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Hope Well Capital to acquire Loc8 as QT

2020-02-06 14:56 ET - News Release

Mr. Bill Hong Ye reports

HOPE WELL CAPITAL CORP. ENTERS INTO LETTER OF INTENT FOR QUALIFYING TRANSACTION WITH LOC8 CORP.

Hope Well Capital Corp. and Loc8 Corp. have entered into a letter of intent (LOI), dated Feb. 6, 2020. Pursuant to this LOI, Hope Well will acquire all of the issued and outstanding securities of Loc8, with such acquisition constituting a reverse takeover of Hope Well. Hope Well, a capital pool company, intends that the transaction will constitute an arm's-length qualifying transaction (as such terms are defined in Policy 2.4 of the corporate finance manual of the TSX Venture Exchange).

Trading in the common shares of Hope Well has been halted since May 10, 2019. Trading will remain halted until, among other things, Hope Well completes certain regulatory filings in connection with the qualifying transaction with the TSX-V and the TSX-V has completed certain matters it considers necessary or advisable.

Terms of the transaction

Hope Well and Loc8 intend to complete the transaction by way of a securities exchange agreement or other similar transaction, whereby Hope Well will acquire all of the securities of Loc8 to form the resulting issuer under the new name of Deepspatial AI. Hope Well currently has 7,724,999 common shares issued and outstanding. Additionally, Hope Well has 772,499 options outstanding under its incentive stock option plan.

Prior to the completion of the concurrent financing, Loc8 has 82,925,000 common shares issued and outstanding. Each of the common shares of Loc8, including those common shares issued pursuant to the concurrent financing, will be exchanged for one common share of the resulting issuer.

On completion of the transaction, all outstanding Loc8 shares (including Loc8 shares issued in the concurrent financing), will be exchanged for resulting issuer shares at the rate of one Loc8 share for each resulting issuer share.

Upon completion of the transaction and the minimum concurrent financing, the fully diluted common shares of the resulting issuer shall be held as follows (excluding any broker warrants that may be issued in the concurrent financing): Loc8 securityholders -- 83.4 per cent; concurrent financing subscribers -- 8.0 per cent; existing Hope Well shareholders -- 7.8 per cent; and existing Hope Well optionholders -- 0.8 per cent.

About Loc8 Corp.

Loc8 (operating as Deepspatial AI) is an artificial intelligence-powered (AI) location intelligence platform which combines geospatial data with internal organizational data to provide complete enterprise solutions to drive the success of the business. Loc8 processes geospatial data and uses proprietary AI algorithms to help businesses make data-driven decisions. Loc8 has developed and is developing a range of products built on advanced AI powered platforms to solve modern organizational problems.

Loc8 processes business data geospatially and creates knowledge and insights that help businesses know who their customers are (customer archetypes), inventory management, site selection, targeted marketing, predict what they need and supply it optimally. It brings geo-personalization to any business as a service using AI. Loc8's AI platform can be integrated into retail chains, logistics firms, manufacturing supply chain companies, banks and more.

Conditions precedent

The LOI contemplates that the following condition precedents be met prior to the closing of the transaction: (i) receipt of all regulatory approvals with respect to the transaction and listing of the resulting issuer shares on the TSX-V; (ii) all third party consents necessary to complete the transaction are obtained; (iii) no adverse material change in the business, affairs, financial condition or operations of Loc8 or Hope Well has occurred between the effective date and the closing date; and (iv) the concurrent financing shall have been completed. As well, sponsorship of a qualifying transaction of a capital pool company is required by the TSX-V unless exempt in accordance with the policies of the TSX-V.

Concurrent financing

Loc8 shall arrange for a brokered private placement financing of a minimum of $2-million and a maximum of $3-million to be completed concurrent to the transaction. The concurrent financing shall comprise a minimum of eight million shares and a maximum of 12 million shares of Loc8, at an issue price of 25 cents per share.

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, satisfactory completion of due diligence, execution of a definitive agreement, and all required approvals and consents, including the approval of the TSX-V.

If completed, the proposed transaction is expected to constitute Hope Well's qualifying transaction under Policy 2.4 of the TSX-V.

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. There can be no assurance that the qualifying 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 qualifying transaction, any information released or received with respect to the qualifying 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-V has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Additional press release

Hope Well plans on issuing additional press releases and updates as the definitive agreement is signed and due diligence is completed, setting out further terms of the transaction, which shall include information about Hope Well upon closing of the transaction; further information about Loc8, including financial information; further information about the concurrent financing and further information about the resulting issuer, including proposed management. The shares of Hope Well will remain halted until Hope Well satisfies the requirements of the TSX-V for resuming the trading of the Hope Well shares or until completion of qualifying transaction.

About Hope Well Capital Corp.

Hope Well is a CPC governed by the policies of the TSX-V. Hope Well's principal business is the identification and evaluation of assets or businesses with a view to complete a qualifying transaction.

We seek Safe Harbor.

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