News Release
Gstaad Capital Corp. Announces Proposed Qualifying Transaction with Archer CleanTech Inc.
Not for Dissemination in the U.S. or through U.S. News Wires
Vancouver, British Columbia (July 26th , 2017) – Gstaad Capital Corp. (“Gstaad”) (GTD.H), a capital pool company, is pleased to announce that it has entered into a Letter of Intent dated July 24th, 2017 (“LOI”) with Archer CleanTech Inc. (“Archer”), a corporation incorporated under the Business Corporations Act (British Columbia) on May 11, 2015, pursuant to which Gstaad will directly or indirectly acquire all of the issued and outstanding securities of Archer (the “Business Combination”) in exchange for equivalent securities of Gstaad on a one for one basis (the “Exchange Ratio”).
The Business Combination will be structured as a share exchange, amalgamation or plan of arrangement and is intended to constitute Gstaad’s Qualifying Transaction under the policies of the TSX Venture Exchange (“TSXV”). The Business Combination will not be a Non-Arm’s Length Qualifying Transaction (as that term is defined under the TSXV policies) and as such, unless the agreed-upon structure to implement the Business Combination otherwise requires, it is not expected that approval of the Gstaad shareholders will be required. The Business Combination is subject to TSXV approval. A finder’s fee may be payable subject to TSX Venture guidelines.
Business of Archer
Archer is committed to providing Cleantech energy supply solutions that generate the potential for residual revenue streams, corporate earnings and achieve reduced carbon outputs. These may include a combination of wind, solar, and hydro power generation projects coupled with power storage. Archer’s business plan will facilitate alternative electrical energy generation, through the leasing of land suitable for wind, solar, biomass and hydro, to project development feasibility and pre finance. Post feasibility, Archer may engage in financing project development and build out, disposition, or joint venturing with strategic partners. To date Archer has raised private financing of approximately $2.7 million and has spent $1.7 million on business development initiatives.
Business Development to date includes:
California, USA
The proposed Qualifying transaction application to the TSXV will primarily be based on the California renewable energy initiative.
• Archer has executed a Letter of Intent with a US based tribal council, signed December 15, 2016, to exclusively model and complete feasibility to develop up to 90 MW of wind and solar energy
on these tribal lands. In addition, Archer is exploring the economic viability of setting up a proprietary utility in the same jurisdiction and has funded the legal and legislative assessment in California. Archer’s lawyers have provided the strategic and administrative framework to develop the proprietary utility within the current California legislation.
• Archer also had a services agreement with a California based power engineering firm which has developed the prefeasibility and regional development plan for up to 400 MW of wind, solar and storage projects. The first phase of the development includes a 40 MW solar farm and a 50 MW wind farm with a tribal partner. Archer has spent $200,000 in third party costs to advance these initiatives which are transitioning into the feasibility assessment phase.
Additional long term opportunities
Jamaica
• Archer through its 100% wholly owned subsidiary has signed a Memorandum of Understanding (MOU) with an international government owned industrial business, within a robust electrical power pricing environment, to pursue and develop multiple renewable energy projects to project feasibility, on a Government owned site. Archer’s client has a mandate of owning and developing government land for industrial and economic growth. Archer’s initiative will be to develop a full feasibility study, confirming solar capacity, transmission grid availability and economic modelling of an in country renewable power utility on the largest target site, to supply alternative power to 17 adjacent industrial companies, and may also develop subject to feasibility, a small 3- 5 MW utility-scale project on these lands.
• Advanced negotiations are also in progress with a major in country University to provide a similar renewable energy solution to meet the University’s energy needs.
Alberta, Canada
• Archer has secured an exclusive development Memorandum of Understanding and has initiated preliminary work towards the development of a 40 MW solar farm in partnership with an Alberta-based First Nation.
Terms of the Agreement
The Qualifying Transaction will be implemented pursuant to a Business Combination which contemplates the acquisition of all of Archer’s common shares, directly or indirectly, by Gstaad, at the Exchange Ratio. The parties have agreed to negotiate exclusively with each other until December 31st, 2017 to pursue the Business Combination and have also agreed to negotiate in good faith and use reasonable commercial efforts to enter into a definitive agreement by October 31st, 2017.
Capitalization
As of the date hereof, Gstaad has 4,083,334 common shares issued and outstanding. No Gstaad options or warrants are currently outstanding. Archer currently has 27,862,460 common shares issued and outstanding.
The Resulting Issuer
On the closing of the Business Combination, Gstaad will implement a name change, subject to regulatory approval, to Archer CleanTech Inc. It is anticipated that the resulting issuer following the
Business Combination will be classified as a “Tier 2” industrial issuer.
Management and Directors of the Resulting Issuer
Paul F. Blaha – Age 50, CEO
Mr. Blaha is a proven business executive with more than 27 years of experience closing acquisitions and major power developments in Canada, United Kingdom, South Africa, Australia, and the United States. Paul has extensive power and utility sector experience developing gas, solar, wind, hydro, biomass, and major power transmission projects. Beginning in the late 1990s, Paul helped grow a small early stage independent power producer (IPP) based in Alberta, Canada, into a company with $3 billion in assets over 10 years. He has extensive commercial power and renewable energy experience in all facets of project development including: structuring, power purchase agreements (PPAs), financial modelling, project finance, power marketing, engineering, and construction. From his progressive executive management roles, Paul has demonstrated success in strategic planning, business development, marketing, finance, operations, and organizational development.
