Dynamic Technologies Group Inc. (NEX: DTG.H, OTC:ERILF)
(“
Dynamic”, “
DTGI” or
“
Company”) announces that on June 23, 2023 at 2:00
p.m. it intends to seek approval from the Court of King’s Bench of
Alberta (the “
Court”) under the Companies’
Creditors Arrangement Act (Canada) (the “
CCAA”)
for an approval and reverse vesting order and a sale approval and
vesting order (collectively, the “
Court Order”) to
implement the Transaction (described below) involving Dynamic and
its subsidiaries, Dynamic Attractions Ltd., Dynamic Entertainment
Group Ltd., Dynamic Structures Ltd. and Dynamic Attractions Inc.
(“
Subsidiaries”).
The TransactionDynamic and its
Subsidiaries intend to complete a transaction (the
“Transaction”) pursuant to which, among other
things: (i) a newly formed Canadian subsidiary of Promising Expert
Limited (the “Purchaser”) will acquire: (i) one
(1) new Class “A” Common Share in the capital of Dynamic (the
“DTGI Share”) for a subscription
price of $1.00, and all other issued and outstanding equity
securities in the capital of Dynamic other than the DTGI Share will
be cancelled, resulting in the Purchaser owning 100% of the issued
and outstanding equity securities of Dynamic upon implementation of
the Transaction; (ii) all of the issued and outstanding equity
securities in the capital of Dynamic Structures Ltd.
(“DSL”), other than the equity securities of DSL
held by persons other than Dynamic which will be cancelled for no
consideration, resulting in the Purchaser owning 100% of the issued
and outstanding equity securities of DSL upon implementation of the
Transaction; (iii) all of the issued and outstanding equity
securities in the capital of Dynamic Attractions Ltd.
(“DAL”); and (iv) all of the issued and
outstanding equity securities in the capital of Dynamic
Entertainment Group Ltd. (“DEGL”).
The purchase price payable pursuant to the
transaction shall be: (i) a credit bid of secured claims being a
portion of the debt owed by Dynamic to the Purchaser; (ii) the
set-off and cancelling of a portion of the debt owed by Dynamic to
the Purchaser under the DIP loan agreement, including any accrued
and unpaid interest on the entire DIP loan amount and any costs
incurred by the Purchaser as interim lender; (iii) the cash payment
of certain priority payables and wind-down costs; (iv) the
assumption of certain retained liabilities, including the principal
amount, plus accrued interest thereon, that is owed to High Express
Holdings Limited, as lender, by DEGL; plus (v) certain other
retained liabilities enumerated in the Transaction agreement which
will continue to be liabilities of Dynamic and its Subsidiaries
following consummation of the Transaction. Excluded liabilities and
excluded assets of the Dynamic and its Subsidiaries will be vested
out of Dynamic and its Subsidiaries and will be assumed and taken
up by another entity referred to as a residual company
(“ResidualCo”) pursuant to the Court Order. All
claims against Dynamic and its Subsidiaries that are not satisfied
through the Transaction will now be claims against ResidualCo and
will have the same priority against any of the excluded assets that
are transferred into ResidualCo.
Dynamic will be seeking the Court’s authority to
complete the Transaction on the basis that the Court Order shall be
the sole authorization required by Dynamic and its Subsidiaries to
proceed with the Transaction. The proposed Court Order provides
that no director or shareholder approval shall be required and,
other than as described below, no authorization, approval or other
action by or notice of filing with any governmental authority or
regulatory body exercising jurisdiction in respect of Dynamic and
its Subsidiaries is required for the completion of the Transaction
by Dynamic and its Subsidiaries. In addition, the proposed Court
Order authorizes the implementation of the steps contemplated as
part of the Transaction without the requirement for Dynamic to
comply with: (i) Multilateral Instrument 61-101 – Protection of
Minority Security Holders In Special Transactions; (ii) National
Policy 11-207 – Failure-to-File Cease Trade Orders; or (iii) the
cease trade order issued by the Executive Director of the Alberta
Securities Commission, which evidences the decision of the
regulator or securities regulatory authority in Ontario, with
respect to Dynamic dated May 9, 2023 (the “Cease Trade
Order”). The Court Order is also seeking a direction that
upon completion of the Transaction that the Alberta Securities
Commission and the Ontario Securities Commission shall forthwith
grant an order (the “Regulatory Order”) under the
securities legislation of those jurisdictions that Dynamic has
ceased to be a reporting issuer in all jurisdictions in Canada in
which it is a reporting issuer and, concurrently with the
Regulatory Order, full revocation of the Cease Trade Order without
further action by Dynamic.
Subject to the granting of the Court Order, no
action is required for the existing holders of the equity
securities of Dynamic or DSL for the completion of the Transaction.
As described above, as part of the Transaction, all of the issued
and outstanding equity securities in the capital of Dynamic, other
than the DTGI Share, and all of the issued and outstanding equity
securities in the capital of DSL will be disposed of by the holders
and cancelled for no consideration, which may result in tax filing
obligations for certain holders that are non-residents of Canada.
