Toronto, Ontario--(Newsfile Corp. - June 7, 2023) - Toronto Cleantech Capital Inc. (TSXV: YAY.P) ("TCC"), a capital pool company, is pleased to announce that it entered into a non-binding letter of intent ("LOI") with Turkey Hill Sugarbush Ltd. ("THS") on May 8, 2023. The LOI outlines the general terms and conditions pursuant to which TCC and THS expect to effect a business combination that will result in TCC acquiring all of the issued and outstanding securities of THS in exchange for securities of TCC and will result in a reverse take-over of TCC by THS (the "Proposed Transaction"), as described below. The Proposed Transaction will constitute a "Qualifying Transaction" of TCC under the policies of the TSX Venture Exchange (the "Exchange"), as such term is defined in Exchange Policy 2.4 - Capital Pool Companies ("Policy 2.4").
The Qualifying Transaction
Pursuant to the terms of the LOI, TCC, THS and THS' parent entity, THS L.P. (the "LP"), will negotiate and enter into a definitive agreement (a "Definitive Agreement") and other transaction documentation, incorporating the principal terms of the LOI. Upon completion of the Proposed Transaction, TCC will have acquired 100% ownership of THS and the business of THS will become the business of the entity resulting from the Proposed Transaction (the "Resulting Issuer"). Pursuant to the Proposed Transaction, the existing shareholders of THS immediately prior to the Proposed Transaction will receive such number of common shares of TCC ("TCC Shares") equal to the value of, and in exchange for, the common shares of THS ("THS Shares") held by such shareholder, which is expected to be 2.874 TCC Shares for every one THS Share.
For the purposes of the Proposed Transaction, the deemed value of each TCC Share shall be $0.184 per share based on the Issue Price of the Concurrent Financing (as such terms are defined below). The value of THS is anticipated to be $4,708,931, based on 8,903,733 THS Shares issued and outstanding immediately prior to the Proposed Transaction. It is anticipated that THS shareholders will represent 45.61% of the shareholders of the Resulting Issuer and TCC shareholders will represent the remainder.
The final structure for the Proposed Transaction is subject to satisfactory due diligence and tax, corporate and securities law advice on the part of both TCC and THS. There is no assurance that a Definitive Agreement will be successfully negotiated or entered into.
Certain common shares of the Resulting Issuer to be issued pursuant to the Proposed Transaction are expected to be subject to restrictions on resale or escrow under the policies of the Exchange, including the securities to be issued to "Principals" (as such term is defined in the policies of the Exchange), which will be subject to the escrow requirements of the Exchange.
The completion of the Proposed Transaction is subject to several conditions, including but not limited to:
- Completion of satisfactory due diligence by both parties;
- Approval of the Proposed Transaction by the board of directors of THS and TCC;
- Receipt of all necessary regulatory approvals, including the approval of the Exchange; and
- Other customary conditions for a transaction of this nature.
Concurrent Financing
In conjunction with, or prior to the closing of the Proposed Transaction, TCC will complete a non-brokered private placement (the "Concurrent Financing"). Pursuant to the Concurrent Financing, TCC is proposing to issue up to 19,021,739 TCC Shares at a price of $0.184 per share (the "Issue Price") for gross proceeds of up to $3.5 million.
The proceeds of the Concurrent Financing will be used to fund the business of the Resulting Issuer, including general and administrative expenses for the Resulting Issuer, for certain transaction expenses incurred by the parties to-date, including TCC discharging an existing royalty payment obligation, and for general working capital purposes.
No commission, finder's fee or similar payment (whether in the form of cash, securities or an interest in assets) is expected to be paid by TCC in connection with the Concurrent Financing. Additional details of the Concurrent Financing will be outlined in a future press release of TCC.
Proposed Significant Assets
The Proposed Transaction will involve TCC acquiring significant assets in the maple syrup products industry.
Starting as a family-owned maple syrup farm in Knowlton, Quebec, THS was incorporated under the Canada Business Corporations Act in 1976 to package and sell maple products. Forty-four years later, THS continues to grow and in 2019, THS moved to a 50,000 sq ft facility which houses THS' state of the art bottling and labelling plant, distribution centre and corporate offices. With over 100 different products, THS' clients range from travel & tourism, gourmet food and specialty shops to supermarkets.
The parties intend for the Resulting Issuer to continue THS' commitment to sustainability in the Maple Syrup Industry while exploring diversifying its product line and developing new markets domestically and internationally.
The Resulting Issuer will change its name to "Turkey Hill Sugarbush Ltd." or such other similar name as is determined by the parties and acceptable to applicable regulators.
Upon completion of the Proposed Transaction, the Resulting Issuer will carry on the business of THS, including continuing THS' commitment to sustainability in the maple syrup industry while exploring diversifying its product line and developing new markets domestically and internationally.
