Stockport Exploration and Sona Nanotech to close RTO




News Release

STOCKPORT EXPLORATION INC. ANNOUNCES PROPOSED ACQUISITION OF SONA NANOTECH LIMITED

Halifax, Nova Scotia, September 18, 2017 – Stockport Exploration Inc. (TSXV: SPT) (“Stockport” or the “Company”) is pleased to announce that it has entered into a letter of intent dated September 15, 2017 relating to the acquisition of Sona Nanotech Limited (“Sona”), a private corporation existing under the laws of Nova Scotia (the “Acquisition”) with its operations in Nova Scotia and its registered office in Halifax, Nova Scotia. This transaction will be effected through an exchange of securities with all of the securityholders of Sona (the “Transaction”).

Overview of Sona

Sona is a nano technology life science firm that has developed two proprietary methods for the manufacture of rod shaped gold nanoparticles. The principal business carried out and intended to be continued by Sona is research and development of its proprietary technology for use in multiplex diagonostic testing platforms that will improve performance over existing tests in the market.
Sona’s gold nanorod particles are CTAB (cetrimonium bromide) free, eliminating the toxicity risks associated with the use of other gold nanorod technologies in medical applications. It is expected that Sona’s gold nano technologies may be adapted for use in applications, as a safe and effective delivery system for multiple medical treatments, pending the approval of various regulatory boards including Health Canada and the FDA.

The Transaction

Pursuant to the terms of the Acquisition, Stockport will acquire all of the issued securities and control of Sona, and in consideration, subject to the acceptance of the TSX Venture Exchange (“TSXV” or the “Exchange), the Company will issue approximately 22,163,282 common shares (post-Consolidation) to the securityholders of Sona, representing approximately 50% of the issued and outstanding common shares of the Company after completion of the Consolidation (as described below) and Private Placement (as described below), on the basis of approximately one (1) post-Consolidation common share of the Company for every 1.5802 common shares of Sona outstanding (the “Sona Shares”) on the date of closing of the Acquisition.

The Company currently has 88,653,128 common shares issued and outstanding, or 113,599,151 common shares on a fully-diluted basis. As a condition of the proposed Transaction, the Company proposes to complete a share consolidation on the basis of four (4) old common shares of Stockport for one (1) new common share of Stockport (the “Consolidation”).

Concurrently with the Acquisition, Sona intends to complete a private placement of up to a maximum of 7 million Sona shares at a price of $0.10 per share, to raise aggregate gross proceeds of up to $700,000 (the “Private Placement”). Finder’s fees may be payable in connection with the Private Placement as permitted under the policies of the Exchange. The net proceeds from the Private Placement will be used by the resulting issuer to fund its business development and for general working capital. Upon completion of the Transaction, the shares issued by Stockport in exchange for the Sona private placement shares will be 4,429,819 post-Consolidation shares, at an effective issue price of $0.158.

In connection with the proposed Acquisition, the Company has engaged Evans & Evans, an independent consulting firm, to review the business of Sona and prepare a valuation report.

Upon completion of the Transaction, it is expected that the resulting issuer will meet the public distribution requirements of an Exchange Tier 2 technology or life sciences issuer. Shareholders of the resulting issuer who will be insiders are expected to comply with any special escrow restrictions as are required to satisfy the Exchange’s minimum listing requirements, as well as to comply with applicable escrow policies of the Exchange. Certain other shareholders of Sona will be subject to the terms of a voluntary pooling agreement for their shares in the resulting issuer. James Megann, the President and Chief Executive Officer and a director of the Company, is also a principal shareholder of Sona. As a result the Transaction is a non-armslength transaction under the policies of the Exchange. No deposit or loan advance has been made to Sona by the Company.

The Company must convene a special meeting of its shareholders for the purpose of obtaining shareholder approval to the Consolidation, Change of Name, and Transaction, in accordance with the policies of the Exchange and applicable securities legislation. Sona must also convene a special meeting of its shareholders for the purpose of obtaining shareholder approval to the Transaction (the “Shareholders’ Approvals”).
The completion of the Transaction will be subject to certain mutual conditions precedent, including:
1. The execution of a definitive agreement (the “Definitive Agreement”);
2. The approval of all matters and documentation in support of the Transaction including and without limitation, the Shareholders’ Approvals;
3. The receipt of all necessary regulatory and third party approvals, including the acceptance of the Exchange, and compliance with all applicable regulatory requirements and conditions in connection with the Transaction;
4. The completion of the Private Placement;
5. The appointment of a qualified sponsor, if required by the Exchange;
6. The confirmation of the representations and warranties of each party to the Definitive Agreement as set out in such agreement;
7. The delivery of standard completion documentation; and
8. Other conditions precedent customary for securities exchange transactions similar to the Transaction.

