CALGARY, AB / ACCESSWIRE / January 6, 2020 / Hoist Capital Corp. (the "Corporation") (TSXV:HTE), a capital pool company under Policy 2.4 - Capital Pool Companies (the "CPC Policy") of the TSX Venture Exchange ("Exchange"), is pleased to announce that, further to its press release dated October 15, 2019, it has entered into a definitive share sale agreement (the "Definitive Agreement") dated January 5, 2020 with BTC Corporation Holdings Pty Ltd. ("BTC") and the shareholders of BTC (the "BTC Shareholders") for the purposes of completing a Qualifying Transaction ("QT") as defined in the CPC Policy. Upon completion of the QT, BTC will become a wholly owned subsidiary of the entity resulting from the QT (the "Resulting Issuer") and the Resulting Issuer will carry on the business of BTC as a technology issuer.
Definitive Agreement
The QT is to be completed by way of a share sale (the "Share Sale"), whereby the BTC Shareholders will exchange 100% of the issued and outstanding fully paid ordinary shares of BTC ("BTC Shares") for common shares (the "Hoist Shares") of the Corporation, resulting in BTC becoming a wholly-owned subsidiary of the Corporation. Pursuant to the Definitive Agreement, in consideration of the Corporation's acquisition of BTC, each BTC Share that is issued and outstanding immediately prior to completion of the QT shall be deemed to be valued at CDN$1,656 per share or an aggregate of CDN$29,556,288 for all of the BTC Shares outstanding as of the date hereof and shall be exchanged for 1,656 Hoist Shares, on a post-Consolidation basis ("Exchange Ratio").
The BTC Shares are subject to a shareholders deed between BTC and the BTC Shareholders dated June 13, 2017, which provides for a drag-along right in the event the Definitive Agreement is executed by BTC Shareholders who collectively hold at least 70% of the BTC Shares outstanding.
As of the date of the Definitive Agreement, BTC has the following securities, or right to acquire securities of BTC, outstanding: (a) 17,519 BTC Shares; (b) the conversion rights of the minority shareholders of BTC Sing SPV Pte Ltd., a related party of BTC, to acquire up to 274 BTC Shares in return for terminating their minority ownership rights; and (c) the conversion rights of the minority shareholders of RhinoLoft Pty Ltd., a related party of BTC, to acquire up to 55 BTC Shares in return for terminating their minority ownership rights.
In addition to the Hoist Shares issuable under the Share Sale, at closing of the QT the Corporation will also issue 1,186,500 Hoist Shares (on a post-Consolidation basis) to certain arm's length financial advisors as a success fee for introducing the parties to the QT.
BTC Financings
In conjunction with the QT, the Definitive Agreement provides that BTC will complete the following equity financings:
- a non-brokered private placement of BTC Shares at a price of AUD$1,550 per BTC Share for gross proceeds of up to AUD$3,000,000, or such greater amount as mutually agreed by BTC and the Corporation (the "Pre-Transaction Placement"); and
- a private placement of subscription receipts for minimum gross proceeds of CDN$500,000 and maximum gross proceeds of CDN$5,000,000, which will be held in escrow and released on closing of the QT (the "Concurrent Financing"). The terms of the Concurrent Financing, including the nature of the securities, the issuance price, the finder's fees and any compensation warrants will be negotiated with the agents selected by BTC.
As of the date hereof, BTC has raised proceeds of approximated AUD$634,000 and has issued an aggregate of 409 BTC Shares under the Pre-Transaction Placement. A finder's fee of 71 BTC Shares was issued as a finder's fee under the Pre-Transaction Placement. For clarity, the 409 BTC shares have been included in the share figures described above and any additional BTC shares issued under the Pre-Transaction Placement and the Concurrent Financing will result in additional Hoist Shares being issued at the Exchange Ratio. The net proceeds of the Pre-Transaction Placement and Concurrent Financing will be used to fund the growth of BTC's business into international markets and for general and administrative expenses.
Consolidation, Continuation and Name Change
The Definitive Agreement provides that, immediately prior to closing of the QT, the Corporation will, subject to shareholder approval:
- complete a consolidation of the Hoist Shares on the basis of one post-consolidation Hoist Share for each 6.89655 pre-consolidation Hoist Shares (the "Consolidation");
- complete a continuation out of Alberta, Canada and being governed by the Business Corporations Act (Alberta) to become a British Columbia, Canada corporation being governed by the Business Corporations Act (British Columbia) (the "Continuation"); and
- change its name to "Banxa Holdings Inc." or such other name as BTC may determine, subject to approval from the British Columbia Registrar of Companies and the Exchange (the "Name Change").
The Corporation intends to hold a special shareholders meeting to approve these matters.
