Vancouver, British Columbia – TheNewswire – September 17, 2024 – Hopefield Ventures Two Inc. (TSXV: HVII.P) (“HVII” or the “Company”) is pleased to announce that it has entered into a non-binding letter of intent (“LOI”) dated September 16, 2024 to complete a business combination (the “Transaction”) with Carrier Connect Systems Ltd. (“Carrier”) and the securityholders of Carrier (the “Carrier Securityholders”). The Transaction will be an arm’s length transaction, and, if completed, will constitute HVII’s “Qualifying Transaction” (as such term is defined in Policy 2.4 – Capital Pool Companies (“Policy 2.4”) of the TSX Venture Exchange (the “TSXV” or the “Exchange”) Corporate Finance Manual (the “Manual”)).

 

In connection with the Transaction, HVII and Carrier will issue a subsequent news release setting out further information contemplated in Policy 2.4.

 

Trading of HVII’s common shares has been halted in accordance with the policies of the TSXV and will remain halted until such time as all required documentation in connection with the Transaction has been filed with and accepted by the TSXV and permission to resume trading has been obtained from the TSXV. It is likely that trading in the HVII’s common shares will not resume prior to the closing of the Transaction.

 

About Carrier Connect Systems Ltd.

 

Carrier is a corporation incorporated under the laws of the Province of British Columbia and was incorporated on July 24, 2019, pursuant to the provisions of the Business Corporations Act (British Columbia) (the “BCBCA”).

 

Carrier operates a Tier II/III data center in Vancouver, British Columbia, having acquired the facility from Distributel Communications in 2022. Carrier specializes in delivering co-location and data center solutions to service providers, enterprises and small businesses, primarily serving the Vancouver area. As a carrier-neutral facility, Carrier’s systems are fully independent and owned outright within its leased space. Carrier is actively expanding its footprint to meet growing demand.

About HVII (TSXV: HVII.P)

HVII is a corporation incorporated under the laws of the Province of British Columbia and is a “reporting issuer” in the Provinces of British Columbia, Alberta and Ontario (the “Reporting Provinces”). HVII was incorporated on January 24, 2022 pursuant to the provisions of the BCBCA.

 

HVII is a “capital pool company” (within the meanings of the policies of the TSXV, including Policy 2.4). HVII has not commenced commercial operations and has no assets other than a minimum amount of cash. Except as specifically contemplated in Policy 2.4, until the completion of a Qualifying Transaction (as defined in Policy 2.4), HVII will not carry on any business other than the identification and evaluation of companies, business or assets with a view to completing a proposed Qualifying Transaction.

 

Terms of the Transaction

 

The LOI is intended as an expression of mutual intention of the Parties to proceed towards negotiating the Definitive Agreement, provided that there is no assurance that a Definitive Agreement will be successfully negotiated or entered into. The final structure of the Transaction is subject to receipt of final tax, corporate and legal (including securities law) advice for both HVII and Carrier, and will be disclosed in a subsequent press release. The Transaction shall be structured so as to provide the Carrier Securityholders with securities of HVII that are economically equivalent to their securities holdings in Carrier (the “Carrier Securities”), all in a manner that is tax efficient to such holders. The Transaction is expected to be completed by way of three-cornered amalgamation, plan of arrangement, takeover bid, share purchase or other similar form of transaction or a series of transactions that have a similar effect, pursuant to the laws of the Province of British Columbia. The publicly traded entity resulting from the Transaction is referred to as the “Resulting Issuer”.

 

Pursuant to the terms and conditions of the LOI, Carrier and HVII (each, a “Party”, and collectively, the “Parties”) have agreed to diligently and act in good faith to negotiate the terms and conditions of a definitive agreement (the “Definitive Agreement”) incorporating the principal terms of the Transaction as described in the LOI, and in addition, such other terms and provisions of a more detailed nature as the Parties may agree upon and as are customary for transactions of this nature.

