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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:
|
Six months
ended June 30, 2019
(unaudited)
|
Year ended
Dec. 31, 2018 (audited)
|
Year ended
Dec. 31, 2017 (audited)
|
|
|
|
|
Revenue
|
$6,166,150
|
$5,316,565
|
$2,053,209
|
Net income
(loss)
|
($1,143,468)
|
($2,045,970)
|
($1,826,575)
|
Total
assets
|
$3,500,600
|
$3,177,000
|
$404,921
|
Total shareholder
equity (deficit)
|
($320,440)
|
$547,162
|
($98,155)
|
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.