Calgary, Alberta--(Newsfile Corp. - February 26, 2021) - Roosevelt Capital Group Inc. (TSXV: ROSV.P) ("Roosevelt" or the "Corporation") a capital pool company as defined under Policy 2.4 - Capital Pool Companies ("CPC") of the TSX Venture Exchange (the "Exchange"), announces changes that are in accordance with the new CPC policy as well as a loan to Cloud DX, Inc., in connection with its qualifying transaction.
Changes in Accordance with New CPC Policy
Roosevelt is pleased to announce that due to changes recently announced by the Exchange to its CPC program and changes to the Exchange's Policy 2.4 - Capital Pool Companies, which became effective as at January 1, 2021 (the "New CPC Policy"), the Corporation intends to implement certain amendments to further align its policies with the New CPC Policy, in addition to its annual and special matters at the Meeting (defined below).
Pursuant to the New CPC Policy, in order for the Corporation to align certain of its policies with the New CPC Policy it is required to obtain the approval of disinterested shareholders of the Corporation. As a result, the Corporation will be seeking such approval at its upcoming annual general and special meeting of shareholders scheduled to be held on March 22, 2021 (the "Meeting"), for the following matters: (i) to amend the Corporation's stock option plan (the "Option Plan") to, among other things, become a "10% rolling" plan prior to the Corporation completing a Qualifying Transaction ("QT"); (ii) to remove the consequences of failing to complete a QT within 24 months of the Corporation's date of listing on the Exchange (the "Listing Date"); and (iii) to amend the escrow release conditions and certain other provisions of the Corporation's Escrow Agreement (the "Escrow Agreement"). These proposed amendments are described in further detail below.
Amendments to the Option Plan
The amendments to the Option Plan, will (i) allow the total number of common shares of the Corporation (the "Common Shares") reserved for issuance as options not to exceed 10% of the Common Shares issued and outstanding as at the date of grant, rather than at the closing date of the initial public offering ("IPO"), for options issued prior to the QT; (ii) allow the number of Common Shares reserved for issuance as options to any individual director or senior officer not to exceed 5% of the Common Shares outstanding as at the date of grant, rather than at the closing date of the IPO, for options issued prior to the QT; (iii) allow the number of Common Shares reserved for issuance as options to Consultants, as defined in the Option Plan, not to exceed 2% of the Common Shares outstanding as at the date of grant, rather than at the closing date of the IPO, for options issued prior to the QT; and (iv) require, prior to the granting of options, the optionee to first enter into an escrow agreement agreeing to deposit the options, and the Common Shares acquired pursuant to the exercise of such options, into escrow as described in the Escrow Agreement.
Removal of the Consequences of Failing to Complete a QT within 24 Months of the Listing Date
Currently, under the Exchange's Policy 2.4 - Capital Pool Companies (as at June 14, 2010) (the "Former Policy") there are certain consequences if a QT is not completed within 24 months of the Listing Date. These consequences include a potential for Common Shares to be delisted or suspended, or, subject to the approval of the majority of the Corporation's shareholders, transferring Common Shares to list on the NEX and cancelling certain seed shares. The New CPC Policy allows CPCs to remove these consequences assuming disinterested shareholder approval is obtained. The Corporation intends to ask disinterested shareholders to approve the removal of such consequences at the Meeting, as it believes that it will afford the Corporation greater flexibility to complete a QT that is beneficial to all interested parties, and will also allow the Corporation to better withstand market volatility.
Amendments to the Escrow Agreement
The Corporation intends to ask disinterested shareholders to approve the Corporation making certain amendments to the Escrow Agreement, including allowing the Corporation's escrowed securities to be subject to an 18 month escrow release schedule as detailed in the New CPC Policy, rather than the current up to 36 month escrow release schedule in the Former Policy. In addition, the Corporation wishes to amend the Escrow Agreement such that all options granted prior to the date the Exchange issues a final bulletin for the QT ("Final QT Exchange Bulletin") and all Common Shares that were issued upon exercise of such options prior to the date of the Final QT Exchange Bulletin will be released from escrow on the date of the Final QT Exchange Bulletin, other than options that (a) were granted prior to the IPO with an exercise price that is less than the issue price of the Common Shares issued in the IPO and (b) any Common Shares that were issued pursuant to the exercise of such options issued below the issue price, which will be released from escrow in accordance with the 18 month escrow release schedule as detailed in the New CPC Policy.