 

In the Definitive Agreement, each of HVII, Carrier and Carrier Securityholders will make such representations and warranties as are customary in transactions of this nature including, without limitation, representations as to the power, authority and standing of such Parties to engage in the contemplated Transaction; the absence of material pending or, to the knowledge of the Parties, threatened litigation and liabilities (contingent or otherwise) affecting the business of any Party in relation to the Transaction; the absence of any material default by either of the Parties under the terms of any material contract; and the accuracy in all material respects of the information, contracts and other materials furnished by either of the Parties for review by the other Party.

 

The Parties intend to enter into the Definitive Agreement on or before October 15, 2024, or such other date as agreed to by the Parties.

 

In addition, either Party may terminate the LOI before entering into the Definitive Agreement if: (a) on or before September 30, 2024, it is not reasonably satisfied with the results of its due diligence investigations of the other Party or as to the legal or tax consequences of concluding the Transaction; (b) the Parties have not entered into the Definitive Agreement on or before October 15, 2024 or such other dates as the Parties agree in writing; or (c) if any law, regulation or judgement of a governmental authority of competent jurisdiction makes the completion of the Transaction or the transactions contemplated by the LOI illegal or otherwise prohibited, and such law has become final and non-appealable. The LOI may also be terminated by written agreement of the Parties to terminate the LOI and automatically upon the delivery of the Definitive Agreement.

 

It is not currently contemplated that the HVII will require the approval of its shareholders for any of the matters set forth in the LOI. However, if required, HVII will, prior to the completion of the Transaction, seek shareholder approval, including by way of calling and holding a meeting of its shareholders in accordance with applicable corporate and securities laws, to effect: (i) the election of the Resulting Issuer Board (as defined below), conditional upon the completion of the Transaction; (ii) the Name Change (as defined below); (iii) the Consolidation (as defined below); (iv) the Transaction or (v) any component thereof as may be required by the Exchange.

 

Name Change

 

In connection with the Transaction, the Parties have agreed that HVII will propose to change its name to “Carrier Connect Data Solutions Inc.” or such other name as may be determined by Carrier and HVII, subject to the approval of the Exchange (the “Name Change”).

 

Consolidation and Capitalization

 

Immediately prior to the share exchange contemplated by the Transaction, HVII will complete a consolidation of its issued and outstanding capital on the basis of one post-consolidated common share of HVII (each an “HVII Post-Consolidated Share”) for each 2.98125 pre-consolidation common shares of HVII, resulting in an aggregate of 6,000,000 HVII Post-Consolidated Shares (the “Consolidation”).

 

Pursuant to the applicable steps of the Transaction, the equity capital of HVII and Carrier will be reorganized as contemplated by the LOI, such that:

 

  1. (a)the Consolidation will  be implemented; 

 

  1. (b)existing holders of HVII’s convertible securities shall become holders of equivalent convertible securities of the Resulting Issuer, adjusted for the Consolidation; 

 

  1. (c)Carrier Securityholders shall receive $100,000 in aggregate as shareholder loan repayments;  

 

  1. (d)Carrier Securityholders shall receive an aggregate of 3,600,000 common shares of the Resulting Issuer (Resulting Issuer Shares”) in exchange the Carrier Securities, on a pro rata basis; and 

 

  1. (e)HVII shall become the holder of all Carrier Securities. 

 

Following the Transaction and the Consolidation, the Resulting Issuer will have approximately 9,600,000 Resulting Issuer Shares issued and outstanding, of which the shareholders of HVII will hold approximately 6,000,000 common shares (62.5%) and the shareholders of Carrier will hold approximately 3,600,000 common shares (37.5%).

 

A portion of the Resulting Issuer Shares may be subject to escrow provisions which shall be imposed by the policies of the TSXV and/or applicable securities laws. If applicable, these escrowed securities will be held in escrow and released, over time, as determined by the TSXV and/or applicable securities laws.

