TORONTO, July 26, 2013 /CNW/ - Folkstone Capital Corp.
(TSX VENTURE:FKS.P) ("Folkstone") and Sophia Capital Corp.
(TSX VENTURE:SCQ.P) ("Sophia") are pleased to announce that
they have entered into an agreement to amalgamate pursuant to the
Business Corporations Act (British
Columbia) (the "BCBCA") and in accordance with the
policies of the TSX Venture Exchange (the "Exchange").
Folkstone and Sophia, as capital pool companies
pursuant to Policy 2.4 (Capital Pool Companies) of the
Exchange ("Policy 2.4"), share the sole business objective
of identifying and evaluating assets and/or businesses with a view
to completing a Qualifying Transaction (as such term is defined in
Policy 2.4). Folkstone and Sophia also have identical directors and
officers. Management of each of Folkstone and Sophia reviewed
several potential opportunities for acquiring a business or assets
for the purposes of completing a Qualifying Transaction. However,
Folkstone and Sophia each determined that it would be better
positioned to complete a Qualifying Transaction as a combined
entity (the "Resulting Issuer"). The Resulting Issuer will
have 12 months from the date the shares of the Resulting Issuer are
listed on the Exchange to complete a Qualifying Transaction.
The amalgamation of Folkstone and Sophia (the
"Amalgamation") is expected to become effective on or before
September 3, 2013. It is anticipated
that upon completion of the Amalgamation:
(i) |
|
each issued and outstanding share of Folkstone will be
exchanged for one (1) share of the Resulting Issuer; |
(ii) |
|
each issued and outstanding share of Sophia will be exchanged
for 1.09 shares of the Resulting Issuer; |
(iii) |
|
each convertible security of Folkstone will automatically
entitle the holder thereof to purchase one (1) share of the
Resulting Issuer at an exercise price equal to the exercise price
specified in the agreement governing such convertible
security; |
(iv) |
|
the directors and officers of the Resulting Issuer will be the
current directors and officers of Folkstone and Sophia; and |
(v) |
|
the auditor of the Resulting Issuer will be Davidson &
Company LLP. |
Immediately following the completion of the
Amalgamation, the shareholders of Folkstone will collectively own
4,150,000 (or 71%) of the shares of the Resulting Issuer and the
shareholders of Sophia will collectively own 1,721,233 (or 29%) of
the shares of the Resulting Issuer (in each case, calculated on a
non-diluted basis). In accordance with Policy 2.4, the share
exchange ratio was based on the cash value of each company on a
pre-transaction basis.
The Amalgamation is considered a "business
combination" and "related party transaction" under Multilateral
Instrument 61-101 (Protection of Minority Security Holders in
Special Transactions) and, accordingly, requires approval by
the holders of a majority of the shares of each of Folkstone and
Sophia, excluding shares held by interested parties ("Majority
of the Minority Shareholder Approval") (2,000,000 shares in
respect of Folkstone and 500,000 shares in respect of Sophia) at
each of the shareholders' meetings to be held by Folkstone and
Sophia to seek approval for the Amalgamation on August 27, 2013 (the "Meetings"), in
addition to the requirements under the BCBCA which require that the
Amalgamation be approved by at least two-thirds (66⅔%) of all votes
cast at each of the Meetings. As a result, the Amalgamation is
conditional upon (among other things) the Amalgamation being
approved at each of the Meetings by: (i) special resolution
(affirmative vote of at least two-thirds (66⅔%) of the votes cast
thereon); and (ii) Majority of the Minority Shareholder Approval.
If the requisite shareholder approval is obtained at each of the
Meetings, and all of the conditions precedent to the completion of
the Amalgamation have been satisfied or waived, Folkstone and
Sophia intend to complete the Amalgamation under the BCBCA.
In connection with the Meetings a detailed joint
information circular will be prepared and distributed to
shareholders and filed on SEDAR. Pursuant to Section 272 of the
BCBCA, registered shareholders of Folkstone and Sophia are entitled
to dissent in respect of the Amalgamation. If the Amalgamation is
completed, dissenting shareholders who have complied with the
dissent procedures under Sections 237 to 247 of the BCBCA will be
entitled to be paid the fair value of their shares.
Completion of the Amalgamation remains
conditional on obtaining all necessary regulatory and shareholder
approvals, including the approval of the Exchange.
About Folkstone Capital Corp.
Folkstone is a capital pool company under Policy
2.4. Pursuant to Policy 2.4, Folkstone is required to complete a
Qualifying Transaction by November 30,
2013. Folkstone has not commenced operations and has no
assets other than cash. Further information about Folkstone,
including the audited financial statements for the year ended
February 28, 2013, is available under
Folkstone's SEDAR profile at www.sedar.com.
About Sophia Capital Corp.
Sophia is a capital pool company under Policy
2.4. Pursuant to Policy 2.4, Sophia was required to complete a
Qualifying Transaction by June 3,
2013. As Sophia did not complete a Qualifying Transaction by
June 3, 2013, trading in the common
shares of Sophia was suspended by the Exchange effective
June 4, 2013 for failure to complete
a Qualifying Transaction within the prescribed time period in
accordance with Policy 2.4. As a result, Sophia was placed by the
Exchange on notice to delist and notified that, in order to avoid
delisting, it must, on or by September 3,
2013, complete (i) a Qualifying Transaction, (ii) a transfer
to the NEX, or (iii) the Amalgamation. Further information about
Sophia, including the unaudited financial statements for the three
month period ended April 30, 2013 and
the audited financial statements for the year ended January 31, 2013, are available under Sophia's
SEDAR profile at www.sedar.com.
Completion of the Amalgamation is subject to
a number of conditions, including Exchange acceptance and
disinterested shareholder approval by the shareholders of each of
Folkstone and Sophia. The Amalgamation cannot close until the
required shareholder approval is obtained. There can be no
assurance that the Amalgamation will be completed as proposed or at
all.
Investors are cautioned that, except as
disclosed in the joint management information circular to be
prepared in connection with the Amalgamation, any information
released or received with respect to the Amalgamation may not be
accurate or complete and should not be relied upon. Trading in the
securities of Folkstone should be considered highly
speculative.
The TSX Venture Exchange has in no way passed
upon the merits of the proposed transaction and has neither
approved nor disapproved the contents of this press
release.
This news release contains certain
forward-looking information. All information, other than
information regarding historical fact, that addresses activities,
events or developments that Folkstone and Sophia believe, expect or
anticipate will or may occur in the future is forward-looking
information. Forward-looking information contained in this news
release includes, but may not be limited to, the completion of the
Amalgamation and the terms, timing and consequences relating
thereto. The forward-looking information contained in this news
release reflects the current expectations, assumptions and/or
beliefs of Folkstone and Sophia based on information currently
available to Folkstone and Sophia. With respect to the
forward-looking information contained in this news release,
Folkstone and Sophia have made assumptions regarding, among other
things, the receipt by Folkstone and Sophia of all necessary
approvals to proceed with the completion of the Amalgamation. The
forward-looking information contained in this news release is
subject to a number of risks and uncertainties that may cause
actual results or events to differ materially from current
expectations, including delays in obtaining, or a failure to
obtain, required regulatory and/or shareholder approvals and/or the
inability of Folkstone and Sophia to complete the proposed
Amalgamation on the terms set out herein or at all. Any
forward-looking information speaks only as of the date on which it
is made and, except as may be required by applicable law, Folkstone
and Sophia disclaim any obligation to update or modify such
forward-looking information, either because of new information,
future events or for any other reason.
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 or accuracy of this release.
SOURCE Folkstone Capital Corp.