Cherry Street Announces Update on Qualifying Transaction with Tribe and Concurrent Financing Led by Stifel GMP

• A one-stop-shop for residential community living, Tribe offers tech-enabled community management that is disrupting the traditional market
• Tribe’s tech-forward service delivery model is fueling one of the fastest growing property management companies in Canada
• Tribe plans to complete a brokered private placement of $11,629,920 on or about December 11, 2020
• Cherry Street expects to hold an annual general and special meeting of shareholders on or about January 28, 2021 to approve all matters related to the Qualifying Transaction

Toronto, Ontario–(Newsfile Corp. – December 10, 2020) –  Cherry Street Capital Inc. (TSXV: CHSC.P) (the “Company” or “Cherry Street“) is pleased to provide an update to its previously announced letter of intent dated October 28, 2020 with Tribe Property Technologies Inc. (formerly, Bazinga Technologies Inc.) (“Tribe“), pursuant to which Tribe will complete a going-public transaction (the “Business Combination“).

ABOUT TRIBE

A one-stop-shop for residential community living, Tribe offers tech-enabled Community Management that is disrupting the traditional market. With the fastest growing tech-forward property management company in Canada, Tribe’s integrated service-technology delivery model serves the needs of developers, condo/residential communities and owners/residents versus traditional property management. Tribe is empowering residential community living in cities.

Headquartered in Vancouver, Canada and incorporated pursuant to the laws of British Columbia on December 14, 2011, Tribe has built a brand that focuses on building communities through communication, transparency and access. Tribe empowers condo developers and strata/HOA communities in Canada and the United States, providing digital services to hundreds of residential communities. With aspirations to expand the reach of their services and offer holistic end-to-end community living solutions, Tribe is changing the way people view community living, interact with their neighbours and interface with their homes.

The following selected financial information is taken from the consolidated financial statements of Tribe for the year ended April 30, 2020, which are expected to be included in the filing statement being prepared in connection with the Business Combination:

Readers are cautioned that the above figures have not been audited and are based on calculations prepared by management. Actual results may differ from those reported in this release once these figures have been audited.

For further information on Tribe, readers are encouraged to review the Company’s news release dated October 30, 2020, and to visit: www.mybazinga.com. Additional information on Tribe, including current financial statements, will be filed and posted on SEDAR (www.sedar.com) upon the completion of a filing statement that will be prepared in connection with the Business Combination.

ABOUT THE BUSINESS COMBINATION AND THE CONCURRENT FINANCING

In accordance with the terms of the Business Combination, it is anticipated that Tribe will amalgamate with a wholly-owned subsidiary of the Company, following which the resulting amalgamated entity will continue as a wholly-owned subsidiary of the Company (the “Resulting Issuer“).

In accordance with the terms of the Business Combination, it is contemplated that: (i) the Company will consolidate (the “Cherry Street Consolidation“) its common share capital on the basis of one post-Cherry Street Consolidation common share for every 8.4488 pre-Cherry Street Consolidation common shares, such that Cherry Street will have approximately 361,000 shares outstanding; (ii) Tribe will consolidate (the “Tribe Consolidation“) its common share capital on the basis of one post-Tribe Consolidation common share for every 9.1719 pre-Tribe Consolidation common shares, such that Tribe will have approximately 12,400,000 shares outstanding, not including any shares issuable in connection with the conversion of the Receipts (as defined below), the Shareholder Loans (as defined below) and the Acquisition (as defined below); and (iii) Tribe will arrange for outstanding shareholder loans of up to $1,750,000 (the “Shareholder Loans“) to be settled through the issuance of post-Tribe Consolidation common shares at a price of $5.00 per share.

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It is further contemplated that the holders of post-Tribe Consolidation common shares (including those investors in the Financing (as defined below), shareholders which converted the Shareholder Loans, and vendors in connection with the Acquisition (the “Converting Shareholders“) will receive one post-Cherry Street Consolidation common share in the capital of the Resulting Issuer in exchange for each outstanding post-Tribe Consolidation common share.

In connection with the Business Combination, Tribe intends to complete a brokered private placement financing (the “Financing“) on or about December 11, 2020, of 2,325,984 subscription receipts (each, a “Receipt” and collectively, the “Receipts“) at a purchase price of $5.00 per Receipt for gross proceeds of $11,629,920, through a syndicate of agents led by Stifel GMP and including, Canaccord Genuity Corp., Haywood Securities Inc. and Richardson Wealth (collectively, the “Agents“). Tribe has granted the Agents an option exercisable up to 48 hours prior to the closing date of the Financing, to arrange for the purchase of up to an additional 15% of the number of Receipts sold under the Financing. The net proceeds from the Financing will be used for completion of the Acquisition (as defined below), working capital and general corporate purposes.

