Mr. Paul Kelly reports
CORPORATE CATALYST ANNOUNCES LETTER AGREEMENT TO COMPLETE A QUALIFYING TRANSACTION WITH GLOBALIVE TECHNOLOGY PARTNERS INC.
Corporate Catalyst Acquisition Inc. has entered into a letter agreement dated March 13, 2018, to complete a business combination with Globalive Technology Partners Inc. to acquire all of the issued and outstanding securities of Globalive. The transaction is intended to constitute the qualifying transaction of Corporate Catalyst, as such term is defined in Policy 2.4 of the corporate finance manual of the TSX Venture Exchange.
Globalive is a private company incorporated under the laws of the Province of Ontario on Dec. 7, 2017. Globalive's assets and principal office are located in Toronto, Ont. Globalive is a technology company developing innovative solutions to disrupt traditional industries, primarily using artificial intelligence, Internet of things and blockchain technology. Globalive's core business is entering into joint ventures with other companies to co-develop new software applications and technology platforms for use in collaborators' businesses, as well as for licensing to third parties. While each collaborator is different in terms of its objectives, its own existing technology and technological expertise, generally Globalive offers the capital and development resources to create the technology stack to be used in the collaborator's business, as well as its managerial, financial and technical expertise.
The qualifying transaction
Subject to regulatory approval, Corporate Catalyst intends to acquire all of the issued and outstanding securities of Globalive by way of a business combination for aggregate consideration expected to be in the amount of approximately $140-million (excluding any options that may be issued, but including the Globalive shares, Globalive debentures, Globalive subscription receipts and Globalive vend-in shares, all as defined below), to be paid by the issuance of common shares of Corporate Catalyst on a posttransaction basis.
Pursuant to the letter agreement, Corporate Catalyst will issue approximately 140 million resulting issuer shares (at a deemed price of $1 per share), in the aggregate, to the holders of common shares of Globalive, the holders of Globalive subscription receipts (as defined below), the holders of existing convertible debentures of Globalive and the holders of the 24 million Globalive shares to be issued in exchange for certain assets valued at $12-million in the aggregate, to be sold to Globalive prior to completion of the transaction to acquire all the Globalive securities. In addition, all, if any, stock options of Globalive that are issued and outstanding on the effective date of the transaction will be exchanged for stock options of the resulting public company, which shall be convertible into approximately 13.9 million resulting issuer shares on a one-for-one basis, with the exercise price and other terms of such options unchanged.
The proposed transaction is not a non-arm's-length qualifying transaction pursuant to Section 2.1 of TSX-V Policy 2.4 and, accordingly, Corporate Catalyst is not required to obtain shareholder approval of the transaction.
On or prior to the effective date, the name of the resulting issuer shall be changed to such name as Globalive may reasonably determine, subject to regulatory and shareholder approval. Corporate Catalyst has also agreed to use its commercially reasonable efforts to consolidate its common shares on a 1:6.66 basis, or such other basis as agreed to by the parties, on or prior to the effective date, subject to shareholder approval. In addition, the resulting issuer will approve an incentive stock option plan pursuant to which options to acquire up to 10 per cent of the issued and outstanding resulting issuer shares, as of the effective date, on a posttransaction basis, may be issued, subject to certain conditions. Corporate Catalyst intends to hold an annual and special shareholders meeting in May, 2018, at which meeting it will ask shareholders to elect directors and approve, among other things, the name change, the consolidation and the adoption of the amended option plan. However, the transaction is not subject to Corporate Catalyst shareholder approval.
Completion of the proposed transaction remains subject to a number of terms and conditions, including the entering into of a formal agreement between the parties, approval of the shareholders of Globalive, approval of the exchange and the completion of the financing (as defined below).
The parties have agreed that until the effective date or the termination of the negotiations contemplated in the letter agreement, each of Corporate Catalyst and Globalive will continue its respective operations in the ordinary course. The parties have further agreed that neither party will solicit or accept alternative offers without approval in advance by the other party.
Prior to the completion of the transaction, it is anticipated that Globalive shall have completed a brokered private placement of subscription receipts of Globalive, for aggregate gross proceeds of approximately $30-million, at an expected price of $1 per Globalive subscription receipt and on such other terms to be agreed on by the parties. Canaccord Genuity Corp. has agreed to act as lead agent in connection with the financing. Each Globalive subscription receipt will be automatically convertible, for no additional consideration, into one Globalive share, upon satisfaction of certain release conditions, which will include, among other things, the closing of the transaction and the listing of the resulting issuer shares on the exchange, and each Globalive share issued therefor shall be exchanged for one resulting issuer share at the closing of the transaction.
