05:17:11 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



Liberty Defense Holdings Ltd
Symbol SCAN
Shares Issued 66,549,721
Close 2020-01-15 C$ 0.11
Market Cap C$ 7,320,469
Recent Sedar Documents

Liberty Defense to resume TSX-V trading June 24

2020-06-22 16:09 ET - News Release

Mr. Aman Bhardwaj reports

LIBERTY PROVIDES UPDATE ON MERGER WITH DRAWDOWN AND ANNOUNCES LIFTING OF TRADING HALT

Liberty Defense Holdings Ltd. has provided an update on its proposed reverse takeover by DrawDown Detection Inc. previously announced on Jan. 28, 2020. Liberty's common shares will resume trading on the TSX Venture Exchange on June 24, 2020.

Merger Update

On April 2, 2020 the Company entered into a binding amalgamation agreement with DrawDown, pursuant to which the Company will acquire all of the issued and outstanding securities of DrawDown (the "Transaction"), on terms more particularly described in the Company's press release dated April 7, 2020, and as updated below. Pursuant to the policies of the Exchange, Liberty's common shares were halted from trading on January 16, 2020, prior to the parties' announcement of the Transaction. Liberty's common shares will resume trading on the Exchange on June 24, 2020 in order to establish the terms of the Concurrent Financing (defined below).

Upon completion, the Transaction will constitute an arm's length reverse takeover of the Company by DrawDown in accordance with Policy 5.2 of the Exchange. The resulting company (the "Resulting Issuer") is expected to resume trading on the Exchange under the name "Liberty Defense Holdings, Ltd." or such other name as the parties may reasonably agree upon and as is acceptable to the Exchange and the corporate registrar.

Prior to the completion of the Transaction:

  • Liberty will complete a consolidation (the "Liberty Consolidation") of the outstanding common shares of Liberty and all of the outstanding securities convertible in common shares of Liberty on a 6.2:1 basis;
  • DrawDown will complete a consolidation (the "DrawDown Consolidation") of the outstanding common shares of DrawDown and all of the outstanding securities convertible in common shares of DrawDown on a 2:1 basis.

Liberty and and DrawDown are currently addressing further comments received from the Exchange regarding the filing statement required under Exchange policies to be delivered to Liberty shareholders in connection with obtaining their approval of the Transaction. Liberty and DrawDown do not anticipate any issues in addressing these further comments. The filing statement must be approved by the Exchange before it is delivered to Liberty shareholders.

Concurrent Financing

Prior to the completion of the Transaction, DrawDown will arrange for the completion of a concurrent financing of Liberty subscription receipts (the "Subscription Receipts") at an expected price of $0.30 per Subscription Receipt (on a post-Liberty Consolidation basis; equal to a price of approximately $0.048 per Subscription Receipt on a pre-Liberty Consolidation basis) for minimum gross proceeds of $2,500,000 (the "Concurrent Financing").

Upon satisfaction of certain escrow release conditions and closing of the Transaction, it is expected that each Subscription Receipt will be automatically exchanged, without payment of any additional consideration, for one common share of the Resulting Issuer and one-half of one warrant of the Resulting Issuer. Each whole warrant will entitle the holder thereof to purchase one Resulting Issuer common share at a price of $0.50 per share for a period of two (2) years from the date of issuance. The Concurrent Financing is expected to result in the additional issuance of approximately 8,333,333 Resulting Issuer common shares and 4,166,666 Resulting Issuer warrants for the aggregate amount of the Subscription Receipts.

The proceeds from the Concurrent Financing shall be used to fund the costs of the Transaction and for working capital and general corporate purposes for the Resulting Issuer.

The final terms of the Concurrent Financing remain subject to change. Additional information in connection with the Concurrent Financing will be provided in subsequent press releases. There is no assurance that the Concurrent Financing will be completed as proposed or at all.

Bridge Financing

On March 5, 2020, DrawDown closed the first tranche of its financing (the "Bridge Financing") of 10% convertible debentures (the "DrawDown Convertible Debentures") in the principal amount of $954,750. As part of the completion of the Transaction: (i) all outstanding DrawDown Convertible Debentures issued pursuant to the first tranche of the Bridge Financing will be converted into DrawDown units (the "DrawDown Units") at $0.24 per DrawDown Unit,1 with each DrawDown Unit consisting of one DrawDown common share and one-half of one DrawDown warrant; (ii) the DrawDown common shares issued upon conversion of the DrawDown Units will be exchanged for Resulting Issuer common shares on a one for one basis, resulting in the additional issuance of up to 3,978,125 Resulting Issuer common shares for the principal amount of the Drawdown Convertible Debentures; and (iii) the 1,989,062 DrawDown warrants issued upon conversion of the DrawDown Units and the Finder's Warrants will cease to represent a right to acquire DrawDown common shares and will instead provide the right to acquire Resulting Issuer common shares on the same terms and conditions. In connection with the first tranche of the Bridge Financing, DrawDown paid cash finder's fees equal to $73,980 and issued 246,600 finder's warrants (the "Finder's Warrants") to certain finders, with each Finder's Warrant entitling the holder to acquire one DrawDown common share at a price of $0.20 per share2 for a period of two years from the date of issuance.

