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by Stockwatch Business Reporter

The TSX Venture Exchange lost 11.52 points to 657.42 Monday. Darryl Cardey's halted shell, Cougar Minerals Corp. (COU), plans to acquire TrackX LLC, a developer of asset-tracking software. The shell will roll back 1 for 2, leaving it with 7,251,736 postconsolidated shares issued, then issue 13.5 million postconsolidated shares to TrackX's sole shareholder, Equita Partners LLC. If the resulting issuer meets certain revenue and EBITDA targets over the next three years, then Equita Partners will receive up to 7.65 million more postconsolidated shares.

There are more details in the acquisition agreement. First, Cougar Minerals will pay Equita $450,000 (U.S.) cash over two years. Second, the shell will lend Equita $300,000 (U.S.) at LIBOR plus 1 per cent for a three-year term. Third, the shell will acquire certain patent rights from Equita for $200,000 (U.S.) plus an option to acquire 4.64 million shares of the resulting issuer, at an exercise price that has not yet been set. (The parties do not say what Equitas will do with all the cash it will receive, but the money will probably go where it is rather badly needed, i.e., to TrackX, which had a working capital deficit of $2.28-million (U.S.) on Dec. 31, 2015.) Fourth, Cougar Minerals will issue 2,175,000 postconsolidated shares to another company, Fluensee Inc., to buy out Fluensee's royalty on 10 per cent of TrackX's revenue. (Fluensee holds the royalty as a result of its sale of intellectual property assets to TrackX.) If the resulting issuer hits its revenue and EBITDA targets, the same ones mentioned above, then Fluensee will receive up to 1.35 million more postconsolidated shares.

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