Parties plan to list on the Canadian Securities Exchange
Vancouver, British Columbia--(Newsfile Corp. - April 27, 2022) - 1210352 BC Ltd. ("1210 BC" or the "Company") is pleased to announce that it has entered into a business combination agreement (the "Business Combination Agreement") with XMachina-AI Inc. ("XMachina"), a company existing under the laws of the Province of British Columbia. The Business Combination Agreement replaces the letter of intent between the Company and XMachina with respect to the Business Combination (as defined below).
About XMachina
XMachina seeks to provide a platform for the acquisition of Artificial Intelligence ("AI") entities in North America. The Company's thesis is based on an aggregation strategy to acquire successful AI targets and make them better through the addition of growth capital, streamlining of corporate processes and human capital acquisitions. The current sector focus of the Company is on enhancing supply-chain efficiencies, logistics and manufacturing.
Summary of the Business Combination
Pursuant to the Business Combination Agreement, the Company and XMachina are expected to complete an arm's length business combination (the "Business Combination") by way of a three-cornered amalgamation, whereby, among other things, the existing shareholders of XMachina (the "XMAI Shareholders"), other than the XMAI Shareholders who exercise their dissent rights under the Business Corporations Act (British Columbia), will receive, subject to adjustment, one (1) Subordinate Voting Share (as defined below) in the capital of the Company as it exists immediately following the Business Combination (the "Resulting Issuer") for each one (1) common share in the authorized share capital of XMachina held, and one (1) Multiple Voting Share (as defined below) in the capital of the Resulting Issuer for each one (1) preferred share in the authorized share capital of XMachina held, in each case on a post-Share Capital Amendment basis (as herein defined).
As a condition precedent of the Business Combination, 1210 BC's board of directors and shareholders must approve the Share Capital Amendment (as herein defined). In accordance with the terms and conditions of the Agreement, and subject to requisite approval of shareholders of 1210 BC (the "1210 BC Shareholders"), 1210 BC has agreed to alter its Notice of Articles and Articles to: (a) alter the identifying name of its outstanding Common shares as "Subordinate Voting Shares" (the "Subordinate Voting Shares"); (b) create a new class of "Multiple Voting Shares" (the "Multiple Voting Shares", and together with the Subordinate Voting Shares, the "Resulting Issuer Shares"); and (c) cancel the existing preferred shares, as more particularly described in its management information circular dated April 14, 2022 (the "Circular") (the "Share Structure Alteration"). Subject to requisite approval of 1210 BC Shareholders, 1210 BC has also agreed to alter its Notice of Articles and Articles to create special rights and restrictions for, and attach those special rights or restrictions to, the Subordinate Voting Shares, entitling the holders thereof to one (1) vote in respect of each Subordinate Voting Share held at meetings of the shareholders, and the Multiple Voting Shares, entitling the holders thereof to ten (10) votes in respect of each Multiple Voting Share held at such meetings, except at a meeting of which only holders of another particular class or series of shares of 1210 BC will have the right to vote (the "Rights and Restrictions Resolution", and together with the Share Structure Alteration, the "ShareCapital Amendment"). The Multiple Voting Shares are non-transferable and non-participating shares and a holder of Multiple Voting Shares will be entitled to convert its Multiple Voting Shares to Subordinate Voting Shares on a one-for-one ten-thousandth (0.001) basis at any time upon notice to the Resulting Issuer. The Multiple Voting Shares are held by the founding management team, namely Mr. Théoret, Mr. Brown, Mr. DiMarco, Mr. Drouet and Mr. Munro.
In connection with, and as a condition precedent to, the Business Combination, 1210 BC intends to change its name to "XMachina-AI Inc." (the "Name Change") and to replace all directors and officers of 1210 BC on the effective date of the Business Combination with nominees of XMachina.
The completion of the Business Combination is subject to the satisfaction of a number of conditions, including, without limitation: (i) the approval of the Business Combination and other matters contemplated therein by the requisite majority of XMAI Shareholders; (ii) the approval of the Share Capital Amendment, omnibus incentive plan, the Business Combination and other matters contemplated therein by the requisite majority of 1210 BC Shareholders; (iii) the approval of the Name Change by 1210 BC's board of directors; and (iv) other conditions customary for a transaction of this nature. There can be no assurance that the Business Combination will be completed as proposed or at all.
