Toronto, Ontario–(Newsfile Corp. – June 17, 2020) – Mithrandir Capital Corp. (TSXV: GMER.P) (“Mithrandir” or the “Corporation“) is pleased to announce an update to its press release dated November 12, 2019, regarding its previously announced qualifying transaction (the “Qualifying Transaction“) consisting of the acquisition of all of the issued and outstanding securities in the capital of PopReach Incorporated (“PopReach“) by way of three-cornered amalgamation pursuant to which a wholly owned subsidiary of the Corporation (“Subco“) will amalgamate with PopReach. Upon completion of the Qualifying Transaction, the Corporation will also change its name to “PopReach Corporation” (the “Resulting Issuer“).
The Corporation has substantially settled with PopReach a definitive acquisition agreement (“Definitive Agreement“) with PopReach and Subco, which includes and sets out the terms and conditions pursuant to which the parties will complete the Qualifying Transaction, on terms and conditions consistent as originally announced by the Corporation and as updated and supplemented in this press release. The parties intend to execute and deliver the Definitive Agreement prior to the filing of the Filing Statement, expected during the last week of June, 2020.
Pursuant to the Qualifying Transaction and the Definitive Agreement, the Corporation will file articles of amendment to consolidate its outstanding share capital (the “Consolidation“) on the basis of 1 post-Consolidation common share for every 8 pre-Consolidation common shares, and each PopReach shareholder will receive 7.62 post-Consolidation common shares (the “Common Shares“) for each PopReach common share (the “PopReach Shares“) held by them, for a total issuance from treasury of 48,233,937 Common Shares. In addition, each convertible, exchangeable, or exercisable security of PopReach will be exchanged for a convertible, exchangeable or exercisable security, as applicable, of the Corporation on substantially the same economic terms and conditions as the original convertible, exchangeable, or exercisable security of PopReach (with their exercise prices being divided by 7.62) resulting in the issuance of 7,744,273 warrants in respect of outstanding PopReach warrants, 5,808,314 options in respect of outstanding PopReach options and 127,358 broker warrants in respect of outstanding PopReach broker warrants.
Following completion of the Qualifying Transaction, the Corporation will have 51,983,937 Common Shares issued and outstanding. Assuming the conversion of all outstanding options, warrants and broker warrants, 66,288,882 Common Shares will be outstanding on a fully diluted basis.
As a result of the Qualifying Transaction and the reverse takeover of the Corporation by shareholders of PopReach, the current auditors of PopReach, MNP LLP, will be appointed the auditor of the Corporation and McGovern Hurley LLP will cease to be the auditor of the Corporation. To the Corporation’s knowledge, there were no “reportable events” as defined in section 4.11 of National Instrument 51-102 – Continuous Disclosure Obligations.
Independent of the Qualifying Transaction, PopReach has also completed a private placement of $2,536,870 in aggregate principal amount of 8% convertible debentures (the “2020 Convertible Debentures“), convertible at a price equal to a 20% discount to the deemed issuance price of the Common Shares, into (a) one PopReach Share and (b) one common share purchase warrant at an exercise price 50% greater than the conversion price for a period of 24 months from the closing of the Qualifying Transaction. In conjunction with the closing of the Qualifying Transaction, all such debentures, together with $950,000 in aggregate principal amount of 8% convertible debentures of PopReach previously issued, in each case together with all accrued and unpaid interest through to June 30, 2020, will be exchanged for an aggregate 7,744,273 Common Shares and 7,744,273 warrants.
Directors and Officers
As a result of the closing of the Qualifying Transaction, the directors and officers of the Corporation will be:
|Jon Walsh||Director, and Chief Executive Officer|
|Christopher Locke||Director, President, Chief Operating Officer, and Corporate Secretary|
|Chris Schnarr||Director, Chairman|
|Greg Donaldson||Chief Financial Officer|
Non-Arm’s Length Parties
The Qualifying Transaction will not constitute a Non-Arm’s Length Qualifying Transaction, as such term is defined in the policies of the TSX Venture Exchange (the “Exchange“).
