Alya Ventures Ltd. (TSX VENTURE:ALY) -
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
Alya Ventures Ltd. ("Alya"), a capital pool company pursuant to Policy 2.4 of
the TSX Venture Exchange (the "TSX-V"), is pleased to announce that on November
18, 2011, it has entered into a definitive agreement with Consumer Impulse,
Inc., doing business as "Snipp", a corporation existing under the laws of
Delaware ("Snipp"), and its shareholders (the "Snipp Shareholders"), whereby
through a series of steps, Alya will acquire all of the issued and outstanding
shares of Snipp (the "Snipp Shares") in exchange for the issuance of 22,742,308
Alya common shares (each, an "Alya Share") which will constitute 67.5% of the
total issued and outstanding common shares of Alya, on a non-diluted basis,
following completion of the qualifying transaction (the "Transaction"). Alya
will also issue 6,188,692 Alya Warrants to the Snipp Shareholders to purchase
6,188,692 Alya Shares at an exercise price of $0.13 per Alya Share for a period
of five years from Closing. Upon Closing, but before completion of the private
placement financing described below, the Snipp Shareholders, collectively, will
be the legal and beneficial owners of 70% of the total issued and outstanding
Alya Shares on a fully-diluted basis. Moreover, concurrent with Closing, the
name of Alya will be changed to Snipp Interactive Inc.
Private Placement Financing
As a condition to closing of the Transaction, Alya intends to complete a private
placement (the "Financing") of 10,000,000 units (each, a "Unit") with a
subscription price of $0.15 per Unit, for gross proceeds of $1,500,000. All or
part of the Financing will be sold on a brokered basis. Each Unit will consist
of one Alya common share and one warrant entitling the holder to purchase one
Alya common share at an exercise price of $0.22 per share within one year of
closing of the Financing and an exercise price of $0.27 per share within two
years of closing of the Financing, with such warrants expiring two years after
the closing of the Financing. It is intended that the net proceeds from the
Financing will be used to strengthen Snipp's sales force, to continue to expand
its product and service offerings, to service its growing client base and for
working capital purposes. All of the subscribers to the Financing will be
advised of the Transaction.
Alya anticipates paying Union Securities Ltd. a finder's fee equal to 7% of
gross proceeds and issuing warrants to Union Securities Ltd. to purchase 10% of
the securities sold in the Financing, exercisable on the same terms as the
warrants described above.
About Snipp
Snipp provides print publishers, advertising agencies and corporate/consumer
brands with a full suite of mobile marketing services in the US and Canada, and
generates revenue by designing, constructing, implementing and managing these
mobile marketing services for its customers.
Overview of the Business
Snipp's business is predicated on the belief that the mobile phone can act as a
bridge between the offline and online worlds and a complement to traditional
media marketing. Snipp focuses on niche-centered or "under-the-line" marketing
techniques that give its clients the ability to tailor their messaging in a
personal manner to a targeted audience. Advertising in traditional marketing
(here defined as all offline marketing, including print, TV, radio and
out-of-home marketing media that consumers are exposed to while not in their
homes), as well as event marketing and public relations, typically suffer from
three main drawbacks:
-- Not interactive: Typically, such marketing tends to be "broadcast"
marketing, i.e. one-to-many, and is not interactive.
-- Ineffectual measurement: Traditional marketing techniques cannot
accurately measure the information they are collecting, in terms of what
traditional media a consumer is actually consuming.
-- Insufficient data: Traditional marketing does not generate sufficient
data on the specific details needed to determine who consumers are and
what they are looking for.
By using the mobile phone as a complement to traditional marketing efforts,
marketers can create advertising that is interactive, can better measure the
results and can generate valuable data about the consumer.
With the rapid penetration of smartphones in North America, the mobile phone is
increasingly being used as a device for the direct consumption of content, be it
mobile web, mobile apps, videos or music - and is being viewed by marketers as
an increasingly attractive platform for their marketing efforts. Snipp has been
providing its clients (primarily brands, advertising agencies and publishers in
North America) with various mobile marketing related services for over three
years.
