Toronto, Ontario–(Newsfile Corp. – June 21, 2021) – Capricorn Business Acquisitions Inc. (TSXV: CAK.H) (the “Company” or “Capricorn“) is pleased to announce certain updates in connection with its previously announced qualifying transaction through a proposed arrangement with Canada Computational Unlimited Inc. doing business as CCU.ai (“CCU.ai“), a bitcoin mining center with renewable energy located in the Province of Québec, Canada.

On May 25, 2021, Capricorn and CCU.ai entered into an arrangement agreement (the “Agreement“) outlining the principal terms and conditions which will result in a reverse takeover of Capricorn by CCU.ai (the “Transaction“). Capricorn is a Capital Pool Company currently trading on the NEX board of the TSX Venture Exchange (the “TSXV” or the “Exchange“) and intends for the Transaction to constitute its Qualifying Transaction, as defined in the policies of the TSXV (the “Policies“). Pursuant to the Agreement, Capricorn will acquire CCU.ai by way of a three corner amalgamation carried out through a CCU.ai plan of arrangement, pursuant to which CCU.ai will be acquired by Capricorn. Upon completion of the Transaction, the resulting issuer (the “Resulting Issuer“) will carry out the business of CCU.ai.

Since the announcement of the Agreement, trading in the common shares of Capricorn (“Capricorn Shares“) remains halted until, at a minimum, Capricorn completes certain regulatory filings in connection with the Transaction with the TSXV and the TSXV has completed certain matters it considers necessary or advisable. It is expected that trading in the Capricorn Shares will not resume prior to the closing of the Transaction.

Completion of Concurrent Financing

On June 18, 2021, CCU.ai completed its previously announced non-brokered private placement (the “Concurrent Financing“) by way of the issuance of subscription receipts (“Subscription Receipts“) at a price of $5.30 per Subscription Receipt, raising gross proceeds of $4,319,902. Such proceeds thus exceeded the minimum amount of proceeds which had been set at $3,450,000. In light of the size of the Concurrent Financing, it is now expected that, following the closing of the Transaction in each case on a non-diluted basis:

• the former shareholders of CCU.ai will hold approximately 52,124,830 common shares of the Resulting Issuer (the “Resulting Issuer Shares“), including as participants in the Concurrent Financing and representing approximately 81.82% of all issued and outstanding Resulting Issuer Shares;
• the former shareholders of Capricorn will hold approximately 2,500,075 Resulting Issuer Shares, representing approximately 3.92% of all issued and outstanding Resulting Issuer Shares;
• approximately 8,645,447 Resulting Issuer Shares will be issued as a result of the Concurrent Financing and the participants in the Concurrent Financing (excluding existing shareholders of CCU.ai) will hold approximately 8,039,204 Resulting Issuer Shares, representing approximately 12.62% of all issued and outstanding Resulting Issuer Shares; and
• the recipients of finder’s fees (as described below) will hold approximately 1,041,200 Resulting Issuer Shares, representing approximately 1.63% of all issued and outstanding Resulting Issuer Shares.

The proceeds of the Concurrent Financing have been placed into escrow pending closing of the Transaction. Upon satisfaction of specified escrow release conditions, which include, among other things, the completion or waiver of all conditions precedent to the Transaction, each Subscription Receipt will automatically convert into one Class B common share of CCU.ai (a “CCU.ai Share“) (which, upon the closing of the Transaction, will convert into 10.607 Resulting Issuer Shares, at a deemed price per Resulting Issuer Share of $0.50) and one-half of one CCU.ai Share purchase warrant with each whole warrant entitling the holder thereof to acquire one CCU.ai Share for a period of thirty-six months from the date of issuance, subject to accelerated time of expiry, at an exercise price of $7.96 per CCU.ai Share (which will convert into 10.607 warrants to purchase Resulting Issuer Shares at a price of $0.75 per Resulting Issuer Share following the completion of the Transaction).

Investment in CCU.ai by True Global Ventures

As part of the Concurrent Financing, True Global Ventures 4 Plus Fund Pte Ltd (“TGV 4 Plus“), a Singapore-based technology fund, subscribed to 582,076 Subscription Receipts for an amount of $3,085,001. Following the closing of the Transaction, it is expected that TGV 4 Plus will hold approximately 6,170,002 Resulting Issuer Shares, representing 9.69% of all issued and outstanding Resulting Issuer Shares (13.86% assuming that TGV 4 Plus exercises in full its right to convert the warrants it subscribed as part of the Concurrent Financing to purchase Resulting Issuer Shares).

TGV 4 Plus is a global technology equity fund that invests in serial entrepreneurs in over 20 cities. Founded by a distributed group of serial entrepreneurs over these cities, TGV 4 Plus has a network of investors that are angel investors, investors, professionals and family offices that help accelerate its portfolio companies globally. TGV 4 Plus is specialized in six areas: bringing in commercial relationships (customers and partners), internationalizing the company, recruiting in general and especially of sales, engineers and developers, promoting the investments to gain exposure, help refinance the company with introductions of traditional venture capital, loans and private equity firms, and help acquiring companies as well as exiting the company.