Two directors of the Corporation each hold $150,000 principal amount of 8% convertible debentures of PopReach and three directors of the Corporation hold $650,000 aggregate principal amount of the 2020 Convertible Debentures. The conversion of these instruments would not result in the creation of a “Control Person” (as such term is defined in the policies of the Exchange) of the Resulting Issuer.
In addition, four directors of PopReach collectively hold 3,000,000 common shares of the Corporation representing, in the aggregate, approximately 10% of the issued and outstanding common shares of the Corporation.
Except as otherwise described herein, none of the insiders, promoters or Control Persons of the Corporation or any of their respective associates and affiliates (before and after giving effect to the Qualifying Transaction) will have any interest in the Qualifying Transaction, other than that which arises from their holding of common shares of the Corporation.
Due to the limited involvement of the directors of the Corporation in PopReach and the limited involvement of the directors of PopReach in the Corporation, none of the Corporation’s directors is an “Insider” or “Non-Arm’s Length Party” of PopReach and none of the PopReach directors is an “Insider” or “Non-Arm’s Length Party” of the Corporation, as such terms are defined under the policies of the Exchange and applicable securities laws.
The Qualifying Transaction is not subject to approval of the shareholders of the Corporation.
Principal Securityholders of PopReach
Prior to completion of the Qualifying Transaction, to PopReach’s knowledge, no person holds more than 10% of the voting rights attached to currently-outstanding shares of PopReach other than Christopher Locke (indirectly through AD2101 Inc., an Ontario corporation, and Push Capital Limited, an Ontario corporation) with approximately 28.05%, Trevor Fencott (indirectly through Millstone Investment Limited Partnership, an Ontario limited partnership, and Push Capital Limited) with approximately 13.62%, Michael Haines (indirectly through Push Corp., an Ontario corporation, and Push Capital Limited) with approximately 14.56% and Jon Walsh (indirectly through Walsh Enterprises, an Ontario corporation, and Push Capital Limited) with approximately 14.23%. Push Capital Limited directly holds approximately 20.79% of the currently-outstanding shares of PopReach, and Push Capital Limited is equally owned by Messrs. Locke, Fencott, Haines and Walsh, each of whom is an Ontario resident.
The Corporation has applied for a waiver to the requirements of TSX Venture Exchange Policy 2.2 Sponsorship and Sponsorship Requirements.
PopReach was incorporated on May 26, 2015 under the Business Corporations Act (Ontario). PopReach is a mobile game publisher focused on consolidating, operating and growing proven, profitable games and game franchises. Headquartered in Toronto with a live operations studio in Bangalore, India, PopReach’s current portfolio of games are played by approximately 500K daily active users. The company’s key game franchises include War of Nations, Kitchen Scramble, Gardens of Time, City Girl Life, and Smurfs’ Village.
For further information:
Mithrandir Capital Corp.
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 release 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 TSX Venture Exchange Inc. 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 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.
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 “forward-looking information” within the meaning of Canadian securities legislation. Forward-looking information generally refers to information about an issuer’s business, capital, or operations that is prospective in nature, and includes future-oriented financial information about the issuer’s prospective financial performance or financial position.
The forward-looking information in this news release includes disclosure about the terms of the Qualifying Transaction, the proposed structure of the Qualifying Transaction and the terms of the Definitive Agreement.
Mithrandir and PopReach made certain material assumptions, including but not limited to: prevailing market conditions; general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; and the ability of the resulting issuer to execute and achieve its business objectives, to develop the forward-looking information in this news release. 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 such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
Actual results may vary from the forward-looking information in this news release due to certain material risk factors. These risk factors include, but are not limited to: adverse market conditions; the inability of Mithrandir or PopReach to complete the Qualifying Transaction on the terms disclosed in this news release, or at all; reliance on key and qualified personnel; and regulatory and other risks associated with the digital gaming industry in general. The foregoing list of material risk factors and assumptions is not exhaustive.
Mithrandir assumes no obligation to update or revise the forward-looking information in this news release, unless it is required to do so under Canadian securities legislation.
(Not for distribution to US wire services or for dissemination in the United States of America)
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/58130