Meraki Acquisition One, Inc. (TSXV:MRKI.P) (the
“
Company”) is pleased to announce that on November
21, 2022, it entered into a definitive agreement (the
“
Agreement”) with Vaultex Pte. Ltd.
(“
Vaultex”), Vaultex’s operating subsidiary and
Vaultex’s security holders setting out the binding terms and
conditions for an arm’s length reverse takeover acquisition to
constitute the Company’s qualifying transaction (the
“
Transaction”) under the policies of the TSX
Venture Exchange (the “
Exchange”). The Transaction
and its proposed terms and conditions were first announced by the
Company in a news release dated April 8, 2022 and updated on May 6,
2022 and on June 20, 2022.
Transaction
Pursuant to the Agreement, the Company and Vaultex and its
security holders will complete the Transaction by way of a
securities exchange such that holders of Vaultex shares and
warrants will exchange their securities for, respectively, shares
and warrants of the Company and the Company will own and control
all of the Vaultex shares and the Vaultex warrants will be
cancelled. The exchange will be on a one-for-one basis (the
“Exchange Ratio”) based on one Vaultex share
having a deemed price of CAN$0.25 per share in exchange for one
Company share having a deemed price of CAN$0.25 per share. The
Exchange Ratio assumes that the Company will not complete a share
consolidation prior to or in connection with the completion of the
Agreement.
The Exchange Ratio under the Agreement is based on the following
valuations: (a) approximately CAN$1,100,000 for the Company on a
non-diluted basis, assuming 4,400,000 Company shares outstanding
and (b) CAN$25,000,000 for Vaultex on a non-diluted basis, assuming
100,000,000 Vaultex shares outstanding, excluding (1) securities
issued under the Pre-Listing Financing (as described below), (2)
the Vaultex shares issuable upon the conversion of the Convertible
Debenture (as described below) and (3) the securities to be issued
under the Concurrent Financing (as described below). The Company
currently has 4,400,000 shares outstanding and 440,000 stock
options outstanding under its stock option plan and 200,000 agent’s
warrants outstanding that were issued in connection with the
Company’s initial public offering.
Vaultex is expected to have 100,000,000 shares outstanding, not
including (1) the Vaultex shares and warrants issued in connection
with the Pre-Listing Financing (as described below), (2) the
Vaultex shares to be issued under the Concurrent Financing (if
any), and (3) the Vaultex shares issuable on conversion of the
outstanding convertible debenture of 150,000,000 Japanese Yen
principal amount that is expected to be converted prior to
completion of the Transaction into approximately 5,457,000 Vaultex
shares at a conversion price of CAN$0.25 and the relevant currency
exchange rate on the date of conversion (the “Convertible
Debenture”). The Convertible Debenture has a interest rate
of 15% per year and accrued interest will be paid in cash upon
conversion.
Under the Agreement: (1) the holders of the Vaultex shares
outstanding immediately prior to the completion of the Agreement,
including the Vaultex shares issued under the Pre-Listing
Financing, to be issued under the Concurrent Financing (if any),
and issuable upon exercise of the Convertible Debenture, will
receive, for every one Vaultex share held immediately prior to the
completion of the Agreement, one Company share; and (2) the holders
of Vaultex warrants outstanding immediately prior to the completion
of the Agreement, including the Vaultex warrants issued under the
Pre-Listing Financing and the Concurrent Financing, will receive
equivalent warrants of the Company based on the Exchange Ratio,
with such additional adjustments as needed. It is a condition for
the completion of the Agreement that the holder of the Convertible
Debenture fully converts the Convertible Debenture into Vaultex
shares prior to closing, which will then be exchanged for Company
shares under the Agreement.
As part of the Transaction, the Company is expected to continue
from the jurisdiction of British Columbia to the jurisdiction of
the Cayman Islands or another offshore jurisdiction acceptable to
the Exchange (the “Continuation”). The
Continuation would require necessary corporate approval, the
approval of the Company’s shareholders and regulatory approval,
including the approval of the Exchange.
On completion of the Transaction, the Company expects to be a
Tier 2 technology issuer listed on the Exchange (the
“Resulting Issuer”). It is also expected that the
Resulting Issuer will change its name to “Vaultex Group Inc.” or
such other name as determined by Vaultex and acceptable to the
Exchange.
