UPSTART INVESTMENTS INC. ENTERS INTO LETTER OF INTENT FOR QUALIFYING TRANSACTION WITH MEGAWATTAGE LLC
/THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN
About
Megawattage, founded in 2006, is an industry leader servicing emergency power needs within
Transaction Summary
The parties intend to complete the Transaction by way of a share exchange, amalgamation, arrangement, or other similarly structured transaction to be determined, having regard to relevant tax, securities and other factors to form the resulting issuer from the Transaction (the "Resulting Issuer"). Following completion of the Transaction, the parties intend for the Resulting Issuer to continue to list its common shares (after giving effect to the Consolidation and Name Change, as defined below) on the TSXV. It is intended that the Resulting Issuer will be listed on the TSXV as a Tier 1 Industrial Issuer upon completion of the Transaction.
Pursuant to the Transaction, UpStart will acquire all outstanding
UpStart Consolidation
Prior to closing of the Transaction ("Closing"), UpStart intends to undertake a consolidation of the common shares of UpStart (each, an "UpStart Share") on a 1.5:1 basis (the "Consolidation"), resulting in one (1) UpStart Share outstanding following the Consolidation for each one and one-half (1 ½) UpStart Share outstanding prior to the Consolidation. Additionally, prior to Closing, UpStart shall change its name to such name as determined by Megawattage, in its sole discretion, in compliance with applicable law and as may be acceptable to the TSXV and a corresponding change shall be made to its trading symbol, as applicable (the "Name Change").
UpStart and Megawattage intend to enter into a definitive agreement (the "Definitive Agreement") evidencing the Transaction which shall contain appropriate terms and conditions, including such reasonable representations and warranties in connection with the Transaction as are customary in comparable circumstances as may be agreed to and in a form satisfactory to both parties.
Finders' Fees
Subject to any requisite approval of the TSXV, upon Closing, an aggregate of
Concurrent Financing
In connection with the Transaction, the parties intend for UpStart to complete a non-brokered private placement offering (the "Concurrent Financing") of UpStart Shares (each, an "Offered Security") of not less than
Bridge Financing
Prior to the closing of the Concurrent Financing, if required and subject to its discretion, UpStart intends to complete an equity private placement bridge financing of a maximum of
Principals of the Resulting Issuer
The board of directors of the Resulting Issuer immediately following Closing shall consist of not more than five (5) persons, two (2) of whom shall be comprised of persons chosen by UpStart, and three (3) of whom shall be determined at the sole discretion of Megawattage. Details regarding the anticipated directors and officers of the Resulting Issuer will be included in a subsequent release.
General Information
Shareholder approval is not required with respect to the Transaction under the rules of the TSXV. However, the structure of the Transaction has not yet been finalized so shareholder approval under corporate law may be required and a meeting of shareholders of UpStart is expected to be held prior to the closing of the Transaction to approve certain matters (including the Consolidation and the Name Change). Trading in the UpStart Shares has been halted and is not expected to resume until the Transaction is completed or until the TSXV receives the requisite documentation to resume trading.
Additional information concerning the Transaction, UpStart, Megawattage and the Resulting Issuer, including financial information respecting UpStart, further details regarding the Concurrent Financing, the names and backgrounds of all persons who will constitute insiders of the Resulting Issuer, and information respecting sponsorship, if applicable, will be provided in a subsequent news release and in UpStart's Filing Statement or Information Circular, as applicable, to be filed in connection with the Transaction and which will be available under UpStart's profile on the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedarplus.com.
UpStart intends to make an application for exemption from the sponsorship requirements of Policy 2.4 in connection with the Transaction; however, there is no assurance that the TSXV will exempt UpStart from all or part of the applicable sponsorship requirements.
UpStart is designated as a
This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities in
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 information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward-looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward-looking statements. Forward-looking statements in this news release include, but are not limited to, the completion of the Transaction and on the terms described herein, the execution of the Definitive Agreement, the completion of the proposed Concurrent Financing and the use of proceeds therefrom, the completion of the proposed Bridge Financing and the use of proceeds therefrom, the proposed directors and officers of the Resulting Issuer, obtaining the appropriate approvals required with respect to the Transaction, the completion of the Consolidation, the completion of the Name Change, shareholder and regulatory approvals, and future press releases and disclosure. Any number of factors could cause actual results to differ materially from these forward-looking statements as well as future results. Although the Corporation believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct. Except as required by law, the Corporation disclaims any intention and assumes no obligation to update or revise any forward-looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking statements or otherwise.
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