Vancouver, British Columbia–(Newsfile Corp. – February 1, 2023) – Further to its press release dated September 22, 2022, Whatcom Capital II Corp. (TSXV: WAT.P) (“Whatcom” or the “Corporation“) and Terrazero Technologies Inc. (“TZ“) are pleased to announce that they have entered into a definitive business combination agreement (the “Definitive Agreement“) which, subject to certain conditions and applicable TSX Venture Exchange (“TSXV“) approval, will result in the reverse takeover of Whatcom by TZ and will constitute Whatcom’s “Qualifying Transaction” (the “Transaction“), as defined by TSXV Policy 2.4 – Capital Pool Companies (“Policy 2.4“).

Summary of the Transaction

Pursuant to the Definitive Agreement, on closing of the proposed Transaction, it is expected that:

(i) Whatcom will consolidate (the “Consolidation“) all of the then issued and outstanding common shares of the Corporation (the “Whatcom Shares“) on the basis of one post-consolidation Whatcom Share for each previously outstanding 3.5 Whatcom Shares (such post-Consolidation Whatcom Shares the “Resulting Issuer Shares“);

(ii) All of the issued and outstanding preferred shares in the capital of TZ will be converted to common shares in the capital of TZ in accordance with TZ’s constating documents;

(iii) TZ and 1396032 B.C. Ltd., a wholly-owned subsidiary of Whatcom, will be amalgamated under the Business Corporations Act (British Columbia) (the “Amalgamation“) and continue as one corporation called TZ Technologies Operating Corp. (“Amalco“), which will be a wholly-owned subsidiary of Whatcom;

(iv) Whatcom will change its name to TerraZero Technologies Inc., (on a post-closing basis, the “Resulting Issuer“);

(v) Holders of the common shares in the capital of TZ will receive one Resulting Issuer Share for each TZ share, and the TZ shares will be canceled; and

(vi) Each outstanding option, warrant and broker warrant exercisable to acquire shares in the capital of TZ will be exchanged for one replacement option, warrant or broker warrant, as applicable, exercisable at the equivalent price to acquire a Resulting Issuer Share.

The parties to the Transaction are at arm’s length and therefore the approval of the shareholders of Whatcom in respect of the Transaction will not be required.

The completion of the Transaction is subject to, among others, the following conditions precedent be met prior to the closing of the Transaction: (a) TZ and the shareholders of TZ shall have tendered all closing deliveries contemplated in the Business Combination Agreement; (b) the shareholders of TZ shall have approved the Business Combination Agreement; (c) the board of directors of each of the Corporation and TZ shall have approved the Transaction; (d) the representations and warranties of each of Whatcom and TZ contained in the Business Combination Agreement shall be true and correct in all material respects at closing; (e) the Resulting Issuer Shares shall have been conditionally approved for listing on the TSXV, and the Transaction shall have been conditionally approved as a Qualifying Transaction by the TSXV, subject to the customary requirements of the TSXV in respect of transactions of the nature of the Transaction; (f) each of the covenants of Whatcom and TZ in the Business Combination Agreement shall have been fulfilled or complied with in all material respects at closing; (i) the existing directors and officers of Whatcom shall have tendered their resignation; and (j) Whatcom will have obtained all applicable authorizations to complete the Consolidation and the change of its name to TerraZero Technologies Inc.

Neither the Corporation nor TZ will be undertaking any financing in connection with the Transaction, and no finder’s fees or commissions are payable in relation to the proposed Transaction.

Other Significant Conditions to Closing

Completion of the 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 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 TSXV has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

Information on Resulting Issuer

Following completion of the Transaction, the Resulting Issuer will carry on the business currently carried on by TZ. The Resulting Issuer will be a Technology issuer under the policies of the TSXV.

It is expected that following completion of the Transaction, there will be an aggregate of 57,483,253 Resulting Issuer Shares outstanding, and 9,220,573 Resulting Issuer Shares will be reserved for issuance pursuant to convertible securities (options and warrants) of the Resulting Issuer. It is expected that following completion of the Transaction the current holders of Whatcom Shares will hold approximately 7.5% of the outstanding Resulting Issuer Shares and the holders of TZ shares will collectively hold approximately 92.5% of the outstanding Resulting Issuer Shares, all as calculated on a non-diluted basis immediately following the closing of the Transaction. Certain of the Resulting Issuer Shares will be subject to voluntary hold periods and TSXV escrow restrictions.

To the knowledge of the directors and executive officers of the Corporation and TZ, the only person who will beneficially own, directly or indirectly, or exercise control or direction over 10% or more of the Resulting Issuer Shares is BIGG Digital Assets Inc. (“BIGG“), which will hold approximately 29% of the Resulting Issuer Shares. BIGG believes the future of crypto is a safe, compliant and regulated environment. BIGG invests in products and companies to support this vision. BIGG has three portfolio companies: Netcoins, Blockchain Intelligence Group and TerraZero.

Management of the Resulting Issuer

Subject to TSXV approval, upon completion of the Transaction, it is expected that the board of directors and the senior officers of the Resulting Issuer will be the following proposed individuals, and two additional independent directors who will be identified in the filing statement to be filed and posted on SEDAR with respect to the proposed Transaction:

Dan Reitzik – proposed Chief Executive Officer, and Director

Mr. Reitzik is the founder, Chief Executive Officer and a director of TZ. Mr. Reitzik has years of experience, knowledge and understanding of blockchain, digital assets and cryptocurrency through his previous role as the co-founder and CEO of DMG Blockchain Solutions Inc. (from 2016 to March 2021), a vertically integrated blockchain and cryptocurrency company that manages, operates and develops end-to-end digital solutions to monetize the blockchain ecosystem.