Upon completion of the Transaction, including the Concurrent
Financing and the conversion of the Convertible Debenture, (1)
based on a minimum Concurrent Financing of CAN$7,500,000, the
current Meraki shareholders are expected to own approximately 3.04%
of the Resulting Issuer common shares, the Vaultex shareholders are
expected to own approximately 69.15% of the Resulting Issuer common
shares, the Convertible Debenture holder is expected to own
approximately 3.77% of the Resulting Issuer common shares (based on
the expectation that approximately 5,457,000 Vaultex shares are to
be issued to the Convertible Debenture holder on conversion), the
Pre-Listing Financing shareholder is expected to own approximately
3.29% of the Resulting Issuer common shares, and the Concurrent
Financing shareholders are expected to own approximately 20.74% of
the Resulting Issuer common shares, all on a non-diluted basis; and
(2) based on a maximum Concurrent Financing of CAN$10,000,000, the
current Meraki shareholders are expected to own approximately 2.85%
of the Resulting Issuer common shares, the Vaultex shareholders are
expected to own approximately 64.68% of the Resulting Issuer common
shares, the Convertible Debenture holder is expected to own
approximately 3.53% of the Resulting Issuer common shares (based on
the expectation that approximately 5,457,000 Vaultex shares are to
be issued to the Convertible Debenture holder on conversion), the
Pre-Listing Financing shareholder is expected to own approximately
3.08% of the Resulting Issuer common shares, and the Concurrent
Financing shareholders are expected to own approximately 25.87% of
the Resulting Issuer common shares, all on a non-diluted basis.
If a broker-agent is engaged in connection with all or a portion
of the Concurrent Financing, it is expected that the broker-agent
would receive broker’s fees, including broker warrants, as is
customarily paid for such a transaction. The Concurrent Financing
may also involve the payment of finder’s fees as permitted by
Exchange policies, otherwise, no finder’s fees are payable in
connection with the Transaction.
Vaultex is “arm’s length” to the Company and the Transaction was
negotiated at arm’s length within the meaning of the policies of
the Exchange. As such, the Transaction constitutes an arm’s length
transaction pursuant to the policies of the Exchange and Company
shareholder approval is not expected to be required for the
Transaction, but shareholder approval is expected to be required
for the Continuation and any other matters that require such
approval, and subject to Exchange acceptance. No deposit, advance
or loan has been made or is required to be made under the
Agreement.
Transaction Conditions
Under the Agreement, the material mutual conditions precedent
include: (1) receipt of Company shareholder approval for the
Continuation and for all other matters contemplated by the
Agreement that require shareholder approval; (2) receipt of
Exchange conditional acceptance or approval for the Transaction;
(3) the completion of the Concurrent Financing for a minimum of
CAN$7.5 million, including the satisfaction or waiver of all
conditions to the conversion of the subscription receipts, save for
the requirement to complete the Transaction; and (4) the fulfilment
of other mutual conditions precedent customary for a transaction of
a similar nature to that of the Transaction.
The obligations of Vaultex and its security holders are subject
to certain conditions that include: (1) the completion of the
Convertible Debenture conversion, (2) the completion of the
Continuation, (3) the Company shall have a positive working capital
balance of at least CAN$30,000 on completion of the Transaction;
(4) Joel Arberman and other principals of the Company who hold
Company shares shall have entered into support agreements to
approve and vote their Company shares in favour of the Transaction
including the Continuation and any related matters in furtherance
of the Transaction; and (5) the directors and officers nominated by
Vaultex shall have been appointed effective upon completion of the
Transaction.
Each of the Company and Vaultex has respective condition
precedents that are customary for a transaction of this type such
as: (1) all covenants shall have been performed in all material
respects; (2) all representations and warrants shall be true and
correct in all material respects; (3) no material adverse change
has occurred; (4) there shall be no pending or threatened suit,
action or proceeding by any governmental entity with a reasonable
likelihood of success; and (5) all consents, approvals,
authorizations and waivers of any persons required or necessary for
completion of the Transactions shall have been obtained.
With the entry into the Agreement, the Company and Vaultex will
prepare a mutually acceptable Filing Statement that is expected to
be submitted to the Exchange and filed on SEDAR.