Financial highlights of the THS include:
| Year End | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 |
| Total Assets | $4,626,337 | $4,222,248 | $5,364,229 |
| Total Liabilities | $6,156,224 | $4,689,650 | $5,289,788 |
| Revenues | $7,372,952 | $3,227,957 | $4,063,295 |
| Net Profit/Losses | ($1,062,485) | ($700,393) | ($1,405,691) |
The above financial information was prepared by management of THS as at the dates noted above and are unaudited.
Location and Jurisdiction
THS is incorporated under the laws of Quebec, Canada and its assets are located in Granby, Quebec.
Identification of Non-Arm's Length Parties
In accordance with Policy 2.4, the following individuals are considered "Non-Arm's Length Parties to the Qualifying Transaction" (as such term is defined in Policy 2.4):
James Sbrolla, CEO of TCC, is considered a Non-Arm's Length Party (as such term is defined in the policies of the Exchange), as he is also a unitholder of the LP.
Eric Beutel, Director of TCC, is considered a Non-Arm's Length Party, as he is also a unitholder and insider of the LP and has a familial relationship with David Beutel, Chairman of THS.
Dimitris Stubos, Corporate Secretary of TCC, is considered a Non-Arm's Length Party, as he is also a unitholder of the LP.
TCC and THS do not have a common control person and related parties of TCC do not own a majority of shares in THS or a majority of units in the LP. Accordingly, the Proposed Transaction will not constitute a "Non-Arm's Length Qualifying Transaction" (as such term is defined in Policy 2.4) and it is not anticipated that the Proposed Transaction will be subject to shareholder approval.
Proposed Directors and Officers of the Resulting Issuer
The board and management of the Resulting Issuer shall be comprised of the following individuals:
David Beutel - Director, Chair
David Beutel is currently Chair of the board of directors of THS. He is also President of Belweather Capital Partners Inc. and Vice President/Secretary of Oakwest Corporation Limited, both private investment companies in Toronto. For over 25 years, David has been working to build smaller, earlier-stage and high growth businesses as a founder, adviser and investor, in Canada and the United States. In addition to THS, David is also non-executive Chairman of Diamond Estates Wines and Spirits, Inc. and of Accord Financial Corp. David holds a BA from the University of Pennsylvania and an MBA from the Schulich School of Business (York University).
Eric Beutel - Director
Eric Beutel is a private investor and corporate director having spent over 35 years in the Investment Industry. Eric is President of Debric Holdings Inc. Eric has substantial board experience, serving on several audit, credit and investment committees in the financial, cleantech and retail sectors. He currently sits on the board of TCC, is Chair of the board of directors of Intouch Insight Ltd. and sits as an independent trustee of The Vector Mortgage Trust. Eric also sits on the board of two not-for-profit organisations. Eric holds an MBA from the University of Ottawa.
Ian Anderson - Director
Ian Anderson has been the President of CKF Inc., since June 2009, before accepting this role; he was Executive Vice President and Chief Operating Officer. CKF Inc. is a plastic packaging and molded pulp product company producing food and protective packaging. CKF operates a global supply chain which services retail, foodservice and consumer products companies from 8 manufacturing plants across North America.
Ian sits as a board member for TCC and The International Molded Fiber Association and is a member of Foodservice Packaging Institute. Ian is a past board member of CHAR Technologies, Stewardship Ontario and Crown Packaging Products Canada. Ian served on the Sustainability Advisory Committee at the Canadian Plastics Industry Association (now CIAC) and was Vice Chair of the Nova Scotia Canadian Manufacturers & Exporters.
Prior to joining CKF Inc. Ian worked in the packaging industry managing plants and businesses across the Americas and the U.K. He is a native of Hamilton, Ontario and currently resides there.
David Bell - Director
David Bell has more than 30 years experience in corporate banking, investment banking, private equity and as the CFO and co-founder of a private royalty investment company. David currently sits on the board of directors of THS. He holds an MBA from University of Toronto and the Chartered Financial Analyst (CFA) designation.
Tom Zaffis - CEO
Spanning over 35 years of experience in the Maple Syrup industry, Tom has held leadership positions as Sales Manager, General Manager, COO and eventually President and CEO of Turkey Hill Sugarbush. Graduating from McGill University in Agrology in 1991 and with certificates as a fixed mechanic, Tom holds a strong belief in leading by example. He has provided training to many current industry experts and has been instrumental in designing and developing many systems and packaging that have become industry standards.
Principals or Insiders of the Resulting Issuer
In addition to the forgoing proposed directors and officers, the following are persons that are expected to qualify as Principals or Insiders (as such terms are defined in the policies of the Exchange) of the Resulting Issuer:
Belweather Capital Partners Inc. ("Belweather"), a private investment and advisory company incorporated under the laws of the Province of Ontario is expected to more than 10% of the outstanding common shares of the Resulting Issuer following completion of the Proposed Transaction. Belweather is controlled by David Beutel, who acts as Chair of THS and is expected to act as Chair of the Resulting Issuer.
