Toronto, Ontario–(Newsfile Corp. – June 29, 2021) – Spirit Banner II Capital Corp. (TSXV: SBTC.P) (“Spirit“) is pleased to announce that it has entered into a non-binding letter of intent dated June 23, 2021 (the “LOI“) with Sabio Mobile, Inc. (“Sabio“) pursuant to which Spirit proposes to acquire all of the issued and outstanding securities of Sabio in exchange for the issuance of securities of Spirit, which will result in Sabio becoming a wholly-owned subsidiary of Spirit (the “Sabio Transaction“). The Sabio Transaction, assuming the completion of the Private Placement (as defined below), will result in a reverse take-over of Spirit where the existing shareholders of Sabio will own a majority of the outstanding common shares of Spirit (the “Spirit Common Shares“) and Spirit is anticipated to be renamed “Sabio Inc.” (the “Resulting Issuer“) or such other name as Sabio may determine. Upon completion of the Sabio Transaction, it is anticipated that the Resulting Issuer will be a Technology Issuer.

Trading of the Spirit Common Shares will be halted in accordance with the policies of the TSX Venture Exchange (the “TSXV“) and will remain halted until such time as all required documentation in connection with the Sabio Transaction has been filed with and accepted by the TSXV and permission to resume trading has been obtained from the TSXV.

The Qualifying Transaction

Spirit is a capital pool company and intends that the Sabio Transaction will constitute its “Qualifying Transaction” under the policies of the TSXV. The Sabio Transaction will not constitute a non-arm’s length qualifying transaction or a related party transaction pursuant to the policies of the TSXV.

Pursuant to the terms and conditions of the LOI, Spirit and Sabio will negotiate and enter into a definitive agreement (the “Definitive Agreement”) incorporating the principal terms of the Sabio Transaction as described in the LOI and this press release. There is no assurance that a Definitive Agreement will be successfully negotiated or entered into. The terms and conditions outlined in the LOI are non-binding on the parties and the LOI is expected to be superseded by the Definitive Agreement to be negotiated between the parties.

As consideration for the acquisition of all of the outstanding securities of Sabio, holders of issued and outstanding common shares of Sabio (“Sabio Common Shares“) will receive approximately one (1) Spirit Common Share (on a post-Spirit Consolidation (as defined below) basis) for each one (1) Sabio Common Share (on a post-Sabio Consolidation (as defined below) basis) (the “Exchange Ratio“), at a deemed price of $1.75 per Spirit Common Share. Excluding any securities issued in connection with the Private Placement (as defined below), immediately prior to the closing of the Sabio Transaction, it is anticipated that: (i) assuming completion of the anticipated exercise of 5,440,064 post-Sabio Consolidation incentive stock options, holders of the post-Sabio Consolidation Sabio Common Shares will receive an aggregate of approximately 35,646,924 Spirit Common Shares in accordance with the Exchange Ratio; (ii) holders of the unexercised post-Sabio Consolidation incentive stock options will receive an aggregate of approximately 3,394,600 incentive stock options of the Resulting Issuer pursuant to the Exchange Ratio; (iii) holders of the post-Sabio Consolidation common share purchase warrants will receive an aggregate of approximately 3,144,357 common share purchase warrants of the Resulting Issuer pursuant to the Exchange Ratio; and (iv) holders of the post-Sabio Consolidation convertible notes will receive an aggregate of approximately 2,591,713 Spirit Common Shares and an aggregate of approximately 1,295,856 common share purchase warrants of the Resulting Issuer, each pursuant to the Exchange Ratio, and on the assumed basis of a fully diluted equity valuation of Sabio of C$80,628,468. In addition, an arm’s length finder’s fee in the form of shares is anticipated to be paid in connection with the closing Sabio Transaction, the holder of which will receive an aggregate of approximately 85,714 Spirit Common Shares in accordance with the Exchange Ratio. The final structure of the Sabio Transaction is subject to the receipt of tax, corporate and securities law advice by both Spirit and Sabio.