Exchange Listing
As contemplated by the Business Combination Agreement, 1210 BC and XMachina intend to apply to the Canadian Securities Exchange (the "Exchange") for the listing of the Subordinate Voting Shares of the Resulting Issuer. The Company is a "reporting issuer" in the Provinces of British Columbia and Alberta but is not currently listed for trading on any stock exchange. Completion of the Business Combination is subject to, among other things, the Company receiving conditional listing approval from the Exchange, satisfaction of the closing conditions of the Exchange, and shareholder approval. The Resulting Issuer has not yet applied for the listing and the Exchange has not yet provided acceptance of such listing and there is no assurance that the Resulting Issuer's application will be submitted for listing on the expected timeline or at all. In connection therewith, 1210 BC expects to file a long form non-offering prospectus (the "Prospectus") with the British Columbia Securities Commission (the "BCSC") and a listing statement (the "Listing Statement") with the Exchange, in accordance with the policies of the BCSC and the Exchange, respectively.
Proposed Management Team and Board of Directors of the Resulting Issuer
On completion of the Business Combination, the current directors and officers of the Company will resign and it is currently expected that the proposed executive officers and directors of the Resulting Issuer will be comprised as follows:
Claude G. Théoret, Proposed Chief Executive Officer and Director (Chairman) of the Resulting Issuer
Mr. Théoret is an astrophysicist and AI/big data/deep learning expert and is a co-founder and CEO/Director (Chairman) of XMachina since June 2021, where he is dedicating 100% of his time. Previous positions held include COO of React Gaming Group Inc. (formerly, Intema Solutions Inc.) from June 2019 to March 2020, where he engineered a successful growth by acquisition strategy. He was also founder, CEO and Chairman of Nexalogy Inc., one of Montreal's first AI companies from August 2006 to November 2017, when he sold the company to DataMetrex AI. Mr. Théoret's entrepreneurial and investor accomplishments include playing an active role in the birth and growth of Québec's startup ecosystem, one of the top 40 startup mentors in the worldwide Founder Institute network, an angel investor and mentor of several data-oriented startups, and partner in his own micro-venture capital that is a limited partner in several Canadian venture capital funds. Mr. Théoret worked at CERN as an astrophysicist and forged his technical skillset at the inception of bigdata and the web along with building his first website in 1994. At McGill University's Astronomy Department, Mr. Théoret became an astrophysicist with expertise in the management of innovation. He was one of its founding members and ranked first in the astronomy and astrophysics postdoctoral fellowship competition in Québec. At Collège de France, he conducted his postdoctoral research as a member of the prestigious HESS Collaboration where he published twice in Nature and once in Science. After teaching as a professor of physics and statistics at the American University in Paris, Claude focused his analytical expertise on Co-Word Analysis, Actor Network Theory and their practical applications. Mr. Théoret has done deep AI driven political and military intelligence work and has a "secret" level clearance with the CAF. Mr. Théoret has been an invited speaker at SXSW, InfoPresse and Creative Mornings, Datavore, TEDxMcGill, BigData Toronto, StartupFest, New York Internet week and many more conferences.
Patrick E. Brown, Proposed Chief Financial Officer and Director of the Resulting Issuer
Mr. Brown is a chartered accountant, co-founder and director/CFO of XMachina since June 2021, where he is and dedicating 100% of his time to related services for XMachina. Mr. Brown is a forward-thinking financial executive with more than 25 years of experience serving SME and large complex organizations within the biotechnology, mining and nutraceutical sectors in Canada and the United States. He is recognized for his expertise at leading financial teams to drive increases in year-over-year revenue, stimulate profit growth, and continually expand the customer base. He is uniquely skilled at guiding an organization's service offerings into new industries, building an effective financial program, devising effective marketing strategies, and orchestrating international branding. From 2010 to 2021, Mr. Brown has owned and operated Parabolic Communications Inc., a boutique consulting firm that provides CFO services to private and publicly listed companies in both Canada and the United States.
