(TSXV-NEX: SVN.H)
/NOT FOR DISSEMINATION TO U.S. NEWSWIRE SERVICES/
TORONTO, Aug. 14, 2015 /CNW/ - 71 Capital Corp. (the
"Corporation") (TSXV-NEX: SVN.H) is pleased to provide the
following update on its previously announced qualifying transaction
(see press release dated May 19,
2015) whereby the Corporation will acquire all of the issued
and outstanding securities (the "Prodigy Shares") of TCB
Corporation doing business as Prodigy Ventures ("Prodigy
Ventures") in exchange for the issuance of common shares and
restricted voting shares (as described below) to the shareholders
of Prodigy Ventures. The acquisition of the Prodigy Shares will
constitute the qualifying transaction of the Corporation (the
"Qualifying Transaction") as such term is defined in the
policies of the TSX Venture Exchange (the "Exchange").
The acquisition of the Prodigy Shares will be effected through
the amalgamation of a wholly-owned Ontario subsidiary ("SubCo") of the
Corporation and Prodigy Ventures. The vendors of the Prodigy
Shares are Tom Beckerman of
Toronto, Ontario, Andrew Kieran of Toronto, Ontario through his Ontario company Mobistrat Consulting Ltd.,
Paul Andrusyshyn through his
Canada company 7797958 Canada
Corp. and Hussein Vastani of
Toronto, Ontario.
Prodigy Ventures is a "venture builder", creating new business
platforms and applications in many of the highest growth technology
segments: mobile video, wearables, proximity marketing, mobile
payments, augmented reality, 3D and social. Prodigy Labs, the
company's technology services business, is a trusted supplier
to some of Canada's largest
enterprises. The Corporation is a capital pool company.
Terms of Qualifying Transaction
Under the terms of the Qualifying Transaction, SubCo will
amalgamate with Prodigy Ventures and the shareholders of Prodigy
Ventures will receive common shares and restricted voting shares
(as described below) in the capital of the Corporation in exchange
for their Prodigy Shares.
The Qualifying Transaction is an arm's length transaction.
No insiders of the Corporation own securities in Prodigy Ventures
and no insiders of Prodigy Ventures own securities in the
Corporation.
Pro forma Capital Structure
The Corporation currently has 4,411,271 common shares issued and
outstanding. In connection with the Qualifying Transaction such
common shares will be consolidated on a two to one basis, resulting
in 2,205,636 new common shares prior to the amalgamation. Current
Prodigy Ventures shareholders will be issued 20,024,724
post-consolidation common shares and 88,051,416 restricted voting
shares. The restricted voting shares of the Corporation will not
carry the right to vote, will rank pari passu with the
common shares of the Corporation with respect to the payment of
dividends and distribution of assets on liquidation, and will be
convertible at the option of the holder on a one-for-one basis
subject to satisfaction of the public distribution listing
requirements of the Exchange.
In connection with the completion of the Qualifying Transaction,
Prodigy Ventures will complete a financing (the "Private
Placement") to raise $85,773
through the issuance of 1,183,081 subscription receipts (the
"Subscription Receipts") at a price of $0.0725 per Subscription Receipt. Each
Subscription Receipt will be exchanged, without the payment of any
additional consideration, for one common share of Prodigy Ventures
upon the satisfaction or waiver of all the conditions necessary to
complete the Qualifying Transaction that may satisfied prior to
such closing. Such common shares of Prodigy Ventures will be
exchanged on a one a one for one basis into freely tradeable common
shares of the Corporation in connection with the completion of the
Qualifying Transaction. The proceeds from the Private
Placement will be used for general working capital purposes.
Following completion of the amalgamation, (i) current
shareholders of the Corporation will hold approximately 8.6% of the
outstanding common shares of the Corporation (and approximately
1.94% of all shares of the Corporation), (ii) current Prodigy
Ventures shareholders will hold approximately 78.0% of the
outstanding common shares of the Corporation (and approximately
95.02% of all shares of the Corporation, (iii) investors in the
private placement (excluding Stephen
Moore and Robert MacLean, two
independent directors of the Corporation) will hold approximately
2.6% of the outstanding common shares of the Corporation (and
approximately 0.57% of all shares), (iv) Stephen Moore and Robert
MacLean (two independent directors of the Corporation who
participated in the financing) will hold approximately 2.0% of the
common shares of the Corporation (and approximately 0.46% of all
shares of the Corporation) and (v) Robson Capital Inc. (a financial
advisor to Prodigy Ventures) will hold approximately 8.9% of the
outstanding common shares of the Corporation (and approximately
2.00% of all shares of the Corporation).