Immediately prior to the completion of the Sabio Transaction, it is anticipated that: (i) Spirit will consolidate its issued and outstanding Spirit Common Shares on the basis of approximately 15.91 pre-consolidation Spirit Common Shares for each one (1) post-consolidation Spirit Common Share (the “Spirit Consolidation Ratio”) as a condition to the completion of the Sabio Transaction (the “Spirit Consolidation“); and (ii) Sabio will consolidate its issued and outstanding Sabio Common Shares on the basis of approximately 0.2757 pre-consolidation Sabio Common Shares for each one (1) post-consolidation Sabio Common Share (the “Sabio Consolidation Ratio”) as a condition to the completion of the Sabio Transaction (the “Sabio Consolidation“). All incentive stock options of Spirit are anticipated to be adjusted on the basis of the Spirit Consolidation Ratio. All incentive stock options of Sabio, common share purchase warrants to purchase Sabio Common Shares and other convertible securities of Sabio are anticipated to be adjusted on the basis of the Sabio Consolidation Ratio.

It is a condition of the Sabio Transaction for Sabio to close a concurrent brokered private placement (the “Private Placement“) for aggregate gross proceeds of up to C$10,000,000 through the offering of subscription receipts (“Subscription Receipts”) of Sabio to be sold at an issue price of C$1.75 or such other price as may be agreed to by Sabio. Immediately prior to the closing of the Sabio Transaction and assuming the other conditions applicable to the Subscription Receipts have been satisfied or waived, each Subscription Receipt shall be deemed to be exercised, without payment of any additional consideration, for that number of Sabio Common Shares as is equal to a fraction, the numerator of which is one and the denominator of which is the Exchange Ratio. Beacon Securities Limited and Paradigm Capital Inc. shall act as the co-lead agents of the Private Placement on their own behalf and on the behalf of a syndicate of agents (collectively, the “Agents“), and in connection with the services provided by the Agents pursuant to the Private Placement, Sabio shall pay the Agents a cash fee of 7.0% of the aggregate gross proceeds raised from the Private Placement (other than for the gross proceeds raised from subscribers on a president’s list provided by Sabio (the “President’s List“) to the Agents, in respect of which a cash fee of 2.0% shall be paid to the Agents) and issue that number of compensation warrants to the Agents equal to 7.0% of the aggregate number of Subscription Receipts sold through the Private Placement (other than for Subscription Receipts issued to subscribers on the President’s List, in respect of which that number of compensation warrants equal to 2.0% of the Subscription Receipts issued to such subscribers shall be issued to the Agents). Each compensation warrant shall be exercisable for one Sabio Common Share or one Spirit Common Share at the issue price of the Subscription Receipts for a period of 24 months following the date of deemed conversion of the Subscription Receipts.

Sabio intends to use the net proceeds from the Private Placement for business development, working capital requirements and general corporate purposes.

About Sabio Mobile, Inc.

Sabio provides a CTV platform that is powered by mobile data, providing leading brands with the perfect balance between media, data and technology. Sabio’s unique approach to combining mobile data, device location and consumer behaviors aims to provide brands with more effective targeting and greater prediction accuracy for their mobile and connected TV ad campaigns. Sabio’s team of experienced marketers, engineers and data scientists are passionately innovative in everything they do, from developing Sabio’s proprietary audience platform and ad server to creating and delivering stunning ads on connected TVs and mobile devices. Sabio was founded in 2014 by veterans in the mobile and TV industries and is headquartered in Los Angeles. Sabio was incorporated under the laws of the State of Delaware.

Sabio has completed its audited financial statements for fiscal years ended December 31, 2019 and 2020 in accordance with international financial reporting standards (IFRS), as required by the policies of the TSXV and applicable securities laws. For its most recent fiscal year ended December 31, 2020, Sabio had audited revenues of US$13,192,426, assets of US$3,515,513, liabilities of US$12,055,228 and net losses of US$281,501 and for its fiscal year ended December 31, 2019, Sabio had audited revenues of US$16,311,492, assets of US$4,009,874, liabilities of US$12,346,876 and net losses of US$2,406,509.