Debric Holdings Inc.("Debric"), a private investment and advisory company incorporated under the laws of the Province of Ontario is expected to own more than 10% of the outstanding common shares of the Resulting Issuer following completion of the Proposed Transaction. Debric is controlled by Eric Beutel, who sits on the board of TCC and is expected to sit on the board of the Resulting Issuer.
Absence of Control
Following the completion of the Proposed Transaction, there will be no individual, entity, or group of concerted parties in a control position of the Resulting Issuer, as defined by applicable securities regulations.
Finder's Fee
There will be no finder's fee or commission paid in relation to the Proposed Transaction.
Loans made to Turkey Hill
TCC and THS intend to enter into a loan agreement (the "Loan Agreement") whereby TCC will lend $250,000 to THS to assist with its ongoing operational costs and expansion initiatives (the "Loan").
Further details pertaining to the Loan Agreement, including its terms will be disclosed in a subsequent press release in accordance with Policy 2.4. The Loan and related Loan Agreement are subject to the approval of the Exchange, in accordance with its policies and procedures.
Trading Halt
Trading of TCC Shares on the Exchange has been halted at TCC's request and will remain halted pending the Exchange's receipt of satisfactory documentation and completion of the Proposed Transaction.
Sponsor
Sponsorship of a "Qualifying Transaction" of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies. TCC intends to seek a waiver from the sponsorship requirements, subject to the provisions set forth in Exchange's policies. However, there is no assurance that a waiver from this requirement can or will be obtained. In the event a waiver is not granted, TCC will seek to fulfil all sponsorship requirements as stipulated by the Exchange.
About Toronto Cleantech Capital Inc.
Toronto Cleantech Capital Inc. is a capital pool company listed on the Exchange. The company focuses on identifying and evaluating businesses and assets with a view to a potential acquisition by completing a Qualifying Transaction (like the Proposed Transaction).
TCC's share capital consists of 11,500,000 TCC Shares issued and outstanding and 1,150,000 stock options exercisable for TCC Shares at a price of $0.10 each, expiring July 2, 2026, and 200,000 warrants exercisable for TCC Shares at a price of $0.10 each, expiring on June 30, 2023.
About Turkey Hill Sugarbush Ltd.
Turkey Hill Sugarbush Ltd. was incorporated under the laws of Quebec, Canada and has been a leader in the maple syrup industry supplying high quality pure maple syrup and maple syrup related products since 1976. Its assets are located in Granby, Quebec.
For further information, please contact:
Toronto Cleantech Capital Inc.
James Sbrolla, CEO
Email: sbrolla@rogers.com
Phone: (416) 828-2077
Turkey Hill Sugarbush Ltd.
David Beutel, Chairman
1037 Bd Industriel, Granby, QC J2J 2B8, Canada
Email: david@oakwest.ca
Phone: (647) 401-8834
Forward-Looking Information
Information set forth in this press release contains forward-looking statements. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates, and projections as at the date of this press release. Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events, or performance are not statements of historical fact and may be forward-looking statements. Often, but not always, forward looking statements or information can be identified by the use of words such as "will", "shall", "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. TCC and THS caution that all forward-looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond the control of TCC and THS. Such forward-looking information may include statements regarding the completion and terms of the Proposed Transaction, the completion and terms of a Definitive Agreement, the value THS and any securities of THS or TCC, the exchange ratio, the terms, amount and timing of the Concurrent Financing and the use of proceeds thereof, completion of the name change of the Resulting Issuer, the composition of the board of directors and management team of the Resulting Issuer, the anticipated principals, insiders and control persons of the Resulting Issuer, the business and strategy of the Resulting Issuer, the terms, payment and repayment of the Loan and the use of the Loan, the resumption of trading of the TCC Shares and the receipt of director, shareholder and regulatory approvals. This information is based on current expectations and assumptions that are subject to significant risks and uncertainties that are difficult to predict, including risks relating to: the ability to satisfy the conditions to completion of the Proposed Transaction, the Concurrent Financing, TCC and THS generally, the delay or failure to receive board, shareholder or regulatory approvals and general economic and market conditions, including risks related to the direct and indirect impact of COVID-19 and its impact on general economic and market conditions. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in any such forward-looking statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. TCC and THS assume no obligation to update forward-looking information in this press release, or to update the reasons why actual results could differ from those reflected in the forward-looking information, unless and until required by applicable securities laws. Additional information identifying risks and uncertainties is contained in TCC's filings with Canadian securities regulators, which are available on SEDAR at www.sedar.com.
Cautionary Statements
Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and, if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed 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 Proposed Transaction, any information released or received with respect to the Proposed 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 Exchange has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.
Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.
All information contained in this press release with respect to TCC and THS was supplied by the parties respectively, for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied on the other party for any information concerning the other party.
This press release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933 (the "1933 Act") or any state securities laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available.
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/169163