The Agents will receive a commission of (i) 6% of gross proceeds in respect of Receipts sold (other than those sold to certain identified buyers, in respect of which 3.5% of gross proceeds will be paid) and (ii) such number of compensation options (each, a “Compensation Option“) as is equal to 6% of the Receipts sold (other than those sold to certain identified buyers, in respect of which 3.5% will be issued), with each Compensation Option exercisable for one post-Tribe Consolidation common share or one post-Cherry Street Consolidation common share in the capital of the Resulting, as applicable.

Net proceeds of the Financing will be held in escrow pending completion of the Business Combination. Immediately prior to completion of the Business Combination, each Receipt will automatically be converted into one post-Tribe Consolidation common share of Tribe, which will then be exchanged for one post-Cherry Street Consolidation common share of the Resulting Issuer.

Each Receipt will be subject to a hold period of four months plus one day from the later of: (i) the Closing Date; and (ii) the date Tribe becomes a reporting issuer in any jurisdiction of Canada. Upon completion of the Business Combination, the common shares of the Resulting Issuer will not be subject to any hold period under applicable Canadian securities laws.

In connection with the Business Combination, and subject to the approval of the Exchange, the Company has agreed to advance a working capital loan to Tribe in the principal amount of $225,000 (the “Bridge Loan“). The Bridge Loan will be secured by a general charge over all of the assets of Tribe, and will bear interest at a rate of five percent (5.0%) per annum. In the event the parties elect not to proceed with the Business Combination, Tribe will arrange for repayment of the Bridge Loan, and all accrued interest, within four months of termination of the Business Combination. The proceeds from the Bridge Loan will be utilized to satisfy expenses associated with the Business Combination, and for the general working capital purposes of Tribe.

The Business Combination constitutes a “Qualifying Transaction” for the Company under TSX Venture Exchange (the “Exchange“) Policy 2.4 – Capital Pool Companies. Following completion of the Business Combination, it is anticipated that the Company will be listed on the Exchange as a Tier 2 Technology Issuer under the name “Tribe Property Technologies Inc.” and the ticker symbol “TRIB”. The Company is at arms-length from Tribe and each of its shareholders. Approximately 86% of the outstanding share capital of Tribe is currently controlled by insiders of Tribe. No shareholders of Tribe are considered “control persons” (within the meaning of the policies of the Exchange) of Tribe. A finders’ fee of $120,000 is owing to York Plains Investment Corp., an arms-length third-party, in connection with completion of the Business Combination.

Closing of the Business Combination is subject to a number of conditions including completion of satisfactory due diligence, entering into of a definitive agreement, completion of the Bridge Loan and the Financing, completion of the acquisition of an arms-length property management company by Tribe (the “Acquisition“), completion of the Cherry Street Consolidation and the Tribe Consolidation, the Company having positive working capital of not less than $500,000 after deducting the Bridge Loan and all costs and expenses associated with the Transaction, approval of the Exchange and shareholders of Tribe, and satisfaction of other closing conditions as are customary in transactions of this nature. There can be no assurance that the Business Combination will be completed as proposed or at all. Trading in the common shares of the Company will remain halted pending further filings with the Exchange.

It is expected that following completion of the Business Combination and the Financing (i) security holders of Tribe (including the Converting Shareholders) will hold 12,853,274 common shares in the capital of the Resulting Issuer (“Resulting Issuer Shares“), representing approximately 82.71% of the Resulting Issuer’s issued and outstanding shares (assuming the issuance of 2,325,984 Receipts pursuant to the Financing and the conversion of $1,266,368 Shareholder Loans and the issuance of $1,000,000 worth of post-Tribe Consolidation common shares in connection with the Acquisition); (ii) shareholders of the Company will hold 361,000 common shares in the capital of the Resulting Issuer, representing approximately 2.32% of the Resulting Issuer’s issued and outstanding shares; and (iii) certain directors, members of the management team and shareholders will own more than 10% of the Resulting Issuer, namely Aquilini Investment Group (28.35%), Talal Yassin (17.49%), Joseph Nakhla, Director and Chief Executive Officer (13.74%) and Raymond Choy, Director (10.58%).

Following the completion of the Business Combination, the board of directors of the Company will be reconstituted to consist of Joseph Nakhla, Raymond Choy, Andrew Kiguel and Charmaine Crooks. Management of the Company will consist of Joseph Nakhla as Chief Executive Officer and John Tims as Chief Financial Officer and Corporate Secretary. The following are brief profiles of the proposed members of management and the board of directors:

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Joseph Nakhla: Director and Chief Executive Officer

Joseph is a serial entrepreneur; passionate about creating livable cities and simplifying residential community living. He is the founder of bazinga! Technologies, a leading condo-living platform used in communities around the world. He is a Director and CEO of Tribe Property Technologies, including Tribe Management, one of Canada’s fastest growing residential management companies. Joseph is the former COO of TIO Networks, a former TSX listed company acquired by Paypal. He currently sits on the Boards of not-for-profits helping change business improvement policies, as well as industry leading companies such as OctoAI and Minehub.

