Toronto, Ontario--(Newsfile Corp. - December 21, 2021) - 1319738 B.C. Ltd. (the "Company" or "Pubco") is pleased to announce that it has signed a business combination agreement (the "Agreement") pursuant to which the Company will acquire (the "Proposed Transaction") all of the outstanding securities of DevvESG Streaming, Inc. ("DESG"), a Delaware-based, ESG principled, high-tech, impact investing company focused on high quality and high return carbon credit generating projects. DESG offers investors exposure to carbon credits, a key instrument used to reduce emissions of carbon dioxide and other greenhouse gases from industrial activities to reduce the effects of global warming. The Proposed Transaction is expected to constitute a reverse takeover of Pubco.
Merger & DESG Concurrent Financing
Pursuant to the Proposed Transaction, the Company will acquire all of the issued and outstanding subordinate voting shares (the "DESG Subordinate Voting Shares") and multiple voting shares (the "DESG Multiple Voting Shares") of DESG by way of three cornered merger (the "Merger") among the Company, a wholly-owned Delaware subsidiary of the Company and DESG. Under the Merger, (i) each DESG Subordinate Voting Share will be cancelled and the former holders of DESG Subordinate Voting Shares will receive one subordinate voting share of Pubco (each, a "Pubco Subordinate Voting Share") for each DESG Subordinate Voting Share held, and (ii) each DESG Multiple Voting Share will be cancelled and the former holders of DESG Multiple Voting Shares will receive one multiple voting share of Pubco (each, a "Pubco Multiple Voting Share") for each DESG Multiple Voting Share held. Outstanding warrants of DESG (the "DESG Warrants") will be cancelled and the former holders of the DESG Warrants will receive warrants to acquire securities of Pubco, which warrants will be on substantially the same terms and conditions as the DESG Warrants, except for the right to receive Pubco Subordinate Voting Shares in lieu of DESG Subordinate Voting Share upon, among other things, payment of the applicable exercise price.
Additionally, prior to completion of the Transaction, DESG is expected to complete a private placement (the "DESG Concurrent Financing") of units of DESG (the "DESG Units") at a price of $0.80 per DESG Unit for gross proceeds, when combined with the Finco Concurrent Financing (defined below), of approximately $10,000,000. Each DESG Unit will consist of one DESG Subordinate Voting Share and one-half of one transferable subordinate share purchase warrant (each full warrant, a "DESG Financing Warrant"). Each DESG Financing Warrant will entitle the holder to purchase, upon exercise thereof, one DESG Subordinate Voting Share at a price of $1.50 per share for a period of 24 months from the closing date of the Proposed Transaction. DESG may pay finder's fees to certain eligible finders in connection with the DESG Concurrent Financing.
Amalgamation & Finco Concurrent Financing
In connection with the Proposed Transaction, DevvESG Streaming Finco Ltd. ("Finco"), a wholly-owned British Columbia subsidiary of DESG incorporated as a special purpose financing vehicle, will complete a private placement (the "Finco Concurrent Financing") of special warrants (the "Special Warrants") at a price of $0.80 per Special Warrant for gross proceeds, when combined with the DESG Concurrent Financing, of approximately $10,000,000. Each Special Warrant will automatically convert, without payment of any additional consideration, into one unit of Finco (each, a "Finco Unit") consisting of one common share of Finco (each, a "Finco Share") and one half of one transferable common share purchase warrant (each full warrant, a "Finco Warrant") on the date which is the earlier of (i) such date as determined by Finco subsequent to the Pubco Subordinate Voting Shares being conditionally approved for listing on the NEO Exchange or another national stock exchange, and (ii) four months and one day following the date of issuance of the Special Warrants. Each Finco Warrant will entitle the holder to purchase, upon exercise thereof, one Finco Share at a price of $1.50 per share for a period of 24 months from the closing date of the Proposed Transaction. Finco may pay finder's fees to certain eligible finders in connection with the Finco Concurrent Financing.
