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VANCOUVER, BC, March 19, 2021 /CNW/ - VLCTY Capital Inc.
(TSXV: VLCY.P) ("VLCTY") and BuildDirect.com Technologies
Inc. ("BuildDirect" or the "Corporation")
are pleased to announce that they have entered into a binding
letter of intent dated March 19, 2021
(the "Letter of Intent"), which outlines the terms and
conditions pursuant to which VLCTY and the Corporation will
complete a transaction that will result in a reverse take-over of
VLCTY by the Corporation (the "Proposed Transaction"). The
Proposed Transaction will be an arm's length transaction, and, if
completed, will constitute VLCTY'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") Corporate Finance Manual (the "Manual")).
In connection with the Proposed Transaction, VLCTY and the
Corporation will issue a subsequent news release setting out
further information contemplated in Policy 2.4.
BuildDirect.com Technologies Inc.
BuildDirect was incorporated on October
20, 1999 pursuant to the Canada Business Corporations
Act ("CBCA"). The Corporation is not a reporting
issuer in any province or territory of Canada. BuildDirect is
an innovative marketplace for purchasing and selling building
materials online. The BuildDirect platform connects homeowners
and home improvement professionals in North America with suppliers and sellers of
quality building materials from around the world, including
flooring, tile, decking and more. BuildDirect's
year-over-year growth, proprietary heavyweight delivery network,
and digital reach have served to solidify its role as a
ground-breaking player in the home improvement industry.
VLCTY Capital Inc.
VLCTY was incorporated on September 16,
2019 pursuant to the provisions of the Business
Corporations Act (British
Columbia) and is a Capital Pool Company (as defined in the
Manual) listed on the TSXV and a reporting issuer in the Provinces
of British Columbia, Alberta and Ontario. VLCTY has no commercial operations
and no assets other than cash.
Proposed Transaction Summary
The Proposed Transaction is expected to be structured as a
three-cornered amalgamation pursuant to the provisions of the CBCA,
whereby VLCTY will incorporate a wholly-owned subsidiary under the
CBCA, which will amalgamate with the Corporation (the
"Amalgamation") to form a newly amalgamated company
("Amalco"). In connection with the Amalgamation, holders of
common shares in the capital of the Corporation
("BuildDirect Shares") will receive common shares in
the capital of the Resulting Issuer (as defined below) for each
BuildDirect Share held immediately before the Amalgamation and the
holders of stock options to purchase BuildDirect Shares will
receive stock options to acquire common shares in the capital of
the Resulting Issuer for each BuildDirect stock option held
immediately before the Amalgamation.
In addition, prior to the Amalgamation, each outstanding VLCTY
common share (the "VLCTY Shares") and security convertible
into a VLCTY Share shall be adjusted in accordance with its terms
to account for the Consolidation (as defined below) and, in respect
of certain of the VLCTY stock options, to amend the expiry date of
such options to a date that is 12 months following completion of
the Proposed Transaction.
In connection with the Proposed Transaction, it is anticipated
that VLCTY will consolidate the VLCTY Shares (the
"Consolidation") on the basis of an agreed upon formula
which will correspond with the issue price of the securities to be
issued by BuildDirect pursuant to its Concurrent Financing as
defined below.
The Proposed Transaction is subject to the parties entering into
a definitive agreement in respect of the Proposed Transaction (the
"Definitive Agreement") on or before April 15, 2021, or such other date as VLCTY and
the Corporation may mutually agree. Completion of the Proposed
Transaction is also subject to a number of other customary
conditions, including obtaining all necessary board, shareholder
and regulatory approvals, including TSXV approval. Pursuant to the
Proposed Transaction, VLCTY shall change its name ("Name
Change") to "BuildDirect.com Technologies Inc.", or such other
name to be determined by the Corporation and as may be acceptable
to the TSXV and regulatory authorities (the "Resulting
Issuer") and it will adopt a new stock option plan and stock
symbol. Upon completion of the Proposed Transaction, the
Resulting Issuer will carry on the business of BuildDirect, and
Amalco will be a wholly-owned subsidiary of the Resulting
Issuer.
In connection with the Proposed Transaction, VLCTY will convene
a meeting of its shareholders for the purpose of approving, among
other matters, the Consolidation (if required by applicable law),
the election of the Board Nominees (if required by applicable law;
as defined herein), the Proposed Transaction (if required by the
policies of the TSXV), the Name Change and the adoption of a new
stock option plan on terms acceptable to the TSXV and applicable
regulatory authorities. BuildDirect will convene a meeting of its
shareholders for the purpose of approving the Amalgamation.
As at the date hereof it is not possible for the parties to
determine the number of common shares of the Resulting Issuer
("Resulting Issuer Shares" that will be issued upon
completion of the Proposed Transaction nor the ownership
percentages associated with VLCTY and the Corporation as this will
depend upon the Concurrent Financing and the Consolidation, both
factors having an impact on the total number of Resulting Issuer
Shares that will be issued in connection with the Amalgamation.
Concurrent Financing
In connection with the Proposed Transaction, BuildDirect will
undertake a brokered private placement of subscription receipts the
proceeds of which will be placed into escrow pending the closing of
the Proposed Transaction. The subscription receipts which will
automatically convert into post-Consolidation VLCTY Shares
immediately prior to the completion of the Proposed Transaction
(the "Concurrent Financing"). The Concurrent Financing will
be led by CIBC Capital Markets and Canaccord Genuity Corp., as
co-lead agents. Notwithstanding the foregoing, at the time of such
financing, the Corporation will consider, among other things,
general market conditions, the development and growth of the
Corporation along with the capital requirements necessary to
execute on the business plan and strategy of the Corporation and
may revise or adjust the scope of the financings accordingly.
