TORONTO, April 4 /CNW/ - ACADEMY CAPITAL CORP. (TSXV: ACY.P) ("Academy"), a Capital Pool Company, announces that, further to its press release dated March 8, 2005, it has executed a binding Share Exchange Agreement (the "Agreement") with Diversified Racing Investments Inc. ("Diversified") whereby Academy will acquire all of the issued and outstanding securities of Diversified. The Agreement formalizes the letter of intent executed on September 9, 2004 (as amended on December 30, 2004 and March 7, 2005, 2005). The transaction is proposed to be Academy's qualifying transaction (the "Qualifying Transaction") pursuant to the policies of the TSX Venture Exchange (the "Exchange"). The Agreement has also been executed by most of the security holders of Diversified, the balance of which should be forthcoming in short order. Under the Agreement, Academy is also acquiring all of the shares of 1598049 Ontario Inc. and 2038072 Ontario Limited, both of which are holding companies with their only assets being shares of Diversified. In this regard, Academy will issue to the shareholders of these companies a number of shares equal to two times the number of Diversified shares held by said companies.
As previously disclosed, Academy will issue two (2) Academy common shares for each share of Diversified tendered. In addition, Academy will issue replacement options and warrants (on the same 2:1 exchange ratio as for Diversified's common shares) to all holders of Diversified's options and warrants who surrender such securities to Academy pursuant to the Agreement, and will issue convertible notes in exchange for the cancellation of convertible notes issued by Diversified. The replacement options, warrants and convertible notes issued by Academy will be on the same terms and conditions as Diversified's existing options, warrants and notes.
Diversified currently has 33,114,513 common shares issued and outstanding. Academy expects to issue approximately 73,500,000 common shares at a deemed price of $0.175 per share, and replacement options, warrants and convertible debt which will provide holders with rights to acquire approximately an additional 26,000,000 common shares of Academy. Prior to closing, Diversified may issue additional securities provided that the holders thereof agree to be bound by the terms of the Agreement. For further information on Diversified and the proposed transaction, please see our earlier press releases dated December 14, 2004, January 31, 2005, and March 7, 2005, respectively.
At present, Academy has 9,794,934 shares issued and outstanding, and a total of 10,774,428 shares outstanding on a fully diluted basis. Academy does not anticipate issuing any additional shares prior to the closing of the Qualifying Transaction.
Academy and Diversified are preparing an Initial Filing Statement for submission to, and review by, the Exchange.
Instant Racing
Diversified has signed an agreement with Racetech LLC for the exclusive Canadian license for Instant Racing, a patented electronic horseracing and pari-mutuel wagering system.
Instant Racing is a patented product that has had tremendous success introducing horseracing to non-core customers in the United States. Instant Racing enables a pari-mutuel wager on historical horse races in an electronic process that emulates the very successful slot machine experience.
Instant Racing utilizes enhanced pari-mutuel wagering terminals to enrich customer interaction by reducing the number of wagering options and simplifying the transaction process at quicker intervals. These terminals use an inviting interface with sound and lighting effects to create a thrilling entertainment experience.
Under the terms of the agreement, Diversified has been granted an exclusive license to exploit Instant Racing in Canada for a term of five years with such term subject to two consecutive five-year renewal terms. The license granted to Diversified includes the right to implement any improvements, developments, additions, derivative works and upgrades that are made to Instant Racing. Under the terms of the agreement, Diversified must obtain regulatory approval to deploy Instant Racing in a minimum of one Canadian jurisdiction. Diversified will pay a royalty to Racetech on revenue received from Instant Racing in Canada and has been granted the license in consideration for efforts to acquire licensing and said royalty payments without any up-front licensing fee.
Mr. Graham Simmonds, President and CEO of Diversified stated, "This is a tremendous opportunity for Diversified and we are very pleased to be able to introduce this revolutionary pari-mutuel product to the Canadian horseracing industry. Instant Racing has enjoyed phenomenal success in the United States benefiting both the racetracks and the industry participants. In addition to the direct financial benefits, the product has also been successful in introducing a new audience to the sport and a new customer base to the racetracks."
Mr. Louis Cella, Vice President of Racetech stated, "The expansion of Instant Racing into Canada is a very significant development for our product and we are eager to begin working with Diversified to introduce Instant Racing to the Canadian horseracing industry. Instant Racing continues to have record setting growth in the United States, and recently at Oaklawn Park - our home track in Arkansas - the 185 machines produced our first $1-million day."
About Diversified
Founded in 2003, Diversified has made strategic investments within the equine industry. Diversified has an agreement with the Belleville Agricultural Society to build a facility to relocate the Quinte Exhibition and Raceway in Belleville and is also pursuing a standardbred racing license for the development of a new track and horse park in Brandon, Manitoba.
Other Information
Research Capital Corp., subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the Qualifying Transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of its completion.
Completion of the Qualifying Transaction is subject to a number of conditions including, but not limited to, the satisfaction of the minimum listing requirements of the Exchange and Exchange approval of the Qualifying Transaction. There can be no assurance that the Qualifying Transaction will be completed as proposed, or at all. The Qualifying Transaction will be an arms' length transaction.
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 Qualifying Transaction 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 TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this release.
%SEDAR: 00020655E
http://www.newswire.ca/en/releases/orgDisplay.cgi?okey=21358
For further information please contact:
Mr. Graham Simmonds,
President, Baymount Corporation,
(416) 979-2881 x223, (416) 979-6708 (fax), graham@baymountcorp.com
Mr. Yoel Altman,
President, Academy Capital Corp.,
(416) 625-1015, (416) 322-5607 (fax), yaltman@sympatico.ca |