 

Conditions of the Transaction

 

Completion of the Transaction is subject to the satisfaction of a number of customary conditions, including, among other things: (i) completion of satisfactory due diligence by Carrier and HVII of the other Party; (ii) the negotiation and execution of the Definitive Agreement; (iii) the Resulting Issuer entering into an employment or consulting agreement with Mark Binns for his role as Chief Executive Officer of the Resulting Issuer, on terms acceptable to Mr. Binns and Carrier; (iv) the Resulting Issuer entering into an employment or consulting agreement with Johan Arnet for his role as Chief Technology Officer of the Resulting Issuer, on terms acceptable to Mr. Arnet and HVII; (v) Carrier providing its audited financial statements for the financial years ended June 30, 2023 and 2024, as well as reviewed interim financial statements as required by the Exchange in connection with the completion of the Transaction; (vi) the appointment of the Resulting Issuer Board, conditional upon the completion of the Transaction; (vii) receipt of all required approvals and consents relating to the Transaction, including without limitation, (A) the TSXV’s approval for the listing of the Resulting Issuer’s shares, (B) the receipt of all requisite approvals of HVII’s securityholders and the Carrier Securityholders, as required by the Exchange or applicable corporate or securities laws to implement the Transaction; (viii) completion of the Consolidation; (ix) Carrier shall have no debt other than accounts payable, such debt not to exceed $30,000 (x) HVII shall have positive working capital; (xi) no material adverse change shall have occurred in the business, results of operations, assets, liabilities or financial condition of  Carrier or HVII, as applicable; (xii) the Resulting Issuer shall have a shareholder base that satisfies the minimum public float and distribution requirements of the Exchange; (xiii) delivery by of all customary closing documentation to be set out in the Definitive Agreement; (xiv) there being no prohibition under applicable laws against consummation of the Transaction; (xv) immediately prior to closing the Transaction, there being no more than 6,000,000 HVII Post-Consolidated Shares; and (xvi) the Parties shall be in compliance in all material respects with the terms of the all documents related to the Transaction.

 

Exclusivity

 

Pursuant to the terms of the LOI, in consideration of the expenses that each of the Parties have incurred and will incur in connection with the Transaction, Carrier and HVII have agreed that, from the date of the LOI until its termination in accordance with its terms, neither Party or its representatives (including the Carrier Securityholders) will initiate, solicit, entertain, negotiate, accept or discuss, directly or indirectly, any proposal or offer from any person or group of persons to acquire all or any portion of the respective businesses or assets of HVII or Carrier, as applicable (an “Acquisition Proposal”), whether by business combination, amalgamation, arrangement, purchase of shares, purchase of assets, tender offer, take-over bid or otherwise, or provide any non-public information to any third party in connection with an Acquisition Proposal or enter into any agreement, arrangement or understanding requiring it to abandon, terminate or fail to consummate the Transaction. Carrier and HVII have agreed that in the event of a breach of the exclusivity provisions by Carrier or the Carrier Securityholders, Carrier will pay a breach fee of $10,000 to HVII, and in the event of a breach of the exclusivity provisions by HVII, HVII will pay a breach fee of $10,000 to Carrier, with all such payments to be made within two business days of such breach.

 

The Resulting Issuer

 

Upon closing of the Transaction, HVII shall complete the Name Change and assume the corporate name of “Carrier Connect Data Solutions Inc.” or such other name as may be determined by Carrier and HVII, which will be the name of the Resulting Issuer.

 

The Resulting Issuer will be involved in the Technology subsector of the TSXV upon completion of the Transaction.

 

If the Transaction is completed, the board of directors of the Resulting Issuer shall be reconstituted in a manner that complies with the requirements of the Exchange and applicable securities and corporate laws, such that it will consist of four directors, being Mark Binns, Johan Arnet and two independent directors to be mutually approved by HVII and Carrier (the “Resulting Issuer Board”), and Mark Binns shall become the Chairman of the Resulting Issuer Board.