Daniel O. Drouet, Proposed Chief Technology Officer and Director of the Resulting Issuer
Mr. Drouet is a co-founder and CTO of XMachina. He has been deeply involved with tech startups as an entrepreneur, investor and mentor for over 20 years. He has broad management experience with particular expertise in product strategy, software development and venture financing. He has conceived and overseen the delivery of numerous software products and IT services, founded several software companies, as well as Canada's most active tech focused venture capital fund. Previously, Mr. Drouet co-founded and served for over a decade on the board of Ajah, a global consultancy focused on data and technology in the public and social sectors. He was Head of Product and Engineering at Soko, an adtech company. He also did a brief stint as Vice-President of Products at React Gaming Group Inc. (formerly, Intema Solutions Inc.) where he helped define a new product strategy. In addition to his full-time position at XMachina, Mr. Drouet is also an Adjunct Professor at l'École de technologie supérieure, one of Canada's largest engineering schools, and the Centech, a world-class incubator for startups innovating in DeepTech and AI. Mr. Drouet holds degrees in both Economics and Electrical Engineering from McGill University.
J. Scott Munro, Proposed Chief Investment Officer, Corporate Secretary and Director of the Resulting Issuer
Mr. Munro is the Chief Investment Officer, corporate secretary, co-founder and a director working as an independent contractor of XMachina since inception on a full-time basis. He is a business executive who has worked as a c-suite executive, including CEO and CFO in private and public companies for over 25 years including: Munro Financial Corporation since January 2010 to current as President and CFO - a business & financial consulting firm, Eviana Health Corporation as CFO from June to September 2020, ImmunoClin Corporation as CFO from December 2013 to August 2016 - a Paris/London-based biotech R&D company, Canam Biotech Inc. (formerly, HemaGenetics Technologies Corp.) as Director and CEO since May 2018 - a biotech R&D company, and Most Home Corp as controller/CFO from April 2000 to December 2010 - a real estate services and technology company, and other private family entities since 1997. Mr. Munro has a strong background in accounting, capital markets, corporate finance, and securities, including over 20 years of U.S. and Canadian public company reporting, M&A, and deal structuring.
Vaughn J.E. DiMarco, Proposed Vice President of Growth
Mr. DiMarco is an entrepreneur, investor and full-time VP of Growth working as an independent contractor of XMachina since December 2021. He graduated from the Queen's University Faculty of Engineering and Applied Science (2012, B.Sc. Mech. Eng.) and more recently was certified in AI Business Strategy at the MIT Sloan School of Management (2020). Vaughn brings with him a decade of experience and best practices in AI, Machine Learning and Data Science, leading technical & business due diligence on hundreds of companies & has funded dozens of strategic AI initiatives within manufacturing, construction, finance, media, entertainment, medical devices & technology. Previous positions held include Investment Director at IVADO LABS from Sept 2019 to Nov 2021 - launching INVEST-AI, a $35M provincial Quebec AI fund. In Oct 2015, he founded VONALYTICS INC - an AI & Data Science consulting firm specializing in user acquisition, analytics, retention & attribution modeling. In 2020, he acquired the assets of Coindera - a Software-as-a-Service (SaaS) company helping more than 50,000 registered users monitor cryptocurrency markets since 2014.
Mr. DiMarco's other relevant professional accomplishments include:
- founding MTL DATA, the fastest growing AI network in Canada with more than 10,000 members committed to advancing Machine Learning, AI & Data methods
- Acting as a top-rated mentor at Springboard, the leading data science boot camp ($50M raised, partnered with Microsoft).
- Selected for the exclusive Next Canada startup program, NextAI - Montreal, in partnership with HEC Montreal Ecole Des Dirigeants and world-renowned AI researchers Yoshua Bengio, Joelle Pineau & Doina Precup.
Alexander Suelzle, Proposed Director of the Resulting Issuer
Mr. Suelzle is a CPA-CA who holds a Bachelor of Business Administration (BBA) from Trinity Western University majoring in accounting and is an independent director appointee of XMachina. He has over 20-years' experience in domestic and international finance, mergers and acquisitions, business valuations, audit and taxation. He has worked in senior management roles in corporate finance, consulting, and assurance divisions for both national and international accounting firms. He has worked closely with clients developing growth and financing strategies in both public and private markets. Over the past 5 years, he has split his time between working as a part-time CFO for several companies and acting as managing partner at Alexander Christopher & Associates Inc., Chartered Accountants, a firm providing both Canadian and US business strategy, audit, valuation, finance and tax services.