Pursuant to the terms of a voting trust agreement, certain
shareholders ("Assigning Shareholders") of Prodigy Ventures have
agreed to assign the voting rights attaching to securities of the
Corporation to be issued to them in connection with the Qualifying
Transaction to Tom Beckerman.
This assignment applies to the common shares of the Corporation to
be held by such Assigning Shareholders on the closing of the
Qualifying Transaction and any common shares acquired or held by
such Assigning Shareholders, directly or indirectly after the date
hereof, including, without limitation, through conversion of
restricted voting shares into common shares. The voting
rights granted under the agreement to Mr. Beckerman cease to apply
to the common shares held by Assigning Shareholders following (i)
the disposition of the direct or indirect registered and/or
beneficial ownership of such common shares or (ii) the disposition
of all securities of the Corporation held by Mr. Beckerman.
By virtue of the voting trust agreement, on closing Mr. Beckerman
will hold voting rights over approximately 80% of the common shares
of the Corporation.
In accordance with Exchange policy, the Corporation's shares are
currently halted from trading and will remain so until the
completion of the Qualifying Transaction.
71 Capital Shareholders Meeting
On July 16, 2015, the Corporation
held an annual and special meeting of its shareholders. In
addition to the normal annual business, at such meeting
shareholders approved (i) the proposed directors of the Corporation
following the Qualifying Transaction (as described below), (ii) a
name change to Prodigy Ventures Inc. or such other name as may be
acceptable to the directors of the Corporation and applicable
regulatory authorities, (iii) the ratification of the Corporation's
stock option plan, (iv) a consolidation of the common shares of the
Corporation on a 1 post consolidation share for 2 pre-consolidation
shares basis, (v) the creation of the restricted voting shares (as
described in more detail below).
Upon completion of the Qualifying Transaction, Prodigy Ventures
will be a wholly-owned subsidiary of the Corporation and the
Corporation will be engaged in the business of Prodigy
Ventures. For a full description of Prodigy Ventures and its
business please see the Corporation's press release dated
May 19, 2015.
Management and Board of Directors of the Resulting
Issuer
Upon completion of the Qualifying Transaction, the resulting
issuer's Board of Directors will consist of Tom Beckerman, Robert
MacLean and Stephen Moore.
The following is biographical information on each of these
individuals.
Tom Beckerman is a seasoned
technology veteran, with over 35 years of experience in senior
leadership roles. Mr. Beckerman is currently focused on the
strategic development and marketing of new high growth technology
platforms and services for mobile video, wearables, proximity
marketing, mobile payments, augmented reality, 3D and social. Apart
from Prodigy Ventures, Mr. Beckerman played instrumental roles in
the development and success of seven other technology, marketing
services, financial information and medical device companies. He
has created unique technologies and worked with Fortune 1000
companies. Mr. Beckerman graduated with an MBA from the
University of Chicago in 1976 and
received a Bachelor of Commerce degree from the University of Toronto in 1974.
Mr. MacLean is a founder of Points International Ltd. and has
served as its Chief Executive Officer of since February 2000. Prior to founding Points
International, Mr. MacLean recorded an impressive list of
leadership roles and achievements during 12 years in the airline
and loyalty industry. As Vice President, Sales with Canadian
Airlines, Mr. MacLean led a team of over 250 employees throughout
North America, delivering over
$2 billion in annual revenue. Mr.
MacLean was also responsible for the airline's award-winning
Canadian Plus loyalty program. Mr. MacLean also served as Canadian
Airline's senior representative on the OneworldTM Alliance's
Customer Loyalty Steering Committee. Mr. MacLean is an active
member of the global loyalty community and speaks frequently at
industry events worldwide. Mr. MacLean is a past member of the
board of directors of Hope Air. Hope Air is a national charity that
helps Canadians get to medical treatment when they cannot afford
the flight costs. Mr. MacLean is a graduate of Acadia University.
