UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
pursuant to Section 13 or 15(d) of The Securities Act of 1934
Date of Report (Date of earliest event reported): 02/13/19
Turner Valley Oil & Gas, Inc.
(Exact name of Registrant as specified in its charter)
Commission File Number: 0-30891
| Nevada | 91-1980526 | |
|
(Jurisdiction of Incorporation) |
(I.R.S. Employer Identification No.) |
1600 West Loop South, Suite 600, Houston, Texas 77027
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 1-713-588-9453
INTRODUCTION
This Registrant (Reporting Company) has elected to refer to itself, whenever possible, by normal English pronouns, such as "We", "Us" and "Our". This Form 8-K may contain forward-looking statements. Such statements include statements concerning plans, objectives, goals, strategies, future events, results or performances, and underlying assumptions that are not statements of historical fact. This document and any other written or oral statements made by us or on our behalf may include forward-looking statements which reflect our current views, with respect to future events or results and future financial performance. Certain words indicate forward-looking statements, words like "believe", "expect", "anticipate", "intends", "estimates", "forecast", "projects", and similar expressions.
| Item 1.01 | Entry into a Material Definitive Agreement |
Turner
entered into an acquisition agreement with (“American”) with terms as follows:
| 1.1. | APC shall have a closing valuation of $2,500,000.00 upon closing estimated to be approximately 5x EBITDA trailing twelve months 2019. |
| 1.2. | TVOG will issue Preferred Stock of the TVOG for 50% and cash and debt assumed for 50% to APC in exchange for 100% of the equity of O&S Builders, Inc., and OSET, LLC . |
| 1.3. | Preferred Stock shall be initially valued at the estimated Valuation herein or $1,250,000.00. |
| 1.4. | TVOG shall pay off all SBA loans equal to approximately $500,000.00 at closing or alternatively adjust the cash portion of the purchase by the same amount TVOG decides to assume or refinance the debts. Any other outstanding debt will be paid from the remaining balance of the $500,000.00 should any exist. |
| 1.5. | The Preferred Stock shall be convertible to common stock at a fixed price per share of $0.01 and have a 2.5% yield payable in cash or in kind every 12 months after effective date. |
| 1.6. | The Preferred Stock conversion price shall be guaranteed for 12 months, whereas a lower price per share at the end of the period for an average of the last 10 trading days of the period shall result in a one-time lowering of the conversion price to that average. For discussion purposes only, the following numbers would be calculated as allocated between Cash, Debt Assumed (or paid off) and Equity Retained; at closing . |
| 1.7. | APC will have a one time option at closing,to retain additional Preferred Stock in instead of the $750,000.00 paid at closing for all or part. |
| % | ||
| Cash | $750,000.00 | 30% |
| Debt Assumed | $500,000.00 | 20% |
| Equity Retained | $1,250,000.00 | 50% |
| Total | $2,500,000.00 | 100% |
| 2.1. | The MOA as summarized herein is valid to be signed and approved by the seller until Friday, February 15, 2019 Midnight time CST. If not approved by then, it will need to be revised by the buyer again. |
| 2.2. | APC will provide a period of exclusivity to TVOG to close the deal which will continue until the established closing date when PSA (Purchasing and Sales Agreement) is signed. APC will not negotiate or speak to other parties during this period. |
| 2.3. | TVOG will acquire APC as per the terms herein as a wholly-owned subsidiary in which APC will continue to operate as is and under the current brand for a minimum period of one (1) year. |
| 2.4. | TVOG proposed a stock sale versus asset sale subject to tax review by both parties and unforeseen liability protection. |
| 2.5. | The Accounts Receivable and Payable will be retained as per the financial statements at the time of the closing date.. |
| 2.6. | APC shall have Long-Term Liabilities notes approximating to $723,643.46 for O&S Builders, Inc and $85,880.11 for OSET, LLC as of December 31, 2018. |
| 2.7. | TVOG will retain current Working Capital which will be calculated using a seasonally adjusted trailing average for the last 12 months period prior to close. TVOG acknowledges that APC has, historically, maintained a large asset balance in the business that was not related to working capital needs. |
| 3.1. | TVOG will invest up to $500,000.00 into APC for capital equipment discussed, as necessary, after closing to handle work upcoming in 2019 through a mutually agreeable, detailed use of proceeds and business plan. |
| 3.2. | As results are reflected in line with the forecasts, TVOG anticipates making an additional investment for an amount to be determined. |
| 3.3. | Such capital expenditures will go toward additional equipment, expansion of staff, marketing and development or as TVOG Executive Leadership deems necessary. |
| 3.4. | TVOG management will, at the appropriate time, take over responsibilities for non-customer facing back office work. Where both efficient and practical, certain day to day operations, and some sales and development work may be transferred to a TVOG managed office to consolidate efforts from multiple locations. |
| 3.5. | Current management person(s) stays on to manage all day-to-day operations, including sales, marketing and administration. |
| 3.6. | Current management person(s) works full-time or as required to maintain current business run-rate and to meet forecasted growth expectations as established by TVOG. |
| 3.7. | APC management shall have an opportunity, at a later date when determined not to be detrimental to the continuing operations of APC, to participate in Management Preferred Stock and expand roles into TVOG leadership whereas earn-in and back-in stock and cash compensation shall be available. |
| 4.1. | These are subject to finalize valuation, structure of deal and for discussion purposes only and available for counter proposal. |
| 4.2. | To APC Group: |
| 4.2.1. | Preferred Stock valued at $1,250,000.00 to the 50%. |
| 4.2.2. | Paid in cash to pay off approximately $500,000.00 in APC debt or if assumed valuation adjusted for the same amount equal to 20% of the valuation. |
| 4.2.3. | Paid in cash unless option is exercised in all or in part, to retain additional Preferred Stock at time of closing for face value of up to $750,000.00 . |
| 4.2.4. | Current management person(s) will receive a W-2 salary amount of $175,000.00 a year for 3 years. Management for APC are identified as: |
| 4.2.4.1. | William O’Connor |
| 4.2.4.2. | Jereme Sonnenfeld |
| 4.2.5. | Expansion capital of $500,000.00+ is to be invested into the business. |
Item 7.01. Regulation FD Disclosure.
