2013-12-12 21:06:29 -
Calgary, Alberta CANADA, December 12, 2013 /FSC/ - Acorn Income Corp. (ACI - CNSX), ("Acorn" or the "Company") announces that its board of directors (the "Board") has unanimously approved to dissolve and liquidate the Company, subject to the approval of the shareholders of Acorn, all in accordance with the Business Corporations Act (Alberta) (the "ABCA"), and any other applicable regulatory and stock exchange requirements.
In connection with the dissolution and liquidation, the Company intends to distribute to its shareholders all available cash, except such cash as is required for paying or making reasonable provision for known and potential liabilities and other obligations of the Company. The Company currently estimates that it will establish a reserve of between $75,000 and $150,000,
which will be used to pay all expenses (including operating expenses up until the dissolution) and other known, non-contingent liabilities, and includes a reasonable provision for the expenses of liquidation and contingent and unknown liabilities. Based on this estimated reserve, the Company currently estimates that the aggregate amount of an initial liquidating distribution to shareholders will be between $0.29 to $0.33 per share, based on 1,940,944 Class A voting shares ("Class A Shares") outstanding as of December 12, 2012.
The amount distributable to shareholders, however, may vary substantially from this estimate based on a number of factors, including the resolution of outstanding known and contingent liabilities, the possible assertion of claims that are currently unknown to the Company, and the costs incurred in calling and holding a shareholders' meeting to approve et al. the dissolution and liquidation of the Company. The Board is not currently aware of any material items that could give rise to unforeseen tax liabilities or other liabilities or costs which would materially reduce the amount of cash available for distribution to shareholders, but there is no assurance that this will remain the case.
Further details regarding the timing of, and amount of funds available for distribution to shareholders upon completion of the dissolution process, and payment of the liabilities of the Company will be provided in a subsequent press release(s).
Until such time as shareholder approval is received, the Company will continue to evaluate other opportunities that have the potential of providing a superior return to its shareholders.
Reasons for the Dissolution
In determining that the liquidation and dissolution is in the best interests of the Company and its shareholders, the Board and management devoted substantial time and effort in identifying and pursuing opportunities to enhance shareholder value; however, that process did not yield a potential transaction which the Board viewed as reasonably likely to provide greater realizable value to its shareholders than the complete dissolution and liquidation of the Company. The Board also considered the difficult economic environment in the junior capital markets, the increasing expense of continuous disclosure obligations and maintaining a stock exchange listing.
Shareholder Approval and Other Regulatory Matters
The Board has called its annual general and special meeting of shareholders for 10:00 a.m. (Calgary time) on February 3, 2014 (the "Meeting"), in Calgary, Alberta, for the purposes of (i) re-appointing auditors, (ii) fixing the number of and electing directors, and (iii) approving the voluntary liquidation and dissolution of the Company in accordance with the ABCA, including the distribution of the net cash assets to the shareholders. The Company's proposed liquidation, dissolution and distribution of net cash assets, must be approved by (i) a special resolution of at least two-thirds of the votes cast by shareholders present in person or by proxy at the Meeting. The Company's annual items of business (fixing the number of and electing directors, and the reappointment of auditors) require the approval by a majority of the votes cast by shareholders present in person or by proxy at the Meeting.
The Company anticipates that the Meeting proxy materials, including the notice of meeting, management information circular (the "Circular") and instrument of proxy, describing the proposed liquidation and dissolution of the Company, together with the annual business items, will be mailed on or about January 7, 2014 to those shareholders of record as of December 30, 2013. Important information about the liquidation and dissolution process will be provided in the Circular, a copy of which will also be available at www.sedar.com after the proxy materials are mailed to the shareholders in accordance with applicable law.
Notwithstanding the receipt of shareholder approval at the Meeting in respect of the voluntary liquidation and dissolution of the Company, the Board will retain the discretion not to proceed if it determines that the liquidation and dissolution is no longer in the best interests of the Company and its shareholders.
Prior to the Company filing final materials in respect of the dissolution and making an final cash distributions, clearance certificates and a dissolution consent must be obtained from the Canada Revenue Agency. The timing for the receipt of such certificates is uncertain and may delay the dissolution and distribution process.
The Class A Shares currently trade on the Canadian National Stock Exchange ("CNSX"). If the requisite shareholder and regulatory approval is received, the Company will take the appropriate steps, following the determination of a record date for those shareholders of the Company eligible to receive the distribution(s) on dissolution, to voluntarily delist from the CNSX.
For further information, please contact Elias Foscolos, Chief Executive Officer and Chief Financial Officer of Acorn Income Corp., Tel: (403) 265-6540, Fax (403) 206-7185, Email: email@example.com
This news release contains forward-looking statements and information ("forward-looking statements") within the meaning of applicable securities laws including statements regarding the preparation and mailing of the Circular, the approval of matters to be presented to shareholders at the Meeting, the liabilities of the Company, the dissolution of the Company and the distribution of funds to shareholders. Although The Company believes that the expectations reflected in its forward-looking statements are reasonable, such statements have been based upon currently available information to the Company. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in forward-looking statements. Risks include, but are not limited to: receipt of all required regulatory and shareholder approvals, changes in tax laws, the ability to collect outstanding receivables in a timely manner, the ability of the Company to effect an orderly wind-up of its operations, the possible delay in implementation of the liquidation and dissolution, the timing and amount of payments to shareholders, unknown liabilities which may be asserted in connection with the liquidation, and the risks associated with the oil and gas service industry. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in more detail in the Company's management's discussion and analysis and other documents available at www.sedar.com. Readers are cautioned to not place undue reliance on forward-looking statements. The statements in this press release are made as of the date of this release, and, except as required by applicable law, The Company does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise.
To view the press release as a PDF file, please click on the following link:
Source: Acorn Income Corp.
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