Snipp's "Mobilize Me" technology platform offers a wide range of mobile
marketing features. The platform provides mobile-based interactions including:
-- Short Message System-based response ("SMS"): a form of text messaging
communication;
-- Quick Response ("QR") Codes and other 2d barcodes: industry standard
barcoding where any kind of data can be encoded;
-- email;
-- Multimedia Messaging Service ("MMS"): text messaging with pictures or
audio; and
-- Snapp: Snipp's image recognition system that allows any image to become
a "tag" that advertisers can use as a call to action. Mobile phone users
can take a photo of a tag and, through the platform, Snipp can set up a
wide range of interactive mobile-based marketing campaigns.
Examples of the types of campaigns that Snipp can enable through its platform
include combinations of:
-- sweepstakes and contests;
-- sampling and giveaways;
-- access to mobile videos (streaming or via MMS);
-- distribution of media content, including ringtones, wallpapers and other
forms of music and video;
-- mobile webpages or clusters of webpages created based on a set of
standardized templates, including collection of basic address
information, product brochures and slideshows;
-- audio call-backs (phone calls that play back pre-recorded audio
messages);
-- text-based alerts and reminders;
-- couponing;
-- geo-location based services (such as store locator, or coupled with
couponing to provide location-based coupons); and
-- social media functionality.
Snipp owns the short-code 76477 (S-N-I-P-P) which has been provisioned for text
messaging with various North American carriers who collectively account for over
98% of the total mobile phone population in Canada and the United States.
Additionally, Snipp has MMS provisioned on the short code with the four major
U.S. carriers, being AT&T, Verizon, Sprint and T-Mobile. The technology platform
is flexible, allowing customers to create differentiated and conditional
responses based on a variety of different factors including geography, area code
and carrier. As a result, advertisers may choose to provide different content
based on any of the interactions described above. Additionally, Snipp offers
marketers "age-gating functionality" and other controls to fine-tune their
marketing efforts to their target audiences.
In the three years that Snipp has been operating, it has completed over two
hundred campaigns for a wide variety of clients including large publishers such
as ESPN, Time Inc. (People, People Stylewatch), Meredith (including all of its
major titles: Better Homes and Gardens, Ladies Home Journal, Parents, Fitness,
Family Circle, Siempre Mujer), Conde Nast (Parade, Golf, GQ, Self, Allure) and
several advertising agencies including Ammirati, Marshall Advertising and 360i.
Through its clients, as well as directly, Snipp has been engaged in campaigns
for some of the largest brands in the world, including Nike, Ford, Oreo, MTV,
Yamaha, GMC, Samsung, Levis, Reebok, Sprint, Powerade and Wendy's.
In general, typical users and beneficiaries of Snipp's technology include:
-- content owners and publishers who bring a mobile channel to their
content;
-- advertisers, who receive higher conversion rates due to the targeted
nature of their advertisements and interactivity of their message;
-- e-commerce providers, who are able to deliver targeted product
promotions and take users directly to check out from a physical medium;
and
-- consumers who can tag or bookmark content in the real world in order to
share and access information across their social networks.
Snipp Ownership
Snipp is a Delaware-based corporation. The company was incorporated on March 30,
2007 and is owned by the following parties:
-- Atul Sabharwal (Maryland): 39.0%
-- Ritesh Bhavnani (Maryland): 39.0%
-- Wilson A. Bell (Virginia): 12.0%
-- Jonathan Bell (Virginia): less than 1.0%
-- Dave Colburn (Virginia): 1.0%
-- Walter Giancola (Virginia): less than 1.0%
-- Rahoul Roy (New York): 5.0%
-- Anthony Durkacz (Ontario): 3.5%
Directors and Officers of Resulting Issuer
On Closing, the existing board of directors of Alya will be adjusted so that it
is composed of four members, namely Atul Sabharwal (new), Ritesh Bhavnani (new),
Bruce Cousins (continuing) and subject to the approval of the TSX-V, one
additional independent director. Alya and Snipp are currently jointly searching
for the independent director. Mr. Erik Hallstrom will be appointed Chief
Executive Officer.