Robert J. Lachance, Proposed Director of the Resulting Issuer
Mr. Lachance is an independent director nominee for XMachina. Robert is a former broker with Dominion Securities and was/is still active in doing due diligence on public companies, startups, and RTOs. He has raised substantial capital for many of them. From 1994 to 2015, Robert was a consultant to Nymox Pharma and was involved in their RTO and raised capital for them. Nymox has a New Drug Application submitted to the FDA and one to be filed shortly to the European Medical Agency (MDA). With his help and advice, Nymox was able to complete P3 trials and bring it to an FDA filing which typically takes 12 years at an average cost of one billion dollars but Nymox completed it for a fraction of that. Robert also has syndicated real estate projects in California, Texas, Florida, Toronto, and Montreal. He is very aware of the challenges and obstacles facing young companies and, with over 50 years of being involved in the financial arena, his experience will be of great value to XMachina shareholders. Robert is an avid artist who lives in Montreal, Quebec.
Conditions to the Business Combination
In addition to the completion of matters discussed herein, completion of the Business Combination is subject to a number of customary conditions, including: (i) receipt of all required consents or approvals, including Exchange listing approval; (ii) completion of the Business Combination on or before September 30, 2022, or such other date as may be agreed upon by the parties; (iii) no prohibition at law existing for completion of the Business Combination; (iv) escrow agreements being entered into pursuant to the policies of the Exchange; (v) approval of the Business Combination and all matters related thereto required to be approved by the shareholders of XMachina and the Company; (vi) the representations and warranties of each of XMachina and the Company being true and correct as of closing; (vii) completion of the Financing and (viii) no material adverse change for each of XMachina and the Company.
Additional Information
Further details about the Business Combination and the Resulting Issuer will be provided in the Listing Statement and the Prospectus prepared and filed by 1210 BC in respect of the Business Combination.
Investors are cautioned that, except as disclosed in the Listing Statement and the Prospectus (or other disclosure document prepared by 1210 BC) in connection with the Business Combination, any information released or received with respect to the Business Combination may not be accurate or complete and should not be relied upon.
For further information contact:
XMachina-AI Inc.
Claude G. Théoret
Chief Executive Officer & Director
T: 514-564-8880
E: claude@machina-ai.com
1210352 BC Ltd.
Richard Paolone
Chief Executive Officer & Director
T: 416-258-3059
E: richard@paolonelaw.ca
No recognized securities exchange accepts responsibility for the adequacy of this news release, which has been prepared by management of 1210 BC.
Cautionary Note Regarding Forward-Looking Statements
This news release contains statements that constitute "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause 1210's actual results, performance or achievements, or developments to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements.
Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects," "plans," "anticipates," "believes," "intends," "estimates," "projects," "potential" and similar expressions, or that events or conditions "will," "would," "may," "could" or "should" occur.
Forward-looking statements in this document include, among others, statements relating to expectations regarding the completion of the Business Combination (including all required approvals), the listing on the Exchange, receiving the receipt from the BCSC with respect to the Prospectus, the business plans of the Resulting Issuer and other statements that are not historical facts. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors and risks include, among others: (a) that there is no assurance that the parties to the Business Combination will obtain the requisite director, shareholder and regulatory approvals for the Business Combination; (b) there is no assurance that the Financing will be completed on the agreed terms or within the timeline; (c) the anticipated costs to complete the Business Combination may exceed current expectations; (d) following completion of the Business Combination, the Resulting Issuer may require additional financing from time to time in order to continue its operations which may not be available when needed or on acceptable terms and conditions; (e) the new laws and regulations could adversely affect the Resulting Issuer's business and results of operations; (f) the stock markets have experienced volatility that often has been unrelated to the performance of companies and these fluctuations may adversely affect the price of the Resulting Issuer's securities, regardless of its operating performance; (g) limited business history of the parties; (h) disruptions or changes in the AI markets or the economy generally; (i) unanticipated costs and expenses; (j) general market and industry conditions; and (k) the impact of COVID-19.
The forward-looking information contained in this news release represents the expectations of 1210 BC as of the date of this news release and, accordingly, is subject to change after such date. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. 1210 BC undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.
Completion of the Business Combination is subject to a number of conditions, including but not limited to Exchange acceptance and, if applicable, disinterested shareholder approval. Where applicable, the Business Combination cannot close until the required shareholder approval is obtained. There can be no assurance that the Business Combination will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the Circular, Listing Statement or Prospectus to be prepared in connection with the Business Combination, any information released or received with respect to the Business Combination may not be accurate or complete and should not be relied upon.
United States Disclaimer
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. 1210 BC's 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 or to U.S. Persons (as such term is defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
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