TORONTO, ONTARIO, March 25, 2024 - General Assembly Holdings Limited (the “Company” or “GA Pizza” or the “Resulting Issuer”) (TSXV: GA) is pleased to announce that, further to its prior news release dated November 22, 2023, it has entered into a merger agreement (the “Definitive Agreement”) dated March 25, 2024, with CanPR Technology Inc. (“CanPR”), and 15772311 Canada Ltd. (“SubCo”), a newly incorporated, wholly-owned subsidiary of the Company. Pursuant to the Definitive Agreement, the Company will acquire all of the issued and outstanding shares of CanPR (the “CanPR Shares”) in exchange for shares in the Company (the “Transaction”). The Transaction will constitute a reverse takeover transaction of the Company by CanPR and will be a “Change of Business” and “Reverse Takeover” of the Company under TSX Venture Exchange (“TSXV”) Policy 5.2 – Change of Businesses and Reverse Takeovers (“Policy 5.2”). Completion of the Transaction will require approval from the TSXV. Shareholders of CanPR (“Target Shareholders”) will also be required to approve the Transaction prior to its closing (“Closing”) and shareholders of the Company (“GA Shareholders”) will also need to approve certain ancillary matters to the Transaction as a condition to Closing, as discussed further below.
Summary of the Transaction
The Definitive Agreement structures the Transaction as a three-cornered amalgamation with CanPR amalgamating with SubCo under the Canada Business Corporations Act, with the amalgamated entity becoming a wholly-owned subsidiary of the Company. Upon Closing, Target Shareholders will receive such number of Post-Consolidation GA Shares (as defined below) so that they will own 90.9% of the Resulting Issuer. Following Closing, the Resulting Issuer will continue the business of CanPR as a company listed on the TSXV as a Tier 2 Technology Issuer under the name “CanPR Technology Inc.” (the “Name Change”).
In connection with the Transaction, the Company intends to seek shareholder approval for the following transactions, which completion thereof will be a condition to Closing (the “Pre-Closing Transactions”): (a) the creation of two new control persons, Timothy Nye and 22K Capital Corp. that will be created in connection with the Shares for Debt Transaction (as defined below) (b) consolidation of its common shares (the “GA Shares”) on a 50:1 basis (the “Consolidation”), whereby each holder of GA Shares will receive one post-Consolidation common share (a “Post-Consolidation GA Share”) for each 50 GA Shares held at the time of Consolidation; (c) completion of the Legacy Share Sale (as defined below), which relates to the sale of all of the shares in the wholly-owned subsidiaries of the Company (other than SubCo) to Tim Nye for aggregate consideration of $1.00; and (d) an amendment to the articles of the Company whereby the authorized share capital is reduced to a single class of common shares.
Following the Consolidation and after giving effect to the Shares for Debt Transaction, the Company will have approximately 3,542,264 Post-Consolidation GA Shares issued and outstanding, as well as incentive stock options entitling the holders thereof to purchase an aggregate of 17,810 Post-Consolidation GA Shares, restricted stock units entitling the holder thereof to acquire 27,860 Post-Consolidation GA Shares, advisory warrants entitling the holder thereof to purchase 54,000 Post-Consolidation GA Shares, and loan bonus warrants entitling the holder thereof to acquire 18,518 Post-Consolidation GA Shares. Upon Closing, the Resulting Issuer anticipates it will also issue 1,493,646 Resulting Issuer incentive stock options (“Resulting Issuer Options”) and 1,468,815 Resulting Issuer Share (as defined below) purchase warrants (“Resulting Issuer Warrants”). The Resulting Issuer Options will be exercisable at $0.02 per Resulting Issuer Share until January 1, 2028 and the Resulting Issuer Warrants will be exercisable at $0.90 per Resulting Issuer Share for a period of twenty-four months from the date of Closing.
Certain Post-Consolidation GA Shares 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 the TSXV policies), which will be subject to the escrow requirements of the TSXV.