Concurrent Financing
Prior to or concurrent with the completion of the Transaction, a
concurrent financing (the “Concurrent Financing”)
for gross proceeds of a minimum of CAN$7,500,000 and a maximum of
CAN$10,000,000 will be completed either (1) by the Company through
the issuance of a minimum of 30,000,000 and a maximum of 40,000,000
subscription receipts of the Company at a price of CAN$0.25 per
subscription receipt, with each subscription receipt to
automatically convert, prior to or concurrently with the completion
of the Agreement, into either: (A) one special warrant, each
special warrant to automatically convert into one share and
one-half of one warrant upon the earlier of the expiry of
applicable hold periods and the date of prospectus qualification;
or (B) one share and one-half of one warrant; and the Company and
Vaultex will mutually determine at the time of the Concurrent
Financing which one of (A) or (B) shall apply based on such factors
as the expected distribution profile; and each whole warrant will
be exercisable into one share at a price of CAN$0.45 per share for
a period of 24 month; or (2) by Vaultex through the issuance of a
minimum of 30,000,000 and a maximum of 40,000,000 units with each
unit consisting of one Vaultex Share and one-half of one Vaultex
Warrant; or by the Company and Vaultex in aggregate through (1) and
(2). The net proceeds of the Concurrent Financing will primarily be
used by the Resulting Issuer to launch its gold exchange services
in Singapore and for general corporate purposes.
Vaultex has completed a pre-listing financing of 4,761,905 units
of Vaultex at a price of CAN$0.21 per unit for gross proceeds of
CAN$1,000,000, with each unit consisting of one Vaultex share and
one warrant, with each warrant entitling the holder to acquire one
additional Vaultex share at a price of CAN$0.30 per share for a
period of 24 months from the date of issuance (the
“Pre-Listing Financing”), such Vaultex securities
to be exchanged for equivalent Company securities based on the
Exchange Ratio under the Agreement. As announced in the Company’s
news release dated June 20, 2022, Vaultex planned to raise a
further CAN$500,000 under the Pre-Listing Financing; however,
Vaultex currently no longer has such plans.
Principals and Insiders of the Resulting
Issuer
It is expected that on completion of the Transaction, the board
of directors of the Resulting Issuer will be consist of five
directors who expected to be Douglas Betts, James Boettcher,
Jeffrey Premer, Guan Seng Sim and Joanne Yan, of which Mr.
Boettcher, Mr. Sim and Ms. Yan are expected to be independent
directors.
The management of the Resulting Issuer is expected to consist of
Jeffrey Premer as Chief Executive Officer, Mike Abbott as Chief
Financial Officer, Paul Lee-Simion as Chief Technology Officer,
Kevin Yoshinaga as Chief Strategy Officer, Umar Khattak as Chief
Marketing and Communications Officer and Mark Gregory as Corporate
Secretary.
The Principal of the Resulting Issuer is expected to be ICO
Capital Management Pte. Ltd. (“ICM”) with
approximately 59.3% to 62.1% of the Resulting Issuer shares on a
non-diluted basis. ICM is a corporation existing under the laws of
Singapore, which currently owns and controls 91.6% of the Vaultex
shares. ICM is controlled by Jeffrey Premer (through his holding
company Nebu Inc., a Wyoming company) with 45.3% of ICM and by Umar
Khattak with 22.3% of ICM.
The backgrounds of the proposed board members and management
appointees of the Resulting Issuer are set out in the Company’s
news releases dated April 8, 2022 and May 6, 2022 other than for
Paul Lee-Simion, who is expected to serve as Chief Technology
Officer of the Resulting Issuer, whose background is as follows:
Paul Lee-Simion has served as the Chief Technology Officer of
RegulAItion. He was previously Head Wealth and Insurance
Architecture, Innovation and Technology at DBS Bank from 2017 to
2020 and Director of the Evolve Centre for Design Thinking and
Innovation at UBS from 2016 to 2017 and Head Engineering and Data
Innovation at Standard Chartered from 2013 to 2015 and Director of
IT, Architecture and Innovation at Deutsche Bank from 2010 to 2012.
Over 40 years, Mr. Lee-Simion has built ground breaking systems to
support the trading life cycle. Mr. Lee-Simion has head senior IT
positions at various international financial institutions and other
large corporations and in government. Mr. Lee-Simion has a
Mathematics degree at Imperial College London.
Sponsorship
Sponsorship for the Transaction may be required. Unless the
Concurrent Financing is brokered, or a certain portion of it is
brokered, and a due diligence letter to provided by the agent,
sponsorship would be required unless a waiver from the sponsorship
requirement is available. The Company intends to apply to the
Exchange for waiver from the sponsorship requirement. At this time,
no sponsor has been retained in connection with the
Transaction.
