N/OT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION
DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO
THE UNITED STATES./
TORONTO, Feb. 9, 2021 /CNW/ - Hope Well Capital
Corp.* (TSXV: HOPE) ("HWCC" or the "Company"), a
capital pool company as defined under Policy 2.4 – Capital Pool
Companies ("CPC") of the TSX Venture Exchange (the
"TSXV"), is pleased to announce it has entered into a letter
of intent dated February 3, 2021 (the
"LOI") with Forward Water Technologies Inc. ("FWT"),
a private company incorporated under the Business Corporations
Act (Ontario), whereby HWCC
acquires all of the issued and outstanding securities of FWT, with
such acquisition constituting a reverse take-over of HWCC (the
"Transaction"), subject to the terms and conditions outlined
below. HWCC as the resulting issuer following the completion
of the Transaction (the "Resulting Issuer") will continue on
the business of FWT. HWCC intends that the Transaction will
constitute its Qualifying Transaction, as such term is defined in
the policies of the TSXV.
FWT has developed a patented industrial wastewater treatment
system that allows manufacturing operations to clean their
wastewater that would otherwise require costly disposal. The
system also enables the reclamation of up to 90% of the waste as
clean water and the return of this valuable resource to the
environment. Alternatively, the clean water can be reused by
the manufacturing operation to reduce their overall water
consumption and environmental footprint.
FWT is excited to bring this technology to market and meet the
demand for enhanced water stewardship. CEO, Howie Honeyman says, "With the financial
strength FWT acquires from this merger and concurrent capital
raise, FWT will be able to drive adoption in the global
opportunities it has already identified." In 2019, FWT completed a
full commercial demonstration of the technology by treating Oil and
Gas source wastewater, the results of which illustrated the
effectiveness and economics of the process. "This was highly
contaminated waste water and was destined for non-recoverable deep
well disposal or energy intensive thermal treatments", Honeyman
says. "The fact that FWT could recover up to 90% of the waste
volume as clean reusable water serves to illustrate what can be
accomplished in the field by adopting this new technology".
In 2020, FWT advanced its early commercialization efforts by
establishing a number of relationships across multiple industries
and geographies. One of these efforts culminated late last
year in the signing of the Company's first technology license
transfer contract with a well-established Indian based engineering
services firm. Currently, its partner in India is already involved in commercial trials
on multiple sites and will expand the use of FWT's technology
throughout that region over 2021 and beyond. This effort combined
with the multiple opportunities FWT has identified within
North America and Europe will lead to rapid global adoption of
the technology.
Summary of the Qualifying Transaction
The LOI contemplates HWCC and FWT completing an arm's length
business combination transaction, pursuant to which Resulting
Issuer shares will be issued to holders of shares of FWT.
HWCC currently has 7,724,999 common shares (the "HWCC
Shares") issued and outstanding. Additionally, HWCC has 772,499
options outstanding under its incentive stock option plan, and
subject to shareholder approval, may grant 625,000 agent's options
to replace the agent's options granted on closing of HWCC's initial
public offering. Prior to the completion of the Brokered Private
Placement, FWT has 11,032,000 FWT common shares (the "FWT
Shares") issued and outstanding, convertible debt in the
aggregate principal amount of $1,5156,666 convertible into a total of 1,652,379
FWT Shares, and commitment to issue 220,640 FWT shares to a
finder.
Pursuant to the Transaction, the FWT Shares, including all FWT
Shares and other securities issued pursuant to the Brokered Private
Placement, will be acquired by HWCC in consideration of HWCC
issuing five (5) HWCC Shares for each one (1) FWT Share issued and
outstanding immediately prior to Closing (the "Exchange
Ratio"). Any FWT Shares, warrants and broker options issued by
FWT in the Brokered Private Placement will be acquired by HWCC and
replaced by such number of shares, warrants and broker options of
the Resulting Issuer with the number of securities and exercise
price adjusted based on the Exchange Ratio.
