Ottawa, Ontario–(Newsfile Corp. – May 27, 2021) – Buzz Capital Inc. (TSXV: BUZ.P) (“Buzz“) and Grata Technologies Inc. (“Grata“) are pleased to announce that they have entered into a binding letter of intent dated effective May 18, 2021 (the “LOI“), pursuant to which Buzz and Grata have agreed to complete a transaction (the “Transaction“) that will result in a reverse take-over of Buzz by Grata. It is intended that the Transaction will constitute the “Qualifying Transaction” of Buzz as such term is defined in Policy 2.4 – Capital Pool Companies (the “Policy“) of the TSX Venture Exchange (the “TSXV“). Following the completion of the Transaction, the issuer resulting from the Transaction (the “Resulting Issuer“) is expected to carry on the current business of Grata.
The LOI, which was negotiated at arm’s length, is expected to be superseded by a definitive amalgamation agreement (the “Definitive Agreement“) to be executed by on or prior to June 15, 2021, or such later date as may be mutually agreed upon by the parties in writing (such date, the “Definitive Agreement Outside Date“). The Transaction is subject to requisite regulatory approvals, including the approval of the TSXV, and standard closing conditions, including, the completion of due diligence investigations to the satisfaction of each of Buzz and Grata, the entering into of the Definitive Agreement, and the conditions described below. The parties anticipate that the transaction will be completed as a three cornered amalgamation although this structure will be subject to receipt of final tax, corporate and securities law advice for both Buzz and Grata.
Buzz is incorporated under the Canada Business Corporations Act, with its registered and head office located in Ottawa, Ontario. It is a reporting issuer in the provinces of British Columbia, Alberta and Ontario. The Transaction is not a Non Arm’s Length Qualifying Transaction pursuant to Section 2.1 of the Policy and, accordingly, Buzz is not required to obtain the approval of its shareholders for the Transaction. However, Buzz intends to call a special meeting of its shareholders (the “Special Meeting“) to approve certain matters ancillary to the Transaction, including the Name Change, the Consolidation and the Board and Management Rollover (each as defined below).
About Grata Technologies Inc.
Toronto-based Grata Technologies Inc. is a next-generation PropTech company developing a suite of tenant engagement software platforms to enhance the living of multi-family residents. Grata combines the power of Smartphone & Smart Building technology to create a digital ecosystem for each building within a property owner’s portfolio. Grata’s platform-agnostic software solutions have created a “win-win-win” solution for residents, property owners, and marketing partners, bringing multi-family real estate into the 21st century. Grata’s Smartphone App integrates directly with existing Property Management software platforms and Smart Building technologies to provide an all-in-one platform for residents, property managers, and property owners to “digitally” live. Through its proprietary software suite of applications, Grata has created a new and valuable “digital real estate marketspace” within traditional real estate for its marketing partners.
Grata is poised to enhance the resident experience while generating substantial value for multi-family property owners across North America.
Grata was incorporated on June 4, 2020 under the laws of the Province of Ontario. As of the date hereof, Mr. Ken Crema, a resident of the Province of Ontario, is the sole Control Person of Grata, holding approximately 44.50% of the issued and outstanding common shares of Grata Technologies Inc. (on an undiluted basis).
Further information may be found at Grata’s website: https://www.grata.life/.
It is anticipated that Buzz will acquire all of the issued and outstanding common shares of Grata (“Grata Shares“) pursuant to a three-cornered amalgamation resulting in the issuance to each shareholder of Grata (a “Grata Shareholder“), one (1) Post-Consolidation Common Share (as defined below) for each one (1) Grata Share held by such holder (the “Exchange Ratio“) immediately prior to the closing of the Transaction.
Treatment of Convertible Securities
The LOI provides that the convertible securities of Grata outstanding immediately prior to the closing of the Transaction will either (i) automatically adjust in accordance with their terms such that, following the completion of the Transaction, the holders thereof will be entitled to acquire Post-Consolidation Common Shares in lieu of Grata Shares, or (ii) be replaced with equivalent convertible securities of Buzz entitling the holders thereof to acquire Post-Consolidation Common Shares in lieu of Grata Shares, and in each case with necessary adjustment to number and exercise or conversion price, as applicable, to account for the Exchange Ratio.
Consolidation and Name Change
Under the terms of the LOI, it is currently anticipated that Buzz will, prior to the closing of the Transaction, effect a consolidation (the “Consolidation“) of its outstanding common shares (the “Common Shares“) on the basis of one (1) new Common Share (each, a “Post-Consolidation Common Share“) for every 29.94012 pre-consolidation Common Shares (the “Consolidation Ratio“); provided, however, that the Consolidation Ratio will be adjusted upward in the event that Buzz’s cash position on the closing date is less than $450,000. The Consolidation Ratio and mechanisms for the upward adjustment thereof remain subject to the terms of the Definitive Agreement.
In addition, under the terms of the LOI, Buzz will, prior to the closing of the Transaction, change its name to “Grata Technologies Inc.” or such other name as Grata may approve and be acceptable to the applicable regulatory authorities (the “Name Change“).
