Platform 9 Capital Provides Update on Qualifying Transaction with CGI Merchant Group

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Toronto, Ontario–(Newsfile Corp. – July 3, 2020) – Platform 9 Capital Corp. (TSXV: PN.P) (the “Company” or “Platform“) is pleased to provide an update to its proposed transaction with CGI Merchant Group, LLC (“CGI“), pursuant to a letter of intent entered into on December 13, 2019 (the “Original Agreement“) and previously announced on December 17, 2019.The transaction was paused in March, 2020 due to significant disruption in the hotel business caused by the COVID-19 pandemic. The parties have now agreed to proceed with the Transaction (as set out below) and propose to complete their due diligence and enter definitive agreement by August 31, 2020, at which time a further news release will be issued. The parties now expect to complete the qualifying transaction by October 31, 2020.

The Original Agreement provided that the target would be an affiliate of CGI. The affiliate has now been formed, which is called CGI Hospitality Opportunity Fund (Canada) LP (the “Fund“), and therefore the parties deem it necessary to enter into an amended and restated letter of intent (the “Amended Letter“) between the Fund and Platform. This Amended Letter sets forth the basic terms and conditions of a proposed business combination between the Fund and Platform, which will complete a reorganization pursuant to a plan of arrangement under the Business Corporations Act (Ontario) into a limited partnership formed under the laws of Ontario (the “Transaction“). The Transaction will constitute a “Qualifying Transaction” for Platform as such term is defined in Policy 2.4 of the Corporate Finance Manual of the TSX Venture Exchange (“TSXV“).

Pursuant to the terms of the Transaction, each equity share of Platform shall be exchanged for a limited partnership unit (“Unit“) of the Fund on the basis of an exchange ratio (the “Exchange Ratio“) determined having regard for the proportionate valuations of Platform and the Fund on a post-Transaction basis, and each outstanding agent warrant of Platform shall be exchanged for a comparable convertible security of the Fund, having regard for the Exchange Ratio. The parties have agreed to a valuation of Platform of $1,541,730CDN and an approximate valuation of the Fund of $50,000,000USD (the “Fund Valuation“). The Fund Valuation is subject to change based on the final valuation of the Gabriel Miami Hotel and the percentage interest acquired by the Fund.

Upon completion of the Transaction, the Fund is expected to meet all of the minimum listing requirements of the TSXV. Completion of the Transaction is subject to a number of conditions including, but not limited to: (i) completion of mutually satisfactory due diligence; (ii) execution of a definitive agreement with respect to the Transaction; (iii) requisite board and shareholder approvals; (iv) completion of a concurrent financing; (iv) acquisition of the Gabriel Miami Hotel by the Fund; and (vi) receipt of all requisite regulatory approvals relating to the Transaction, including, without limitation, the TSXV.

Hospitality Fund

CGI Merchant Group, LLC is an institutional investment manager that is establishing an institutional fund platform (the “Hospitality Fund“), comprised of GP and LP capital, a legal fund structure with access to asset acquisition resources and hotel asset management expertise for a new hospitality concept: The Gabriel – A Conscious Certified Hotel. The Fund will indirectly purchase equity interests of the Hospitality Fund.

The Hospitality Fund’s core strategy is to deploy capital to opportunistically acquire hotels and other hospitality assets in a pandemic and post-pandemic environment. The Hospitality Fund intends to rebrand its acquired hotels using the brand umbrella developed and owned by an affiliate of the Hospitality Fund: Conscious Certified Hotel.

The Hospitality Fund’s investment objectives are: an attractive risk adjusted rate of return as measured by cash-on-cash returns net of all fees, expenses, and carried interests, a reasonable diversification among investments within the total portfolio, a limited life structure that aligns fund management and general partner and limited partner interests and goals and a distribution policy that returns cash to limited partners as rapidly as possible given the nature of the underlying portfolio.

The Gabriel Miami

The seed institutionally held asset to be held in the portfolio of the Hospitality Fund will be The Gabriel Miami. The Gabriel Miami is operationally and financially committed to the core social values of its targeted travelers-the socially conscious traveler. The Gabriel Miami is a Hilton hotel under the Curio Collection and managed by Evolution Hospitality, a subsidiary of Aimbridge Hospitality. The property includes five (5) revenue generating components: Hotel (The Gabriel Miami), Restaurant (Cvltvra Restaurant), Spa (Dermamex), Wallscape (two billboards operated by Outfront Media), and Parking. The iconic building is a Trophy “Class-A” high-rise in Miami’s skyline and is located in the heart of Downtown Miami, just steps away from Miami’s most well-known visited sports arena, art & culture and shopping venues in South Florida. The Gabriel Miami is located in the arts and culture epicenter of Miami, which, in the aggregate, is one of the areas with the most foot traffic in the city. The hotel is surrounded by the city’s biggest arena, the city’s opera and ballet venue, the two biggest science and arts museums, and the biggest marketplace, to name a few. The majority of these venues and attractions were finished or renovated in the past five years. Currently, there are 30 under-construction developments including a USD$4 billion World-Center project, an entertainment and observation sky rise set to be the tallest building in the state, as well as a USD$1 billion signature bridge. The capital influx that this particular area has seen and is expected to receive surpasses that of any other area in Miami. The Gabriel Miami has been awarded the Deal Of The Year award from the National Association of Black Hotel Owners, Operators and Developers (“NABHOOD“) sponsored by Hilton at their Annual Conference on July 24, 2019 in downtown Miami. This is an event of national reach, and the award was presented by the chairman of NABHOOD and Hilton’s President & CEO.

Trading in the Company’s shares has been halted as a result of the announcement of the Transaction. The Company expects that trading will remain halted pending closing of the Transaction, subject to the earlier resumption upon TSXV acceptance of the Transaction and the filing of required materials in accordance with TSXV policies. Further information with respect to the terms of the Transaction will be announced in a subsequent press release once available.

About Platform 9 Capital Corp.

The Company is incorporated under the Business Corporations Act (Ontario) and is a Capital Pool Company listed on the TSXV. The Company has no commercial operations and has no assets other than cash. For further information please see the final prospectus of the Company dated May 17, 2018, filed on SEDAR at www.sedar.com.

For further information please contact:

John Travaglini
Chief Executive Officer
(416) 861-1100

Cautionary Notes

All information provided in this press release relating to CGI and the Fund has been provided by management of CGI and has not been independently verified by management of the Company.

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 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. 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 press release contains statements that constitute “forward-looking information” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. 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 news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements contained in this press release include, without limitation, statements regarding: the terms, conditions, and completion of the Transaction and the Concurrent Financing; use of funds; and the business and operations of the Fund. In making the forward- looking statements contained in this press release, the Company has made certain assumptions, including that: due diligence will be satisfactory; the Concurrent Financing will be completed on acceptable terms; all applicable shareholder, and regulatory approvals for the Transaction will be received. Although the Company believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurance that the expectations of any forward-looking statements will prove to be correct. Known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: results of due diligence; availability of financing; delay or failure to receive board, shareholder or regulatory approvals; and general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking statements or otherwise.

Not for distribution to United States newswire services or for dissemination in the United States. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/59128