In addition to the above listed mutual conditions precedent, the completion of the Transaction is also subject to conditions precedent in favour of Sona, including:
1. The completion of a satisfactory due diligence review of the Company, its financial condition, operations, assets and liabilities, by Sona and its professional advisors; and
2. The completion of the Consolidation of the Company.

In addition to the above listed mutual conditions precedent, and conditions precedent in favour of Sona, the completion of the Transaction is also subject to the following additional conditions precedent in favour of the Company:
1. The completion of a satisfactory due diligence review of Sona by the Company and its professional advisors; and
2. The receipt and review of audited financial statements of Sona by the Company.

The conditions precedent in favour of the Company may be waived in whole or in part by the Company and the conditions precedent in favour of Sona may be waived in whole or in part by Sona.

The completion of the Transaction is expected to occur on the day that is the seventh business day following the satisfaction or waiver of the conditions precedent or such other date as mutually agreed to by the Company and Sona, but in any event no later than January 31, 2018. Each of the Company and Sona will bear its own respective costs and expenses associated with the Transaction. The Company intends to apply for a waiver or an exemption from sponsorship requirements; however, there is no assurance that the Company will be able to obtain this exemption.

Overview of Management and the Board of Directors

Management
It is expected that the management of the resulting issuer will consist of Darren Rowles as President and Chief Executive Officer and Rob Randall as Chief Financial Officer and Corporate Secretary. Gerrard Marangoni, a Director of Sona, is a founder and current director of Sona.

Mr. Rowles, President and Chief Executive Officer of Sona, has been active in the high technology industry for the past 14 years, serving as Particle Sysnthesis Group Manager and more recently as Product Manager based in Cardiff, Wales for both nanoparticle technologies and lateralflow technologies and services at BBI Solutions.

Mr. Randall, CPA,CA, Chief Financial Officer and Secretary of Stockport, has served as contract CFO for a number of companies listed on the TSXV over the past six years and has extensive financial experience within the public company environment. He currently serves as CFO for Stockport, Torrent Capital Ltd., and Antler Gold Inc.. Previously, he was the Corporate Controller with Etruscan Resources Inc. and a principal with PricewaterhouseCoopers.

Board of Directors

It is the intention of the Company and Sona to establish and maintain a board of directors with a combination of appropriate skill sets that is compliant with all regulatory and corporate governance requirements, including any applicable independence requirements. Upon completion of the Transaction, the board of the resulting issuer is expected to be reconstituted to comprise of four members nominated from the boards of Sona and Stockport.

Change of Name

The Company proposes to change its name on closing to “Sona Nanotech Inc.” or such other name as is acceptable to the Registrar of Companies and the Exchange.

About Stockport

Stockport was incorporated under the federal laws of Canada and its common shares are listed on the TSX Venture Exchange under the symbol “SPT”. The Company’s business is the exploration for mineral resources. The Company does not currently have any ongoing operations, and its material assets are exploration concessions, cash and marketable securities. It is a post-closing condition of the Acquisition that the current mineral resource property interests and business of Stockport will be liquidated by sale or option in an orderly manner.
In accordance with Exchange policy, the Company’s shares are currently halted from trading and are expected to remain halted until after the Exchange accepts and confirms the completion of the Transaction.

Except for statements of historical fact, all statements in this press release, including, but not limited to, statements regarding future plans, objectives and payments are forward-looking statements that involve various risks and uncertainties.

For More Information

For more information about Stockport, please contact:
James Megann President and Chief Executive Officer Telephone: (902) 442-7192 Email: jmegann@stockportexploration.com

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and disinterested shareholder approval. Where applicable, 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 the 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 the securities of the Company should be considered highly speculative.

The Exchange has in no way passed on the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.