 

Information regarding the Principals and Insiders (as such terms are defined under the policies of the TSXV) of the Resulting Issuer will be disclosed in a subsequent press release.

 

Escrow

A portion of the Resulting Issuer Shares may be subject to escrow provisions which shall be imposed by the policies of the Exchange and/or applicable securities laws.

 

Sponsorship, Advisors

 

HVII 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 HVII from all or part of the applicable sponsorship requirements.

 

Non-Arm’s Length Parties

 

No Party to the Transaction or their respective Associates or Affiliates (as such terms are defined in the Manual), is a Control Person (as defined in the Manual) of both HVII and Carrier and as such the Transaction will not be a Non-Arm’s Length Party Transaction (as defined in the Manual).

 

No Non-Arm’s Length Party (as defined in the Manual) to HVII (a) has any direct or indirect beneficial interest in Carrier; (b) is an insider of Carrier; or (c) has any relationship with the Non-Arm’s Length Parties to the Qualifying Transaction (as defined in the Manual).

 

Further Information

 

HVII and Carrier will provide further details in respect of the Transaction including a summary of the structure of the Transaction, the amount and type of consideration to be paid in connection with the Transaction, the professional biographies of the Principals and Insiders of the Resulting Issuer, and additional financial information relating to Carrier in due course once available by way of press release.

 

All information contained in this press release with respect to HVII and Carrier 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.

 

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 HVII should be considered highly speculative.

 

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this news 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 or to or for the account or benefit of U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

 

Contact Information

 

Hopefield Ventures Two Inc.

Suite 2200 – 885 West Georgia Street

Vancouver, B.C. V6C 3E8

 

Attention: Mark Binns, Chief Executive Officer

Telephone: (604) 681-0084

Email: [email protected]

1.Cautionary Statement Regarding Forward-Looking Information

This news release contains “forward-looking information” within the meaning of Canadian securities legislation. Forward-looking information generally refers to information about an issuer’s business, capital, or operations that is prospective in nature, and includes future-oriented financial information about the issuer’s prospective financial performance or financial position. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “anticipate”, “would”, “will”, “estimates”, “believes”, “intends” “expects” and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward looking statements concerning (a) the Transaction (including consideration payable), (b) the Consolidation (including its timing), (c) the Name Change (including its timing), (d) the expected composition of the board of directors of the Resulting Issuer, (e) the completion and timing of board, securityholder and regulatory approvals, including the application to and approval by the TSXV in respect of the Transaction, (f) the proposed structure of the Transaction, (g) the ability of HVII and Carrier to meet the conditions of the Transaction and the timing for completing the Transaction, (h) the timing for entering into a Definitive Agreement and the terms and conditions therein, (i) trading in HVII’s common shares and when such trading will resume, if at all, (j) the issuance of and timing associated with issuing a further comprehensive news release or news releases and (k) certain financial information and forecasts.

The Company cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of HVII and Carrier, including expectations and assumptions concerning HVII, Carrier and the Resulting Issuer, the Consolidation, the Name Change, the Transaction, the negotiation of the Definitive Agreement on satisfactory terms, the timely receipt of all required shareholder, court and regulatory approvals (as applicable), including the acceptance of the TSXV, the satisfaction of other closing conditions in accordance with the terms of the Definitive Agreement, as well as other risks, uncertainties, and assumptions, including but not limited to assumptions regarding prevailing market conditions and general business, economic, competitive, political and social uncertainties to develop the forward-looking information in this news release. 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 forward-looking statements. There can be no assurance that the Transaction will be completed in its entirety. Investors are cautioned that any information released or received with respect to the Consolidation, the Name Change, and the Transaction may not be accurate or complete and should not be relied upon. Such forward-looking statements, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

The forward-looking statements contained in this press release are made as of the date of this press release, and HVII does not undertake any obligation to update publicly or to revise any of the included forward looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

Neither the 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 of this release.

Not for distribution to United States newswire services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws.

Copyright (c) 2024 TheNewswire – All rights reserved.