Pursuant to the Proposed Transaction, the Company will acquire all of the issued and outstanding Finco Shares by way of three cornered amalgamation (the "Amalgamation") among the Company, a wholly-owned British Columbia subsidiary of the Company ("BC Subco") and Finco. Under the Amalgamation, (i) each Finco Share will be cancelled and the former holders of Finco Shares will receive one Pubco Subordinate Voting Share for each Finco Share held. Outstanding Finco Warrants will be cancelled and the former holders of the Finco Warrants will receive warrants to acquire securities of Pubco, which warrants will be on substantially the same terms and conditions as the Finco Warrants, except for the right to receive Pubco Subordinate Voting Shares in lieu of Finco Shares upon, among other things, payment of the applicable exercise price.
Share Amendment, Consolidation & Name Change
In connection with the Proposed Transaction, Pubco will (i) undergo a consolidation (the "Consolidation") of the common shares of Pubco (the "Pubco Shares") on a ratio that results in there being 1,250,000 post-consolidation Pubco Shares outstanding immediately prior to completion of the Proposed Transaction; (ii) change its name to DevvESG Streaming Inc. or such other name designated by DESG (the "Name Change"); and (iii) amend its current articles to (a) amend the terms of the existing Pubco Shares to become an unlimited number of "Subordinate Voting Shares"; and (b) create a new class of shares consisting of an unlimited number of "Multiple Voting Shares" (the "Share Amendments").
Following the completion of the Transaction, the outstanding capital of the Company is expected to consist of 27,250,000 Pubco Subordinate Voting Shares and 4,650,000 Pubco Multiple Voting Shares.
Board and Management Changes
It is the parties' intention that upon closing of the Proposed Transaction, the board of directors and officers of the Resulting Issuer be reconstituted to be comprised of Sunny Trinh (Chief Executive Officer), David Goertz (Chief Financial Officer), Chris Merkel (Chief Operating Officer), William Stewart (Director), Tom Anderson (Director), Ray Quintana (Director) and Danny Matthews (Director), or such other directors and officers as DESG may determine in its discretion.
Closing Conditions
The completion of the Proposed Transaction remains subject to a number of terms and conditions, including, among other things (1) completion of the DESG Concurrent Financing and Finco Concurrent Financing; (2) the Pubco Subordinate Voting Shares having been conditionally approved for listing on the NEO Exchange; and (3) the completion of the Consolidation, Name Change and Share Amendments in a manner satisfactory to DESG.
About DESG
DESG is an ESG principled, high-tech, impact investing company focused on high quality and high return carbon credit generating projects. DESG offers investors exposure to carbon credits, a key instrument used to reduce emissions of carbon dioxide and other greenhouse gases from industrial activities to reduce the effects of global warming. DESG's technology partnership with Devvio, Inc. ("Devvio") provides DESG access to Devvio's proprietary ESG blockchain platform (the "DevvESG Platform"). Through the DevvESG Platform, DESG can efficiently evaluate the quality of potential carbon offset projects and companies and thus is able to select the highest grade carbon credits for investment. The DevvESG Platform further facilitates the creation and tracking of the immutable, and thus secure and reliable, carbon credits on the DevvESG Platform's blockchain network.
For further information please contact Binyomin Posen at 416 869-1234.
ON BEHALF OF THE BOARD
(signed) "Binyomin Posen"
Binyomin Posen
Director
The securities of the Company have not, nor will they be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons in the absence of U.S. registration or an applicable exemption from the U.S. registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in the United States or in any other jurisdiction in which such offer, solicitation or sale would be unlawful.
All information contained in this news release with respect to Pubco, Delaware Subco and BC Subco was supplied by the Company and all information in this news release with respect to DESG, Finco and Devvio was supplied by DESG, for inclusion herein, and Pubco and its directors and officers have relied on DESG for any information concerning such parties.
This news release contains forward-looking statements relating to the timing and completion of the Proposed Transaction, the future operations of the Company and DESG and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "will", "may", "should", "anticipate", "expects" and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding the Proposed Transaction and the future plans and objectives of the Company and DESG are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the expectations of the Company and DESG include the failure to satisfy the conditions to completion of the Proposed Transaction set forth above and other risks detailed from time to time in the filings made by the Company and DESG under securities regulations.
The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, and DESG. As a result, the Company and DESG cannot guarantee that the Proposed Transaction will be completed on the terms and within the time disclosed herein or at all. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and the Company and DESG will update or revise publicly any of the included forward-looking statements as expressly required by Canadian securities law.
THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT AUTHORIZED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
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