Upon completion of the Transaction and the minimum Brokered
Private Placement, the non-diluted common shares of the Resulting
Issuer shall be held as follows: FWT securityholders – 69.01%;
Brokered Private Placement subscribers – 22.73%; and existing HWCC
shareholders – 8.26%. Accordingly, on completion of the
Transaction, the security holders of FWT would own a majority of
the issued and outstanding shares of the Resulting Issuer.
The common shares of the Resulting Issuer will be listed for
trading on the TSXV. Further information about the proposed
Transaction will be provided in a subsequent news release.
The parties to the Transaction are at arm's length and it is
therefore anticipated that the approval of the shareholders of HWCC
in respect of the Transaction will not be required. The
Company does plan to hold a meeting of shareholders whereat, among
other things, the shareholders of HWCC will be asked to approve,
among other things: (i) the change of name of HWCC to a name
provided by FWT; and (ii) the appointment of a new slate of
directors, conditional upon completion of the Transaction. It is
anticipated that the Transaction and the definitive agreement in
respect of the Transaction (the "Definitive Agreement") will
be put before the shareholders of FWT for their approval.
Pursuant to the terms of the LOI, until the earliest of (i) the
execution of the Definitive Agreement; (ii) mutual agreement of
HWCC and FWT; or (iii) the termination of the LOI in accordance
with its terms, HWCC and FWT have agreed not to solicit, negotiate,
accept or discuss with any other entity, any transaction that would
be in opposition to or in competition with the Transaction. In the
event that either HWCC or FWT terminates the LOI, other than for
certain prescribed reasons, the non-terminating party shall be
entitled to the reimbursement of its out of pocket costs and
expenses from the date of the LOI to the date of termination.
Trading in the HWCC Shares has been halted since May 10, 2019. Trading will remain halted until,
among other things, HWCC completes certain regulatory filings in
connection with the Transaction with the TSXV and the TSXV has
completed certain matters it considers necessary or advisable, or
until the completion of the Transaction.
Brokered Private Placement
In connection with the Transaction, it is anticipated that FWT
will be completing a brokered financing of FWT units (the "FWT
Units") or subscription receipts convertible into FWT Units
(the "Brokered Private Placement") to raise a minimum
$4,250,000 and a maximum of
$6,500,000 at a price of $1.00 per FWT Unit to be completed prior to
closing of the Transaction (the "Closing") and on such other
terms and conditions satisfactory to FWT, acting reasonably.
Each FWT Unit will be comprised of one (1) FWT Share and one-half
of one FWT warrant (each whole warrant, an "FWT
Warrant"). Each FWT Warrant will entitle the holder to
acquire one FWT Share at $1.25 per
share during 24 months from the Closing date of the Transaction
(the "Closing Date"). FWT also expects to issue broker
options equal to 7% of the FWT Units sold to acquire FWT Units
during 24 months from the Closing Date. Immediately prior to
completion of the Transaction, any subscription receipt issued in
the Brokered Private Placement, will automatically convert into one
FWT Unit. All proceeds of a FWT subscription receipt financing will
be held in escrow pending the concurrent completion of the
Transaction and will be returned to subscribers in the event the
Transaction is not completed. The Definitive Agreement will
provide that the parties acknowledge and agree that the terms of
the Brokered Private Placement may be amended by FWT with the prior
written consent of HWCC. Certain existing shareholders of FWT
have indicated that they intend to participate in the Brokered
Private Placement.
Subject to applicable laws and TSXV Policies, it is anticipated
that all Resulting Issuer shares issued in exchange for the FWT
Shares (including the FWT Shares issued upon conversion of the FWT
Units issued in Brokered Private Placement) on the Closing Date
will be freely tradable common shares of the Resulting Issuer upon
completion of the Transaction.
