Globalive Technology today announced that it has signed a
binding letter agreement to complete a reverse takeover transaction
with Socati Corp., a US-based company that produces THC-free
broad-spectrum hemp extracts for use in a variety of cannabinoid
products.
TORONTO, June 4, 2020 /CNW/ - Globalive Technology
Inc. (TSX-V: LIVE) (the "Company"), a technology company
based in Toronto, Ontario,
announced today that it has signed a binding letter of intent (the
"LOI") with Socati Corp. ("Socati") dated
June 3, 2020 to complete a reverse
takeover pursuant to which the Company will acquire all of the
issued and outstanding securities of Socati in exchange for common
shares of the Company (the "RTO").
About Socati
Socati is a leading processor of THC-free broad-spectrum hemp
extracts and ingredients for use in cannabinoid products.
Leveraging investments in new technologies, Socati engages in
large-scale manufacturing and has logistics in place to meet
growing demand. With the ability to manufacture broad-spectrum hemp
extracts at scale, Socati is built to serve the needs of large,
international consumer packaged goods (CPG) companies that are
seeking high quality raw materials.
Socati is a private corporation, incorporated under the laws of
Delaware on August 28, 2018, with several wholly owned
subsidiaries that together make up the Socati business. Its
corporate headquarters is located in Austin, Texas, and it has significant assets
in Woodburn, Oregon, where it
operates a seed genetics, research and development and agricultural
operations facility, and in Missoula,
Montana, where it operates a 22,000 sq. ft. production
facility and testing laboratory.
Being in a growth phase of its business cycle, Socati is
incurring significant expenses, which are partially offset by
revenue from the operating portion of its business and capital
raised through equity offerings. Socati has raised a total of
US$42 million over two funding rounds
(including, most recently, a US$33
million Series A round completed in January 2019).
The RTO
Subject to regulatory and shareholder approval, and the
satisfaction of other conditions precedent, the Company intends to
acquire all of the issued and outstanding securities of Socati
(collectively, the "Socati Securities") from the holders of
the Socati Securities (collectively, the "Socati
Securityholders") for aggregate consideration of approximately
US$25 million. The consideration will
be paid by issuing common shares of the Company to the Socati
Securityholders at a price per share (the "Share Price")
calculated by dividing the value of all assets remaining in the
Company on closing (including cash and cash-equivalents, investment
and technology assets), plus US$500,000, by the number of issued and
outstanding common shares of the Company, on a fully-diluted basis,
on the date of the closing. The Company currently holds cash and
cash-equivalents of approximately US$5,151,000 and estimates that it will hold no
less than US$4,500,000 by the closing
date of the RTO.
The terms of the RTO contemplate that, with the exception of
cash and cash-equivalents, the Company's existing business, assets
and liabilities, including its technology venture subsidiaries and
their intellectual property, its interest in Flexiti Financial Inc.
and its affiliates (the "Flexiti Group") and some or all of
its technology investments (collectively, the "Legacy
Assets") will, subject to regulatory and shareholder approval,
be transferred to a third-party that is to be determined, with the
value of the Legacy Assets captured or distributed to the
shareholders of the Company immediately prior to the RTO (the
"Spin-Off"). Any investment assets that are not transferred
out of the Company prior to closing the RTO will be valued as at
the closing date and included in the calculation of the Share Price
as detailed above.
Socati and the Company will rationalize their equity incentive
plans, any equity incentives issued under such plans and all other
outstanding convertible securities to create one or more post-RTO
equity incentive plans in the go-forward entity (the "Resulting
Issuer") to properly incentivize management, directors and key
employees.
Following completion of the RTO, the name of the Resulting
Issuer will be changed to a name to be determined by Socati,
subject to regulatory and shareholder approval.