Vaultex
Vaultex is an allocated gold and commodity trading platform
based and regulatory compliant in Singapore. Access to its exchange
is currently limited to institutional and accredited investors as
defined by the Monetary Authority of Singapore. Initial products
are limited to licensed exempt spot commodities such as physical
gold and precious metals. Vaultex does not trade or provide custody
of any digital assets.
Vaultex utilizes blockchain technology for the exchange ledger,
but does not trade or have custody of digital assets. Vaultex will
provide users in certain jurisdictions the ability to trade
allocated gold in a regulated environment. Users from Canada or
United States would only be considered in connection with the
achievement of appropriate registrations in those countries.
Physical gold storage is with Brinks Singapore, an arm of Brinks
global security services.
Vaultex operates similar to a traditional exchange as it has the
same core components for order entry, routing and matching with
ancillary components required for clearing, management, reporting,
market surveillance and regulatory compliance. In addition, Vaultex
adheres to strict KYC, AML, ATF and PEP onboarding and ongoing
screening.
Vaultex was incorporated on June 11, 2018 and is a private,
unlisted corporation existing under the laws of Singapore with a
wholly-owned subsidiary, Vaultex Exchange Pte. Ltd., also existing
under the laws of Singapore.
According to Vaultex’s 2021 year-end audited financial
statements, as at December 31, 2021, it had total assets of
US$732,511, total liabilities of US$1,820,529 of which US$1,528,784
were borrowing and US$291,745 were other payables, and capital
deficiencies of US$1,088,018. Vaultex did not generate any revenues
and had a loss of US$1,003,298 in 2021.
Trading Halt
Trading of the Company’s listed shares on the Exchange was
halted at the request of the Company on April 8, 2022 in advance of
the announcement of the Transaction. The closing price for the
Company’s common shares was CAN$0.20 per share when trading was
halted. The trading halt is expected to continue until completion
of the Transaction.
Further Information
For further information, please see the prospectus of the
Company dated January 28, 2022 and filed on SEDAR or contact Joel
Arberman, Chief Executive Officer of the Company, at (516) 299-9092
or joel@merakiacquisition.com.
Notices
The securities referred to herein have not been, nor will they
be, registered under the United States Securities Act of 1933, as
amended, and may not be offered or sold in the United States or to,
or for the account or benefit of, U.S. persons absent registration
or an applicable exemption from the registration requirements. This
news 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.
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 release.
Completion of the Transaction is subject to a number of
conditions, including but not limited to, Exchange acceptance and
if applicable pursuant to Exchange 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 TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed transaction and has neither approved nor
disapproved the contents of this press release.
Information concerning Vaultex has been provided to the Company
by Vaultex for inclusion in this news release.
Caution Regarding Forward Looking
Information
The information set forth in this news release includes
forward-looking statements under applicable securities laws.
Forward-looking statements are statements that relate to future,
not past, events. In this context, forward-looking statements often
address expected future events, plans, prospects, business and
financial performance, and often contain words such as
“anticipate”, “believe”, “plan”, “estimate”, “expect”, and
“intend”, statements that an action or event “may”, “might”,
“could”, “should”, or “will” be taken or occur, or other similar
expressions. All statements, other than statements of historical
fact, included herein are forward-looking statements, including,
without limitation, statements regarding the Transaction, the
anticipated plans of Vaultex and its business, the Agreement, the
Pre-Listing Financing, the Concurrent Financing, the Convertible
Debenture, the exchange of or conversion of Vaultex securities for
securities of the Company or Resulting Issuer, the use of proceeds
from the financings, the agents, finders and sponsors in relation
to the financings and the Transaction, the Continuation, any share
consolidation, the name change, the changes to the board and
management, board approvals, shareholder approvals and Exchange
acceptance. By their nature, forward-looking statements involve
known and unknown risks, uncertainties and other factors that may
cause the 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: failure to complete the Agreement, failure to
satisfy all conditions precedent to the Agreement, including
shareholder approval, acceptance by the Exchange, completion of the
Pre-Listing Financing, the Concurrent Financing and Convertible
Debenture conversion, the Continuation, any share consolidation,
the name change and the additional risks identified in the Company
filings with the TSX Venture Exchange and applicable Canadian
securities regulators. Forward-looking statements are made based on
the Company or Vaultex’s management’s respective beliefs, estimates
and opinions on the date that statements are made and the
respective companies undertakes no obligation to update
forward-looking statements if these beliefs, estimates and opinions
or other circumstances should change, except as required by
applicable securities laws. Investors are cautioned against
attributing undue reliance, importance or certainty to
forward-looking statements.
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