In connection with the Transaction, Grata is expected to undertake a private placement of Grata Shares at a price on $6.14 per Common Share for gross proceeds of not less than $10,000,000 (the “Concurrent Financing“). The proceeds of the Concurrent Financing are expected to be used to fund the expenses associated with the Transaction and the Concurrent Financing, and the working capital requirements of the Resulting Issuer.
The completion of the Transaction will be subject to the satisfaction (or waiver, where permitted) of various conditions precedent, including but not limited to: (i) the parties entering into the Definitive Agreement on or before the Definitive Agreement Outside Date, (ii) the parties obtaining all required directors’, shareholders’, regulatory and third-party approvals and consents, including the conditional approval of the TSXV, for the Transaction, (iii) the approval of all matters put forward by Buzz at the Special Meeting, (iv) the completion of the Concurrent Financing (as defined below) for gross proceeds of not less than $10,000,000, (v) the completion of the Consolidation, the Name Change, and the Board and Management Rollover, (vi) compliance with applicable listing requirements of the TSXV, and (vii) Buzz not having any liabilities or outstanding liens or encumbrances at the closing date, other than liabilities for costs incurred in connection with the Transactions.
Buzz Shareholder Approval
Buzz is not required to obtain approval of its shareholders for the Transaction, as the Transaction is an Arm’s Length Qualifying Transaction pursuant to Section 2.1 of the Policy. However, Buzz intends to call a Special Meeting of shareholders to approve certain matters ancillary to the Transaction, including the Name Change, the Consolidation, and the Board and Management Rollover.
Proposed Directors and Officers of the Resulting Issuer
Following the completion of the Transaction, it is expected that the board of directors and officers of Buzz will be reconstituted to be comprised of such persons as nominated or selected by Grata, all in a manner that complies with the requirements of the TSXV and applicable securities and corporate laws (the “Board and Management Rollover“). Addition information with respect to the Board and Management Rollover, and the biographies of the incoming directors and officers will be provided at a later date, once determined and finalized by the parties.
The TSXV requires sponsorship of a Qualifying Transaction of a capital pool company, unless exempt in accordance with the policies of the TSXV. Buzz is currently reviewing the requirements for sponsorship and may apply for an exemption from the sponsorship requirements pursuant to the policies of the TSXV. However, there can be no assurance that Buzz will ultimately obtain such exemption. Buzz intends to provide any additional information regarding sponsorship at a later date, once determined by the parties. In the event that the TSXV does not grant an exemption from sponsorship requirements of the TSXV, Buzz would be required to engage a sponsor.
The Common Shares, which are currently listed on the TSXV under the symbol “BUZ.P”, are currently suspended from trading as a result of Buzz not completing a Qualifying Transaction within 24 months of the date of listing and it is expected that the Common Shares will remain suspended until completion of the Transaction.
About Buzz Capital Inc.
Buzz is a capital pool company pursuant to the Policy, and in accordance with the Policy, until the completion of its Qualifying Transaction (as defined in the Policy) Buzz’s principal business is the identification and evaluation of companies, businesses or assets with a view to completing a Qualifying Transaction. Investors are cautioned that trading in the securities of a capital pool company is considered highly speculative.
Buzz recently received approval of its shareholders to certain matters at an annual and special shareholder’s meeting held on May 21, 2021 which allows Buzz to transition to the new TSXV Policy 2.4 Capital Pool Companies. Further details are contained in a news release issued by Buzz dated May 26, 2021 which is available at www.sedar.com.
This news release contains forward-looking statements and forward-looking information (collectively, “forward-looking statements“) within the meaning of applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “anticipate”, “will”, “estimates”, “believes”, “intends” “expects” and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this news release contains forward-looking statements concerning the Transaction (including the Name Change, the Consolidation, and the Board and Management Rollover), the Concurrent Financing, the expected composition of the board of directors of the Resulting Issuer, and the proposed structure by which the Transaction is to be completed. Forward-looking statements are inherently uncertain, and the actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of Buzz and Grata, including expectations and assumptions concerning (i) Buzz, Grata, the Resulting Issuer, and the Transaction, (ii) the ability of the parties to negotiate and enter into the Definitive Agreement on satisfactory terms, (iii) the timely receipt of all required shareholder, court and regulatory approvals (as applicable), including the acceptance of the TSXV, and (iv) the satisfaction of other closing conditions in accordance with the terms of the Definitive Agreement. Readers are cautioned that assumptions used in the preparation of any forward-looking statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of Buzz and Grata. Readers are further cautioned not to place undue reliance on any forward-looking statements, as such information, although considered reasonable by management of Buzz and Grata at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.
The forward-looking statements contained in this news release are made as of the date of this news release, and are expressly qualified by the foregoing cautionary statement. Except as expressly required by securities law, neither Buzz nor Grata undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to the requirements of the TSXV, 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 news release.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
All information contained in this news release with respect to Buzz and Grata was supplied by the respective party for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.
For further information please contact:
Buzz Capital Inc.
Chuck Rifici, President and CEO
Grata Technologies Inc.
Ken Crema, Chairman
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 news release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
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