The RTO is subject to certain conditions precedent (the
"Conditions"), including but not limited to: (i) the Company
continuing to be listed on the TSX Venture Exchange (the
"Exchange"); (ii) director and shareholder approval for both
Socati and the Company; (iii) receipt of any necessary Exchange,
regulatory and third-party approvals or consents; (iv) no material
adverse change in either the Company or Socati between the date of
the LOI and the closing of the RTO; (v) the Company holding cash
and cash-equivalents of no less than US$4,500,000 on closing of the RTO; (vi)
completion of the pre-closing matters described above, (vii) the
completion of the Spin-Off on terms satisfactory to the parties,
acting reasonably; and (ix) other conditions typical for a
transaction of this nature.
Socati and the Company are arm's length, provided that Globalive
Capital, the controlling shareholder of the Company, owns a minimal
(less than 1%) equity interest in Socati.
No insider of the Company, or any of their associates or
affiliates, has any material interest, direct or indirect, in the
RTO other than in connection with: (i) the entitlement of such
insiders who are shareholders of the Company to receive shares of
the Resulting Issuer on the same basis as other shareholders of the
Company; and (ii) Mr. Lacavera as a potential director of the
Resulting Issuer. No finder fee will be paid in connection with the
RTO.
Financing
Prior to completion of the RTO, the Company and Socati will seek
to complete a private placement of subscription receipts for
aggregate gross proceeds of up to US$5
million on terms to be determined. The subscription receipts
are expected to convert automatically into common shares of the
Resulting Issuer on closing of the RTO at the Share Price. The
conversion of the subscription receipts are expected to be subject
to standard terms and conditions, including the satisfaction of the
Conditions for the RTO described above.
Sponsorship
Sponsorship of the RTO is required by the policies of the
Exchange unless an exemption is granted by the Exchange. The
Company intends to apply for an exemption from the sponsorship
requirement in accordance with Exchange policy, however, there can
be no assurance that the Exchange will grant such an exemption.
Proposed Management and Board of Directors of the Resulting
Issuer
Upon completion of the RTO, it is anticipated that the persons
identified below will serve as directors and officers of the
resulting issuer.
Josh Epstein – Chief Executive
Officer and Director
As CEO of Socati, Mr. Epstein is the
visionary behind the company's innovation-based mission. He was
previously the President and COO of Nuuvera, an international
cannabis company which sold for US$826
million in 2018. Prior to that, he was a partner with
FastForward Innovations, an early-stage venture capital firm
investing globally in the healthcare, biotech, cannabis and gaming
sectors. He also previously practiced law with the international
law firm Baker Botts, where he focused on venture capital, mergers
and acquisitions and private and public securities offerings.
Brian Goldberg – Chief
Financial Officer
Mr. Brian
Goldberg was formerly Chief Financial Officer, Chief
Strategy Officer & Executive Vice President of Corporate
Development of Amplify Snack Brands, Inc. from company formation in
2014 through successful exit to The Hershey Company in 2018 for
~US$1.7 billion. Mr. Goldberg
was previously Chief Financial Officer at Badlands Power Fuels, LLC
through its successful exit to Heckmann Corporation in 2012 and
served as the Chief Financial Officer and Chief Operating Officer
at Sweet Leaf Tea Company through its successful exit to Nestle in
2011. He is also Co-Founder and Managing Director of Capstream
Group, an investment bank based in Austin. Mr. Goldberg holds a Bachelor of
Science in Management with a major in accounting from Tulane University, a Master of Accountancy with an
emphasis in taxation from the University of
Georgia and a Master of Business Administration from The
Darden School at The University of
Virginia.
Leon Ojalvo – Chief Commercial
Officer
Mr. Ojalvo was previously founder and managing
principal of Liberty Base Investments, a private equity and real
estate development firm with strategic investments in the
technology and cannabis sectors. The firm successfully developed or
invested in over 2.6 million square feet of medical, storage,
retail and hospitality assets. Prior to that, he was director at
Ackman-Ziff Real Estate Group, a leading investment banking firm,
and VP of Mergers and Acquisitions and Latin American Business
Development for Mood Media, the largest global provider of in-store
sensory experiences, where he led a number of strategic
acquisitions and oversaw the company's Latin American expansion. He
earned a B.S. degree in Economics from Duke
University and a Master's in Business Administration from
Columbia Business School.