Description of Significant Conditions to Closing
The completion of the Transaction is subject to the satisfaction
of various conditions as are standard for a transaction of this
nature, including but not limited to (i) the negotiation of the
Definitive Agreement; (ii) receipt of all requisite regulatory,
stock exchange, court or governmental approvals, authorizations and
consents; (iii) the absence of any material change or a change in a
material fact or a new material fact affecting HWCC or FWT; (iv)
completion of the Brokered Private Placement (as defined below);
and (v) if applicable, each company having received appropriate
approvals from their shareholders. There can be no assurance that
the Transaction will be completed on the terms proposed above or at
all.
If completed, the proposed transaction is expected to constitute
HWCC's Qualifying Transaction under Policy 2.4 of the TSXV.
Completion of the Qualifying Transaction is subject to a
number of conditions including but not limited to, due diligence,
TSXV acceptance and if required by TSXV policies, majority of the
minority shareholder approval. Where applicable, the Qualifying
Transaction cannot close until the required shareholder approval is
obtained. There can be no assurance that the Qualifying
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 Qualifying
Transaction, any information released or received with respect to
the Qualifying 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 press release.
The Resulting Issuer
Upon completion of the Transaction, the Resulting Issuer is
expected to change its name to Forward Water Technologies Corp. or
such other name as determined by FWT and the Resulting Issuer will
be a technology issuer under the TSXV Rules.
Concurrent with the completion of the Transaction, it is
expected that all directors and officers of HWCC will resign, other
than one HWCC director nominee, and be replaced by nominees put
forth by FWT. Additional directors will be added to the board of
directors of the Resulting Issuer (the "Board") in the
normal course and once identified, information with respect to the
proposed additional directors will be included in a subsequent news
release.
Arm's Length Transaction
The proposed Transaction is an arm's length transaction in
accordance with the policies of the TSXV and is not subject to HWCC
shareholder approval.
Sponsorship
FWT is proposing to apply to the TSX-V for an exemption from
applicable sponsorship requirements, failing which FWT will ask the
lead agent of the Brokered Private Placement to act as sponsor.
About HWCC
HWCC is a CPC governed by the policies of the TSXV. HWCC's
principal business is the identification and evaluation of assets
or businesses with a view to complete a Qualifying
Transaction. Investors are cautioned that trading in the
securities of a CPC should be considered highly speculative.
About Forward Water Technologies Inc.
Forward Water Technologies Inc., is an Ontario corporation. The company is
dedicated to the commercialization of its proprietary forward
osmosis technology. FWT's corporate office is located in
Mississauga, Ontario and its
research, development and engineering office is located in
Sarnia, Ontario.
Website: forwardwater.com
Additional Information
A comprehensive press release with further particulars relating
to the Transaction, including further particulars of the Resulting
Issuer and the Brokered Private Placement, will follow in
accordance with the policies of the TSXV. In addition, a
summary of FWT's financial information will be included in
subsequent news release.
All information contained in this press release with respect to
HWCC and FWT was supplied, for inclusion herein, by the respective
parties and each party and its directors and officers have relied
on the other party for any information concerning the other
party.
Cautionary Note
As noted above, completion of the Transaction is subject to
receipt of all requisite regulatory, stock exchange, court or
governmental approvals, authorizations and consents, approval of
the shareholders of FWT and HWCC (as applicable), and completion of
the Brokered Private Placement by FWT. Where applicable, the
Transaction cannot close until the required approvals have been
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
continuous disclosure document containing full, true and plain
disclosure regarding the Transaction, required to be filed with the
securities regulatory authorities having jurisdiction over the
affairs of the Company, any information released or received with
respect to the Transaction may not be accurate or complete and
should not be relied upon. The trading in the securities of HWCC on
the TSXV should be considered highly speculative.
Trading in the common shares of the Company is presently halted
and is expected to remain halted pending closing of the
Transaction. While halted, the common shares of the Company may
only trade upon TSXV approval and the filing of required materials
with the TSXV as contemplated by TSXV policy.
