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Gravitas II Capital Corp
Symbol GII
Shares Issued 23,688,000
Close 2022-07-11 C$ 0.095
Market Cap C$ 2,250,360
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Gravitas II firms up deal to acquire Parvis as QT

2022-11-03 23:35 ET - News Release

Mr. Nima Besharat reports

GRAVITAS II CAPITAL CORP. ANNOUNCES DEFINITIVE AGREEMENT WITH PARVIS INVEST INC. FOR PROPOSED QUALIFYING TRANSACTION

Further to the news release dated Aug. 29, 2022, Gravitas II Capital Corp. has entered into an amalgamation agreement dated Nov. 1, 2022, with Parvis Invest Inc. and 14492528 Canada Inc. (Subco), a wholly owned subsidiary of the company, pursuant to which Gravitas II will, by way of a three-cornered amalgamation, acquire all of the issued and outstanding securities of Parvis.

The transaction is subject to TSX Venture Exchange approval and is intended to constitute Gravitas II's qualifying transaction in accordance with TSX Venture Exchange Policy 2.4 (Capital Pool Companies).

In connection with the transaction, Gravitas II intends to consolidate its common shares on a one-for-2.49 basis.

About Parvis Invest Inc.

Parvis, a licensed exempt market dealer in all provinces of Canada, is on a mission to make real estate investing available through a dynamic platform, bridging property developers and accredited investors. Parvis is reimagining how people find real estate investment opportunities and is simultaneously revolutionizing the platform-based real estate market by delivering capital solutions to the developers it partners with. Parvis works closely with established and reputable property developers across North America to supply its users with high-calibre, curated residential, commercial and industrial real estate projects. Through its user-friendly digital platform, Parvis provides easy liquidity to a once illiquid asset by allowing investors to trade on a secondary market secured by blockchain technology. Parvis offers lower fees compared with traditional real estate investment trusts. Parvis has an experienced executive team with deep industry knowledge and expertise in delivering attractive returns through high-quality real estate assets.

Upon completion of the transaction, the resulting issuer (as defined below) will take over the business of Parvis as a Tier 2 technology issuer.

The transaction

Pursuant to the terms of the amalgamation agreement and subject to certain conditions, including receipt of applicable regulatory and shareholder approvals, on the closing date of the transaction, Parvis will amalgamate with Subco pursuant to the provisions of the Canada Business Corporations Act. The amalgamated entity (Amalco) will be a wholly owned subsidiary of Gravitas II, and, as further detailed below, the shareholders of Parvis will be issued one common share of Gravitas II (on a postconsolidation basis) for every one Parvis common share held immediately prior to the completion of the transaction. Additionally, all outstanding options, warrants and broker warrants of Parvis will be exchanged for options, warrants and broker warrants, respectively, of Gravitas II on the same terms and conditions as the original securities.

The amalgamation must be approved by not fewer than 66 per cent of the votes cast at a meeting of shareholders of Parvis, which will be held to consider, among other things, the amalgamation. In addition, it is anticipated that the company will hold a special meeting of the company's shareholders to approve, among other things, the adoption of a new omnibus equity plan, an increase in the number of directors on the board of directors of the company to seven and the election of the new board nominees in connection with the transaction, as detailed below under the heading board and management. For avoidance of doubt, the amalgamation is not anticipated to be subject to Gravitas II shareholder approval. It is expected that each of the Parvis meeting and the Gravitas meeting will be held by Feb. 1, 2023, or such other date as agreed to by the parties.

The completion of the transaction is subject to the satisfaction of certain conditions, including, but not limited to:

  1. The reconstitution of the board at closing to appoint, among two others, each of David Michaud, Jas Bagry and Conan Graham to the board;
  2. The appointment of each of David Michaud, Jas Bagry and Conan Graham as chief executive officer, chief financial officer and chief operating officer, respectively;
  3. The completion of a brokered private placement of subscription receipts of Parvis, to be led by Gravitas Securities Inc. (the terms of which will be disclosed in a subsequent news release);
  4. The completion of the consolidation;
  5. The company obtaining shareholder approval for, among other things, the omnibus equity plan, the board size increase and election of the board nominees;
  6. Approval of the amalgamation by the shareholders of Parvis;
  7. Gravitas II having a cash balance of at least $3.15-million at the closing date;
  8. Parvis having no current liabilities or long-term debt as at the closing date, other than as disclosed in Parvis's financial statements and debts incurred in the ordinary course of business or for the purposes of completing the transaction;
  9. The absence of any material adverse change in the business of either Gravitas II or Parvis;
  10. No material action, cause of action, claim, demand, suit, investigation or other proceedings in progress, pending, or threatened against or affecting any of Gravitas II, Subco, Parvis, or any such company's respective officers and directors;
  11. No proceeding or law being enacted or commenced that frustrates the consummation of the transaction;
  12. Dissent rights having not been exercised by shareholders of Parvis holding more than 5 per cent of the outstanding common shares;
  13. Each of Parvis and Gravitas II being satisfied as to the results of their respective due diligence investigations;
  14. Receipt of all requisite regulatory, corporate, stock exchange, governmental and third party authorizations and consents, including the approval of the TSX-V.