Rusty Sutterlin – Chief
Science Officer
Dr. Sutterlin is the Chief Science Officer
at Socati, where he leads the scientific efforts that enable Socati
to create high quality, consistent and compliant cannabinoid
ingredients for the CPG market. Dr. Sutterlin has more than 20
years of experience as the chief science officer for multiple
private companies, leading scientific discovery teams that have
become leaders in their respective industries. He has managed the
development of more than a dozen federal and state grants and has
overseen multiple projects that evolved from an idea to large
commercial production facilities. He has received organizational,
local, state and federal recognition for his work, including the
prestigious U.S. Presidential Green Chemistry Challenge Award. Dr.
Sutterlin earned a Ph.D. in chemistry and a Post-Doctoral degree in
chemical engineering from the University of
Missouri-Columbia.
Brad Kelley – Chief Operating
Officer
As COO of Socati, Mr. Kelley is responsible for
implementing the company's strategy across the company's operations
and supply chain while ensuring the highest ethics, safety,
quality, and efficiency standards. Brad joined Socati with more
than 25 years of executive and operational experience in flavors,
ingredients, and chemicals. Over the last eleven years, as V.P.
Operations, Chief Operations Officer, and President, his leadership
was instrumental in the rapid growth of Mane's U.S. flavor
division. Before joining Mane, he worked for Givaudan in the U.S.
and in Switzerland, where he held
various operations leadership positions. He started his career with
Monsanto in Pensacola, Florida.
Mr. Kelley holds a degree in Chemical Engineering from Florida State University.
Mark Elfenbein – Chief Revenue
Officer
As Chief Revenue Officer at Socati, Mr. Elfenbein
oversees the company's sales and marketing functions, building on
more than 20 years of experience leading rapidly growing companies
in new emerging industries. Mr. Elfenbein has previously served as
Chief Revenue Officer, President or CEO of five publicly traded
companies, which combined raised financing in excess of
US$1 billion. He was most recently
Chief Revenue Officer at Sentient Technologies, which raised nearly
US$150 million, the largest sum at
the time for an artificial intelligence (AI) company. Prior to
that, he was president and CEO of Slyce Technologies, where he led
the company's effort to deploy a visual research technology that
had tremendous success among Fortune 500 companies. Earlier in his
career, Mark was a founder of Mood Media, the largest global
provider of in-store sensory experiences, and co-founder and head
of revenue for FUN Technologies, the largest online pay-to-play
casual gaming business. He earned a B.B.A. degree from the
University of Manitoba.
Scott Seder – SVP of
Regulatory Affairs
As SVP of Regulatory Affairs for Socati,
Mr. Seder is responsible for the company's regulatory, compliance
and government relations activities. As a former prosecutor,
regulator, legislative counsel, policymaker and attorney in private
practice, Mr. Seder brings over two decades of government affairs
and regulatory affairs experience to his role. Among his more
notable positions, he served the State of
Illinois as the General Counsel to the Illinois Department
of Financial and Professional Regulation. In that role, he was
responsible for all legal matters relating to the agency's
regulation of over 1.2 million licensed professionals in
Illinois, including physicians,
pharmacists and pharmacies. As a private attorney prior to joining
Socati, Mr. Seder represented some of the country's largest and
most successful cannabis cultivators and dispensaries in licensure,
vendor contracts, personnel, and regulatory matters. He earned a
B.S. degree in history from Vanderbilt
University and a J.D. from the Illinois Institute of
Technology Chicago-Kent College of Law.
