TORONTO, ONTARIO–(Marketwired – Nov. 24, 2017) –
NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH US NEWSWIRE SERVICES
As previously announced on November 7, 2017, Apolo Acquisition Corp. (“Apolo” or the “Corporation“) (TSX VENTURE:ACA.P) entered into a binding letter agreement dated November 6, 2017 setting out the general terms of a business combination with CryptoGlobal Inc. (“CryptoGlobal“), a privately held arm's length company incorporated under the Business Corporations Act (Ontario). CryptoGlobal operates in the distributed ledger technology space, utilizing specialized equipment to solve complex computational problems to validate transactions on the blockchain (a process known as “mining”), receiving digital or virtual currencies, including Bitcoin, Ethereum, Litecoin and Dash, in exchange for this service. CryptoGlobal's office and equipment are all located in the Province of Ontario. Subject to regulatory, shareholder, director and other approvals that may be required, and other conditions which shall be set out in a definitive business combination agreement among Apolo, a wholly-owned subsidiary of Apolo and CryptoGlobal, CryptoGlobal will amalgamate with a wholly-owned subsidiary of Apolo in order to facilitate the completion of Apolo's qualifying transaction (the “Transaction“) in accordance with the policies of the TSX Venture Exchange (the “TSXV“). Application has been made to have the resulting issuer company (the “Resulting Issuer“) categorized as a Tier 2 technology issuer on the TSXV upon completion of the Transaction.
Apolo is also pleased to announce that CryptoGlobal previously entered into an engagement letter with Canaccord Genuity Corp. on behalf of a syndicate of agents (together, the “Agents“), whereby the Agents will sell, on a commercially reasonable best efforts private placement basis, 12,000,000 common shares (the “CryptoGlobal Shares“) at a price of $0.85 per CryptoGlobal Share for aggregate gross proceeds of $10,200,000 (the “Offering“). Closing of the Offering is subject to the execution of a definitive agency agreement and satisfaction of customary conditions set out therein. In consideration for their services, the Agents will receive a cash commission equal to 6.0% of the gross proceeds of the Offering.
Further Details Regarding the Transaction
On or immediately prior to the completion of the Transaction, it is anticipated that: (i) Apolo will effect a name change to such name as may be determined by CryptoGlobal; and (ii) Apolo will consolidate its issued and outstanding common shares (the “Apolo Shares“) on the basis of one “new” Apolo Share for every 3.938 “old” Apolo Shares issued and outstanding (the “Consolidation“). Pursuant to the terms of the Transaction, the holders of CryptoGlobal securities (including those held by investors in the Offering subsequent to the completion thereof) will receive one (1) equivalent security of the Resulting Issuer (on a post-Consolidation basis) in exchange for each outstanding CryptoGlobal security. As at the date of this news release, Apolo has 11,650,000 Apolo Shares, and 715,000 stock options and 500,000 broker warrants, each exercisable to acquire one Apolo Share at an exercise price of $0.10 per Apolo Share (on a pre-Consolidation basis). As at the date hereof, CryptoGlobal has the following securities issued and outstanding: 105,000,000 CryptoGlobal Shares, 1,850,000 stock options each exercisable into one CryptoGlobal Share at a price of $0.63 per CryptoGlobal Share, and 750,000 finder warrants exercisable into CryptoGlobal Shares at a price of US$0.40 per CryptoGlobal Share. On completion of the Offering and the Transaction, it is anticipated that there will be an aggregate of approximately 119,958,354 common shares of the Resulting Issuer (“Resulting Issuer Shares“) issued and outstanding and an additional 2,908,532 convertible securities of the Resulting Issuer exercisable into Resulting Issuer Shares.
Principal Purposes of Funds
The net proceeds from the Offering are anticipated to be used, principally, for capital expenditures related to acquisition of additional speciality digital mining equipment and general working capital costs. While the Resulting Issuer intends to spend the funds available to it as stated above, there may be circumstances where for sound business reasons a reallocation of funds may be necessary.