Conditions to Closing the QT
Completion of the QT is subject to a number of customary commercial conditions, including but not limited to:
- completion of satisfactory due diligence by both parties;
- completion of the Pre-Transaction Placement;
- completion of the Concurrent Placement;
- completion of the Consolidation, Continuation and Name Change;
- receipt of all applicable regulatory, shareholder and Exchange approvals;
- the resignation of all directors and officers of the Corporation who will not be continuing as directors and officers of the Resulting Issuer;
- the appointment of Domenic Carosa, Matthew Cain and an additional director to be determined by BTC as directors of the Resulting Issuer, to be effective at completion of the QT;
- completion of the QT on or prior to March 31, 2020, or such later date as the Corporation and BTC may mutually agree; and
- the absence of any material adverse effect on the financial and operational condition or the assets of the Corporation or BTC.
Management and Board of Directors of Resulting Issuer
Upon completion of the QT, other than Arif Shivji, who will stay on as a member of the board of directors of the Resulting Issuer (the "Resulting Issuer Board"), all existing directors and officers of the Corporation will resign and the following individuals, subject to receipt of applicable regulatory and shareholder approvals, will be appointed as an officer of the Resulting Issuer or to the Resulting Issuer Board:
Domenic Carosa -Founder & Non-Executive Chairman and Director
With over 25 years' experience in business and technology, Mr. Carosa is a resident of Australia and has built a reputation as a leader in the Internet space by building one of Australia's largest independent digital music websites, MP3.com.au in the late 90's, and building from scratch, Australia's second largest virtual web hosting and domain companies which he sold for AUD$25m in 2005-06. He was also the youngest CEO of a public company in Australian history in 2000 when he was 25 years of age.
Mr. Carosa is co-founder & Chairman of Future Capital Development Fund Pty Ltd (a registered Pooled Development Fund). Future Capital has successfully raised in excess of AUD$8M in patient equity capital in recent years, invested in 14 early stage investees.
Mr. Carosa is also Founder & Chairman of Dominet Venture Partners, a boutique internet investment group with over 50 investments in technology-related companies globally. Mr. Carosa is also CEO & Executive Director of a global media company Crowd Media Holdings Ltd which is listed on the Australian and Frankfurt Stock exchanges. Mr. Carosa is past Chairman of the Internet Industry Association (IIA) and holds a Masters of Entrepreneurship & Innovation (MEI) from Swinburne University.
Matthew Cain - Director
Mr. Cain has 25 years' experience providing Corporate Advisory, Consultancy and Equity Capital Markets expertise to private and public companies.
Mr. Cain is currently a Non-Executive Director of Registry Direct Limited, Treasurer and Committee Member of the Melbourne Racing Club, Director of MRC Foundation Board and Director of Corporate Development with Dominet Digital Ventures.
Mr Cain is based in Melbourne, Australia and has sector expertise in wagering and gaming, technology, telecommunications and Fintech previously working for Macquarie Bank, Bell Potter and ANZ Securities.
Haozheng "Jack" Lu - Director
Mr. Lu is based in San Francisco where he is the investment director at NGC, which is also a shareholder in BTC. Mr. Lu specializes in researching blockchain mechanisms for generating decentralized consensus and real-world implications provided by blockchain. Mr, Lu's invaluable presence is defined by his abilities to analyze economic and social models behind projects, while also exploring the game theoretical topics including incentive provisions, industrial organization and market microstructure on blockchain and smart contracts. Jack was the founder of Econ-Box, a behavioural economics club.
Mr. Lu was the cofounder of ShowGo, an US based start-up. In addition, Mr. Lu holds an Economics and Quantitative Economics degree from Reed College.
Holger Arians - Chief Executive Officer
Mr, Arians worked in corporate development at different multinational companies in Germany before he moved to Australia in 2013. Prior to joining BTC, Mr. Arians oversaw and worked closely with a portfolio of early stage technology companies as CEO of Dominet Venture Partners, which was founded by Mr. Carosa.
Mr. Arians has experience in entrepreneurship, strategy and management and was involved in several start-ups as a founder and investor. He was appointed Honorary Finance Judge at the Cologne Finance Court in Germany in 2013. Mr. Arians holds a degree in Business Administration from Fontys Hogeschool in The Netherlands, an Executive MBA from both ESSEC Business School in France and Mannheim Business School in Germany and is a Harvard Business School Alumnus (PLDA14).
Insiders
Dominet Digital Investments Pty Ltd. ("Dominet"), an Australian corporation controlled by Domenic Carosa, is the largest shareholder of BTC and currently holds approximately 23% of the outstanding BTC Shares. Upon completion of the QT, it is currently anticipated that Dominet will beneficially own or control, directly or indirectly, approximately 10% of the outstanding common shares of the Resulting Issuer and will be considered an insider of the Resulting Issuer pursuant to the policies of the Exchange and applicable securities laws.