Lorne Abony – Chairman and
Director
Mr. Abony is a prominent entrepreneur and venture
capitalist. He was the co-founder and CEO of Nuuvera, a
Canada-based cannabis company,
which sold in 2018 for US$826
million. Prior to that he was the CEO of Mood Media
Corporation, a large publicly traded media entity which employed
3,300 people in 47 countries. He also co-founded FUN Technologies
and in 2004 became the youngest-ever CEO of a listed company on the
Toronto Stock Exchange. The company was sold to Liberty Media in
2006 for US$484 million. Mr. Abony
earned an honors B.A. degree from McGill
University, a L.L.B. and J.D. from the Windsor University International Law Center, and a
M.B.A. from Columbia Business
School.
Edward Lonergan –
Director
Mr. Lonergan is a proven business leader with more
than 40-years of success in global consumer and B2B industries. He
currently serves as the Executive Chairman of Zep, a leading
innovator of cleaning solutions for retail, food and beverage,
industrial and institutional, and vehicle care customers, and
Chairman of DRB Systems, a leading provider of point-of-sale
software and tunnel control solutions to the car wash industry. He
also serves on the board of Owens Corning Company and is a Senior
Advisor at New Mountain Capital. Previously, he served as President
and CEO of Chiquita Brands International, President and CEO of
Diversey, President of Gillette Europe, and in various roles at
Procter & Gamble. He earned a B.A. degree in political science
from Union College.
Eric Ball –
Director
Mr. Ball is a veteran technology finance executive,
investor and board member across multiple industries. He currently
serves as General Partner at Impact Venture Capital, which invests
in early-stage information technology start-ups with a focus on
civic technology, cybersecurity, financial technology, big data,
telecommunications and media. He also chairs the Audit Committee at
Glu Mobile, a publicly traded leader in 3D freemium mobile gaming.
Previously, Eric was CFO at C3 IoT, a leading enterprise AI
software provider, and served as Treasurer at Oracle, one of the
world's premier technology companies. While at Oracle, he was named
one of the "100 Most Influential People" in finance by Treasury
& Risk Magazine. Prior to joining Oracle, Mr. Ball served in
executive roles at Flextronics International, Cisco Systems,
Avery Dennison, and AT&T. He
earned a Ph.D. in management from Claremont
Graduate University – Peter F.
Trucker and Masatoshi Ito Graduate School of Management, as
well as a M.A. degree in economics and a M.B.A. from the
University of Rochester and a B.A.
degree in economics from University of
Michigan.
Anthony Lacavera -
Director
Mr. Lacavera is the founder of Globalive Capital
Inc., a telecommunications and technology-focused investment
company. Mr. Lacavera has made over 100 venture and private equity
investments over the past 15 years, including founding WIND Mobile
which became Canada's fourth
largest wireless carrier before it was sold to Shaw for approximately CAD$1.6 billion. Mr. Lacavera was named
Canada's CEO of the Year by the
Globe and Mail in 2010, one of the 50 Most Influential Torontonians
in 2013 and one of Canada's Top
Executives by Power and Influence magazine in 2014. Mr. Lacavera
holds an Engineering Degree from the University of Toronto.
Additional Information
A copy of the LOI with more detailed information about the RTO
is available for review on the Company's SEDAR page at
www.sedar.com. The Company will disclose additional information
relating to the RTO, the Spin-Off and related matters as soon as
they becomes available, including additional financial information
relating to Socati, the backgrounds of any other person who may
constitute an insider of the Resulting Issuer, and any other
relevant information.
The LOI is binding on the parties, however, the parties are
continuing to negotiate the more detailed, definitive agreements
that will govern the RTO, the Spin-Off and related matters. In the
course of those negotiations, material terms pertaining to the RTO,
including its structure, timing, the consideration payable for the
Socati Securities, the calculation of the Share Price, the
Financing, closing conditions and other matters may be added,
amended or removed. The Company will provide an update on any
material terms not already disclosed as soon as reasonably possible
once that information becomes available.
Completion of the RTO is subject to a number of conditions
precedent, including the Conditions described above. If the
conditions precedent cannot be satisfied or (if applicable) waived,
the RTO will not close. There can be no assurance that the RTO 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 RTO, any information released or received
with respect to the RTO may not be accurate or complete and should
not be relied upon. Trading in the Company's securities in
anticipation of the RTO should be considered highly
speculative.