Paul also has a successful track record of developing partnerships with First Nations throughout Canada, and he now serves on the board of an Alberta-based First Nations development company with diverse renewable energy and power transmission interests in Alberta. Mr. Blaha graduated with a BASc (Honours) in chemical engineering from the University of Toronto, Canada, in 1989 and later completed an MBA from the University of Western Ontario, London, Canada.
Ron W. Loudoun – Age 53, President, Director
Ron Loudoun is a successful business strategist with more than 30 years’ experience. He possesses an excellent background in new business development, multi-site operations, performance/quality improvement, administration and long-term planning. Distinguished as a meticulous, methodical, handson leader, Ron has been the catalyst for the advancement of Archer CleanTech. Most recently, Ron’s skill set includes being a principal in and directly involved with the start-up and administration of a number of public companies. He has maintained a longstanding interest in both communicating the need for and sourcing new methods for conscious minded development and growth. For the last four years he has been involved in the clean-tech industry and held the position as CEO at Archer. Mr. Loudoun graduated with a Diploma of Administrative Management from BCIT in 1983 with an elective in Real Estate.
Paul Larkin – Age 67, Director
Since 1983, Mr. Larkin has also been the President of the New Dawn Group, an investment and financial consulting firm located in Vancouver, British Columbia, New Dawn is primarily involved in corporate finance, merchant banking and administrative management of public companies. Mr. Larkin was an investment banker before founding New Dawn in 1983.
Mr. Larkin has been a Director and/or Officer of various TSX, NYSE, and TSX Venture Exchange listed companies, since forming New Dawn and is currently a Founding Partner, Director and Chairman of the Audit committee of US. Geothermal Inc. (HTM: NYSE MKT), a leading renewable energy company that is operating and developing geothermal power projects in Oregon, Nevada, Idaho, California and Guatemala.
David L. Ashby – Age 68, Vice President Business Development, Director
Mr. Ashby has over 40 years of business experience as the owner and operator of his own companies and partnerships. After completing a Bachelor of Arts Degree from the University of Saskatchewan in 1970, he co-founded a Non Destructive Testing (NDT) company that quickly became the largest pipeline x-ray company in Canada with an international presence at that time. He spent over 20 years in the oil and gas industry providing non-destructive testing and general pipeline inspection for Trans Canada Pipeline, Enbridge, Nova Corporation (AGTL), West Coast Transmission and numerous others. He provided consulting service sourcing millions of dollars in federal and provincial grants, loans and subsidies for a broad range of companies in sales, service and high tech industries. He has extensive experience in marketing, investor relations and funding for early stage companies.
Peter Sherba – Age 52, Director
Peter Sherba was President of Westcana Electric Inc. and Lumisave Industrial Technologies. His new electrical company, Platinum Power Contracting Ltd. operates in Western Canada specializing in industrial and clean energy projects. Mr. Sherba has a proven track record in contract procurement, project planning, execution, and finalization of projects and is actively involved in the growth and development of several CleanTech companies. Mr. Sherba graduated from Scottsdale Community College in 1983 with a Business Transfer Degree.
Sponsorship
Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless an exemption from the sponsorship requirement is available. Gstaad intends to apply for a sponsorship exemption.
Additional information will be made available in a further press release(s) as details are confirmed.
Trading Halt
In accordance with TSX policies Gstaad’s common shares are currently halted and Gstaad anticipates they will remain halted until the documentation required by the TSXV for the proposed Business Combination can be provided to the TSXV.
The transaction terms outlined in the LOIs and MOUs are non-binding on the parties and are expected to be superseded by a definitive agreement (the “Definitive Agreement”) to be signed between the parties. The transaction is subject to regulatory approval, including the approval of the TSXV and standard closing conditions, including the approval of the Definitive Agreement by the directors of Gstaad and Archer, and completion of due diligence investigations to the satisfaction of each of Gstaad and the Archer. The Qualifying Transaction contemplates the completion of a concurrent financing of $2,000,000 on terms to be determined. The legal structure for the Qualifying transaction will be determined after the parties have considered all relevant tax, securities law, and accounting considerations. However, there is no assurance that the Definitive Agreement will be successfully negotiated or entered into and there is no assurance that the financing as described above will be completed. Completion of the Business Combination is subject to a number of conditions, including but not limited to, TSXV acceptance and, if applicable pursuant to TSXV requirements, majority of the minority approval of the shareholders of Gstaad. Where applicable, the Business Combination cannot close until the required shareholder approval is obtained. There can be no assurance that the Business Combination will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Business Combination, any information released or received with respect to the Business Combination may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSXV has in no way passed upon the merits of the proposed Business Combination and has neither approved nor disapproved the contents of this press release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
For further information please contact, Paul Larkin, President & Chief Executive Officer, Gstaad Capital Corp. at 604 687 7767, plarkin@pro.net
On behalf of Gstaad Capital Corp.
Paul Larkin
President and Chief Executive Officer
Neither the 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.