The following individuals are expected to be Insiders of the Resulting Issuer,
as defined in Policy 1.1 of the TSX-V:
Erik Hallstrom
Mr. Hallstrom (age 43) is currently an independent advisor and investor, and has
over 15 years' experience creating and growing technology and services
companies. He previously served in a partner-level role as U.S. co-head and
Executive Vice President of Inzenka Inc., a boutique growth consulting firm from
November 2009 to August 2010. Prior to his involvement at Inzenka, he was the
Chief Operating Officer of Lightbridge Corporation (formerly Thorium Power
Ltd.), a publicly listed international energy technology and advisory company,
from February 2007 to November 2008. From May 2003 to December 2006, Mr.
Hallstrom held various executive positions at WorldSpace Corporation, an
international media and telecommunications firm, including as Senior Vice
President, Strategy & Business Development. He began his business career as a
management consultant with the Boston Consulting Group in North America and
Europe between August 1994 and March 2002, where he led strategy development and
operations improvement initiatives at global corporations and innovative
emerging companies, and was a member of its Technology & Communications
practice. Mr. Hallstrom holds a Master of Science degree from the Royal
Institute of Technology in Sweden, a Master of Science degree from Stockholm
School of Economics in Sweden, and a Master of Business Administration degree
(with Distinction) from INSEAD in France.
Atul Sabharwal
Mr. Sabharwal (age 36) is currently a director and one of the founders of Snipp
and has over 15 years experience in the telecommunications and digital
media/mobile space industry. Since 2006 he has served as the Executive Director
of the ACME Group, a large telecommunications and energy infrastructure company
with interests in South Asia and Africa. Between 2009 and 2011 he served as a
board member of eSolar Inc., a Pasadena, CA-based company that is backed by
Idealab, Google.org, General Electric Inc., Oak Investment Partners and the
Quercus Trust. Mr. Sabharwal recently stepped down as a director after a
successful investment by General Electric Inc. in the company, but continues to
serve as a board observer. Mr. Sabharwal also is the founder of the Finalysis
Group, a consulting company focused on helping growth businesses with a South
Asian component. Between 2005 and 2007 he founded and ran a successful venture
that provided remote services such as call center management and lead generation
to corporate clients. His earlier roles also include positions at AOL, IBM
Business Services (previously PWC Consulting), the Boston Consulting Group and
Star TV, a subsidiary of News Corporation. Mr. Sabharwal has a Bachelor of
Science degree in Economics (Hons. First Class) from St. Xaviers College,
Calcutta, India and a Master of Business Administration degree from the
Australian Graduate School of Management, Sydney, Australia and the Wharton
School, University of Pennsylvania.
Ritesh Bhavnani
Mr. Bhavnani (age 36) is currently a director and one of the founders of Snipp.
He is a 10 year veteran of the digital media/mobile space industry. Mr. Bhavnani
founded Snipp in April 2007 and has been working at Snipp full-time since May
2010. From 2005 to May 2010, Mr. Bhavnani was employed at McKinsey & Company in
their Media, Technology and Telecommunications practices, where he advised
Fortune 500 companies, including large media conglomerates and cable providers,
on issues related to digital convergence, strategy and online growth. In April
2000, Mr. Bhavnani founded Unsurface Inc., a consumer-facing digital media
distribution service that was funded and eventually acquired by Sony Music
Corporation in September 2001. From 2001 to 2003, Mr. Bhavnani was the General
Manager at Precicompo Pvt Ltd. in India, an automobile component manufacturing
business. Mr. Bhavnani has a Bachelor of Science degree from Stanford
University, and a Master of Business Administration degree (with distinction)
from INSEAD in France and Singapore.
Bruce Cousins
Mr. Cousins (age 50) is currently a director and Chief Executive Officer of
Carmanah Technologies Corporation. He was previously Vice President and Chief
Financial Officer of Ballard Power Systems Inc. from April 2009 to July 2010.
Prior to working at Ballard, Mr. Cousins was Vice President and Chief Financial
Officer of Xantrex Technologies Inc. from June to September 2008 and Executive
Vice President and Chief Financial Officer of Aspreva Pharmaceuticals
Corporation from February 2004 to June 2008. Mr. Cousins began his career in the
pharmaceutical industry with Johnson & Johnson, working with various operating
franchises for approximately 14 years. Mr. Cousins is a Chartered Accountant and
articled with Deloitte & Touche in Toronto, Canada. Mr. Cousins holds an Honours
Bachelor of Commerce from McMaster University.