Sponsorship of the transaction is required by the policies of the exchange, unless an exemption is granted by the exchange. Corporate Catalyst will apply for an exemption from the sponsorship requirements pursuant to exchange policies. However, there is no assurance that the exchange will grant this exemption.
Proposed management and board of directors of the resulting issuer
Upon completion of the transaction, it is anticipated that the persons identified below will serve as directors and officers of the resulting issuer. In addition, Globalive may consider adding one or two more independent directors either prior to, or following closing of, the transaction to join the board of directors of the resulting issuer.
-- chief executive officer and director
Mr. Lacavera is the founder of Globalive Capital Inc., a telecommunications/technology focused investment company. Mr. Lacavera has made over 100 venture and private equity investments over the past 15 years, including founding Wind Mobile which became Canada's fourth-largest wireless carrier before it was sold to Shaw for approximately $1.6-billion. Mr. Lacavera was named Canada's CEO of the year by The Globe and Mail in 2010, one of the 50 most influential Torontonians in 2013 and one of Canada's top executives by Power and Influence magazine in 2014. Mr. Lacavera holds an engineering degree from the University of Toronto.
Eric So -- chief strategy officer
Mr. So has over 15 years of experience advising both private and public companies. He is chairman of HyperBlock Technologies Corp. and also serves as a director of Therapix Biosciences Ltd. He has recently served on the executive committee of Mundo Inc. where he was chief legal and corporate development officer. An alumnus of Torys LLP, Mr. So holds a bachelor of science from McGill University and a law degree from the University of Windsor. Mr. So is heavily involved in charity work within his community.
-- chief corporate officer
Mr. Lockie has over 15 years of experience as a legal counsel, business adviser and investor. He is chief legal officer at Globalive Capital Inc. and previously served on the board of Wind Mobile and as its chief regulatory officer. Prior to joining Globalive, Mr. Lockie was a partner at Davies Ward Phillips & Vineberg LLP. He graduated from the University of Toronto with his BA (honours) and obtained his LLB from McGill University. He was vice-chair of the American Bar Association's international corporate counsel committee from 2011 to 2013, and for three consecutive years has been recognized by the Canadian General Counsel Association as one of Canada's top five young in-house counsel.
Brock Bundy -- chief financial officer
Mr. Bundy has over 20 years of experience leading teams in private equity investments and has closed more than 40 transactions in both public and private markets. He is on the investment committee of a fund that has $1.6-billion in assets under management.
Scott Nirenberski -- chief operating officer
Mr. Nirenberski has over 20 years of experience of investing in the technology sector. He founded Mosaic Asset Management, a San Francisco-based $280-million TMT hedge fund. Mr. Nirenberski also ran the technology research team for the multibillion hedge funds Pequot Capital Management and Seasons Capital Management.
Bhavin Shah -- chief technology officer
Mr. Shah has over 15 years of experience in software engineering and for five years was the chief technology officer of TouchBistro. He is also a former director of Globalive Communications.
Mr. Theofilos is a co-founder and chief executive officer of Mundo Inc., a leading global performance mobile ad network. He has founded or invested in over 50 private technology and blockchain companies and serves on the board of Mundo and CoinSquare, a leading Canadian cryptocurrency exchange.
Kingsley Ward -- director
Mr. Ward has more than 25 years of experience as an investor and director of various private equity and public companies. He is chairman of his family office holding company, The Vimy Ridge Group Ltd., and chairman of Founders Advantage Capital Corp., Data Communications, Clarus Securities Inc., Jones Brown Holdings Inc. and Nucro Technics.
Globalive Capital Inc., a company controlled by Mr. Lacavera, resident in Ontario, is expected to own, upon completion of the financing, approximately 40 per cent of the outstanding common shares of Globalive (which includes 20 million vend-in shares to be issued to it), on an as converted basis, and through voting agreements will have voting control over additional common shares.
Other than as disclosed above, no person is expected to own more than 10 per cent of the resulting issuer shares.
Corporate Catalyst will disclose additional information relating to the transaction as soon as it becomes available, including financial information relating to Globalive, as well as backgrounds of any other person who may constitute an insider of the resulting issuer and any other relevant information.
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.
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