatory and shareholder approvals in connection with the matters described above and other conditions customary for a transaction of this type, including completion of due diligence by each party to the Transaction. The parties intend to apply for an exemption from the sponsorship requirements of the TSX Venture Exchange.

Trading of the common shares of Universal remains halted in connection with the dissemination of this news release, and the halt is expected to remain in place until the Transaction is completed.

For more information please contact:  Universal Ventures Inc.
Charalambos (Harry) Katevatis
President and Chief Executive Officer
Tel: (604) 642-6175

Cautionary Statements

The information provided in this news release regarding mCloud and FDSI has been provided by mCloud and has not been independently verified by Universal.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX Venture Exchange approval and shareholder approval (which, in the case of the latter approval, Universal intends to obtain by way of written consent). 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 filing statement to be prepared in connection with the Transaction or this news release, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Universal should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this news release.

The information in this news release includes certain information and statements about management’s view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions including, without limitation, the completion of the Transaction and the Private Placement, satisfaction of the escrow release conditions, and the ability of mCloud and the Resulting Issuer to satisfy outstanding payments under the FDSI purchase agreement, that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Although Universal and mCloud believe that the expectations reflected in forward looking statements are reasonable, neither entity can give any assurances that the expectations of any forward looking statements will prove to be correct. Except as required by law, Universal and mCloud disclaim any intention and assume no obligation to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise.

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