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Enter Symbol
or Name
USA
CA



Hope Well Capital Corp
Symbol HOPE
Shares Issued 7,724,999
Close 2017-11-15 C$ 0.25
Market Cap C$ 1,931,250
Recent Sedar Documents

Hope Well to acquire Payfare as QT

2017-11-20 19:23 ET - News Release

Mr. Sheldon Kales reports

HOPE WELL ENTERS INTO LETTER OF INTENT FOR QUALIFYING TRANSACTION

Hope Well Capital Corp. has entered into a letter of intent dated Nov. 17, 2017, pursuant to which Sheldon Kales proposes to acquire all of the issued and outstanding securities of Payfare Inc., a corporation governed under the laws of Ontario. The corporation is a capital pool company and intends for the acquisition of Payfare to constitute its qualifying transaction as such term is defined in the policies of the TSX Venture Exchange.

Payfare is a Toronto-based fintech company providing mobile banking solutions for the rapidly emerging on-demand economy. Payfare's technology and partnership with MasterCard are driving financial inclusion and empowerment to millions of next-generation workers by providing full-service mobile bank accounts with instant access to their earnings.

Payfare was incorporated under the Business Corporations Act (Ontario) in 2014. The company is headquartered in Toronto, Ont. Payfare currently has 98,039,206 common shares issued and outstanding. Payfare also has 14,705,881 options and 22,843,895 warrants outstanding to acquire an aggregate of 37,549,776 Payfare shares.

The financial statements of Payfare for the fiscal years ended 2014 and 2015 have been audited and for 2016 are currently being audited, and they will, together with the unaudited interim statements for the period Sept. 30, 2017 (to be reviewed by Payfare's auditor), be included in a filing statement to be prepared and filed with the exchange in connection with the qualifying transaction.

Financial information regarding Payfare will be disclosed in a further news release following the preparation of the financial statements as noted above.

Terms of qualifying transaction

Pursuant to the terms of the letter of intent, Hope Well agrees to consolidate, prior to completion of its proposed qualifying transaction, its shares, broker warrants and options on a one-for-1.580113 basis. Currently, the corporation has 7,724,999 common shares, 625,000 broker warrants and 772,499 options outstanding. Postconsolidation, Hope Well will have 4,888,890 common shares, 395,541 broker warrants and 488,888 options.

Subject to certain terms and conditions, the corporation intends to acquire all of the issued and outstanding Payfare shares in consideration for issuances of postconsolidation shares based on an exchange ratio of one Payfare share for one postconsolidation share at a deemed price of 45 cents per postconsolidation share for a total purchase price of $44,117,643. All Payfare options and warrants outstanding will also be acquired by Hope Well and replaced by Hope Well options and warrants based on the same exchange ratio. The exchange ratio may be adjusted if Payfare issues more shares prior to the completion of the qualifying transaction other than in the Payfare financing.

Payfare will use best efforts to complete a non-brokered private placement financing of a minimum of $1-million and a maximum of $9-million issuing additional Payfare shares with an effective price of not less than 45 cents per Payfare share (the actual price per share settled upon shall be referred to as the Payfare financing price). All Payfare shares issued in the Payfare financing will be exchanged for postconsolidation shares upon completion of the qualifying transaction based on the exchange ratio.

On closing the qualifying transaction (assuming minimum offering of the Payfare financing), Hope Well will have 105,150,317 postconsolidation shares outstanding. Current shareholders of Hope Well will own 4.65 per cent of the postconsolidation shares outstanding, current shareholders of the Payfare will own 93.24 per cent and the Payfare financing investors will own 2.11 per cent. On closing the qualifying transaction (assuming maximum offering of the Payfare financing), Hope Well will have 122,928,095 postconsolidation shares outstanding. Current shareholders of Hope Well will own 3.97 per cent of the postconsolidation shares outstanding, current shareholders of the Payfare will own 79.76 per cent and the Payfare financing investors will own 16.27 per cent.

On closing the qualifying transaction, the corporation will also have 395,541 broker warrants and 488,888 options all exercisable at 32 cents per postconsolidation shares, as well as 14,705,881 options and 22,843,895 warrants issued as replacement for Payfare options and warrants.

Insiders, board of directors and management of the resulting issuer

Payfare currently has two major shareholders: Keith McKenzie and Ryan Deslippe, both residents of Ontario, Canada. All of the shareholders of Payfare are at arm's length to Hope Well. Mr. McKenzie and Mr. Deslippe are expected to each own more than 10 per cent of the postconsolidation shares after giving effect to the qualifying transaction (and therefore are expected to become insiders of Hope Well by virtue of their respective shareholdings).

At closing of the qualifying transaction, all of the existing directors and officers of Hope Well except Bill Hong Ye will resign, and it is anticipated that the board of directors of the resulting issuer will be increased in size to five directors and will be composed of Mr. Ye as nominee of Hope Well and four nominees of Payfare, of whom at least two directors will be independent of management.

More details of insiders and proposed directors and officers of the resulting issuer will be disclosed in a further news release.

Sponsorship for qualifying transaction

Sponsorship of a qualifying transaction of a capital pool company is required by the exchange unless exempt in accordance with the policies of the exchange. Hope Well may engage a sponsor to satisfy the sponsorship requirements pursuant to the policies of the exchange.

Shareholder approval

Since the qualifying transaction is an arm's-length transaction under the policies of the exchange, Hope Well will not be required to obtain shareholder approval of the transaction. However, Hope Well will be required to hold a shareholders meeting to approve the consolidation prior to the completion of the qualifying transaction.

Description of significant conditions to closing

Completion of the qualifying transaction will be subject to satisfaction of waiver of terms and conditions, customary or otherwise, including but not limited to completion of the consolidation of Hope Well securities, satisfactory completion of due diligence, execution of a definitive agreement, and all required approvals and consents, including the approval of the exchange.

If completed, the proposed transaction is expected to constitute the corporation's qualifying transaction under Policy 2.4 of the exchange.

Completion of the qualifying transaction is subject to a number of conditions, including, but not limited to, due diligence, exchange acceptance and, if required by exchange policies, majority of the minority shareholder approval. Where applicable, the qualifying transaction cannot close until the required shareholder approval is obtained.

Additional press release

The corporation plans on issuing additional press releases and updates as the definitive agreement is signed and due diligence is completed. The shares of the corporation will remain halted until the corporation satisfies the requirements of the exchange for resuming the trading of the Hope Well shares or until completion of the qualifying transaction.

We seek Safe Harbor.

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