The Exchange has not considered or made any determination on the
merits of the proposed RTO and has neither approved nor disapproved
of the contents of this press release.
About Globalive Technology Inc.
Globalive Technology is a next generation software company and
venture partner developing innovative solutions to disrupt
traditional industries by leveraging artificial intelligence and
machine learning technology stacks. Globalive Technology is
controlled by Globalive Capital Inc., which has founded and
co-founded 12 businesses over the past 20 years with six successful
exits ranging from US$10M to US$1.3B. It has also
made over 100 venture investments and has over 45 technology
companies in its portfolio. For more information,
visit www.globalivetech.com.
About Socati Corp.
Socati is a leading processor of broad-spectrum hemp extracts.
Leveraging investments in new technologies, Socati engages in
large-scale manufacturing and has logistics in place to meet
growing demand. With the ability to manufacture broad-spectrum hemp
extracts at scale, Socati is built to serve the needs of large,
international CPG companies that are seeking high quality raw
materials.
For media inquiries:
Rob
Moysey
Communications Manager, Globalive
Media@globalivetech.com
For investor inquiries:
Simon
Lockie
Chief Corporate Officer
1-647-977-2727
InvestorRelations@globalivetech.com
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This news release contains forward-looking statements
relating to the timing and completion of the proposed RTO and
Spin-Off, the future operations of the Company and the Resulting
Issuer and other statements that are not historical facts. Such
forward-looking statements are often identified by terms such as
"possible", "if", "would", "will", "is incurring", "subject to",
"intends", "estimates", "contemplated", "following", "continuing
to", "anticipates", "anticipated" and similar expressions. All
statements, other than statements of historical fact included in
this release, including those noted above, are forward-looking
statements that involve risks and uncertainties. There can be no
assurance that such statements will prove to be accurate and actual
results and future events could differ materially from those
anticipated in such statements. Important factors that could cause
actual results to differ materially from the Company's expectations
include changes to Socati or the Company's business focus,
strategic plan or capital requirements; changes in market, industry
and regulatory conditions for Socati or the Company; unexpected
operating gains or losses in the Socati or the Company; a breakdown
in the Company's relationship with Socati; the inability to satisfy
the conditions precedent to complete the RTO; the inability to
raise adequate financing or adequate financing on terms
sufficiently favourable to Socati and the Company; the inability to
obtain the necessary regulatory, shareholder and third-party
approvals for the RTO; changes in Socati or the Company's
assessment of the desirability of the RTO; other parties seeking to
acquire an interest in Socati or the Company; competitors in the
industry and other risks as set out in the Company's Filing
Statement available on its SEDAR page
at www.sedar.com.
The reader is cautioned that assumptions used in the
preparation of any forward-looking information may prove to be
incorrect. Events or circumstances may cause actual results to
differ materially from those predicted as a result of numerous
known and unknown risks, uncertainties, and other
factors, many of which are beyond the control of the Company.
The Company cannot guarantee that any of the forward-looking
statements contained in this press release will occur as disclosed
herein or at all. The reader is cautioned not to place undue
reliance on any forward-looking information.
Such information, although considered reasonable by
management at the time of preparation, may prove to be
incorrect and actual results may differ materially from those
anticipated. Forward-looking statements contained in this news
release are expressly qualified by this cautionary statement. The
forward-looking statements contained in this news release are made
as of the date of this news release and the Company will only
update or revise publicly the included forward-looking statements
as expressly required by Canadian securities law.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities of the
Company, Socati or the resulting issuer in either Canada or the United
States. The securities of such entities have not been and
will not be registered under the United States Securities Act of
1933, as amended (the "US Securities Act"), or any state
securities laws and may not be offered or sold within the United States or to U.S. Persons unless
registered under the US Securities Act and applicable state
securities laws or an exemption from such registration is
available.
Neither the Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the Exchange) accepts
responsibility for the adequacy or accuracy of this
release.
SOURCE Globalive Technology