The Definitive Agreement includes a number of conditions precedent to Closing, including but not limited to, receipt of the requisite shareholder approvals from both GA (approving the Pre-Closing Transactions) and CanPR (approving the Transaction), completion of the Pre-Closing Transactions, approvals of all regulatory bodies having jurisdiction in connection with the Transaction, approval of the TSXV, including the satisfaction of its listing requirements, and the satisfaction of other closing conditions customary to the transactions of this nature. There can be no assurance that the Transaction will be completed as proposed or at all. Following completion of the Transaction, CanPR will become a wholly-owned subsidiary of the Company, which will form the Resulting Issuer. The foregoing is a summary of the Definitive Agreement and is qualified in its entirety by the Definitive Agreement, a copy of which will be available under GA Pizza’s profile on SEDAR+ at www.sedarplus.com.
It is expected that upon Closing the Resulting Issuer will have approximately 38,925,978 common shares issued and outstanding (each, a “Resulting Issuer Share”) on an undiluted basis. Upon completion of the Transaction, it is expected that: (i) the former shareholders of CanPR will hold approximately 90.9% of the Resulting Issuer Shares; and (ii) the former shareholders of the Company will hold approximately 9.1% of the Resulting Issuer Shares. It is anticipated that the Resulting Issuer will have approximately $2.0 million in cash available upon completion of the Transaction.
The Transaction constitutes an Arm’s Length Transaction (as defined under the policies of the TSXV) as neither CanPR, nor any officer, director or shareholder holding more than 10% thereof, are considered “Non-Arm’s Length Parties to the RTO”, as such term is defined in Policy 5.2. Accordingly, the Transaction, as currently contemplated, will not be subject to approval by the Company’s shareholders as (a) it is not a “Related Party Transaction” (as defined under the policies of the TSXV); (b) immediately prior to Closing, the Company will be without active operations; (c) the Company is not currently subject to a cease trade order and will not otherwise be suspended from trading on completion of the Transaction; and (d) shareholders of the Company are not otherwise required to approval the Transaction in accordance with applicable securities laws.
Directors and Officers of the Resulting Issuer
In conjunction with and upon Closing, the board of directors of the Resulting Issuer is expected to consist of five (5) directors and the management of the Resulting Issuer is expected to consist of four (4) officers, all of whom will be nominated by CanPR. The existing directors (other than Ted Hastings) and officers of the Company will resign at or prior to Closing. It is expected that at Closing, the following individuals will constitute the board and management of the Resulting Issuer:
Akshat Soni, Chief Executive Officer and Director
Akshat Soni has over 10 years of entrepreneurial and management experience in the technology sector. His journey began in the e-commerce domain, where he founded a company that focused on website development and assisted businesses with product sourcing/shipping. In September 2015, Akshat co-founded and was CEO of a rideshare and carpooling platform, HiRide, expanding its reach into Canada and the US and amassing a user base of 200,000 users. In January 2020, HiRide was acquired by Steer Technologies Inc. (TSXV: STER) and Akshat continued as CEO of HiRide until March 2021. In October 2020, Akshat founded a platform in the fantasy gaming/prediction space called HiQ, which accumulated over 3 million users within 12 months of launching. In 2022, Akshat co-founded CanPR. In addition, Akshat has founded multiple startups in the real estate, blockchain, and telehealth sectors. He earned his Bachelor of Business Administration from Wilfrid Laurier University.
Rishi Mittal, President
Rishi Mittal is a seasoned professional with over 17 years of experience in the field of Canadian Immigration and Overseas recruitment. As a licensed immigration consultant, he has built a reputation for providing expert advice and tailoring solutions to meet diverse client needs. Beyond his primary profession, Rishi's entrepreneurial spirit has led him to play pivotal roles in the founding and investment of various tech startups, notably in the ride-share and real estate sectors. His keen eye for innovation and passion for business development have been instrumental in his success. His most notable venture is the co-founding of Ghost Kitchen Brands in 2018. This innovative startup has not only grown to over 120 employees under Rishi's leadership but also successfully raised over $15 million dollars in funding. Rishi's diverse experience and commitment to excellence make him a dynamic leader in his field. Mr. Mittal holds a Bachelor of Commerce degree from the University of Alberta.