It is anticipated that two shareholders of the resulting issuer, Atul Sabharwal
and Ritesh Bhavnani, will hold greater than 10% of the issued and outstanding
Alya Shares following Closing.
Selection Financial Information Concerning Snipp
The table below sets out certain selected financial information regarding Snipp
for the periods indicated. The selected financial information has been prepared
in accordance with International Financial Reporting Standards and remains
subject to the completion of a final audit.
Nine months ended Year Ended Year Ended
September 30, 2011 December 31, 2010 December 31, 2009
(unaudited) (unaudited) (unaudited)
US$ US$ US$
Revenue 268,142 290,771 140,983
Gross Profit 268,142 290,771 140,983
Income (Loss)
Before Tax 38,642 (28,198) 63,554
Total Comprehensive
Income (Loss) for
the Period 38,203 (28,051) 63,453
Current Assets 99,481 55,253 120,406
Non-Current Assets Nil Nil Nil
Total Assets 99,481 55,253 120,406
Current Liabilities 82,256 76,231 113,333
Non-Current
Liabilities Nil Nil Nil
Total Liabilities 82,256 76,231 113,333
Total Equity 17,225 (20,978) 7,073
Growth Strategy
Going forward, Snipp is expected to increase revenues through two major efforts:
-- Expanding sales efforts targeting agencies, brands and publishing
clients: Snipp aims to increase its sales force and expand its capacity
to service clients where the company has successfully delivered its
services in the past. It will also continue to push up the marketing
value chain and increasingly target agencies and brands directly. Thus
far Snipp has, in particular, established very strong relationships with
publishing clients. However, many campaigns are controlled and
conceptualized by brands in concert with their advertising agencies.
Snipp believes there are considerable opportunities to increase its
revenues by investing in additional marketing and sales efforts directly
towards advertising agencies and brands. Snipp also plans to further
develop specialized offerings for select industry verticals. Vertical
marketing aims to support specific and specialized needs and tactics
that are used within specific industries. By increasingly tailoring
offerings to select verticals, Snipp expects to broaden its customer
base within those verticals and increase the number of campaigns that it
participates in.
-- Exploring international licensing and expansion possibilities: Snipp is
working towards expanding the possibilities for its platform based on
numerous requests it continues to receive from interested parties in
various parts of the world. Corresponding opportunities for Snipp may
include reseller agreements, licensing of its platform on a branded or
white-label basis and joint ventures.
Other Details of the Transaction
In consideration for certain consulting services provided by Mr. Waheed Nazerali
to Alya, and pursuant to a finder's fee agreement between them dated September
20, 2011, Alya will issue 400,000 Alya Shares to Mr. Nazerali at the Closing
(the "Finder's Fee"). Upon payment of the Finder's Fee, Mr. Nazerali will hold
1.2% of all of the issued andoutstanding shares in the capital stock of Alya
immediately before Closing and before taking into account the Financing. Snipp
Shareholders will continue to hold 67.5% of all of the issued and outstanding
shares in the capital stock of Alya immediately before Closing and before taking
into account the Financing.
It is intended that the Transaction will constitute Alya's "Qualifying
Transaction", as such term is defined in Policy 2.4 of the TSX-V, and that on
completion of the Transaction, Alya will be listed as a Tier 2 company on the
TSX-V.
The Transaction is subject to a number of closing conditions in favour of both
Alya and Snipp, including acceptance of the Transaction by the TSX-V and
completion of the Financing.
In addition, concurrent with Closing, the name of Alya will be changed to Snipp
Interactive Inc.
