Leopard Resources (ASX:LRR) is acquiring G8 Communications Holdings Limited, a developer of next generation wireless technology, and is raising up to $4 million.
G8’s wholly-owned subsidiary Connected IO’s (CIO) flagship product is the Machine Connect modem for intelligent connectivity between machines.
This is fully developed and now been marketed.
The M2M phenomenon is accelerating and has the potential to affect about every device requiring connection to the internet.
Acquisition Terms
Leopard is issuing 200 million LRR shares to the vendors subject to satisfactory completion of due diligence along with shareholder and regulatory approval.
Milestone shares will also be issued. On achieving $15 million in revenues during the years 2016, 2017 or 2018 the vendors will be issued 100 million shares. A further 50 million shares will be issued on achieving $25 million in revenues.
The Acquisition is subject to the satisfaction of the following conditions:
- Formal agreement: Entry into formal documentation in relation to the acquisition and associated issue of the prospectus;
- Shareholder and regulatory approvals: the company obtaining all necessary shareholder and regulatory approval; and
- Due diligence: The company completing due diligence in respect of the acquisition to its satisfaction within 30 days.
Capital Raising
Leopard is seeking to raise up to $1 million by way of a convertible note raising which is to be completed in two tranches of $500,000.
The notes will convert at a rate of $0.01 per share (on a post consolidation basis) and are subject to escrow and shareholder approval.
The first tranche of $500,000 will be utilised to pay outstanding creditors, re-compliance costs and for general working capital. The second tranche of $500,000 will be utilised for G8’s working capital.
It will also undertake completing a capital raising of $3 million to fund the ongoing operation and expansion of G8 Communications and provide additional general working capital.
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