Toronto, Ontario–(Newsfile Corp. – March 23, 2021) – BuzBuz Capital Corp. (TSXV: BZBZ.P) (“BUZ” or the “Company“), announces that, in connection with recent changes to the TSX Venture Exchange’s (the “Exchange“) Capital Pool Program and Exchange policy 2.4 “Capital Pool Companies” (“Policy 2.4“), the Company intends to implement certain amendments to bring the Company’s practices and operations in line with the revisions to Policy 2.4, which became effective January 1, 2021 as described below.
Further, the Company is pleased to announce that all meeting matters of its 2021 Annual and Special Meeting of Shareholders (the “Meeting“) held on March 10, 2021 in Toronto, Ontario, Canada were passed with the required majorities, including the aforementioned amendments in connection with the recent changes to Policy 2.4. The shareholders elected Richard Buzbuzian, Anthony Di Benedetto, Jason Monaco and Robert Suttie to be duly elected as directors of the Company until the close of the next annual meeting of shareholders of the Company. In addition, at the Meeting the shareholders approved certain resolutions necessary to complete its recently announced qualifying transaction with Inolife (R&D) Inc. (“Inolife“) as further described in the Company’s press releases dated October 2, 2020, November 2, 2020, December 24, 2020 and December 30, 2020. The Company continues to work with Inolife to seek conditional approval from the Exchange for the qualifying transaction with Inolife and will update the shareholders at the appropriate time.
Revised CPC Policy 2.4
The Company believes that the changes to Policy 2.4 (the “Revised Policy“) offer greater flexibility and increased financing opportunities that will permit Capital Pool Companies listed on the Exchange (“CPCs“) with improved opportunities to complete a “Qualifying Transaction” that is beneficial to all parties involved. Pursuant to the Revised Policy, in order to implement certain changes under the Revised Policy, the Company is required to obtain disinterested shareholder approval. Accordingly, the Company will seek written approval of at least 50% of disinterested shareholders for the following matters: (i) to amend the Company’s stock option plan (the “Option Plan“) to, among other things, become a “10% rolling” plan prior to the Company completing a qualifying Transaction (a “QT“); (ii) to remove the consequences of failing to complete a QT within 24 months of the Company’s date of listing on the Exchange (the “Listing Date“); (iii) to amend the escrow release conditions and certain other provisions of the Company’s CPC escrow agreement (the “Escrow Agreement“), including allowing the Company’s escrowed securities to be subject to an 18 month escrow release schedule as detailed in the Revised Policy, rather than the current up to 36 month escrow release schedule under the previous Policy 2.4; and (iv) permitting payment of a finder’s fee or commission to a Non-Arm’s Length Party to the Company upon completion of a QT (collectively, the “Shareholder Approvals“).
Amendments to Stock Option Plan
The amendments to the Option Plan will (i) allow the total number of common shares of the Company reserved for issuance under the Option Plan both before and after completion of a QT to equal up to 10% of the issued and outstanding common shares of the Company as at the date of grant, rather than at the closing date of the initial public offering (“IPO”), for options issued prior to the QT; (ii) allow the number of common shares reserved for issuance under the Option Plan to any individual director or senior officer not to exceed 5% of the Common Shares outstanding as at the date of grant, rather than at the closing date of the IPO, for options issued prior to the QT; (iii) allow the number of common shares reserved for issuance under the Option Plan to all technical consultants not to exceed 2% of the common shares outstanding as at the date of grant, rather than at the closing date of the IPO, for options issued prior to the QT; and (iv) require, prior to the granting of options, the optionee to first enter into an escrow agreement agreeing to deposit the options, and any common shares acquired pursuant to the exercise of such options, into escrow as described in the escrow agreement.
Consequences of Failing to Complete a QT within 24 Months of the Listing Date
Prior to the January 1, 2021 revisions, Policy 2.4 contained consequences for a CPC failing to complete a QT within 24 months of its listing date, including a potential for the Company to be delisted or suspended, or, subject to the approval of the majority of the Company’s shareholders, transferring the Company’s common shares to list on the NEX and cancelling certain seed shares. The Company intends to seek written approval of at least 50% of disinterested shareholders to remove these consequences in accordance with the terms of the Revised Policy.
Amendments to the Escrow Agreement
Under the Revised Policy, securities subject to a CPC escrow agreement are subject to an 18-month escrow period, as opposed to the 36-month period previously required under Policy 2.4. The Company intends to seek written approval of at least 50% of disinterested shareholders to make certain amendments to the Escrow Agreement, including allowing the Company’s escrowed securities to be subject to an 18-month escrow release schedule in accordance with the Revised Policy. In addition, in accordance with the requirements of the Revised Policy, the Escrow Agreement will be amended to provide that all options granted prior to the date the Exchange issues a final bulletin for the QT (“Final QT Exchange Bulletin“) and all common shares that were issued upon exercise of such options prior to the date of the Final QT Exchange Bulletin will be released from escrow on the date of the Final QT Exchange Bulletin, other than options that (a) were granted prior to the IPO with an exercise price that is less than the issue price of the common shares issued in the IPO and (b) any common shares that were issued pursuant to the exercise of such options issued below the issue price.
Payment of Finder’s Fees
The Revised Policy permits for the payment of a finder’s fee to a Non-Arm’s Party (as that term is defined in Exchange Policies) to the CPC in connection with an arm’s length QT where disinterested shareholder approval is obtained. The Company intends to seek written approval of at least 50% of disinterested shareholders to permit payment of a finder’ fee to a Non-Arm’s Length Party in connection with a QT, in accordance with the terms of the Revised Policy.
Under the Revised Policy, the Company is permitted to implement certain other changes without obtaining shareholder approval. As a result, the Company intends to immediately take advantage of all the changes under the Revised Policy that do not require shareholder approval, including, but not limited to:
(i) removing the restriction which provided that no more than the lesser of 30% of the gross proceeds from the sale of securities issued by the Company and $210,000 may be used for purposes other than identifying and evaluating assets or businesses and obtaining shareholder approval for a proposed qualifying transaction, and implementing the restrictions on the permitted use of proceeds and prohibited payments under the Revised Policy, under which reasonable general and administrative expenses not exceeding $3,000 per month are permitted;
(ii) removing the restriction on the Company issuing new agent’s options in connection with a private placement; and
(iii) removing the restriction such that now one person has the ability to act as the chief executive officer, chief financial officer and corporate secretary of the Company at the same time, for which the Company had previously obtained a waiver.
The Company believes that transitioning to these revised provisions of the Revised Policy is in the best interests of the shareholders as it will allow the Company to have greater flexibility and mechanisms to increase shareholder value.
For further information, please contact:
President and CEO
BuzBuz Capital Corp.
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 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, as amended (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.
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. In making the forward- looking statements contained in this press release, the Company has made certain assumptions, including that: all applicable shareholder, and regulatory approvals for the changes under the Revised Policy will be received; and there would not be changes in the conditions under which the proposed changes would be completed, including regulatory changes or the operating environment for the Company. 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 and economic risks associated with current unprecedented market and economic circumstances due to the COVID-19 pandemic. 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.
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