KEON CAPITAL INC. ANNOUNCES PROPOSED TRANSACTION WITH FRAME HOLDINGS INC.
06 Novembre 2023 - 10:30PM
Keon Capital Inc. (“
Keon” or the
“
Company”) (TSXV: KEON.H) is pleased to announce
that it has entered into a letter of intent (the “LOI”) dated
October 28, 2023 respecting the proposed acquisition by Keon of
Frame Holdings Inc. (“Frame”) (the “Transaction”). Under the LOI,
Keon and Frame have agreed to act in good faith to draft, negotiate
and execute a definitive agreement (the “Definitive Agreement”)
respecting the Transaction, which will supersede the LOI. The
Transaction will be a “Change of Business” and “Reverse Takeover”
for Keon under Policy 5.2 of the TSX Venture Exchange (the
“Exchange”). The Transaction will not constitute a transaction with
any “Non-Arm’s Length Party” of Keon (as such term is defined by
the Exchange).
Trading of the common shares of Keon will remain
halted in connection with the dissemination of this news release
and will recommence at such time as the Exchange may determine,
having regard to the completion of certain requirements pursuant to
Exchange Policy 5.2. Further details respecting the proposed
Transaction will follow in future news releases.
About Frame
Frame Holdings Inc., incorporated under the
Business Corporations Act (British Columbia) in November 2022, is a
start-up manufacturer and seller of tiny prefabricated homes using
offsite construction based in North Vancouver, British Columbia.
Frame is on schedule to complete the prototype for its first
flagship product, “Riverside”, which is a 269 square foot tiny home
complete with a murphy bed, full kitchen, bath and loft, by the end
of 2023. Frame intends to stand out in the marketplace through
elegant minimalist design and sustainable, socially-responsible
practices through material sourcing and production efficiency. The
company intends to sell to two primary customers segments: (a)
direct to consumers (home owners) and (b) land bankers and property
developers, offering a turnkey solution. No shareholder of Frame
currently holds more than 7% of the issued and outstanding Frame
shares.
The Transaction
The LOI contemplates that the Transaction will
be structured as a three-cornered amalgamation (the
“Amalgamation”), with Frame amalgamating with a newly incorporated,
wholly-owned subsidiary of Keon (“Subco”) under the Business
Corporations Act (British Columbia) and becoming a wholly-owned
subsidiary of Keon. Shareholders of Frame will receive one common
share in the capital of Keon in exchange for each outstanding
common share of Frame held by them, with Keon expected to issue an
aggregate of approximately 40,000,000 Keon shares to the Frame
shareholders under the Transaction. Keon will not make any loans or
advances to Frame in connection with the Transaction.
In connection with the Transaction, Keon is
expected to conduct a 2.8:1 share consolidation of issued and
outstanding Keon common shares (the “Keon Share Consolidation”),
and any shares issued to Frame shareholders under the Transaction
will be on a post-consolidation basis. In addition, prior to
closing the Transaction Frame is expected to complete an equity
financing having gross proceeds of no less than $2,000,000 through
the issuance of Frame common shares to participating investors at a
price of $0.20 per share (the “Frame Private Placement”). The exact
number of Keon shares to be issued to Frame shareholders under the
Transaction will depend on the size of the Frame Private Placement.
Keon intends to issue additional Keon shares to an arm’s length
third party finder, such number of shares to be the maximum
allowable under Exchange policies and to be determined based on the
number of Keon shares issued to Frame shareholders under the
Transaction.
Closing of the Transaction will be subject to a
number of conditions, including completion of the Keon Share
Consolidation, completion of the Frame Private Placement, approval
of the Exchange, and approval of the amalgamation by the Frame
shareholders.
The Transaction is not a “related party
transaction” as such term is defined by Multilateral Instrument
61-101 – Protection of Minority Security Holders in Special
Transactions and is not subject to Policy 5.9 of the Exchange. As a
result, no meeting of the shareholders of Keon is required pursuant
to Policy 5.2 of the Exchange or applicable securities laws.
Sponsorship of the Transaction may be required
by the Exchange unless a waiver is granted by the Exchange. Keon
intends to apply for a waiver of sponsorship; however, there can be
no guarantee that a waiver will be granted.
On behalf of the Board of Directors
“Nader Vatanchi”
Chief Executive OfficerTel: 778.881.4631Email:
nadervatanchi@hotmail.com
###
Completion of the Transaction is subject to a
number of conditions, including but not limited to, Exchange
acceptance and if applicable, disinterested 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 Keon 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 news release.
Neither 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.
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