Arun Soni, Chief Financial Officer and Corporate Secretary
Arun Soni has over 35 years of experience in the fields of finance, accounting, and management. He operates his own accounting firm, which specializes in serving clients within the immigration, automotive, and technology sectors. Arun's expertise also expands into 10+ years of experience as the Head of Finance in various automotive franchises. With a professional background, Arun has a track record as an entrepreneur as a founder of companies in both the travel and finance industries. Arun is a Chartered Professional Accountant (CPA) and Charted Accountant from India (CA).
Lors Kushtov, Chief Technology Officer
Lors Kushtov has over 10 years experience scaling software systems and developed user-centric applications, with 7 years leading technical software development teams. He has founded multiple technology-based ventures across diverse sectors, including sports gaming, ride-sharing, entertainment and e-commerce. Previously, Mr. Kushtov served as software engineer at Instacart, a leading e-commerce platform, facilitating the integration of multiple retailers into their B2B services. Mr. Kushotv graduated from the University of Toronto with a Bachelor of Computer Science degree with a specialization in software engineering.
Stephen A. Smith, Chairman
Mr. Smith currently serves as a Board Director for Organigram Holdings Inc. (TSX: OGI / NASDAQ: OGI) (Audit Committee Chair), Flow Beverage Corp. (TSX: FLOW) (Audit Committee Chair), MAV Beauty Brands Inc. (TSX: MAV) (Audit Committee Chair), and CE Brands Inc. (TSX-V: CEBI) (Audit Committee Chair). From 2020 to 2023 Mr. Smith served on the Board of Directors of Freshii Inc. (Lead Director and Audit Committee Chair) and from 2018 to 2019 Mr. Smith served on the Board of Directors of Newstrike Brands Ltd. (Lead Director and Audit Committee Chair). From 2013 to 2017 Mr. Smith served on the Board of Directors of CST Brands Inc., an SEC registrant (Audit Committee and Executive Committee). From 2014 to 2018, Mr. Smith held the position of Executive Vice President and Advisory Board Director of Jackman Reinvention Inc., a privately held brand and strategy consulting firm in Toronto. From 2007 to 2013, Mr. Smith served as co-chief Executive Officer and Chief Financial Officer of Cara Operations Limited (now Recipe Unlimited), Canada’s oldest and largest full-service restaurant company. Mr. Smith was a key member of the executive team during the rapid growth and repositioning of Cara. From 1985 to 2007, Mr. Smith held various senior and executive level positions, including Executive Vice President from 1999 to 2006, at Loblaw Companies Limited, the leading food and pharmacy retailer in Canada. Mr. Smith has previously served on St Michael’s Hospital Foundation Board and on the Board of Directors of Metro Toronto Convention Centre. Mr. Smith is a Chartered Professional Accountant (CPA, CA) and holds a Bachelor of Commerce degree from the University of Toronto.
Dexter John, Director
Dexter John brings over 25 years of leadership, governance and risk management experience from his prior positions at Stikeman Elliott LLP, Donahue LLP, Investment Dealers Association, Ontario Securities Commission and the Toronto Stock Exchange. He is currently the President and CEO of Morrow Sodali (Canada) Ltd., a company that offers consulting services in M&A advisory, corporate governance, contested meetings advisory, ESG, shareholder engagement, strategy and executive compensation. Prior to joining Morrow , Mr. John served as Senior Vice President and Executive Vice President of D.F. King Canada (formerly CST Phoenix Advisors) and Executive Vice President & General Counsel of Kingsdale Shareholder Services Inc., where he advised a number of public company issuers and boards on governance matters and corporate strategy. Mr. John currently serves on the Board of Directors for Organigram Inc. (TSX: OGI / NASDAQ: OGI), and Financial Services Regulatory Authority (Ontario). He previously served on Boards for Prosper Gold Corp. (TSX-V: PGX), Augustine Ventures Inc., and Partners Real Estate Investment Trust. He was a co-author of Charting the Future of Corporate Governance Report that was recently released by the members of The Committee on the Future of Corporate Governance in Canada.
