Calgary, Alberta--(Newsfile Corp. - June 14, 2021) - Timeless Capital Corp. (TSXV: TLC.P) ("Timeless" or the "Company"), a capital pool company as defined under TSX Venture Exchange ("TSXV" or the "Exchange"), is pleased to announce it has entered into an arm's length binding letter of intent dated June 9, 2021 (the "LOI") with Brane Inc. ("Brane"), a private company incorporated under the Business Corporations Act (Ontario), in respect of a proposed business combination that would result in the reverse take-over of Timeless by Brane to form the resulting issuer (the "Resulting Issuer") who will continue on the business of Brane (the "Transaction"). Timeless intends that the Transaction will constitute its Qualifying Transaction, as such term is defined in the policies of the Exchange.
About Brane
Founded in 2017, Brane is a blockchain innovation company, which provides digital asset custody services. Brane's goal is to become the first made in Canada qualified custodian for digital assets, providing Canadian financial institutions and investors with a domestic alternative.
Summary of Proposed Transaction
The LOI was negotiated at arm's length and is effective as of June 9, 2021. The terms and conditions outlined in the LOI are binding on the parties and the LOI is expected to be superseded by a definitive agreement (the "Definitive Agreement") to be negotiated between the parties.
The Transaction will be structured based on the advice from legal, tax and professional advisors. Based on the information available to Timeless at the date hereof, Timeless proposes that, subject to TSXV and/or regulatory approval and certain conditions, it would acquire all of the issued and outstanding shares of Brane ("Brane Shares") in exchange for common share of Timeless ("Timeless Shares"), on the basis of one (1) Timeless Share for each Brane Share. For the purposes of the Transaction, the Timeless Shares will have a deemed value of $0.20 per Timeless Share on a pre-Consolidation basis. Immediately prior to the completion of the Transaction, Timeless will effect a share consolidation (the "Consolidation"), which will result in the Timeless Shares having a deemed value equal to the value of the Brane Shares, as determined by the pricing of the Concurrent Financing (as defined below), provided that in no event shall the Consolidation ratio exceed one (1) post-consolidation Timeless Share ("Post Consolidation Timeless Share") for every five (5) pre-consolidation Timeless Shares. As a result of the Transaction, any outstanding convertible securities of Brane will be adjusted accordingly or replacement securities issued in the Resulting Issuer.
It is anticipated that the Resulting Issuer will continue the business of Brane under a new name which will include "Brane", or such other name as the board of directors of the Resulting Issuer shall determine and as may be approved by the TSXV (the "Name Change"). Upon completion of the Transaction, all directors and officers of Timeless (elected or appointed prior to the completion of the Transaction) shall resign and each of the directors and officers of the Resulting Issuer shall be nominees of Brane.
Certain common shares of the Resulting Issuer to be issued pursuant to the Transaction are expected to be subject to restrictions on resale or escrow under the policies of the TSXV, including the securities to be issued to "Principals" (as defined under TSXV policies), which will be subject to the escrow requirements of the Exchange.
Completion of the Transaction will be subject to a number of conditions, including but not limited to, negotiation and execution of the Definitive Agreement, each of Timeless and Brane being satisfied with the results of its due diligence review of the other party, completion of the Concurrent Financing (as described below) for gross proceeds of not less than $5,000,000, receipt of Timeless and Brane board approval for the Transaction, receipt of Brane shareholder approval of the Transaction, receipt of Timeless shareholder approval for all necessary matters, including the Name Change and Consolidation, and Timeless and Brane obtaining all necessary consents, orders and regulatory approvals, including the approval of the Exchange, and other customary conditions.
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.
Concurrent Financing
The LOI contemplates that prior to the closing of the Transaction, Brane will complete a brokered equity private placement for gross proceeds of the greater of: (i) $5,000,000 or (ii) such amount that represents at least 20% of the issued and outstanding common shares of the resulting issue upon completion of the Transaction (the "Concurrent Financing"). Further terms relating to the Concurrent Financing, including the pricing thereof, shall be disclosed in a future press release.
In addition, the LOI permits Brane to raise up to an addition $3,000,000 prior to completion of the Concurrent Financing and the Transaction.
Sponsorship
Timeless intends to make an application for exemption from the sponsorship requirements of the TSXV in connection with the Transaction, however there is no assurance that the TSXV will exempt Timeless from all or part of applicable sponsorship requirements.
Additional Information
Additional information concerning the Transaction, Timeless, Brane and the Resulting Issuer, including financial information of Brane, will be provided in subsequent news releases and in Timeless' Filing Statement to be filed in connection with the Transaction, which will be available under Timeless' SEDAR profile at www.sedar.com.
Upon closing of the Transaction, the Resulting Issuer expects to list as a Tier 2 issuer on the Exchange.
The Transaction will not constitute a "Non-Arm's Length Qualifying Transaction" (as such term is defined in the policies of the TSXV). Accordingly, it is not anticipated that the Transaction will be subject to the approval of the Timeless shareholders.
In accordance with the policies of the TSXV, the Timeless Shares are currently halted from trading and will remain so until such time as the TSXV determines, which, depending on the policies of the TSXV, may not occur until completion of the Transaction.
About Timeless
Timeless completed its initial public offering in October, 2018. The Timeless Shares are listed for trading on the TSXV under the stock symbol "TLC.P". Timeless has not commenced commercial operations and has no assets other than cash. Timeless was incorporated under the laws of the Province of Alberta.
Timeless currently has outstanding 7,000,000 Timeless Shares and incentive stock options to acquire 266,666 Timeless Shares at a price of $0.10 per share.
Further Information
Timeless Capital Corp.
Fahim Gadallah, CEO
Phone: (604) 248-2080
Email: fgadallah@gadallahmanagement.com
Brane Inc.
Adam Miron, Interim CEO
Phone: (613) 986-2422
Email: adam@brane.capital
Completion of the Transaction is subject to a number of conditions, including without limitation, Exchange acceptance and obtaining all shareholder approvals. 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 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.
There is no assurance that a Definitive Agreement will be successfully negotiated or entered into and there is no assurance that the Concurrent Financing will be completed.
The TSXV has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.
All information contained in this press release with respect to Brane and Timeless was supplied by the parties respectively, for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied on the other party for any information concerning the other party.
Forward-Looking Information
This press release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this press release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected" "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts". "estimates", "believes" or intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could, "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this press release, forward-looking statements relate, among other things, to: the Transaction and certain terms and conditions thereof; the business of Brane, the Concurrent Financing; the Consolidation of Timeless Shares and the ratio thereof; the Name Change; the exchange ratio for the Brane securities; TSXV sponsorship requirements and intended application for exemption therefrom; shareholder, director and regulatory approvals; and future press releases and disclosure. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and the delay or failure to receive shareholder, director or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Except as required by law, neither Timeless nor Brane assume any obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws, unless an exemption from such registration is available.
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