OVO.P Ov2 Investment 1 Inc

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TORONTO, Sept. 12, 2019 /CNW/ - OV2 Investment 1 Inc. (the "Corporation") (TSXV: OVO.P), is pleased to announce that it has entered into a business combination agreement (the "Business Combination Agreement") dated August 30, 2019 with Freightera Logistics Inc. ("Freightera") and 1221126 B.C. Ltd. ("Subco"), a company wholly-owned by the Corporation, pursuant to which the parties will complete a business combination by way of three-cornered amalgamation (the "Transaction").  Upon completion of the Transaction, Freightera and Subco will amalgamate to continue as one corporation ("Amalco"), which will be a wholly-owned subsidiary of the Corporation. The Corporation proposes to change its name to "Freightera Logistics Inc." and will carry on the business of Freightera. The Transaction is an arm's length transaction.

Freightera is a private company formed under the laws of the Province of British Columbia. Freightera is a leading freight shipping marketplace offering instant freight quotes, online shipment bookings and lower emission transportation options in North America. Selected financial information from Freightera's audited financial statements for the years ended December 31, 2018 and 2017, and unaudited management-prepared financial statements for the six months ended June 30, 2019, is as follows:

Freightera currently has 32,703,854 common shares ("Freightera Shares") issued and outstanding.  Eric Beckwitt, a founder and the sole director and officer of Freightera, and Yevgeniya Ponarina, a founder of Freightera, each hold 26% of the outstanding Freightera Shares. Mr. Beckwitt and Ms. Ponarina are both residents of British Columbia.

Terms of the Transaction

Pursuant to the Business Combination Agreement, the Corporation will, prior to completion of the Transaction, complete a share consolidation on the basis of one post-consolidated common share for every 5.227391531 pre-consolidated common shares (the "Consolidation"). As a result of the Consolidation, the Corporation will have 2,200,000 post-Consolidation common shares ("OV2 Shares") issued or issuable on a fully-diluted basis. On closing of the Transaction, the Corporation will issue 19,000,000 OV2 Shares to Freightera shareholders on the basis of an exchange ratio (the "Exchange Ratio") to be calculated based on the number of Freightera Shares outstanding or issuable immediately prior to completion of the Transaction on a fully-diluted basis, excluding shares and convertible securities issued in connection with the Restructuring Transaction and Financings (described below). In consideration for the OV2 Shares, Amalco will issue to the Corporation one common share of Amalco for each whole OV2 Share issued.  Following the amalgamation, the issued and outstanding Freightera Shares and Subco shares will be cancelled, Amalco will be a wholly-owned subsidiary of the Corporation and the Corporation will carry on Freightera's business.

In accordance with their terms, the currently outstanding warrants of Freightera that are not exercised prior to closing of the Transaction will expire and be of no further force and effect. The convertible debentures of Freightera, other than those issued in connection with the Restructuring Transaction and Financings, and any warrants of Freightera issued in connection with the Financings, will be convertible into OV2 Shares, adjusted in accordance with the Exchange Ratio. Convertible debentures issued in connection with the Restructuring Transaction and Financings will be convertible into OV2 Shares in accordance with their terms.

In connection with the Transaction, Freightera will complete a concurrent non-brokered private placement of securities of Freightera for minimum aggregate gross proceeds of $3,500,000 at a price and on terms and conditions to be mutually agreed upon by Freightera and the Corporation (the "Concurrent Financing").

Freightera also proposes to complete one or more interim private placement financings on terms to be agreed to with the Corporation (the "Interim Financings" and together with the Concurrent Financing, the "Financings").     

Completion of the Transaction is subject to approval by the TSX Venture Exchange ("Exchange").  Freightera and Subco will require shareholder approval for the amalgamation, and the Corporation will require shareholder approval for the Consolidation and proposed name change.

Freightera Restructuring Transaction

Prior to the execution of the Business Combination Agreement,  Freightera completed a transaction with a company ("Holdco") controlled by Sheldon Pollack, a director and Chief Executive Officer of the Corporation, to restructure Freightera's current debt (the "Restructuring Transaction").

In connection with the Restructuring Transaction, Freightera, through a series of steps, acquired all of the issued and outstanding shares of Holdco. Holdco paid $2,000,000 in cash to Freightera on closing and will receive an additional $2,000,000 on closing of the Transaction pursuant to a promissory note payable to Holdco by OV2 Capital Inc. OV2 Capital Inc. is controlled by Sheldon Pollack, a director of the Corporation.  Pursuant to the Restructuring Transaction, Freightera issued to a trust controlled by Mr. Pollack (the "Pollack Trust") a $2,500,000 secured non-convertible promissory note (the "Bridge Note") and a $1,500,000 secured convertible promissory note (the "Convertible Note"). The Bridge Note bears interest at the rate of 12% per annum and matures on the earlier of (i) nine months from the date of issuance and (ii) completion of the Transaction. The Convertible Note bears interest at a rate of 2% per annum until completion of the Transaction (and 10% per annum thereafter) and matures on August 30, 2024. On completion of the Transaction, the Convertible Note is convertible at the Pollack Trust's option into OV2 Shares at a price of $0.75 per OV2 Share. If the Transaction does not complete by May 29, 2020, the Convertible Note is convertible into Freightera Shares at a price of $0.53 per Freightera Share.

Management and Board of Directors of Resulting Issuer

Upon completion of the QT, all of the existing directors and officers of the Corporation will resign and the directors of the Corporation will consist of Eric Beckwitt and four other nominees selected by Freightera and acceptable to the Exchange. Mr. Beckwitt will also be the Chief Executive Officer of the Corporation.

Eric Beckwitt is the founder, sole director and Chief Executive Officer of Freightera. He was the principal development team leader and patent holder of what has become the Freightera freight marketplace application. Mr. Beckwitt is a specialist in software development and business automation. He has successfully arranged funding for, designed, engineered, and managed diverse IT projects, ranging from reports to Congress and the President of the U.S., to global websites for international organizations and businesses for 25 years. He is an internationally recognized author and speaker on emissions reduction from freight transport.  He wrote "A Green Future for Freight" in the 2016 and 2018 G7 Summit editions of Climate Change: The New Economy. He was a speaker at COP22, the UN Climate Change Conference in Marrakesh.  He is the creator of North America's First Low Emission Freight Marketplace in cooperation with SmartWay and Natural Resources Canada.  Mr. Beckwitt and/or Freightera have been featured in Forbes, Fortune, Inc. Magazine, NBC, ABC, and Entrepreneur, among over 300 news sites worldwide. He is the recipient of over 18 grants and awards, including the 2016 Technology Impact Award and 2019 Clean50 Award.

Further information with respect to the identity of each of the proposed directors and officers of the Corporation upon completion of the Transaction will be provided separately, once determined.

Trading Halt

Trading in the common shares of the Corporation has been has been halted and the shares are not expected to resume trading until the Transaction has been completed, or until the Exchange receives the requisite documentation to resume trading. If the Transaction is completed, the Corporation expects to be listed on the Exchange as a technology issuer.

Sponsorship

The Corporation intends to make an application for exemption from the sponsorship requirements of the Exchange in connection with the Transaction, however there is no assurance that the Exchange will exempt the Corporation from all or part of applicable sponsorship requirements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward Looking Information

Statements in this press release regarding the Transaction and Freightera's business, which are not historical facts, are "forward-looking statements" that involve risks and uncertainties. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.

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.

SOURCE OV2 Investment 1 Inc.