Mr. Moore is the Managing Director of Newhaven Asset Management
Inc., a wealth management company. Prior to January 2006, he held a number of senior
positions in the financial services industry focused in the areas
of investment research, institutional sales, corporate finance and
private equity. Mr. Moore was the Chairman of the Board of
Governords of CI Investments Inc. until July
2007, and is currently the Chair of the Governance
Committee, and a member of the Audit Committee of CI Financial
Corp. Mr. Moore is a trustee of the Advantaged Preferred
Share Trust and a director of Pivot Technology Solutions Inc.,
where he serve as a member of the Audit and Compensation, Corporate
Governance and Nominating Committees. Mr. Moore holds a B.A.
in Economics and an MBA from Queen's University.
Background information regarding the officers, other than Mr.
Beckerman is set forth below.
Andrew Hilton, – Chief Financial Officer and Corporate
Secretary.
Andrew Hilton has provided
financial reporting and corporate secretarial services for a number
of public companies since 2005. He was the Chief Financial Officer
of GC-Global Capital Corp. from 2010 – 2012 and is has been the
Chief Financial Officer of Jaguar Financial Corporation (TSXV: JFC)
since December 2013, Added Capital
Inc. (TSXV: AAD) since December 2013,
Cardinal Capital Partners Inc. (TSXV: CCP.H) since April 2013 and Axiom Corp. (OTC Pink: AXMM) since
February 2015. Mr. Hilton is a Chartered Professional
Accountant and holds an Honours BA in Economics and Financial
Management from Wilfrid Laurier
University.
Hussein Vastani – Proposed Chief
Technology Officer.
Hussein Vastani is Prodigy
Ventures' Chief Technology Officer and in that capacity leads
Prodigy Ventures's technology development for both services and new
ventures. Mr. Vastani has an M.Sc. in Computer Science, with over
eight years of experience in full stack architecture, design and
development. Hussein previously led advanced technology projects at
MacDonald Dettwiler and Teranet. Prior to joining Prodigy Ventures
Mr. Vastani was a Senior Software Engineer from November 2010 to April
2015 with Clear Pursuit Interactive Inc.
Andrew Kieran – Proposed Vice
President.
Andrew has more than ten years' experience in technology
architecture, design and development. He is focused on the domestic
and international financial services industry, and has been a
leader in the development of innovative mobile and payment
solutions. Andrew also leads Prodigy Ventures' staff augmentation
services practice. Prior to joining Prodigy Ventures Andrew
was (i) a Senior Manager, Mobile at
NexJ Systems from January 2013 to
April 2014, (ii) a Director,
Mobile at Broadstreet Mobile from
April 2012 to December 2012 and (iii) a Senior Developer at
Canadian Imperial Bank of Commerce from May
2014 to April 2012.
Sponsorship of Qualifying Transaction
Jacob Securities Inc., subject to completion of satisfactory due
diligence, has agreed to act as sponsor in connection with the
Qualifying Transaction. An agreement to sponsor should not be
construed as any assurance with respect to the merits of the
transaction or the likelihood of completion.
Description of Significant Conditions to
Closing
Completion of the Qualifying Transaction is subject to a
number of conditions including but not limited to, due diligence,
Exchange acceptance and if required by Exchange policies and
shareholder approval. Where applicable, the Qualifying Transaction
cannot close until the required shareholder approval is
obtained. There can be no assurance that the Qualifying
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 Qualifying Transaction, any information
released or received with respect to the Qualifying 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.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed transaction and has neither approved nor
disapproved the contents of this press release.
The Corporation will make a subsequent news release with
information on sponsorship and summary financial information in
accordance with Exchange policy.
Cautionary Statements
This news release contains "forward-looking statements"
within the meaning of applicable securities laws relating to the
proposal to complete the Qualifying Transaction and associated
transactions, including statements regarding the terms and
conditions of the Qualifying Transaction and associated
transactions. Readers are cautioned not to place undue
reliance on forward-looking statements. Actual results and
developments may differ materially from those contemplated by these
statements depending on, among other things, the risks that the
parties will not proceed with the Qualifying Transaction and
associated transactions, that the ultimate terms of the Qualifying
Transaction and associated transactions will differ from those that
currently are contemplated, and that the Qualifying Transaction and
associated transactions will not be successfully completed for any
reason (including the failure to obtain the required approvals or
clearances from regulatory authorities). The statements in this
news release are made as of the date of this release. The
Corporation undertakes no obligation to comment on analyses,
expectations or statements made by third parties in respect of the
Corporation, Prodigy Ventures, or their respective financial or
operating results or (as applicable), their securities.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE 71 Capital Corp.