Accordingly, there can be no assurance that the transaction will be completed on the terms proposed above or at all.

Subject to satisfaction or waiver of the conditions precedent referred to herein and contained in the amalgamation agreement, Gravitas II and Parvis anticipate that the transaction will be completed on or before Aug. 1, 2023.

Resulting issuer

On closing of the transaction, it is expected that Gravitas II will issue at a minimum the following securities to Parvis securityholders, on a postconsolidation basis, in exchange for the issued and outstanding securities of Parvis at the closing date:

  • 15.62 million common shares to current Parvis shareholders (in exchange for the same number of Parvis common shares issued and outstanding as of the date hereof);
  • 2.81 million common share purchase warrants to current Parvis warrantholders, exercisable for 2.81 million common shares of the resulting issuer at a price of 75 cents per share (in exchange for the same number of Parvis warrants issued and outstanding as of the date hereof);
  • 308,800 broker warrants to current Parvis holders of broker warrants, exercisable for 308,800 units of the resulting issuer at a price of 50 cents per unit (in exchange for the same number of Parvis broker warrants issued and outstanding as of the date hereof);
  • 1,562,000 options to current Parvis optionholders, exercisable for 1,562,000 common shares of the resulting issuer at a price of 50 cents per share (in exchange for the same number of Parvis options outstanding as of the date hereof).

On closing of the transaction, the resulting issuer will change its name to Parvis Invest Inc. and carry on the real estate investment business conducted by Parvis. Additionally, the resulting issuer shares will be listed under a new trading symbol, and the resulting issuer anticipates meeting the TSX-V's initial listing requirements for a Tier 2 technology issuer.

Board and management

Upon completion of the transaction, it is expected that the board of directors and management of the resulting issuer will consist of Mr. Michaud, Mr. Bagry, Mr. Graham, Drew Green, Kia Besharat and two other independent directors to be determined at a later date. All current directors and officers of Gravitas II, other than Mr. Green and Mr. Besharat, will resign at the closing of the transaction.

The following individuals are expected to be directors or senior officers of the resulting issuer.

David Michaud, chief executive officer and director

Mr. Michaud has over 15 years of experience in finance and corporate law, ranging from representing businesses to large financial institutions on a wide range of investment activities and operations. Having honed his expertise working with various financial regulators in Canada, the United States and abroad, Mr. Michaud has completed various domestic and cross-border corporate acquisitions and structured financial transactions and investments of up to $20-billion in value. Prior to founding Parvis, Mr. Michaud was the legal director for Fiera Capital Corp., providing strategic counsel on legal and business development opportunities such as acquisitions and investment funds. Mr. Michaud also has held the position of senior legal counsel for National Bank of Canada, where he provided legal services to senior management on mergers and acquisitions and corporate legal issues. Mr. Michaud also founded Henry Investments, a real estate development company, along with his two brothers. Mr. Michaud holds a BA of economics and politics from the University of Moncton, a JD from University of Ottawa, and a master of law degree from the University of London (United Kingdom).

Jas Bagry, chief financial officer, corporate secretary and director

Mr. Bagry is a seasoned finance professional, entrepreneur and CFA charterholder with over 15 years of experience in fund management, real estate investment and financial advisory services. Prior to founding Parvis, Mr. Bagry founded InnoVenture Financial Inc., a firm that provides chief financial officer advisory services to seed and Series A stage start-ups. Mr. Bagry has invested in and sits on the boards of several businesses, including a real estate asset manager with over $15-million of net assets and several properties in development planning. Previously, Mr. Bagry was vice-president of New Market Funds, a multifund manager with $65-million of private capital to deliver affordable housing and community-based investment products across Canada. Mr. Bagry was also a venture capitalist in New York and an early-stage adviser to technology companies. Mr. Bagry holds an MBA from Columbia Business School and a BA of commerce from UBC's Sauder School of Business.