Forward-Looking Information
Although the Company 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 the Company can give no assurance that they will prove
to be correct. When used in this press release, the words
"estimate", "project", "belief", "anticipate", "intend", "expect",
"plan", "predict", "may" or "should" and the negative of these
words or such variations thereon or comparable terminology are
intended to identify forward-looking statements and information.
The forward-looking statements and information in this press
release include information relating to the business plans of HWCC
and FWT, FWT management's expectation on the commercialization of
its technology, the Transaction (including TSXV approval, court
approval, and the closing of the Transaction), the board of
directors and management of the Resulting Issuer upon completion of
the Transaction and the Brokered Private Placement. Such statements
and information reflect the current view of HWCC and/or FWT,
respectively. Risks and uncertainties that may cause actual results
to differ materially from those contemplated in those
forward-looking statements and information.
By their nature, forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause our
actual results, performance or achievements, or other future
events, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the
following risks: (i) there is no assurance that HWCC and FWT will
obtain all requisite approvals for the Transaction, including the
approval of their respective shareholders (as applicable), the
approval of the TSXV for the Transaction (which may be conditional
upon amendments to the terms of the Transaction) or court approval
of the Transaction; (ii) there is no assurance the Brokered Private
Placement will be completed as contemplated or at all; (iii)
following completion of the Transaction, the Resulting Issuer may
require additional financing from time to time in order to continue
its operations and financing may not be available when needed or on
terms and conditions acceptable to the Resulting Issuer; (iv) new
laws or regulations could adversely affect the Resulting Issuer's
business and results of operations; and (v) the stock markets have
experienced volatility that often has been unrelated to the
performance of companies. These fluctuations may adversely affect
the price of the Resulting Issuer's securities, regardless of its
operating performance. There are a number of important factors that
could cause HWCC's and FWT's actual results to differ materially
from those indicated or implied by forward-looking statements and
information. Such factors include, among others: currency
fluctuations; limited business history of HWCC; disruptions or
changes in the credit or security markets; results of operation
activities and development of projects; project cost overruns or
unanticipated costs and expenses, and general market and industry
conditions. The terms and conditions of the Qualifying Transaction
may be based on the Company's due diligence and the receipt of tax,
corporate and securities law advice for both the Company and FWT.
The Company undertakes no obligation to comment on analyses,
expectations or statements made by third parties in respect of the
Company, FWT, their securities, or their respective financial or
operating results (as applicable).
HWCC cautions that the foregoing list of material factors is not
exhaustive. When relying on HWC'Cs forward-looking statements and
information to make decisions, investors and others should
carefully consider the foregoing factors and other uncertainties
and potential events. HWCC has assumed that the material factors
referred to in the previous paragraph will not cause such
forward-looking statements and information to differ materially
from actual results or events. However, the list of these factors
is not exhaustive and is subject to change and there can be no
assurance that such assumptions will reflect the actual outcome of
such items or factors. The forward-looking information contained in
this press release represents the expectations of HWCC as of the
date of this press release and, accordingly, is subject to change
after such date. Readers should not place undue importance on
forward-looking information and should not rely upon this
information as of any other date. HWCC does not undertake to update
this information at any particular time except as required in
accordance with applicable laws.
This press release is not an offer of the securities for
sale in the United States. The securities 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 exemption from
registration. This press release shall not constitute
an offer to sell or the solicitation of an offer to
buy nor shall there be any sale of the securities in any state in
which such offer, solicitation or sale would be
unlawful.
The TSX Venture Exchange Inc. has in no way passed upon
the merits of the Transaction and has neither approved nor
disapproved the contents of this press release.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this press release.
*
Hope Well Capital Corp. is in no way affiliated with or related to
Hopewell Capital Corporation, a separate pre-existing business
purportedly engaged in the field of venture capital across
Canada, or the Hopewell Group of
Companies' multi-faceted real estate and logistics group
SOURCE Hope Well Capital Corp.