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Aphelion receives conditional TSX-V OK for Edge QT

2021-11-15 20:41 ET - News Release

Mr. Seth Kay reports

APHELION CAPITAL CORP. AND EDGE TECHNOLOGIES, INC. ANNOUNCE RECEIPT OF TSXV CONDITIONAL APPROVAL, FILING OF FILING STATEMENT AND ENGAGEMENT OF CANACCORD GENUITY

The TSX Venture Exchange has conditionally approved its proposed business combination pursuant to a merger agreement dated effective March 3, 2021, as amended, among Aphelion Capital Corp., Edge Technologies Inc., Electric Acquisition Corp., a wholly owned subsidiary of Aphelion, Aphelion FundCo Inc. and 1289571 B.C. Ltd., a wholly owned subsidiary of Aphelion, which will constitute the qualifying transaction of the company, and it has filed a filing statement in respect of the qualifying transaction dated effective Nov. 12, 2021, on the company's SEDAR profile.

Aphelion is further pleased to announce that the parties have executed an amendment to the merger agreement whereby the parties have agreed to extend the outside date in respect of the merger agreement to Jan. 31, 2022, make certain amendments to the special rights and restrictions to be attached to the subordinate voting shares (SVS) and preferred multiple voting shares (MVS) to be created in connection with the qualifying transaction, amended the stock split to be undertaken by the company in connection with the qualifying transaction from 5 to 1 to 2 to 1, and agreed to certain amendments generally to accommodate the financings (as defined below). The amended special rights and split ratio will be subject to shareholder approval at a special meeting of the shareholders of the company to be held on Dec. 14, 2021. Aphelion has prepared an information circular in connection with the meeting, a copy of which is available on the company's SEDAR profile. The parties may further amend the terms of the merger agreement or with respect to the qualifying transaction as may be required and agreed upon to complete the qualifying transaction.

Concurrent financings

In connection with the qualifying transaction, Aphelion, Edge and FundCo have entered into an engagement letter dated Sept. 29, 2021, with Canaccord Genuity Corp., pursuant to which each of Aphelion and FundCo will complete a brokered private placement in connection with the qualifying transaction. Aphelion will complete a brokered private placement of a minimum of 6,935,483 and a maximum of 9,677,419 postsplit SVS (the SVS sold under the Aphelion financing (as defined below)), at a price per offered share of 62 cents for aggregate gross proceeds of approximately between $4.3-million and $6-million, and FundCo will complete a brokered private placement of 1,612,903 subscription receipts of FundCo at a price per subscription receipt equal to the financing price for aggregate gross proceeds of approximately $1-million.

Upon completion of the qualifying transaction, the resulting issuer intends to use the net proceeds from the financings for company growth, product development, strategic acquisitions and general corporate purposes.

Aphelion financing

Closing of the Aphelion financing will follow the completion of the split, and each offered share shall be, upon issue, a postsplit SVS. Each offered share will be subject to a hold period of four months and one day from the date of issuance thereof.

In connection with the Aphelion financing, the agent will be paid a cash commission equal to 7 per cent of the gross proceeds raised under the Aphelion financing and be issued such number of share purchase warrants as is equal to 7 per cent of the offered shares sold under the Aphelion financing. Each Aphelion agent's warrant will entitle the holder to acquire one SVS at the financing price for a period of 24 months following the date of issuance thereof.

The Aphelion financing shall be completed concurrently or immediately before the closing of the qualifying transaction, and shall be following the completion of the split.

FundCo financing

Each subscription receipt will automatically be converted, without payment of any additional consideration and without any further action on the part of the holder thereof, into one common share in the capital of FundCo, upon satisfaction of certain escrow release conditions as described in a subscription receipt agreement to be entered into at closing of the FundCo financing. Each FundCo share received by holders of the subscription receipts shall then be converted into one postsplit SVS in connection with the completion of the qualifying transaction.

The gross proceeds of the FundCo financing, less 50 per cent of the FundCo cash fee (as defined below) and the cash portion of the CFF (as defined below), which will be paid upon closing of the FundCo financing, will be deposited in escrow at closing pending the satisfaction of the escrow release conditions. If either: (i) the escrow release conditions are not satisfied on or before the escrow release deadline to be stipulated in the subscription receipt agreement; or (ii) prior to such escrow deadline, Edge or Aphelion advises the agent or announces to the public that it does not intend to satisfy the escrow release conditions, the subscription receipts will be cancelled and the escrowed funds shall be returned to the holders of the subscription receipts in accordance with the terms of the subscription receipt agreement.

In connection with the FundCo financing, the agent will be paid a cash commission equal to 7 per cent of the gross proceeds raised under the FundCo financing and be issued such number of FundCo share purchase warrants as is equal to 7 per cent of the subscription receipts sold under the FundCo financing. If, and only if, the escrow release conditions are satisfied by the escrow deadline, each FundCo agent's warrant will be exchanged for one SVS purchase warrant entitling the holder to acquire one SVS at the financing price for a period of 24 months following the date of issuance thereof.

In addition, Aphelion and FundCo will pay the agent a $150,000 corporate finance fee (the CFF) upon closing of the FundCo financing, with 50 per cent of the CFF payable in cash and 50 per cent of the CFF payable in FundCo shares at a deemed price per FundCo share equal to the financing price. The FundCo financing shall be completed on such date to be determined between FundCo and the agent.

Closing

Assuming all conditions to the closing of the qualifying transaction are satisfied, the parties anticipate closing the qualifying transaction in December, 2021. In due course, the parties will issue a further press release announcing the closing of the qualifying transaction and the date on which the common shares of the company will resume trading. In connection with the qualifying transaction, and subject to the receipt shareholder approval of the company of certain resolutions proposed for adoption at the meeting, the company will, among other things, change its name to Edge Total Intelligence Inc., split its issued and outstanding common shares on the basis of two postsplit common shares for each one presplit common share, redesignate its common shares as SVS, create a new class of MVS, and assign special rights and restrictions to each of the SVS and MVS. The qualifying transaction does not require the consent of the shareholders of the company; however, certain transactions required to consummate the qualifying transaction requires the approval of the shareholders, which will be sought at the meeting.

Additional information

The qualifying transaction is not a non-arm's-length transaction (as defined in the policies of the TSX-V), and as such, shareholder approval is not required for the qualifying transaction under the policies of the TSX-V. Trading in the common shares of the company is currently halted and will remain halted until completion of the qualifying transaction. Completion of the qualifying transaction is subject to a number of conditions, and there can be no assurance that the qualifying transaction will be completed as proposed or at all. For further information, please refer to the filing statement and the information circular of the company in respect of the meeting posted to the company's issuer profile on SEDAR.

About Edge Technologies Inc.

Edge Technologies was incorporated on July 29, 1993, under the laws of the State of Virginia, United States. Edge is a software company based in Arlington, Va., United States, and provides a connected intelligence platform that enriches the usefulness of existing data and systems such as RPA, BI, ERP, ITSM, CRM and BPM, and delivers real-time, secure, connected, role-based data aggregation, digital process orchestration and information visualization -- helping enterprises experience significantly improved returns.

About Aphelion Capital Corp.

The company was incorporated under the Business Corporations Act (British Columbia) on Jan. 10, 2019, and is a capital pool company (as defined in the policies of the TSX-V) listed on the TSX-V. The company has no commercial operations and no assets other than cash.

We seek Safe Harbor.

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