Smart retail labelling company Danavation Technologies has accepted a reverse takeover bid from fellow Canadian company Wolf’s Den Capital.

Danavation provides micro e-paper displays in North America. Its Digital Smart Labels, powered by IoT and M2M automation technology and proprietary software, let retailers, grocers, healthcare providers, manufacturers and logistics companies automate labelling, price, product and promotions in real time.

This can solve problems such as high labour costs, data accuracy and low productivity associated with traditional labour-intensive workflows. It says its mission is to empower the adoption of smart retail, smart cities and Industry 4.0, and advocate for environmental sustainability by significantly reducing paper use.

Wolf’s Den Capital does not have any commercial operations. The company has been carrying out a review of its strategic alternatives and potential investments in diversified industries, which review has led to the execution of this share exchange agreement.

Upon completion of the transaction, the combined company will continue to carry on the business of Danavation.

Wolf’s Den Capital will acquire all of the issued and outstanding shares of Danavation in exchange for shares of Wolf’s Den Capital. The transaction will constitute a reverse takeover of the company by Danavation and its shareholders.

Wolf’s Den Capital will complete a consolidation of its issued and outstanding common shares on the basis of one post-consolidation common share for every eight outstanding common shares in its capital. Each Danavation shareholder will receive one share in exchange for each share held in the capital of Danavation.

As a condition to the completion of the transaction, Danavation must complete a private placement of up to 17,600,000 shares in the capital of Danavation resulting in Danavation having not fewer than 100 shareholders, each holding a board lot, as defined in accordance with the policies of the Canadian Securities Exchange.

In connection with the transaction, Wolf’s Den Capital will undertake a private placement of common shares, subscription receipts or other securities convertible into shares, for aggregate gross proceeds of up to $6m, expected to close concurrently with the transaction.

It is expected that upon closing of the transaction, the combined company will issue from treasury up to 74,300,000 shares to the Danavation shareholders and up to 20,000,000 shares in connection with the concurrent financing and that, after such issuances, Wolf’s Den Capital will have approximately 116,956,465 issued and outstanding shares. Current Wolf’s Den Capital shareholders will hold approximately 19.4% of the outstanding shares, subscribers in the concurrent financing will hold approximately 17.1% of the outstanding shares, and Danavation shareholders will hold approximately 63.5%.

Upon completion, the current directors and officers of Wolf’s Den Capital will resign. It is expected that the board of directors and management of the combined company will be comprised of five directors, being John Ricci, the co-founder, president and CEO of Danavation, Frank Borges, co-founder and managing partner of Danavation, Michael Della Fortuna, Tom Loberto and Mark Di Vito. Ricci will continue as CEO of the combined company.