Officers and Directors
Prior to completion of the Proposed Transaction and subject to
approval by the TSXV and the filing of all required materials,
BuildDirect will reconstitute the board of the directors of VLCTY
with nominees suitable to BuildDirect which individuals will
comprise the board of directors of the Resulting Issuer. Further,
the officers of the Resulting Issuer will be determined prior to
completion of the Proposed
Transaction.
Non-Arm's Length Parties
No party to the Proposed 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 VLCTY and
the Corporation and as such the Proposed Transaction will not be a
Non-Arm's Length Party Transaction (as defined in the Manual).
Trading in VLCTY Shares
Trading in VLCTY Shares has been halted in compliance with the
policies of the TSXV. Trading in VLCTY Shares will remain halted
pending the review of the Proposed Transaction by the TSXV and
satisfaction of the conditions of the TSXV for resumption of
trading. It is likely that trading in the VLCTY Shares will not
resume prior to the closing of the Proposed Transaction.
Cautionary Note Regarding Forward-Looking
Information
This press release contains statements which constitute
"forward-looking statements" and "forward-looking information"
within the meaning of applicable securities laws (collectively,
"forward-looking statements"), including statements
regarding the plans, intentions, beliefs and current expectations
of VLCTY and BuildDirect with respect to future business activities
and operating performance. Forward-looking statements are often
identified by the words "may", "would", "could", "should", "will",
"intend", "plan", "anticipate", "believe", "estimate", "expect" or
similar expressions and includes information regarding: (a)
expectations regarding whether the Proposed Transaction will be
consummated, including whether conditions to the consummation of
the Proposed Transaction will be satisfied including, but not
limited to, the necessary board, shareholder and regulatory
approvals and the timing associated with obtaining such approvals,
if at all; (b) the timing for completing the Proposed Transaction,
if at all, and the conditions to such transaction; (c) whether and
on what basis the VLCTY Shares will be consolidated and if the
Consolidation will be approved by shareholders and the timing
associated therewith; (iv) the timing associated with entering into
the Definitive Agreement and the terms and conditions therein; (v)
the Financing including the size and timing associated
with completing such financing; (vi) the preparation and delivery
to shareholders of a management information circular, the timing
associated with its preparation and delivery to shareholders and
the convening of the necessary shareholders meeting; (vii) the
business plans and expectations of the Corporation; (ix) trading in
VLCTY Shares and when such trading will resume, if at all; (ix) the
issuance of and timing associated with issuing a further
comprehensive news release or news releases; and * expectations for
other economic, business, and/or competitive factors.
Investors are cautioned that forward-looking statements are
not based on historical facts but instead reflect VLCTY and
BuildDirect's respective management's expectations, estimates or
projections concerning future results or events based on the
opinions, assumptions and estimates of management considered
reasonable at the date the statements are made. Although VLCTY and
BuildDirect believe that the expectations reflected in such
forward-looking statements are reasonable, such statements involve
risks and uncertainties, and undue reliance should not be placed
thereon, as unknown or unpredictable factors could have material
adverse effects on future results, performance or achievements of
the Resulting Issuer. Among the key factors that could cause actual
results to differ materially from those projected in the
forward-looking statements are the following: the ability to
consummate the Proposed Transaction; the ability to obtain
requisite regulatory and shareholder approvals and the satisfaction
of other conditions to the consummation of the Proposed Transaction
on the proposed terms and schedule; the potential impact of the
announcement or consummation of the Proposed Transaction on
relationships, including with regulatory bodies, employees,
suppliers, customers and competitors; changes in general economic,
business and political conditions, including changes in the
financial markets; changes in the perception and demand for
cannabis in both local and export markets; changes in applicable
laws and regulations both locally and in foreign jurisdictions;
compliance with extensive government regulation and the costs
associated with compliance; costs of building and developing
projects and product opportunities; the risks and uncertainties
associated with foreign markets; and the diversion of management
time on the Proposed Transaction. These forward-looking statements
may be affected by risks and uncertainties in the business of VLCTY
and BuildDirect and general market conditions, including
Covid-19.
Should one or more of these risks or uncertainties
materialize, or should assumptions underlying the forward-looking
statements prove incorrect, actual results may vary materially from
those described herein as intended, planned, anticipated, believed,
estimated or expected. Although VLCTY and BuildDirect have
attempted to identify important risks, uncertainties and factors
which could cause actual results to differ materially, there may be
others that cause results not to be as anticipated, estimated or
intended and such changes could be material. VLCTY and BuildDirect
do not intend, and do not assume any obligation, to update the
forward-looking statements except as otherwise required by
applicable law.
Completion of the Proposed Transaction is subject to a number
of conditions, including but not limited to TSXV acceptance and, if
applicable pursuant to TSXV requirements, majority of the minority
shareholder approval. Where applicable, the Proposed Transaction
cannot close until the required shareholder approval is obtained.
There can be no assurance that the Proposed Transaction will be
completed as proposed or at all.
Investors are cautioned that, except as disclosed in the
management information circular or filing statement of VLCTY to be
prepared in connection with the Proposed Transaction, any
information released or received with respect to the Proposed
Transaction may not be accurate or complete and should not be
relied upon. Trading in the securities of VLCTY should be
considered highly speculative.
The TSXV has in no way passed upon the merits of the Proposed
Transaction and has not approved or disapproved of the contents of
this news release.
Neither the 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
release.
SOURCE VLCTY Capital Inc.
