TSX Venture Exchange: FGD
Frankfurt Stock Exchange: 1G5
TORONTO, Sept. 18, 2017 /CNW/ - First Global Data ("First
Global" or the "Company") is providing an update on the following
developments in connection with its litigation with Fountain Asset
Corp. ("Fountain") and certain other parties.
As stated in the Company's news release dated February 13, 2017, the Company was served with a
Notice of Application and Application Record (the "Application")
brought by Fountain, issued in the Superior Court of Justice of
Ontario, Court file CV-17-569015,
commenced in Toronto, in which
Fountain was seeking a court order that the Company deliver to
Fountain certain options to subscribe for and purchase 3,375,000
common shares of the Company at $0.10
per share pursuant to the terms of a Financial Advisor Agreement
dated August 29, 2015. In the
Application, Fountain also sought a declaration that Fountain is
entitled to subscribe for and purchase 3,500,000 common shares of
the Company at $0.11 per share
pursuant to a warrant certificate, dated August 31, 2015.
The Company is vigorously defending the Application. The matter
came up for an initial hearing on August 3,
2017 before Madam Justice Kristjanson of the Superior Court
of Justice of Ontario. The Company has various
defences, but is primarily defending the Application on the basis
that the options and warrants are void and unenforceable since they
were granted as part of a financing transaction bearing a criminal
rate of interest in breach of section 347 of the Criminal Code. As
well, the Company is asserting that the interest rate associated
with the loan is in breach of the Interest Act, RSO, 1990.
Fresh as Amended Statement of Claim
Furthermore, the Company and its wholly owned subsidiary First
Global Data Corp. have commenced an action (the "2017 Action"), by
way of a Fresh as Amended Statement of claim initially issued in
the Superior Court of Justice of Ontario, Court file CV-17-577847, on
June 27, 2017 (and amended on
September 12, 2017), against Fountain
and a number of other parties (the "Defendants") including
Yoel Altman, Paul Haber, Paul Van
Benthem and Jason Ewart and
corporations associated with them. The Company and First
Global Data Corp. seek, among other things: damages in the amount
of $20,000,000 for breach of
contract, breach of trust, negligent, reckless or intentional
misrepresentation, unjust enrichment and conspiracy; a declaration
that Altman, Haber and Van Benthem
have conspired with the Defendants, Jason
Ewart and Fountain, and with others for the issue and
transfer of 26,000,000 common shares of the Company ("FGD Shares")
to the Defendants to the detriment of the Company and its
shareholders and to cause the Company to assume the liabilities of
LTP Financing Ltd. ("LTP") and other relief; and in the
alternative, a declaration that Altman, Haber and Van Benthem have conspired with Ewart and
Fountain and with others, or have otherwise wrongfully caused the
Company to issue 15,128,840 common shares of the Company to Altman,
Haber and Van Benthem and to cause
the Company to assume the liabilities of the LTP. The Company and
First Global Data Corp. also seek a court declaration and other
compensatory relief against Fountain including (i) a declaration
that the Credit Agreement dated May 14,
2015 entered into with Fountain was in breach of section 4
of the Interest Act, and for an Order pursuant to section 5 of the
Interest Act for the recovery of any interest or compensation
received by Fountain in excess of 5% per annum; (ii) an Order
that the FGD Shares issued pursuant to the terms of the Forbearance
Agreement dated August 31, 2015 made
with Fountain constitute interest both pursuant to the provisions
of the Interest Act, and pursuant to section 347 of the Criminal
Code; or otherwise constitute an unlawful charge or penalty; (iii)
for an Order that the effective interest rate levied by Fountain
pursuant to the Credit Agreement and Forbearance Agreement exceed
60% per annum contrary to section 347 of the Criminal Code; (d) an
Order for the repayment of all interest (including the FGD Shares
or their equivalent value), and for the repayment of all other
interest, fees, penalties and charges paid by the Company and/or
First Global Data Corp. in excess of 5% per annum.
In response to the Application brought by Fountain scheduled to
be heard on August 3, the Company and
First Global Data Corp. brought a motion heard by the court on
August 3, 2017 to convert the
Application to an action, and to consolidate the action with the
2017 Action. In her written Endorsement dated
August 24, 2017, Madam Justice
Kristjanson agreed with the Company's motion request and directed
that the Application be converted to an action, and that the claims
raised in the Application be advanced as a counterclaim in the 2017
Action. As a result of this ruling, the Court is expected to
adjudicate the issues raised in both the Application and the 2017
Action in the same proceedings at some future date not yet
scheduled.
In her August 24, 2017 reasons for
granting the Company's motion, Madam Justice Kristjanson found that
the 2017 Action and the Application involved the same factual
matrix, common legal and factual issues, and many common
parties. The 2017 Action and the Application both involve:
Fountain, the Company and related parties, the failed acquisition
of LTP, the financing extended by Fountain to the Company, the
relationship among Altman, Haber, Van
Benthem and Ewart, and whether the options, warrants and FGD
shares constitute interest under the Interest Act and/or section
347 of the Criminal Code.
About First Global Data Ltd.
(www.firstglobaldata.com)
First Global is an international financial services technology
("FINTECH") company. The Company's two main lines of business are
mobile payments and cross border payments. First Global's
proprietary leading edge technology enables the convergence of
compliant domestic and cross border payments, shopping, Peer to
Peer ("P2P"), Business to Consumer ("B2C"), and Business to
Business ("B2B") payments. First Global enables its strategic
partners and clients around the world with our leading edge
financial services technology platform.
Caution:
Neither TSX Venture Exchange Inc.
("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.
The securities offered have not been registered under the
U.S. 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
requirements. This press release shall not constitute an offer to
sell or a solicitation of an offer to buy nor shall there be any
sale of the securities offered in any jurisdiction in which such
offer, solicitation or sale would be unlawful.
Forward Looking Information:
This news release
contains "forward-looking information" within the meaning of
applicable securities laws. Although First Global 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 First Global 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. The statements in this press release are made as
of the date of this release. First Global undertakes no obligation
to comment on analyses, expectations or statements made by
third-parties in respect of First Global, its securities, or
financial or operating results (as applicable). First Global
disclaims any intent or obligation to update publicly any
forward-looking information, whether as a result of new
information, future events or results or otherwise, other than as
required by applicable securities laws.
SOURCE First Global Data Limited