Uppekha Jain, Director
Uppekha Jain currently serves as Press Secretary to Ontario`s Minister of Tourism, Culture and Sport and previously was the Director of Ethnic Media for PC Caucus Services at Queen's Park. Prior to her work in Ontario, Uppekha lived in Mumbai, India after winning the Miss India Worldwide title. While there, she excelled in the world of Bollywood media and entertainment, acting in movies and television shows, appearing in commercials and hosting events globally. Uppekha was the first Canadian to land a starring role on national Indian prime-time television, on Star Plus' top-rated soap opera, Saath Nibhaana Saathiya. She is also an executive producer of a television series currently in pre-production. Uppekha holds an Honours Bachelor of Business Administration from Wilfrid Laurier University and has worked as a brand marketer for several CPG companies including Coca-Cola and Cadbury.
Ted Hastings, Director
Mr. Hastings currently serves as the Chief Executive Officer of PopReach Corporation (dba Ionik) (TSXV:INIK)He was the Chief Executive Officer of RhythmOne plc (LSE AIM:TRMR) ("RhythmOne"), an advertising technology company, from July 2017 to May 2018 and President of RhythmOne from February 2017 to July 2017. From May 2015 to January 2017, he was Chief Executive Officer of Perk Inc. (TSX:PER) ("Perk"), a mobile rewards company, and from November 2014 to May 2015 he was also President of Perk. From April 2012 to April 2015, Mr. Hastings was Chief Executive Officer of Rebellion Media Group Corp. ("Rebellion Media"), a digital media company. Prior to joining Rebellion Media, Mr. Hastings was President of Cyberplex Inc. (currently known as EQ Inc.) (TSXV:EQ) ("EQ Inc."), from July 2010 until March 2012, a company focused on digital media buying and marketing. Prior to joining EQ Inc., Mr. Hastings held the positions of Chief Executive Officer of Orion Foundry (Canada) Inc. (doing business as Tsavo Media), an online publishing company from October 2007 to June 2010, President of Geosign Corporation, also an internet media company, from January 2007 to September 2007 and Chief Executive Officer of Global Beverage Group, Inc., a software sales and distribution company, from January 2002 to December 2006. Mr. Hastings began his career as a chartered accountant at Deloitte LLP. He holds a Bachelor of Business Administration degree from Wilfrid Laurier University. Mr. Hastings was previously a director of Coreworx, Maintenance Assistant Inc., Communitech, Fongo, and Push Strength.
Filing Statement
In connection with the Transaction and pursuant to the requirements of the TSXV, the Company intends on filing a filing statement on its issuer profile on SEDAR+ (www.sedarplus.com), which will contain relevant details regarding the Transaction, CanPR and the Resulting Issuer.
Additional Information
Additional terms regarding the Transaction were previously disclosed in a new release of the Company dated November 22, 2023, which is available under the Company’s SEDAR+ profile at www.sedarplus.com
Trading in the common shares of the Company has been halted and will remain halted, pending the satisfaction of applicable requirements of Policy 5.2. There can be no assurance that trading of the common shares of the Company will resume prior to completion of the Transaction.
Sponsorship
The Transaction may require sponsorship under the policies of the TSXV unless an exemption from sponsorship is granted. The Company intends to apply for an exemption from sponsorship requirements of the TSXV in connection with the Transaction. There can be no assurance that such exemption will ultimately be granted.