Conan Graham, chief operating officer and director

Mr. Graham is a versatile executive recognized for his success across varying business sectors. Whether it is in private or public industry, start-up, or merger and acquisition environments, working with capital partners, or advising on and creating efficiencies within multibillion-dollar enterprises, Mr. Graham has a steep history in scaling business, optimizing organizations and producing sustainable results.

Mr. Graham has over a decade of leadership experience distributing and supporting innovative technology throughout Canada and in a recent role as chief operating officer with Element Lifestyle Retirement (TSX-V: ELM), Mr. Graham was responsible for leading his senior management team through various stages of development with a portfolio of client assets valued in excess of $600-million while meeting with capital partners, strategic investors and stakeholders required to drive company growth.

Mr. Graham holds an MBA from Queen's University and a BA in administrative studies, and is a project management professional (PMP).

Drew Green, chairman and director

Mr. Green is the chief executive officer, president and director of Indochino, a global leader in custom apparel, where between 2015 and 2022, he expanded the business by 600 per cent as chief executive officer and president, reaching nine figures in revenue in 2018. Between 2015 and 2022, he and his team established strategic capital commitments for Indochino from Madrona Venture Partners, Highland Consumer, Dayang Group, Mitsui & Co. (Tokyo Stock Exchange: 8031) and Postmedia Network (Toronto Stock Exchange: PNC.B), and has secured partnerships with the New York Yankees, Boston Red Sox, Nordstrom, and hundreds of National Basketball Association (NBA), Major League Baseball (MLB), National Football League (NFL) and National Hockey League (NHL) athletes, celebrities and teams. Prior to Indochino, Mr. Green founded and was chief executive officer of one of Canada's first multimerchant marketplace (acquired by Emerge Commerce (TSX-V: ECOM)), and prior to that, played key leadership roles at DoubleClick (acquired by Google (Nasdaq: GOOGL), Shop.com (acquired by Market America) and Flonetwork (acquired by DoubleClick)). Mr. Green holds a bachelor's degree from York University. Mr. Green is a founder, chairman and director of the board of Directors of Emerge Commerce, a disciplined, diversified, rapidly growing acquirer and operator of direct-to-consumer e-commerce brands across North America, along with being chairman and/or founder of other public and private companies.

Kia Besharat, director

Mr. Besharat has over 15 years of extensive private equity, investment banking and directorship experience, including as former managing director at Ubequity Capital Partners, a leading global merchant and investment bank. Mr. Besharat acts exclusively as a consultant to Gravitas Securities Inc., where he helps with the advisory, restructuring, corporate finance, and merger and acquisition mandates across the firm's platform, with a recent focus on the following industry groups: consumer/retail, natural resources, Internet/new media, technology and health care. While at Gravitas Securities as a senior managing director of investment banking, Mr. Besharat played a pivotal role in establishing Gravitas Securities as one of the top boutique investment banks in Canada. His transactions have totalled in excess of $1-billion at Gravitas Securities and more than $4-billion over the span of his career. Mr. Besharat serves as a director of Bruush Oral Care (Nasdaq: BRSH), Mednow (TSX-V: MNOW) and Emerge Commerce (TSX-V: ECOM). Mr. Besharat holds a bachelor of arts (economics with a minor in management) from McGill University, as well as a master of science (finance and investment) from the University of Edinburgh. He was also one of Canada's top tennis players, having competed as a professional in tournaments around the world and at the NCAA Division 1 level. In 2018, Mr. Besharat was recognized by the Investment Industry Association of Canada (IIAC) as a top 40 under 40 award nominee.

Please refer to the initial news release for a description of the interests of non-arm's-length parties (as defined in TSX-V policies) to the company in Parvis and the non-arm's-length parties to company that are insiders (as defined in TSX-V policies) of Parvis and TSX-V sponsorship requirements, among other matters required by Section 11.2 of Policy 2.4. The company will disseminate a subsequent news release containing the remaining information required by Section 11.2 of Policy 2.4, including without limitation available significant financial information regarding Parvis and the terms of the concurrent financing, when such information becomes available.

Filing statement

In connection with the transaction and pursuant to the requirements of the TSX-V, Gravitas II will file a filing statement on its issuer profile on SEDAR, which will contain details regarding the transaction, Gravitas II, Parvis and the resulting issuer.

Completion of the transaction is subject to a number of conditions, including, but not limited to, TSX-V acceptance and, if applicable, pursuant to TSX-V 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.

We seek Safe Harbor.

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