Cresval Capital Corp. Announces Signing of Definitive Agreement With Tess Inc.
January 17 2018 - 8:50AM
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE
SERVICES OR DISSEMINATION IN THE UNITED STATES
Cresval Capital Corp. (TSXV:CRV) (“
Cresval”) today
announced that it has entered into a definitive agreement (the
“
Definitive Agreement”) to complete a business
combination with Tess Inc. (the “
Proposed
Transaction”), a 52% controlled subsidiary of Riot
Blockchain Inc., a NASDAQ listed corporation. If completed in
the manner contemplated by the Definitive Agreement, the Proposed
Transaction will result in, among other things, Tess Inc. becoming
“TessPay Inc.” (“
TessPay”). TessPay is a
technology company developing a blockchain-based secure payment
platform for businesses that can guarantee they are paid on time
and in full. As part of the Proposed Transaction, TessPay
intends to complete a private placement (the “
Proposed
Financing”) of an unsecured convertible note (the
“
Note”) for gross proceeds of up to $3,500,000.
Further details with respect to the Proposed Transaction and the
Proposed Financing, as well as a description of TessPay and its
business, is contained in Cresval’s news release dated December 11,
2017.
The Definitive Agreement contains customary
representations, warranties and covenants for transactions of this
nature, and provides that the Proposed Transaction is to be
completed pursuant to a plan of arrangement (the
“Arrangement”). To facilitate the
Arrangement, among other things, Cresval will incorporate a new
wholly owned subsidiary (“Cresval Subco”).
Pursuant to the Arrangement, the following transactions shall occur
sequentially on the closing date of the Proposed Transaction (the
“Effective Date”) in the following order:
- Cresval shall undertake a reorganization of its share capital
by amending its Articles to create an unlimited number of Class A
Shares and Class B Shares.
- Each of the issued and outstanding common shares of Cresval as
at the Effective Date shall be exchanged for one-third (1/3) of a
Class A Share and one (1) Class B Share.
- The Cresval Subco and Tess shall amalgamate under the
provisions of the Business Corporations Act of British Columbia
(the “Amalgamation”) and the resulting amalgamated
company will be known as “TessPay Inc.”
- Because of the Amalgamation, all of the issued and outstanding
common shares of Cresval Subco held by Cresval shall be exchanged
for 8.4 million common shares of TessPay (the “TessPay
Shares”).
- Because of the Amalgamation, all of the issued and outstanding
common shares of Tess shall be exchanged for TessPay Shares on the
basis of 15.36 TessPay Shares for every pre-Amalgamation one (1)
Tess Share (resulting in approximately 123.4 million TessPay Shares
being held by the current Tess Shareholders).
- All of the issued and outstanding Class B Shares of Cresval
will be redeemed and cancelled by Cresval at their redemption
value, being equal to their “paid-up capital", as that term is
defined in the Income Tax Act (Canada), and Cresval will pay the
redemption value of the Class B Shares by the distribution of 8.4
million TessPay Shares to the Cresval Shareholders on a pro rata
basis in accordance with such Common Shareholders’ respective
holdings of Class B Shares.
- All Cresval stock options and share purchase warrants not
exercised prior to the Effective Date will be exchanged for an
option or warrant to acquire Class A Shares of Cresval, adjusting
the number of Class A Shares exercisable to one-third of the
nearest lower whole number of Cresval Shares which the holder of
such Cresval options or shares would have received if exercised
immediately prior to the Effective Date, at an exercise price equal
to three (3) times the exercise price of the option or warrant so
exchanged.
- All outstanding Tess options and share purchase warrants will
be exchanged for an option or warrant to acquire the applicable
number of TessPay Shares and the Note will become an obligation of
TessPay.
Following the completion of the Arrangement, and
subject to meeting the listing requirements of the TSX Venture
Exchange (the “TSXV”), the TessPay Shares will be
listed on the TSXV and TessPay will be a separate, stand-alone,
listed corporation from Cresval, with all of the shareholders of
Cresval also becoming shareholders of TessPay and holding
approximately 6.8% of the issued shares of TessPay, calculated on a
fully diluted basis. Cresval will continue to hold all of its
resource properties and all of its liabilities, and subject to
meeting the listing requirements of the TSXV, all of its Class A
Shares will be listed on the TSXV.
The Proposed Transaction is subject to a number
of conditions as set forth in the Definitive Agreement, including
(without limitation), the approval of the shareholders of TessPay
and Cresval, the completion of the Proposed Financing, and the
receipt of all requisite regulatory, court and stock exchange
approvals.
Cresval currently intends to convene a special
general meeting of its shareholders in March, on a date yet to be
determined, to consider and approve the Proposed Transaction.
Certain directors and officers of Cresval have entered into voting
support agreements with Tess pursuant to which they have agreed to
support and vote in favour of the Proposed Transaction at the
Cresval shareholders meeting. A comprehensive information circular
containing further details of the Definitive Agreement and Proposed
Transaction will be prepared and filed in connection with the
shareholder meeting.
Forward-Looking Statements
The information provided in this press release
may include forward-looking statements relating to future events or
the future financial performance of the Company. Because such
statements are subject to risks and uncertainties, actual results
may differ materially from those expressed or implied by such
forward-looking statements. Words such as "anticipates," "plans,"
"expects," "intends," "will," "potential," "hope" and similar
expressions are intended to identify forward-looking
statements. These forward-looking statements are based upon
current expectations of the Company and involve assumptions that
may never materialize or may prove to be incorrect. Actual results
and the timing of events could differ materially from those
anticipated in such forward-looking statements as a result of
various risks and uncertainties. Detailed information regarding
factors that may cause actual results to differ materially from the
results expressed or implied by statements in this press release
relating to the Company may be found in the Company's periodic
filings on SEDAR, including the factors described in the sections
entitled "Risk Factors" at www.SEDAR.com. The parties do not
undertake any obligation to update forward-looking statements
contained in this press release.
Completion of the Proposed Transaction
and the Proposed Financing are subject to a number of conditions,
including but not limited to, stock exchange acceptance.
There can be no assurance that the Proposed Transaction and/or the
Proposed Financing will be completed as proposed or at
all.
Investors are cautioned that, except as
disclosed in the information circular to be prepared in connection
with the Proposed Transaction, any information released or received
with respect to the Proposed Transaction and/or the Proposed
Financing may not be accurate or complete and should not be relied
upon. Trading in the securities of the Company should be considered
to be highly speculative.
The TSXV has in no way passed upon the
merits of the Proposed Transaction or the Proposed Financing and
has neither approved nor disapproved the contents of this news
release.
NEITHER 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.
Media Contacts:
TessPay
Karen Chase or Travis Kruse
Russo Partners,
LLC
(646) 942-5627
(212)
845-4272
karen.chase@russopartnersllc.com
travis.kruse@russopartnersllc.com
CresvalLee Ann Wolfin,
President & CEOCresval Capital Corp.Office ph: (604)
682-3701Mobile: (604) 913-7788lawolfin@cresval.com
TessPay Investor
Contact:IR@RiotBlockchain.com
CRESVAL CAPITAL
CORP. Suite 900 – 570 Granville
StreetVancouver, British
ColumbiaV6C 3P1Ph.: (604)
682-3701Fax: (604) 682-3600
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