TORONTO, Sept. 20,
2024 /CNW/ - On June 3,
2024, Carriage House Wealth Ltd. (the "Acquiror"), an
exempt market dealer and portfolio manager, entered into an
Investment Management Agreement with an arm's-length client of the
Acquiror whereby the client retained the Acquiror's services as a
portfolio manager and the client gave discretionary trading
authority to the Acquiror in regard to the securities held in the
client's account. Accordingly, pursuant to the terms of the
Investment Management Agreement, the Acquiror acquired control or
direction over the securities in the client's account, although
beneficial ownership of the securities did not change and
beneficial ownership remains with the client.
On June 27, 2024, Vertiqal Studios
Corp. (TSX:VRTS) (the "Issuer") issued a two-year unsecured
subordinated redeemable convertible debenture to the client in the
principal amount of $1,000,000
("Convertible Debenture #2"). The client deposited
Convertible Debenture #2 into the client's managed account with the
Acquiror, although the debenture remains registered in the name of
the client. Convertible Debenture #2 has a maturity date of
June 27, 2026. Interest on the
principal amount outstanding will accrue at an annual rate of 15%.
The principal amount of Convertible Debenture #2 is convertible at
any time prior to the maturity date, at the option of the holder,
into common shares of the Issuer at a price of $0.025 per share. Assuming the conversion of the
principal amount of Convertible Debenture #2, and based upon the
number of common shares of the Issuer that are beneficially owned
by the Acquiror and the number of common shares of the Issuer that
are under the control or direction of the Acquiror pursuant to
Investment Management Agreements with this and other
managed-account clients of the Acquiror, as at June 27, 2024 the Acquiror beneficially owned
and/or exercised control and direction over an aggregate of
59,729,400 common shares of the Issuer, representing 9.46% of the
Issuer's issued and outstanding common shares at that time. When
adding the post-conversion deemed beneficial ownership of the
client's Convertible Debenture #2 (which represents an additional
40,000,000 common shares of the Issuer), the Acquiror was deemed to
beneficially own and/or exercise control and direction over an
aggregate of 99,729,400 common shares of the Issuer as at
June 27, 2024, representing 14.86% of
the Issuer's issued and outstanding common shares on a partially
diluted basis.
Immediately prior to the arrival of Convertible Debenture #2
into the client's managed account at the Acquiror on June 27, 2024, the Acquiror owned and held
5,600,000 common shares of the Issuer directly in the Acquiror's
own account, in addition to having control or direction over a
further 54,129,400 common shares of the Issuer in the Acquiror's
managed accounts that are beneficially owned by the Acquiror's
arm's-length clients. In addition, at this time the Acquiror
also had control or direction over an earlier-issued convertible
debenture of the Issuer ("Convertible Debenture #1") that
was held in a managed account of an arm's-length client of the
Acquiror; however, this convertible debenture is not convertible
into common shares of the Issuer until September 10, 2025 (it is not convertible into
common shares of the Issuer within the 60 days following
June 27, 2024 or the 60 days
following the date of this press release, see subsection 1.8(1) of
NI 62-104). Accordingly, immediately prior to the arrival of
Convertible Debenture #2 into the client's managed account at the
Acquiror on June 27, 2024, the
Acquiror beneficially owned or had control or direction over
59,729,400 common shares of the Issuer representing 9.46% of the
Issuer's 631,113,354 outstanding common shares.
Additional updates:
On July 4, 2024, pursuant to an
Investment Management Agreement with the Acquiror, a client of the
Acquiror transferred control or direction of such client's
13,600,000 common shares of the Issuer to the Acquiror. These
shares became included in the client's managed account with the
Acquiror. The client retains beneficial ownership of such shares.
Accordingly, as at July 4, 2024, the
Acquiror is deemed to beneficially own and/or exercise control and
direction over an aggregate of 113,329,400 common shares of the
Issuer, representing 16.89% of the Issuer's issued and outstanding
common shares on a partially diluted basis.