Insiders of the Resulting Issuer

Upon completion of the Sabio Transaction, it is anticipated that the board of directors of the Resulting Issuer will consist of five nominees, each to be appointed by Sabio, three of whom are anticipated to be: (i) Aziz Rahimtoola; (ii) Paula Madison; and (iii) Carl Farrell. The senior management team of the Resulting Issuer will consist of those officers appointed by the new board of directors of the Resulting Issuer concurrent with the closing of the Sabio Transaction, and is anticipated to include: (i) Aziz Rahimtoola, Chief Executive Officer; (ii) Sajid Premji, Chief Financial Officer; (iii) Joe Camacho, Chief Marketing Officer; and (iv) Jason Tong, SVP of Engineering.

Aziz Rahimtoola – Aziz Rahimtoola is the CEO and Founding Team Member of Sabio and its subsidiary AppScience Inc., with more than 24 years of experience in the TV and mobile advertising tech industry. He has held leadership roles with multiple media and telecommunications companies, such as NBC Universal and AT&T Adworks. Prior to Sabio, Aziz was the SVP at Opera Mediaworks where he helped foster revenue and product innovation. As CEO, Aziz is responsible for keeping the company and its employees focused on short and long-term growth objectives. On the rare days when Aziz is not traveling, he can be found in Los Angeles with his wife and daughter.

Paula Madison – Paula Williams Madison is Chairman and CEO of Madison Media Management LLC and 88 Madison Media Works Inc. In 2011, Madison retired from NBCUniversal (NBCU) after a successful 22 years, where she held a number of leadership roles, including Executive Vice President for Diversity as well as a Vice President of the General Electric Company (GE), then the parent company of NBCU. She is also the author and executive producer, respectively, of the book and documentary FINDING SAMUEL LOWE, which tells the story of her successful search to locate her Chinese grandfather’s descendants in China. Madison also is a board member of her family’s investment company, Williams Group Holdings LLC, the majority owner of The Africa Channel. She and her husband Roosevelt Madison live in Los Angeles.

Carl Farrell – Carl Farrell is an experienced board member and advisor with over 30 years of global management expertise guiding large and small organizations through growth and transformation. Most recently, before retirement from full time roles, Carl was the Group President of commercial real-estate leader Altus Group where he also served as an independent director on the company’s board of directors. Prior to that, Carl was the Chief Revenue Officer and member of the board of directors of global analytics leader SAS Institute. Before his 15-year tenure at SAS, Carl held senior management positions at Vignette Corporation, J.D Edwards, Idiom Technologies and JBA. Currently, Carl is a member of the board of directors of enterprise software company Basware Corporation and acts as a strategic advisor to other technology companies in Europe and North America. Originally from England, Carl resides in Toronto, Canada.

Joe Camacho – Joe is Sabio’s Chief Marketing Officer and Team Member of Sabio. Joe is responsible for all marketing efforts as well as Hispanic and Political growth opportunities at Sabio. He is a seasoned marketing executive with production and sales experiences that range from network broadcast television to mobile. Prior to joining Sabio, Joe was CMO of Latin American Multimedia Corp, and he holds an MBA from San Diego State University. Joe currently resides in Los Angeles where he invests much of his free time hiking and exploring the Gold Coast’s local beaches and mountains with his wife and two children.

Sajid Premji – Sajid Premji is the Chief Financial Officer of Sabio and its subsidiary AppScience Inc. Sajid has 15 years of experience in accounting, finance and capital markets in both Canada and the United States. Sajid is a Certified Public Accountant (CPA) and a Chartered Professional Accountant (CPA, CA). Before joining Sabio, he spent several years in the public companies’ audit and assurance practice at a national public accounting firm in Canada, and in the Internal Audit group at a large, multi-national financial institution (TD Bank Financial Group). Most recently, he held a senior-level position in the financial crimes compliance function at TD Securities (USA) LLC, a New York City-based investment bank and registered broker/dealer. Originally from Toronto, Canada, Sajid resides in New York City.

