Mr. Chris Frostad of Victory Capital reports
GRAVITAS ILIUM CORPORATION AND VICTORY CAPITAL CORP. ANNOUNCE PROPOSED GOING PUBLIC QUALIFYING TRANSACTION
Victory Capital Corp. has entered into a letter of intent dated July 6, 2018, with Gravitas Ilium Corp. (GIC), a corporation existing under the laws of the Province of Ontario, to complete a going-public transaction for GIC. Gravitas Financial Inc. currently owns 46.1 per cent of the common shares of GIC. Victory intends that the proposed transaction will constitute its qualifying transaction under Policy 2.4, Capital Pool Companies, of the TSX Venture Exchange. For convenience, Victory, as it will exist after completion of the proposed transaction, is sometimes referred to herein as the resulting issuer. The proposed transaction will not be a non-arm's-length qualifying transaction as such term is defined under TSX-V policies.
Information concerning GIC
GIC provides a regulated and licensed financial services platform developed to serve the wealth management and investment banking needs of entrepreneurs with an initial focus on those in the Chinese-Canadian community. GIC currently has two primary operating subsidiaries:
2242257 Ontario Inc. (2242): GIC owns approximately 55 per cent of 2242, which owns 95 per cent of Gravitas Securities Inc. (GSI) and 100 per cent of Gravitas Capital International Inc. (GCII). GSI is an IIROC (Investment Industry Regulatory Organization of Canada) investment dealer and wealth manager with offices in Toronto and Vancouver. GSI is focused on investment banking and private client wealth management and has $400-million of private client capital and more than 20 financial advisers. GCII is a U.S. broker dealer specializing in public and private equity and debt offerings, as well as merger and acquisition advisory. GCII is a FINRA (Financial Industry Regulatory Authority) member and a member of the SIPC (Securities Investor Protection Corp.).
foreGrowth Inc.: GIC owns 96 per cent of foreGrowth, which focuses on designing institutional-quality investment products for high-net-worth retail investors. In partnership with GSI, which acts as the portfolio manager and/or investment fund manager of the foreGrowth investment products, foreGrowth launched one fund in 2016 and five funds in 2017, which to date have raised, in aggregate, over $28-million.
Information concerning Victory
Victory is a capital pool company governed by the policies of the TSX-V. The principal business of Victory is the identification and evaluation of assets or businesses with a view to completing a qualifying transaction.
Trading in the common shares of Victory has been halted. It is unlikely that the common shares of Victory will resume trading until the proposed transaction is completed and approved by the TSX-V.
Information regarding the proposed transaction
For the purposes of the proposed transaction, Victory will be valued at 30 cents per share, based on 5,088,750 common shares of Victory issued and outstanding, and GIC, as it is currently constituted, will be valued based on the lesser of: (a) the postmoney valuation implied by a financing raising gross proceeds from majority arm's-length investors of not less than $3-million; and (b) $30-million. The agreement is to be superseded by a definitive agreement in respect of the proposed transaction to be entered into on or before Sept. 7, 2018 (or such other date as may be mutually agreed in writing between GIC and Victory). The transaction is subject to requisite regulatory approvals, including the approval of the TSX-V, the Ontario Securities Commission, IIROC and other applicable authorities. The legal structure for the proposed transaction will be confirmed after the parties have considered all applicable tax, securities law and accounting efficiencies.
A comprehensive press release with further particulars relating to the proposed transaction, including the financing, and the resulting issuer will follow in accordance with the policies of the TSX-V.
We seek Safe Harbor.
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