Raymond Choy: Director

Raymond is the President and Board Member of Peterson Group. With over 20 years of experience in business and real estate in North America, he combines knowledge, networks, and vision with his energetic leadership style. He was formerly the Chief Investment Officer, responsible for acquisitions and dispositions, developments, capital lending, private equity, and partnerships. Raymond is a Chartered Professional Accountant and Certified Public Accountant (Illinois) with a Bachelor of Business Administration from Simon Fraser University. He is active in the community, having participated in many of Peterson’s charitable initiatives, and served as past Director of the NAIOP Commercial Real Estate Development Association and Chair of the NAIOP Education Committee.

Andrew Kiguel: Director (Independent)

Andrew is an accomplished executive with leadership experience in Canadian capital markets, corporate governance and entrepreneurship. He was the co-founder and CEO of Hut 8 Mining, one of the largest publicly listed bitcoin miners in the world with a listing market capitalization of $450 million and over $140 million of revenue within the first 24 months. Prior to that, Andrew spent over 18 years at GMP Securities (now Stifel Canada) in investment banking, his most recent title as a Managing Director and Head of Real Estate Banking.

Charmaine Crooks: Director (Independent)

Charmaine is a Member of the Order of Canada, five-time Olympian, Entrepreneur and Community Leader. Based in West Vancouver, with over 20 years of corporate governance experience as a director on several national and international non-profit and public boards. Charmaine is the president and founder of NGU Consultants Inc., providing global strategic advisory and corporate development to a variety of sectors including technology, sports, e-sports, health and major events. She is Vice President of the Global Esports Federation and founding Chair, Canada Esports Association. Recognized in 2018 as one of Canada’s Most Powerful Top 100 by the Women’s Executive Network.

John Tims: Chief Financial Officer and Corporate Secretary

John (CPA/CGA) is a motivational, hands-on finance and accounting leader with more than 25 years of proven performance in manufacturing, service and distribution organizations – six of which are in strata and property management. His experience encompasses finance, risk management, IT management, acquisitions and rapid growth environments. He has an exceptional ability to lead and motivate teams, foster growth, reduce costs and provide risk mitigation solutions.

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SPONSORSHIP

Sponsorship may be required by the Exchange unless exempt in accordance with Exchange policies. The Company intends to seek an exemption from the sponsorship requirements. If applicable, the Company will include any additional information regarding sponsorship in a subsequent press release.

For further information, contact Rudy Cheddie at rudy@soroc.com.

For further information from Tribe, contact Joseph Nakhla at joseph.nakhla@mybazinga.com.

On behalf of the Board,

Cherry Street Capital Inc.

Rudy Cheddie, Chief Executive Officer

Completion of the Business Combination is subject to a number of conditions, including but not limited to, Exchange acceptance. The Business Combination cannot close until the required approvals are obtained, and the outstanding conditions satisfied. There can be no assurance that the Business Combination will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Business Combination, any information released or received with respect to the Business Combination may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the Business Combination 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 policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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This news release may contain certain “Forward-Looking Statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws regarding the Company and Tribe and their respective businesses, which may include, but are not limited to, statements with respect to the filing of the filing statement, the completion of the Business Combination, the Financing and the Acquisition, the terms on which the Business Combination, the Financing and the Acquisition are intended to be completed, the ability to obtain regulatory and shareholder approvals and other factors. When or if used in this news release, the words “anticipate”, “believe”, “estimate”, “expect”, “target, “plan”, “forecast”, “may”, “schedule” and similar words or expressions identify forward-looking statements or information. These forward-looking statements or information may relate to proposed financing activity, regulatory or government requirements or approvals, the reliability of third-party information and other factors or information. Such statements represent the Company’s and Tribe’s current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties. Many factors, both known and unknown, could cause results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements. The Company and Tribe do not intend, and do not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules and regulations.

This press release is not an offer of securities for sale in the United States. The securities may not be offered or sold in the United States absent registration or an exemption from registration under U.S. Securities Act of 1933, as amended (the “U.S. Securities Act“). The Company and Tribe have not registered and will not register the securities under the U.S. Securities Act. The Company and Tribe do not intend to engage in a public offering of their securities in the United States.

NOT FOR DISTRIBUTION IN THE U.S. OR TO U.S. NEWSWIRE SERVICES.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/70023