Jason Tong – Jason Tong is Sabio’s SVP of Engineering and is responsible for leading the engineering teams in California and India. He has been instrumental in Sabio’s growth and building its proprietary DSP, SSP and App Science Platforms. Jason has over ten years of experience in mobile marketing and overall ad tech with extensive knowledge of ad serving, action tracking and reporting. His specialties include LAMP, RTB, Ad network, performance marketing and programmatic marketing. Jason attended CSU Hayward and enjoys playing badminton.

Biographical information regarding yet to be determined directors will be provided in a subsequent news release.

Significant Conditions to Closing

The completion of the Sabio Transaction is subject to a number of conditions precedent, including but not limited to satisfactory due diligence review, negotiation and execution of the Definitive Agreement and accompanying transaction documents, approval by the boards of directors of each of Spirit and Sabio, approval of the shareholders of each of Spirit and Sabio (if required), obtaining necessary third party approvals, TSXV acceptance, closing of the Private Placement for minimum aggregate gross proceeds of up to C$10,000,000 and preparation and filing of a management information circular or filing statement outlining the definitive terms of the Sabio Transaction and describing the business to be conducted by the Resulting Issuer following completion of the Sabio Transaction, in accordance with the policies of the TSXV. There can be no assurance that the Sabio Transaction or the Private Placement will be completed as proposed, or at all.

The obligations of Spirit and Sabio pursuant to the LOI shall terminate in certain specified circumstances, including in the event that a Definitive Agreement is not entered into between the parties by July 21, 2021.

Sponsorship

Sponsorship of a Qualifying Transaction is required by the TSXV unless a waiver from the sponsorship requirement is obtained. Spirit intends to apply for a waiver from sponsorship for the Sabio Transaction. There is no assurance that a waiver from this requirement will be obtained.

Additional Information

This is an initial press release. Spirit plans to issue a comprehensive press release in accordance with Policy 2.4 once it has entered into the Definitive Agreement to provide, among other things, selected financial information respecting Sabio and the additional biographies of the anticipated directors and officers of the Resulting Issuer. Additional information with respect to Sabio and the Sabio Transaction will be included in Spirit’s management information circular or filing statement to be filed in connection with the Sabio Transaction, which will be available under Spirit’s SEDAR profile at www.sedar.com.

About Spirit Banner II Capital Corp.

Spirit is a capital pool company created pursuant to the policies of the TSXV. It does not own any assets, other than cash or cash equivalents and its rights under the LOI. The principal business of Spirit is to identify and evaluate opportunities for the acquisition of an interest in assets or businesses and, once identified and evaluated, to negotiate an acquisition or participation subject to acceptance by the TSXV so as to complete a Qualifying Transaction in accordance with the policies of the TSXV.

Forward-Looking Statements Disclaimer

Certain information in this press release may contain forward-looking statements. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. Spirit assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to Spirit. Additional information identifying risks and uncertainties is contained in filings by Spirit with the Canadian securities regulators, which filings are available at www.sedar.com.

Completion of the Sabio 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 filing statement or management information circular to be prepared in connection with the Sabio 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 TSXV has in no way passed upon the merits of the proposed Sabio Transaction and has neither approved nor disapproved the contents of this press release.

The Spirit Common Shares will remain halted until such time as permission to resume trading has been obtained from the TSXV. Spirit is a reporting issuer in Alberta, British Columbia, and Ontario.

For more information about Spirit, please contact Matthew Wood, Chief Executive Officer, at (647) 951-6508.

NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR 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. THIS NEWS RELEASE DOES NOT CONSTITUTE AN OFFER OR SALE OF SECURITIES IN THE UNITED STATES.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/88957