No non-arm's length party to Alya has any direct or indirect beneficial interest
in the assets of Snipp, nor is any non-arm's length party to Alya an insider of
Snipp. There exists no relationship between or among the non-arm's length
parties to Alya and the non-arm's length parties to Snipp. The Transaction does
not constitute a Non-Arm's Length Qualifying Transaction as defined in Policy
2.4 of the TSX-V. Pursuant to the rules of the TSX-V, including Policy 2.4, and
in compliance with the British Columbia Business Corporations Act and the
constating documents of Alya, the Transaction will not be subject to shareholder
approval, but remains subject to TSX-V acceptance. Alya will prepare a TSX-V
compliant filing statement in conjunction with the Transaction.
Alya will be relying on the exemption in Section 3.4 of TSX-V Policy 2.2 from
having an application for listing in connection with a Qualifying Transaction
sponsored by a member of the TSX-V.
All information provided in this press release relating to Snipp has been
provided by management of Snipp and has not been independently verified by
management of Alya.
On behalf of the Board of Directors,
Conrad Swanson, President, Chief Executive Officer and Director
Alya Ventures Ltd.
Completion of the Transaction is subject to a number of conditions, including
but not limited to, TSX-V acceptance. 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 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 a capital pool company
should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the
proposed Transaction and has neither approved nor disapproved the contents of
this press release.
Disclaimer for Forward-Looking Information
This press release contains forward-looking statements and information that are
based on the beliefs of management and reflect Alya's current expectations. When
used in this press release, the words "estimate", "project", "belief",
"anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the
negative of these words or such variations thereon or comparable terminology are
intended to identify forward-looking statements and information. The
forward-looking statements and information in this press release include
information relating to the business plans of Alya and Snipp, the Financing, the
Transaction (including TSX-V approval, the proposed name change of Alya, and the
completion or termination thereof) and the board of directors and management of
the resulting issuer upon completion of the Transaction. Such statements and
information reflect the current view of Alya with respect to risks and
uncertainties that may cause actual results to differ materially from those
contemplated in those forward-looking statements and information.
By their nature, forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performance
or achievements, or other future events, to be materially different from any
future results, performance or achievements expressed or implied by such
forward-looking statements.
Such factors include, among others, the following risks:
-- there is no assurance that the Financing will be completed or as to the
actual proceeds to be raised in connection with the Financing or as to
the offering price to be realized. In particular, the amount raised may
be significantly less than the amounts indicated if investors are not
prepared to invest;
-- post-closing, Alya may require additional financing from time to time in
order to continue its operations. Financing may not be available when
Alya needs it;
-- the new board and management of Alya may not be able to function as a
team;
-- future advertising and competition in this market may render our
technology and methods obsolete;
-- information technology, network and data security risks could harm
Alya's business;
-- Alya must invest in technological innovation in order to stay
competitive. If Alya fails to make investments in technological
innovations, its business and results of operations could be adversely
affected;
-- new laws or regulations could adversely affect Alya's business and
results of operations;
-- the stock markets have experienced volatility that often has been
unrelated to the performance of companies. These fluctuations may
adversely affect the price of Alya Shares, regardless of its operating
performance; and
-- there is no assurance that the approval of the TSX-V required to
complete the Transaction will be obtained. Further, approval of the TSX-
V may be conditional upon amendments to the transactions disclosed
herein.
There are a number of important factors that could cause Alya's actual results
to differ materially from those indicated or implied by forward-looking
statements and information. Such factors include, among others: currency
fluctuations; limited business history of Alya; disruptions or changes in the
credit or security markets; results of operation activities and development of
projects; project cost overruns or unanticipated costs and expenses,
fluctuations in the resulting issuer's product prices, a general downtown in
advertising expenditures and general market and industry conditions.
Alya cautions that the foregoing list of material factors is not exhaustive.
When relying on Alya's forward-looking statements and information to make
decisions, investors and others should carefully consider the foregoing factors
and other uncertainties and potential events. Alya has assumed a certain
progression, which may not be realized. It has also assumed that the material
factors referred to in the previous paragraph will not cause such
forward-looking statements and information to differ materially from actual
results or events. However, the list of these factors is not exhaustive and is
subject to change and there can be no assurance that such assumptions will
reflect the actual outcome of such items or factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS THE
EXPECTATIONS OF ALYA AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS
SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON
FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY
OTHER DATE. WHILE ALYA MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS
INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH
APPLICABLE LAWS.
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