Tickers: XTSX:HPB
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TORONTO, ONTARIO - TheNewswire - December 24, 2019 - Hampton Bay Capital Inc. (the "Corporation" or "Hampton Bay") (TSXV:HPB.P) is pleased to announce that it has entered into a letter of intent dated December 20, 2019 (the "LOI") with Lendified Holdings Inc. ("Lendified") to effect an arm's length transaction that will result in a reverse takeover of Hampton Bay by Lendified (the "Proposed Transaction").
Lendified, a federally-incorporated private lending company based in the Province of Ontario, is a leading Canadian FinTech company operating both a lending platform which provides working capital loans to small businesses across Canada through its wholly-owned subsidiary, Lendified Inc., as well as a software as a service technology platform providing AI-enabled credit origination and analytics to financial institutions across Canada through its wholly-owned subsidiary, JUDI.
The Transaction
It is currently anticipated that the Proposed Transaction will be effected by way of a share exchange, merger, amalgamation, arrangement or other similar form of transaction as is acceptable to the parties. It is intended that the Proposed Transaction will constitute the "Qualifying Transaction" of Hampton Bay as such term is defined in the policies of the TSX Venture Exchange ("TSXV").
There are currently an aggregate of 15,819,500 common shares in the capital of Hampton Bay (each, a "Hampton Bay Common Share") issued and outstanding, as well as 1,581,950 stock options and 621,950 broker warrants, each of which is exercisable to acquire one Hampton Bay Common Share at an exercise price of $0.10. In connection with the Proposed Transaction, all outstanding stock options and warrants of Hampton Bay will remain in effect on substantially the same terms and in accordance with TSXV policies.
Pursuant to the Proposed Transaction, all existing shares, options, warrants and other securities convertible into shares of Lendified shall be exchanged for similar securities of the resulting issuer following completion of the Proposed Transaction on substantially similar terms and conditions. For the purposes of the Business Combination, the parties have agreed that Hampton Bay shall have a deemed value of $2,100,000 and Lendified shall have a deemed value of $17,900,000 for an aggregate value of $20,000,000 (prior to giving effect to the Concurrent Financing (as defined below)).
On or immediately prior to the completion of the Proposed Transaction, it is anticipated that: (i) Hampton Bay will effect a name change to such name as may be determined by Lendified (the "Name Change"); and (ii) Hampton Bay will consolidate the outstanding Hampton Bay Common Shares (the "Consolidation") on the basis of one "new" Hampton Bay Common Share for every 1.88 "old" Hampton Bay Common Shares issued and outstanding.
If the Proposed Transaction is completed, it is anticipated that the board of directors of Hampton Bay shall be reconstituted to consist of such directors as Lendified shall determine, provided that Hampton Bay shall be entitled to nominate such number of directors equal to its pro rata interest in the resulting issuer, subject to the minimum residency requirements of the Canada Business Corporations Act, and all existing officers of Hampton Bay shall resign and be replaced with officers appointed by the new board of directors.
It is anticipated that Lendified will complete a financing of aggregate gross proceeds of not less than $4,000,000 through one or more Canadian investment dealers in connection with the Proposed Transaction prior to closing (the "Concurrent Financing").
It is anticipated that Hampton Bay will provide Lendified with a bridge loan of up to $225,000 (the "Bridge Loan"), subject to the policies of the TSXV. The terms of the Bridge Loan will be set out in a definitive loan agreement between Hampton Bay and Lendified. Upon completion of the Proposed Transaction, the Bridge Loan will be consolidated as part of the debt assumed by the resulting issuer.
The Proposed Transaction may require sponsorship and Hampton Bay plans to provide a news release update should a sponsor be retained. Trading in the Hampton Bay Common Shares has been halted and shall remain halted pending closing of the Proposed Transaction, subject to the earlier re-commencement of trading only upon TSXV approval and the filing of required materials with the TSXV as contemplated by its policies.
The obligations of Hampton Bay and Lendified pursuant to the LOI shall terminate in certain specified circumstances, including in the event that the Proposed Transaction is not completed by February 28, 2020, unless otherwise agreed to by the parties.
Completion of the Proposed Transaction is subject to a number of conditions including, but not limited to, satisfactory diligence review by each party, TSXV acceptance, shareholder approval and completion of the Concurrent Financing. The Proposed Transaction cannot close until all required shareholder approvals have been obtained. There can be no assurance that the Proposed 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 Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. A comprehensive press release with further particulars relating to the Proposed Transaction will follow in due course.
This press release contains certain forward-looking statements, including but not limited to statements about the Corporation's future plans and intentions, the completion of the Proposed Transaction, the proposed structure of the Proposed Transaction, the completion of the Name Change and Consolidation, the board of directors of Hampton Bay following completion of the Proposed Transaction, issuance of the Bridge Loan and the completion of the Concurrent Financing. Wherever possible, words such as "may", "will", "should", "could", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict" or "potential" or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect management's current beliefs and are based on information currently available to management as at the date hereof.
Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Corporation cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and the Corporation assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.
About Hampton Bay
Hampton Bay is a CPC created to identify and evaluate potential acquisitions of commercially viable businesses and assets that have the potential to generate profits and to add shareholder value. Except as specifically contemplated in the CPC policy of the TSXV, until completion of a 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:
Jeremy Edelman
Chief Executive Officer and Chief Financial Officer
+61 455 553 363
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange 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 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.
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