Holders of Dynamic or DSL equity securities who are non-residents
of Canada should consult with their tax advisors.
The proposed Court Order also provides for
release in favour of (i) the present and former directors,
officers, employees, legal counsel and advisors of Dynamic and its
Subsidiaries; (ii) FTI Consulting Canada Inc., the court-appointed
monitor (“Monitor”) and its legal counsel; and
(iii) the Purchaser and its legal counsel, in respect of any claims
relating to any act, omission, transaction, dealing or other
occurrence in connection with the CCAA proceedings, the Transaction
or completed pursuant to the Court Order, other than those claims
that are not permitted to be released pursuant to section 5.1(2) of
the CCAA.
The consummation of the Transaction is subject
to satisfaction or waiver of a number of conditions precedent set
forth in the Transaction agreement including, among other things,
the Court granting the Court Order and the recognition of such
Court Order by the U.S. Bankruptcy Court.
UpdateOn June 2, 2023, the
Court also approved (i) the sale of certain redundant equipment,
assets and inventory to Infinity Asset Solutions Inc.
(“Infinity”) pursuant to an asset purchase
agreement between DAL and Infinity dated May 17, 2023; (ii) the
liquidation and sale of certain redundant equipment, assets and
inventory by Infinity pursuant to an auction services agreement
between DAL and Infinity dated May 17, 2023; and (iii) a sale of
certain equipment, assets and inventory to Universal pursuant to
certain transaction documents between Universal and DAL.
MLT Aikins LLP is acting as legal counsel to
Dynamic and its Subsidiaries in connection with the CCAA
proceedings and the proposed Transaction.
About Dynamic Technologies Group Inc.
Dynamic is a world leader in the design
engineering, production, and commissioning of iconic, media-based
attractions and ride systems for the global theme park industry and
popular tourist destinations. Dynamic leverages its world class,
media-based attraction products and attraction development
capability on a co-venture ownership basis. The Company also
applies its engineering integration and problem-solving skills on
special projects in diversified industries such as alternative
energy and large optical telescopes and enclosures. Dynamic’s
common shares are listed on the NEX Board of the TSX Venture
Exchange under the symbol DTG. For more information about the
Company, visit www.dynamictechgroup.com or contact:
Guy Nelson |
Allan Francis |
Executive Chair & CEO |
Vice President – Corporate
Affairs and Administration |
Phone: (416) 949-7227 |
Phone: (204) 589-9301 |
Email:
gnelson@dynamictechgroup.com |
Email:
afrancis@dynamictechgroup.com |
Reader AdvisoryThis news
release contains forward-looking statements, within the meaning of
applicable securities legislation, concerning Dynamic’s business
and affairs. In certain cases, forward-looking statements can be
identified by the use of words such as ‘‘plans’’, ‘‘expects’’ or
‘‘does not expect’’, ‘‘budget’’, “booked”, ‘‘scheduled’’,
“positions”, ‘‘estimates’’, “forecasts’’, ‘‘intends’’,
‘‘anticipates’’, “believes” or variations of such words and phrases
or state that certain actions, events or results ‘‘may’’, “may be”,
‘‘could’’, “should”, ‘‘would’’, ‘‘might’’ or ‘‘will’’, ‘‘occur’’ or
‘‘be achieved’’. Such statements include statements with respect
to: (i) the anticipated granting of the Court Order by the Court;
(ii) the intention of Dynamic and its Subsidiaries to complete the
Transaction; (iii) the expectation that Court Order shall be the
sole authorization required by Dynamic and its Subsidiaries to
proceed with the Transaction; (iv) the expectation that the
proposed Court Order will provide that no director or shareholder
approval shall be required and no authorization, approval or other
action by or notice of filing with any governmental authority or
regulatory body exercising jurisdiction in respect of Dynamic and
its Subsidiaries is required for the completion of the Transaction
by Dynamic and its Subsidiaries; (v) the expectation that all of
the issued and outstanding equity securities in the capital of
Dynamic, other than the DTGI Share, and all of the issued and
outstanding equity securities in the capital of DSL will be
disposed of by the holders and cancelled for no consideration; and
(vi) the expectation that the Alberta Securities Commission and the
Ontario Securities Commission shall forthwith grant the Regulatory
Order under the securities legislation of those jurisdictions
that Dynamic has ceased to be a reporting issuer in all
jurisdictions in Canada in which it is a reporting issuer and,
concurrently with the Regulatory Order, full revocation of the
Cease Trade Order without further action by Dynamic. These
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
statements. Although Dynamic believes these statements to be
reasonable, no assurance can be given that these expectations will
prove to be correct and such forward-looking statements included in
this news release should not be unduly relied upon. Actual results
could differ materially from those anticipated in these
forward-looking statements as a result of prevailing economic
conditions, and other factors, many of which are beyond the control
of the Company. The forward-looking statements contained in this
news release represent Dynamic’s expectations as of the date
hereof, and are subject to change after such date. The Company
disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise, except as may be required by applicable
securities regulations.
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.
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