Arm's Length Transaction
The Transaction is an arm's length transaction in accordance with the policies of the Exchange.
About BTC
BTC is a private company under the laws of Australia. BTC is building the payment infrastructure for global digital banking by providing fiat-to-crypto payment services online and via thousands of retail locations in Australia and around the world. Onboarding Bitcoin and Ethereum are the primary crypto currencies transacted with BTC. BTC owns and operates or intends to operate premium brands in several global markets including Canada (Bitcoin.ca), United Kingdom (Bitcoin.co.uk) & Australia (Bitcoin.com.au) as well as over 20 other premium Bitcoin domains including European Union, Mexico & Ireland.
BTC has developed and is expanding a secure trusted ecosystem and fostering utility of Bitcoin through industry leading products, platforms and education. BTC has unrivalled physical distribution in stores throughout Australia with over 6,000 retail locations and is seeking to expand into new regions. Included in BTC's strategic investor list is KuCoin, a cryptocurrency exchange based in Hong Kong that processes approximately USD$2billion of digital currency transactions on a monthly basis.
Based on audited financial statements, for the fiscal year ended June 30, 2017 BTC had a gross profit of AUD$1,280,976 on revenue of AUD$4,924,053 and had Net Assets of AUD$399,264. For the fiscal year ended June 30, 2018 BTC had a gross profit of AUD$4,069,799 on revenue of AUD$25,942,007 and had net assets of AUD$1,821,126. For the fiscal year ended June 30, 2019 BTC had revenue of AUD$8.0M and gross profit of AUD$1.8M.
Further Information
Trading in the Hoist Shares will remain halted until the QT has been completed, or until the Exchange receives the requisite documentation to resume trading. For additional information regarding the QT, please refer to the Corporation's press release dated October 15, 2019.
In connection with the QT and pursuant to the requirements of the Exchange, the Corporation will file a filing statement on its issuer profile on SEDAR (www.sedar.com), which will contain details regarding the QT, the Corporation, BTC and the Resulting Issuer.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. 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 management information circular or 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.
For further information, contact:
Arif Shivji, President
Tel: (403) 803-2150
[email protected]
NEITHER 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.
THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES, THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1993, AS AMENDED, OR ANY SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.
Forward-Looking Information
This press release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this press release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", "is expected" "anticipates", "plans", "budget", "scheduled", "forecasts". "estimates", "believes" or intends" or variations (including negative and grammatical variations) of such words and phrases or stating that certain actions, events or results "may" or "could, "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this press release, forward-looking statements relate, among other things, to: the QT and certain terms and conditions thereof and the ability of the parties to satisfy the conditions precedent to complete the QT; the business, objective, goals and future plans of BTC; completion of the Pre-Transaction Placement and the Concurrent Financing; the completion of the Consolidation, Continuation and Name Change; the appointment of new management and board of the Resulting Issuer; Exchange sponsorship requirements and intended application for exemption therefrom; shareholder, director and regulatory approvals; and future press releases and disclosure.
These statements are based upon assumptions that are subject to significant risks and uncertainties, including assumptions that all conditions to the closing of the QT will be satisfied, that the QT will be completed on the terms set forth in the Definitive Agreement, that BTC will be able to complete the Pre-Transaction Placement, that BTC will be able to complete the Concurrent Financing, that the Corporation will be able to complete the Consolidation, the Continuation and the Name Change, that the Corporation will be able to appoint the proposed new management and board of the Resulting Issuer and that the Corporation will be able to obtain shareholder, director and regulatory approvals as applicable.
Although the Corporation and BTC consider these assumptions to be reasonable based on information currently available to them, they may prove to be incorrect, and the forward looking statements in this press release are subject to numerous risks, uncertainties and other factors that may cause future results to differ materially from those expressed or implied in such forward looking statements. Such risk factors may include, among others, the risk that required approvals and the satisfaction of material conditions are not obtained in connection with the QT, the risk that the QT is not approved or completed on the terms set out in the Definitive Agreement or at all, the risk that BTC will not be able to complete the Pre-Transaction Financing, the risk that BTC will not be able to complete the Concurrent Financing, the risk that the Corporation will not be able to complete the Consolidation, the Continuation or the Name Change, the risk that the proposed new management and board of the Resulting Issuer cannot be appointed, and general business, economic, competitive, political and social uncertainties. Although the Corporation and BTC believe that the expectations reflected in forward-looking statements are reasonable, they can give no assurances that the expectations of any forward-looking statements will prove to be correct. Except as required by law, the Corporation and BTC disclaim any intention and assume no obligation to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise.
SOURCE: Hoist Capital Corp.