Change in Exchange Ratio for CCU.ai Shares

Capricorn and CCU.ai intend to enter into an amending agreement to the Agreement in order to adjust the Exchange Ratio. As a result of this adjustment, pursuant to the Transaction: (i) holders of issued and outstanding CCU.ai Shares will receive 10.607 Resulting Issuer Shares for each CCU.ai Share (the “Exchange Ratio“) held by them; and (ii) all options and warrants convertible into CCU.ai Shares (including the warrants issued in connection with the Concurrent Financing) shall be exchanged, based on the Exchange Ratio, for similar securities to purchase Resulting Issuer Shares on substantially similar terms and conditions.

Board of Directors and Management of the Resulting Issuer

Prior to completion of the Transaction, and subject to approval by the TSXV and the filing of all required materials, CCU.ai and Capricorn will reconstitute the board of the directors of Capricorn with five nominees from CCU.ai and one nominee from Capricorn. As previously announced, it is expected that Dominique Payette, Frederick T. Pye, Yvan Routhier, Romain Nouzareth and Mathieu Nouzareth will act as directors of the Resulting Issuer.

The Company is pleased to announce that Frank Di Tomaso is expected to complete the Resulting Issuer’s board of directors and to serve as Chairman of the Audit Committee and Kyle Appleby is expected to serve as the Resulting Issuer’s chief financial officer and corporate secretary.

Frank Di Tomaso

Frank Di Tomaso is a Fellow Chartered Professional Accountant and holds the ICD.D designation from the Institute of Corporate Directors. Mr. Di Tomaso is a corporate director and was a partner and consulting partner at Raymond Chabot Grant Thornton LLP until 2013. He is a director of several companies and is involved in both the business world and the community. In this regard, he received, in 2004, the Award of Distinction from Concordia University’s John Molson School of Business in recognition of his outstanding contribution to the business world and the community.

Kyle Appleby

Kyle Appleby spent the first 10 years of his career working in public accounting where he worked in both audit and advisory practices working for private companies and investment funds. In 2007 Mr. Appleby exited the world of public accounting and founded CFO Advantage Inc., a company focused on providing management and accounting services to public companies across a variety of industries including crypto-currency, technology, junior mining, food production, agriculture, cannabis, and many others. Mr. Appleby has served as CFO for numerous companies, listed in Canada, the US, and the UK. As a result, he has extensive experience in financial reporting, IPOs, fundraising, and corporate governance. Most recently, Kyle was the CFO of Hut 8 Mining Corp. before its initial listing in July 2018. Mr. Appleby is a graduate of York University, and has been a member in good standing of the Chartered Professional Accountants of Ontario (and Canada) since 2002.

About CCU.ai

CCU.ai was incorporated pursuant to the Business Corporations Act (Québec) on November 16, 2017. Since its creation, CCU.ai operates a high-density computation center built for high-grade cryptocurrency mining, AI data processing and fintech infrastructure located in the city of Joliette in the Province of Québec. In 2018, CCU.ai contracted with Hydro-Joliette to purchase up to 20 MW of hydro-electrical power to be used for crypto mining. 5 MW are currently used by CCU.ai to produce the equivalent of around 100 PH/s of Bitcoin mining power (hashrate) and 6 GH/s of Ethereum mining power. CCU.ai has mined 421 Bitcoin since its creation. CCU.ai has built the capacity to use an additional 2.5 MW of power and is ready to host new mining rigs for cryptocurrency. In May 2021, CCU.ai entered into an agreement to rent a portion of its mining space to a third party for a monthly fee of up to $130,000. The capacity to use the remaining 12.5 MW is set to be built in the coming months. CCU.ai is led and managed by technology entrepreneurs, electricity and ventilation experts and network specialists. Since its inception, CCU.ai has pursued a vision of environmental stewardship and increased performance throughout the digital assets mining process. The availability of energy from renewable sources in the province of Québec has made this endeavor feasible and a great base for future growth.

Filing Statement

In connection with the Transaction and pursuant to the requirements of the TSXV, Capricorn will file on SEDAR (www.sedar.com) a filing statement which will contain details regarding the Transaction, CCU.ai, Capricorn and the Resulting Issuer.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV 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.

The TSXV has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.

NEITHER THE TSXV NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSXV) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

Cautionary Statement Regarding Forward-Looking Information

This news release contains certain forward-looking statements, including statements relating to the Transaction and certain terms and conditions thereof, the ability of the parties to complete the Transaction, the Exchange Ratio, the Resulting Issuer’s ability to qualify as a Tier 2 Technology issuer, the TSXV sponsorship requirements, the finding of a sponsor, if applicable, shareholder, director and regulatory approvals, future press releases and disclosure, and other statements that are not historical facts. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect management’s current beliefs and are based on information currently available to management as at the date hereof.

Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. As a result, the Company cannot guarantee that the Transaction will be completed on the terms described herein or at all. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.

For additional information, please connect to www.ccu.ai or contact: Romain Nouzareth, Chief Executive Officer of Canada Computational Unlimited Inc. at [email protected] or Yvan Routhier, Chief Executive Officer, President and Director of Capricorn Business Acquisition Inc. at [email protected] or (514) 249-0714.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/88056