Calgary, Alberta–(Newsfile Corp. – August 5, 2022) – Trail Blazing Ventures Ltd. (TSXV: BLAZ.P) (the “Corporation“) is pleased to announce details concerning its proposed arm’s length qualifying transaction (the “Transaction“) involving a proposed business combination with Ecologyst Outfitters Inc. (“Ecologyst“), a private company incorporated under the laws of British Columbia.
Ecologyst is a company with a goal of disrupting the legacy clothing industry by producing and selling sustainably and ethically produced fashion through its manufacturer-to-consumer (“M2C“) business model using 100% natural biodegradable materials. Its mission is to create the world’s most sustainable clothing supply chain. Founded in 2019 in Victoria, British Columbia, Ecologyst combines technology and in-house ethical production to eliminate waste and reduce inventory, while maintaining high quality standards. Ecologyst is expanding their M2C model to bring their locally produced production practices to more cities across North America. Ecologyst believes that the future is circular, where the solution to ending the environmental degradation associated with the existing clothing industry lies with owning fewer, higher quality and ethically produced garments. For more information, visit www.Ecologyst.com.
Prior to the completion of the Transaction, Ecologyst intends to complete a brokered private placement offering of up to $4,000,000 (the “Subscription Receipt Private Placement“). The Private Placement shall be in the form of subscription receipts of Ecologyst (“Subscription Receipts “) at a price of $0.20 per Subscription Receipt. The Private Placement is expected to be completed prior to the closing of the Transaction. In connection with the completion of the Transaction, the Subscription Receipts shall automatically convert into Newco Common Shares (as defined below). Additionally, Ecologyst is currently in the process of completing a non-brokered private placement of common shares for up to $3,000,000 (the “Initial Private Placement“). The Initial Private Placement is in the form of common shares of Ecologyst (“Ecologyst Common Shares“) at a price of $0.20 per Ecologyst Common Share. The Initial Private Placement is expected to be completed in September 2022.
The Corporation has entered into a non-binding letter of intent with Ecologyst dated August 4, 2022 (the “LOI“) pursuant to which the Corporation and Ecologyst intend to complete the Transaction by way of share purchase, plan of arrangement, amalgamation, three-cornered amalgamation or alternate structure to be determined, having regard to relevant tax, securities and other factors and potentially including a pre-closing reorganization of Ecologyst, to form the resulting issuer (“Newco“) to be named “Ecologyst Outfitters Inc.” or such other name as may be determined by Ecologyst. Pursuant to the proposed Transaction, each issued and outstanding Ecologyst Common Share and Subscription Receipt will be exchanged into one common share of Newco (“Newco Common Share“) on a 1:1 basis so that all of the issued and outstanding Ecologyst Common Shares will be exchanged for approximately 80,513,934 Newco Common Shares (not including Ecologyst Common Shares issued pursuant to the Initial Private Placement, the Subscription Receipts issued pursuant to the Subscription Receipt Private Placement or other Ecologyst Common Shares reserved for issuance), and each unexercised incentive stock option of Ecologyst shall be exchanged for a replacement option issued by Newco with the same terms as the option exchanged therefor. Additionally, it is expected that the outstanding common shares and options of the Corporation will be consolidated on a 2:1 basis.
It is intended that the Transaction, when completed, will constitute the Corporation’s “Qualifying Transaction” in accordance with Policy 2.4 of the TSX Venture Exchange (the “Exchange“) Corporate Finance Manual. A more comprehensive news release will be issued by the Corporation disclosing details of the Transaction, including financial information respecting Ecologyst, further details regarding the Private Placement, the names and backgrounds of all persons who will constitute insiders of Newco, and information respecting sponsorship, once an agreement has been finalized and certain conditions have been met, including:
i) approval of the Transaction by the boards of directors of the Corporation and Ecologyst;
ii) satisfactory completion of due diligence; and
iii) execution of the definitive agreement.
The Corporation does not anticipate that Shareholder approval will be required with respect to the Transaction under the rules of the Exchange. However, the structure of the Transaction has not yet been finalized so shareholder approval under corporate law may be required. In the event a final agreement is not reached, the Corporation will notify shareholders. Trading in the common shares of the Corporation will remain halted and is not expected to resume trading until the Transaction is completed or until the Exchange receives the requisite documentation to resume trading.
ABOUT THE CORPORATION
The Corporation is a capital pool company (a “CPC“) that has not commenced commercial operations and has no assets other than cash. Except as specifically contemplated in the Exchange’s CPC Policy, until the completion of its qualifying transaction, the Corporation will not carry on business, other than the identification and evaluation of businesses or assets with a view to completing a proposed qualifying transaction.
For further information, please contact:
Chief Executive Officer
Trail Blazing Ventures Ltd.
Email: [email protected]
Chief Executive Officer
Ecologyst Outfitters Inc.
Email: [email protected]
Forward-Looking Information Cautionary Statement
Statements in this press release regarding the Corporation’s business which are not historical facts are “forward-looking statements” that involve risks and uncertainties, such as terms and completion of the proposed Transaction, terms and completion of the Subscription Receipt Private Placement and completion of the Initial Private Placement, the goal of Ecologyst to disrupt the legacy clothing industry and the belief that Ecologyst’s business model can provide solutions to environmental degradation issues. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. The forward-looking statements and circumstances discussed in this press release, including the completion of the Transaction may not occur or could differ materially as a result of known and unknown risk factors and uncertainties affecting the Corporation, including (without limitation) risks relating to Ecologyst completing the Initial Private Placement and the Subscription Receipt Private Placement, risks relating to the viability of the M2C business model and the scalability of local production practices and risks regarding market conditions, economic factors, and the equity markets generally. No forward-looking statement can be guaranteed. Forward-looking statements speak only as of the date on which they are made and, except as required by applicable securities laws, the Corporation undertakes no obligation to publicly update or revise any forward-looking statement, 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, execution of a binding definitive agreement relating to the Transaction, completion of satisfactory due diligence, Exchange acceptance, receipt of requisite regulatory approvals, and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approvals, and any ancillary matters thereto, are 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 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.
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