Ryan Cheung – proposed Chief Financial Officer, Corporate Secretary and Director

Mr. Cheung is the Chief Financial Officer, Corporate Secretary and a director of TZ. Mr. Cheung, CPA, CA, is founder of MCPA Services Inc. Chartered Professional Accountants, providing accounting, management, securities regulatory compliance services to private and publicly-listed companies. Mr. Cheung also serves as an officer and/or director of a number of publicly-listed companies. Mr. Cheung holds a Bachelor of Commerce degree from the University of Victoria and is a member of the Chartered Professional Accountants of British Columbia. Mr. Cheung was previously worked alongside Dan Reitzik as the Chief Financial Officer of DMG Blockchain Solutions Inc. from September 2017 to July 2021.

Ryan Kieffer – proposed Chief Metaverse Officer

Mr. Kieffer is the Co-Founder of Bear NFT, a Metaverse marketing agency – and the Co-Founder of Confidential Creative, an animation studio and creative agency with an established portfolio of music videos and animation projects for the likes of Maroon 5, Journey, Carrie Underwood, Peacock Kids and more. As an expert in the Metaverse, Mr. Kieffer has leveraged both skill sets to produce several events including To the Moon Fest, Decentraland’s first live music festival and Halloween Events. Mr. Kieffer brings a wealth of industry connections and leads many of the business development initiatives at TerraZero. Mr. Kieffer oversees many of TerraZero’s business divisions and has operational knowledge and experience working within the Metaverse.

Brandon Johnson – proposed Chief Experience Officer

Mr. Johnson oversees business development initiatives and oversees many TerraZero divisions. Mr. Johnson has led creative and execution for clients and projects in blockchain, VR/AR, gaming, animation, film and series television. Brandon has also managed freelance teams and helmed community development initiatives for freelance platforms. Mr. Johnson’s vision is to bring elevated interactive experiences to the Metaverse through innovative technologies.

Lance Morginn – proposed Director

Mr. Morginn is a director of TZ. Mr. Morginn is the co-founder, President and a director of BIGG Digital Assets Inc. With over 20 years of industry experience in technology-based start-ups, he brings a vast and proven track record for growing and developing businesses from the ground-up. His background includes roles as Founder/CEO/Director in several publicly and privately traded companies.

Adrian Glover – proposed Director

Mr. Glover is a 20-year software industry professional, who has over 10 years of experience delivering software products as a Project and Development Manager. Mr. Glover is currently the Chief Technology Officer of DMG Blockchain Solutions Inc. and work alongside Mr. Reitzik and Mr. Cheung during their time at DMG Blockchain Solutions Inc. His experience began in research & development and includes one of the first connected mobile applications using Geographical Information System (GIS) technology for asset tracking on Windows CE. As a Project Manager, Adrian was certified as a Project Management Professional (PMP) and mentored new Project Managers in the trade. He has successfully introduced Agile Project and Product Management techniques to multiple companies using industry-standard tools and techniques. He has a track record of repeated success delivering products built on emerging technologies, including Big Data, VR, and Mobile VR.

Martin Cronin – proposed Director

Mr. Cronin spent over 20 years in international diplomacy with the British Government with appointments across the Middle East, South Asia, Europe and North America spanning counter-terrorism, conflict resolution, trade and inward investment. Following a posting as British Consul-General to Western Canada, Martin settled in British Columbia and joined the private sector, serving as CEO and Director of several private and public companies in the public safety and defence sectors, including as the former CEO and a director of Patriot One Technologies Inc. He is the Executive Chairman of Syniad Innovations Inc., which has a portfolio of ventures rooted in deep science. Martin is former Honorary Colonel of a Canadian Army Primary Reserve Regiment, Director of the Canadian Forces Liaison Council and Advisory Board Member of the Central Okanagan Regional Economic Development Commission. He is a frequent speaker on the Middle East and issues of international security.

Sponsorship

Under the policies of the TSXV, the parties to the Transaction are required to engage a sponsor for the Transaction unless an exemption or waiver from this requirement can be obtained. Whatcom intends to make an application for a waiver from the TSXV’s sponsorship requirements.

Additional Information

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with 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. Whatcom will issue additional news releases related to the post-closing capitalization of the Resulting Issuer, financial information regarding TZ, and other material information as it becomes available.

Neither the TSX Venture Exchange, Inc. nor its Regulation Services Provider (as that term is defined in the polices of the TSX Venture Exchange) has in any way passed upon the merits of the Transaction and associated transactions and neither of the foregoing entities accepts responsibility for the adequacy or accuracy of this release or has in any way approved or disapproved of the contents of this press release.

For further information, please contact:

Whatcom Capital II Corp.
Darren Tindale, CEO, CFO, Corporate Secretary and Director
Telephone: (604) 376-3567

Cautionary Statements

This news release contains “forward-looking information” within the meaning of applicable securities laws relating to the proposal to complete the Transaction and associated transactions, including statements regarding the terms and conditions of the Transaction, the business plans and objectives of TZ and the Resulting Issuer, expectations for other economic, business and competitive factors and approval of regulatory bodies. The information about TZ contained in the press release has not been independently verified by the Corporation. Although the Corporation believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Corporation can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Transaction; the Transaction and associated transactions will differ from those that currently are contemplated; and that the Transaction and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The terms and conditions of the Transaction may change based on the Corporation’s due diligence and the receipt of tax, corporate and securities law advice for the parties to the Transaction.

The statements in this press release are made as of the date of this release. The common shares have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Not for distribution to United States newswire services or for dissemination in the United States

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/153297