Other Changes
Under the New CPC Policy, the Corporation is permitted to implement certain other changes from the Former Policy without obtaining shareholder approval. As a result, the Corporation wishes to have the option to take advantage of all the changes under the New CPC Policy that do not require shareholder approval, which became effective on January 1, 2021, including, but not limited to:
- increasing the maximum aggregate gross proceeds to the treasury that the Corporation can raise from the issuance of Common Shares in the IPO, seed shares and private placement to the new maximum of $10,000,000, rather than $5,000,000 which was the limit under the Former Policy;
- removing the restriction which provided that no more than the lesser of 30% of the gross proceeds from the sale of securities issued by the Corporation and $210,000 may be used for purposes other than identifying and evaluating assets or businesses and obtaining shareholder approval for a proposed QT, and implementing the restrictions on the permitted use of proceeds and prohibited payments under the New CPC Policy, under which reasonable general and administrative expenses not exceeding $3,000 per month are permitted;
- removing the restriction on the Corporation issuing new agent's options in connection with a private placement; and
- removing the restriction such that now one person has the ability to act as the chief executive officer, chief financial officer and corporate secretary of the Corporation at the same time.
The Corporation believes that the New CPC Policy is in the best interests of the shareholders as it will allow the Corporation to have greater flexibility and mechanisms to increase shareholder value.
Loan to Cloud
In connection with the Corporation's previously announced qualifying transaction ("Qualifying Transaction") with Cloud DX, Inc. ("Cloud"), Roosevelt will advance to Cloud, on or about February 26, 2021, a secured loan in the amount of $250,000 (the "Loan"), pursuant to Section 8.5 of Policy 2.4 in the Exchange's corporate finance manual. The Loan will carry interest at a rate of prime plus 5% and shall accrue and be compounded on a monthly basis. The Loan is evidenced by a loan agreement and secured by a general security agreement on all the assets of Cloud and is payable on demand on the maturity date, being the closing or termination of the Qualifying Transaction. The Loan has been approved by the Exchange.
ABOUT THE CORPORATION
The Corporation is a capital pool company (a "CPC") that has not commenced commercial operations and has no assets other than cash. Except as specifically contemplated in the Exchange's New CPC Policy, until the completion of its qualifying transaction, the Corporation will not carry on business, other than the identification and evaluation of businesses or assets with a view to completing a proposed qualifying transaction.
ABOUT CLOUD DX
Cloud is a leader in virtual healthcare and digital medicine with rapidly growing sales across North America. Our complete remote patient monitoring platform incorporates proprietary medical devices, mobile apps, clinical dashboards, artificial intelligence and EMR integration. Cloud DX now provides products and services to hospitals, healthcare providers and provincial health departments across North America. In 2020, Cloud was a co-recipient of the Roche COVID Challenge award, and is widely recognized for their ground-breaking med tech innovations, including winning the Qualcomm Tricorder XPRIZE Bold Epic Innovator Award, Fast Company magazine "World Changing Idea" and most recently a 2021 Edison Award nomination.
For further information, please contact:
Bruce Bent
Chief Financial Officer
Roosevelt Capital Group Inc.
Telephone: + 1 (905) 567-3431
Email: bbent@msw.on.ca
Robert Kaul
Chief Executive Officer
Cloud DX, Inc.
Telephone: (888) 534-0944
Email: ceo@clouddx.com
www.clouddx.com
ANY SECURITIES REFERRED TO HEREIN WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "1933 ACT") AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.
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. The Exchange has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the content of this press release.
The information contained or referred to in this press release relating to Cloud has been furnished by Cloud. Although Roosevelt has no knowledge that would indicate that any statement contained herein concerning Cloud is untrue or incomplete, neither Roosevelt nor any of its respective directors or officers assumes any responsibility for the accuracy or completeness of such information.
Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance, receipt of requisite regulatory approvals, completion of the concurrent financing and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approvals, and any ancillary matters thereto, are 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 Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool Corporation should be considered highly speculative.
This forward-looking information in respect of Roosevelt and Cloud reflects Cloud's or Roosevelt 's, as the case may be, current beliefs and is based on information currently available to Roosevelt and Cloud, respectively, and on assumptions Roosevelt and Cloud, as the case may be, believes are reasonable. These assumptions include, but are not limited to, management's assumptions about the Exchange approval for the Qualifying Transaction, requisite shareholder approvals in connection with the New CPC Policy matters and the Qualifying Transaction, closing of the private placement, closing of the business combination and Cloud's assumptions regarding its business objectives.
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 news release.
NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION
IN THE UNITED STATES
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