On May 29, 2020, DrawDown closed the second tranche of the Bridge Financing of DrawDown Convertible Debentures in the principal amount of $909,400. As part of the completion of the Transaction: (i) all outstanding DrawDown Convertible Debentures issued pursuant to the second tranche of the Bridge Financing will be converted into DrawDown Units at $0.24 per DrawDown Unit,3 with each DrawDown Unit consisting of one DrawDown common share and one-half of one DrawDown warrant (ii) the DrawDown common shares issued upon conversion of the DrawDown Units will be exchanged for Resulting Issuer common shares on a one for one basis, resulting in the additional issuance of up to 3,789,166 Resulting Issuer common shares for the principal amount of the Drawdown Convertible Debentures; and (iii) the 1,894,583 DrawDown warrants issued upon conversion of the DrawDown Units and the Finder's Warrants will cease to represent a right to acquire DrawDown common shares and will instead provide the right to acquire Resulting Issuer common shares on the same terms and conditions. In connection with the second tranche of the Bridge Financing, DrawDown paid cash finder's fees equal to $50,992 and issued 169,972 Finder's Warrants to certain finders, with each Finder's Warrant entitling the holder to acquire one DrawDown common share at a price of $0.20 per share4 for a period of two years from the date of issuance.

Post-Closing Capitalization

On completion of the Transaction, the former DrawDown shareholders will hold approximately 52.17% of the outstanding common shares of the Resulting Issuer, the former Liberty shareholders will hold approximately 26.11% of the common shares of the Resulting Issuer and the purchasers of the Subscription Receipts will hold approximately 20.27% of the common shares of the Resulting Issuer, on a non-diluted basis.

The following table sets out the expected fully diluted share capital of the Resulting Issuer after giving effect to the Transaction:

Financial Information Concerning DrawDown

The following table sets forth selected audited financial information for DrawDown for the period of incorporation on October 26, 2018 until December 31, 2019. DrawDown's financial statements were prepared on the basis of IFRS and are expressed in U.S. dollars.

The audited financial statements of DrawDown, together with other required financial information, will be included in the Company's filing statement prepared in connection with the Transaction.

Additional information in connection with the Transaction will be provided in subsequent press releases.

About DrawDown Detection Inc.

DrawDown Detection Inc. is a privately-held corporation incorporated on October 26, 2018 under the Business Corporations Act (British Columbia), and is a weapons detection technology company that commercializes intellectual property for use in the public safety market. The Company is in the development stage of a handheld device to detect smokeless gunpowder (the "Gunpowder Detection Sensor"). The Company's business plan is to develop and sell its patented Gunpowder Detection Sensor to law enforcement agencies and critical infrastructure providers, including but not limited to schools, sporting venues, hotels, places of worship and private business markets globally. The Gunpowder Detection Sensor technology is being developed in the United States. DrawDown is widely held and does not have any controlling shareholders.

About Liberty Defense Holdings Ltd.

Liberty Defense Holdings provides security solutions for concealed weapon detection in high volume foot traffic areas and has secured an exclusive license from Massachusetts Institute of Technology (MIT), as well as a technology transfer agreement, for patents related to active 3D radar imaging technology that are packaged into the Hexwave product. The system is designed to provide discrete, modular and scalable protection to provide layered, stand-off detection capability. This is intended to provide a means to proactively counter evolving urban threats. The sensors with active 3D radar imaging and Artificial Intelligence (AI)-enhanced automatic detection are designed to detect metal and non-metal firearms, knives, explosives and other threats. Liberty is committed to protecting communities and preserving peace of mind through superior security detection solutions.

Cautionary Notes about the Transaction

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable, disinterested shareholder approval. The Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in any management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in securities of Liberty should be considered highly speculative.

All information contained in this press release with respect to DrawDown, its business and operations was supplied by DrawDown for inclusion herein. Liberty has not conducted due diligence on the information provided and does not assume any responsibility for the accuracy or completeness of such information.

We seek Safe Harbor.

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