The Company intends to issue a press release on 02/14/19 to provide investors with updates regarding this acquisition. The update is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
| Exhibit No. | Description | |
| 99.1 | Press release planned to issue by the Company on 02/14/19 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 8-K has been signed below by the following person(s) on behalf of the Registrant and in the capacity and on the date indicated.
Dated: 02/13/19
Turner Valley Oil and Gas, Inc.
By: /s/ Steve Helm
Steve Helm, President/CEO/Director
EXHIBIT 99.1
Turner Announces Acquisition of Veteran-Owned American Parking Control
HOUSTON, Texas - 02-14-19 - NASDAQ Announcement - Turner Valley Oil and Gas, Inc. (the “Company”) (OTC: TVOG), a company focused on capitalizing on technology-forward American infrastructure expansion, is pleased to announce that Turner has completed an acquisition agreement with O&S Builders, Inc. dba American Parking Control (“APC”), an all-encompassing construction services company located in Houston, Texas.
HIGHLIGHTS OF THE TRANSACTION INCLUDE:
| ● | APC is a full service construction company in business since 1984 with over 17 employees. |
| ● | Principal owner William O’Connor has an extensive background in regards to mega infrastructure projects with Bechtel, one of the largest private engineering and contracting companies in the world. |
| ● | APC annual revenues for 2016 were $1,608,566.90, $2,949,008.76 for 2017, and $3,098,999.44 for 2018. |
| ● | Revenue for 2018 was lower than anticipated due to inclement weather that delayed jobs. Much of that revenue and accounts payable will be realized in 2019. |
| ● | Estimated run-rate for 2019 is forecasted to be $5MM and EBITDA with an average of 10% margin. |
Turner CEO Steve Helm stated, ” This most recent acquisition agreement with APC brings another building block to the technology forward infrastructure company we are constructing here at Turner. We could not be happier with the company and the excellent management that comes along with this transaction. This is now the third acquisition agreement that TVOG has completed and we are diligently working on adding some truly game-changing and disruptive acquisitions to the TVOG fold that we are confident the investment community will be excited about”.
ACQUISITION
Turner has structured the acquisition to include the purchase of all of the shares of APC to be owned as a wholly owned subsidiary. TVOG will audit the books of the company and complete a detailed business plan to support continuous operation and growth as a condition of closing. The Company will use its Preferred Stock for a portion of the acquisition and will also sell Preferred Stock to investors in conjunction with its investment banking advisor currently being engaged as well as initial capital provided by GHS Investments, LLC. The transaction includes Preferred Stock and investment capital in order to expand its clients and grow revenue. This structure protects both insider and retail investors from dilution to Turner’s common stock structure. Specific details of the transaction can be found with the 8K Filing released in conjunction with this press release.
CLOSING CONDITIONS
Following this initial closing announcement, subsequent events will include Turner filing a Form 10 or S1 registration, which includes 10 K and 8 K filings with the SEC. This will meet all registered and fully reporting standards and a result, Turner will meet the qualifications needed for it to be an OTCQB, fully filing company. These are important steps that in addition to Turner’s recent Nasdaq system registration, will aid in Turner’s plan to uplist to a higher exchange. In addition, closing conditions include transfer of assets, release of escrowed funds, appointment of a new Board of directors and management, and an updated corporate website.
About Turner Valley Oil and Gas, Inc.
Turner (OTC:TVOG) is a solutions provider of innovative infrastructure solutions, services and differentiated infrastructure-related technologies to the U.S. infrastructure industry. The company is focused on the Services, Supply Chain and Technologies segments with plans to operate a wide range of businesses including road and highway pavement companies, supply chain related and technology/R&D companies that provide innovative solutions for the construction, maintenance and repair, support, transportation and technologies throughout the U.S. For more information: http://TVOGInc.com
About American Parking Control
American Parking Control, a veteran-owned, comprehensive construction company, has proudly served the Houston area since 1984. They recognize the importance of maintaining APC’s long tradition of outstanding customer service. Many of their customers are schools and universities with high standards and precise specifications, and APC believes that their satisfaction with their work is a testament to its quality. The company specializes in a range of commercial, public sector, and industrial construction services—including installing complex foundations, asphalt and concrete paving. They do sealcoating, storm sewer installation, soil stabilization, land clearing, and regrading. For more information: https://www.americanparkingcontrol.com
Certain statements in this press release are forward-looking and involve a number of risks and uncertainties. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended.
Key Links:
OTC Markets Profile: http://www.otcmarkets.com/stock/TVOG/profile
Disclaimer: http://tvoginc.com/index.php/contactus/disclaimer/
Contacts:
Steve Helm, CEO
Turner Valley Oil And Gas, Inc.
Address: 1600 West Loop South, Suite 1600, Houston, Texas 77027
Phone: 1-713-588-9453
Email: info@TVOGinc.com
Website: http://TVOGInc.com