Pursuant to the terms of a Debt Settlement Agreement dated
July 2, 2024 whereby the Acquiror and
the Issuer agreed that the Issuer would issue common shares to the
Acquiror in order to settle an outstanding amount owing to the
Acquiror for consulting services, on July 5,
2024 the Issuer issued 8,666,666 common shares to the
Acquiror. The common shares were valued by the parties at
$0.03 per share. This transaction
increased the Issuer's total issued and outstanding common shares
from 631,113,354 to 639,780,020. Accordingly, upon the closing of
this transaction, the Acquiror is deemed to beneficially own and/or
exercise control and direction over an aggregate of 121,996,066
common shares of the Issuer, representing 17.95% of the Issuer's
issued and outstanding common shares on a partially diluted
basis.
On July 15, 2024, the Acquiror
purchased an additional 178,333 common shares of the Issuer through
a secondary-market transaction utilizing the facilities of the
Toronto Stock Exchange. The common shares were purchased at
$0.02 per share. Accordingly, upon
the completion of this transaction, the Acquiror is deemed to
beneficially own and/or exercise control and direction over an
aggregate of 122,174,399 common shares of the Issuer, representing
17.97% of the Issuer's issued and outstanding common shares on a
partially diluted basis.
In conclusion, as at the date of this press release:
- the Acquiror directly owns 14,444,999 common shares of the
Issuer;
- the Acquiror, as a portfolio manager, has control or direction
over an additional 67,729,400 common shares of the Issuer, which
are beneficially owned by the Acquiror's arm's-length clients in
their managed accounts;
- the Acquiror, as a portfolio manager, has control or direction
over Convertible Debenture #1, which is beneficially owned by an
arm's-length client of the Acquiror in a managed account and which
is not convertible into common shares of the Issuer at a price of
$0.025 per share until September 10, 2025 (which means that, as at the
date hereof, there is no deemed beneficial ownership of the
underlying common shares, see subsection 1.8(1) of NI
62-104). Deemed beneficial ownership of the 20,000,000 common
shares of the Issuer that underly Convertible Debenture #1 will
occur on July 12, 2025 (60 days prior
to the conversion date);
- the Acquiror, as a portfolio manager, has control or direction
over Convertible Debenture #2, which is beneficially owned by an
arm's-length client of the Acquiror in a managed account and which
is convertible into common shares of the Issuer at a price of
$0.025 per share (representing
40,000,000 common shares) at the option of the holder; and
- the Issuer has 639,780,020 common shares issued and outstanding
(on a basic basis).
In accordance with applicable securities laws, the Acquiror may,
from time to time and at any time, acquire additional commons
shares of the Issuer, and/or other equity, debt or other securities
or instruments (collectively, "Securities") of the Issuer in
the open market or otherwise, and the Acquiror reserves the right
to dispose of any or all of such Securities in the open market or
otherwise at any time and from time to time, and to engage in
similar transactions with respect to the Securities, the whole
depending on market conditions, the business and prospects of the
Issuer and other relevant factors.
The head office address of the Acquiror is 33 Toronto Street
North, Unit #2, Uxbridge,
Ontario L9P 1E6.
The Acquiror acquired the securities of the Issuer for
investment purposes, and has no present intention of acquiring
additional Securities. Depending upon the Acquiror's evaluation of
the business, prospects and financial condition of the Issuer, the
market for the Issuer's Securities, general economic and tax
conditions and other factors, the Acquiror may acquire more or sell
some or all of the Securities owned, managed or controlled by the
Acquiror.
This press release is issued pursuant to early warning
requirements of National Instrument 62-103 – The Early Warning
System and Related Take-Over Bid and Insider Reporting Issues
which also requires the Early Warning Report to be filed in
accordance with applicable Canadian securities laws. For further
information please refer to the Early Warning Report to be posted
on Vertiqal Studios Corp.'s
SEDAR+ profile at www.sedarplus.com or which may be obtained
by contacting the Acquiror at
inquiries@carriagehousewealth.ca or 905-922-3323.
SOURCE Carriage House Wealth Ltd.