Proposed Management and Board of Directors of the Resulting Issuer
Upon completion of the Transaction, it is anticipated that the persons identified below will serve as directors and officers of the Resulting Issuer:
Rob Segal – Chief Executive Officer and a Director
Mr. Segal is a North American marketing and communications executive and entrepreneur. Mr. Segal founded Segal Communications (acquired by Interpublic in 2000) and went on to lead WorldGaming (acquired by Cineplex in 2015), Ruby and has worked with a number of global brands. Mr. Segal is a cofounder of CryptoGlobal and a Board member of OMX (theOMX.com) and Autism Speaks Canada. He holds a B.A. from the University of Western Ontario.
James Millership – President and a Director
Mr. Millership is an early stage investor and entrepreneur. His background in operations and finance has led to a successful career focused on start-ups and corporate turnarounds. He most recently played a leadership role in the reorganization of two tech platforms: WorldGaming (acquired by Cineplex in 2015) and Ruby. James is a co-founder of CryptoGlobal. He holds an MBA from the Ivey School of Business.
Roozbeh Ebbadi – Chief Operating Officer
Mr. Ebbadi has deep expertise in the blockchain and his experience spans software development, payment processing, cybersecurity compliance and business intelligence. Mr. Ebbadi is a co-founder of CryptoGlobal and holds a Civil/Environmental Engineering Diploma from Seneca College at York University.
Jacob Shultis – Chief Technology Officer
Mr. Shultis is a software designer and architect. He has overseen the development and deployment of software applications in the NGO, Entertainment and blockchain technology sectors. Mr. Shultis is a co-founder of CryptoGlobal and holds a degree in Computer Engineering from the University of Toronto.
Daniel Kumer – Chief Counsel
Mr. Kumer is corporate lawyer, specializing in the real estate and technology sectors. Mr. Kumer has held executive positions with several of Canada's largest public and private real estate developers, including Senior Vice President, Investments at SmartCentres. Mr. Kumer holds a BA from Western University, an MBA from the Schulich School of Business, a JD from Osgoode Hall Law School, and is a member of The Law Society of Upper Canada.
Perry Miele – Independent Director
Mr. Miele is Chairman and partner of Beringer Capital, a fund investing in emerging marketing services companies. Most recently, Mr. Miele assumed the role of Chairman of Match Marketing, a North American retail marketing firm with over 7000 employees and 8 offices in the U.S. and Canada. Mr. Miele is also a director of Andrew Peller Limited, a TSX listed company, and is on the Boards of the Canadian Heart & Stroke Foundation and Trillium Heath Partners.
The proposed Chief Financial Officer and two directors, at least one of whom will be independent of the Resulting Issuer, will be announced shortly.
Financial Information of CryptoGlobal
Based on the draft audited financial statements of CryptoGlobal for the financial period ended October 31, 2017, CryptoGlobal had marginal earnings and incurred a net loss of $95,787. In addition, as at October 31, 2017, CryptoGlobal had total assets of $16,544,211, current liabilities of $122,769, deficit of $95,787 and shareholders' equity of $16,421,442.
Camp5 Inc., a holding company existing under the laws of the Province of Ontario, and jointly controlled by Rob Segal and James Millership, currently owns 52,694,300 CryptoGlobal Shares, representing approximately 50.2% of the total issued and outstanding CryptoGlobal Shares as the date hereof (calculated on an undiluted basis).
Arm's Length Transaction
The Transaction is an arm's length transaction in accordance with the policies of the TSXV and is not subject to Apolo shareholder approval.
Apolo has made an application to the TSXV for an exemption from sponsorship requirements, but there is no assurance that such an exemption will be granted.
In connection with the Transaction and pursuant to the requirements of the TSXV, Apolo will file a filing statement on its issuer profile on SEDAR (www.sedar.com), which will contain details regarding the Transaction, the Offering, Apolo, CryptoGlobal and the Resulting Issuer.
This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
ANY SECURITIES REFERRED TO HEREIN WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE “1933 ACT”) AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.
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 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 news release.
FORWARD LOOKING STATEMENTS
This news release contains certain forward-looking statements, including, but not limited to, statements about the Corporation's future plans and intentions and completion of the Transaction and the Offering. 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 news 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 news release, and the Corporation assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
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