About CanPR
CanPR Technology Inc. is a technology platform that is dedicated to helping immigrants in their journey toward becoming permanent residents of Canada. At CanPR, we offer a range of services to assist with the immigration journey. Our platform provides a comprehensive understanding of the process of immigrating to Canada, completing and tracking immigration applications, connecting newcomers with employers to help them find a job, and post-immigration services to help them settle in Canada. Currently, the platform has over 1,000,000 app installs. CanPR was incorporated pursuant to the Canada Business Corporations Act on June 20, 2022. For more information on CanPR, visit www.canpr.io.
Select Financial Information
The following table sets out selected unaudited financial information with respect to CanPR for the year-ended May 31, 2023 and the six-months ended November 30, 2023. CanPR’s financial statements are prepared in accordance with the International Financial Reporting Standards, issued by the International Accounting Standards Board, and are denominated in Canadian dollars. CanPR and its auditors are currently in the process of preparing updated audited financial statements for the fiscal year-ended May 31, 2023, which time such revised audited financial information will be disclosed:
Legacy Share Sale
In connection with the Transaction, the Company has entered into a share purchase agreement with Tim Nye to dispose of each of the Company’s subsidiaries (other than SubCo), namely, GA CPG Limited, GA Subscriptions Limited and 2499754 Ontario Limited (the “Legacy Share Sale”) for aggregate consideration of $1.00. As part of the Legacy Share Sale, the Company has executed customary ancillary documents including an intellectual property assignment agreement from the Company to 2499754 Ontario Limited and mutual releases. As the Legacy Share Sale will be considered a sale of all or substantially all of the property of the Company, before such transaction can close it will require approval from 66.66% of shareholders of the Company present its upcoming annual general and special shareholder meeting in accordance with the Business Corporations Act (Ontario) (“Shareholder Approval”) as well as disinterested shareholder approval, which will exclude the votes of Mr. Nye (“Disinterested Shareholder Approval”). The Legacy Share Sale is also subject to approval from the TSXV. The Company and Mr. Nye are not “Non-Arm’s Length Parties” within the meaning of applicable TSXV policies, and the purchase price for the Legacy Share Sale was arrived at through arm’s length negotiations.
The Legacy Share Sale constitutes a Reviewable Disposition as defined in TSXV Policy 5.3 – Acquisitions and Dispositions of Non-Cash Assets (“Policy 5.3”) and the Company has received conditional approval to close such Legacy Share Sale, subject to Shareholder Approval and Disinterested Shareholder Approval and other customary conditions as required under Policy 5.3.
Shares for Debt Transactions
The Company announces that it intends to settle certain outstanding indebtedness in the aggregate amount of $6,674,121 (the “Debt”) owing to certain arm’s length and non-arm’s length creditors (the “Creditors”) through the issuance of 133,482,420 GA Shares at a deemed price per GA Share of $0.05 (the “Shares for Debt Transactions”).
The Company determined to satisfy the indebtedness with GA Shares as it has no immediate sources of cash. Issuance of the GA Shares in connection with the Shares for Debt Transactions is subject to approval of the TSXV. The GA Shares issued pursuant to the Shares for Debt Transactions will be subject to a four month plus one day hold period pursuant to applicable securities legislation.
Forming part of the Creditors are certain “related parties”, as such term is defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), which include Ted Hastings (Chairman of the Company); Kevin Ferrell (Director of the Company); Glen Keleher (Director of the Company); and Iain Klugman (Director of the Company) (collectively, the “Related Party Creditors”). Accordingly, the Shares for Debt Transactions with the Related Party Creditors will constitute a “related party transaction” under MI 61-101. The Company intends to rely on the exemptions from the valuation and minority approval requirements of MI 61-101 provided for in subsections 5.5(g) and 5.7(e) as the Company is considered to be in financial hardships. For each Shares for Debt Transaction with a Related Party Creditor, there is at least one or more independent directors in respect of such transaction. Further, the board of directors of the Company, acting in good faith, has determined, and at least two-thirds of independent director, acting in good faith, have also determined, that the Company is in serious financial difficult, the transaction is designed to improve the financial position of the issuer, and the terms of the Shares for Debt Transactions are reasonable in the circumstances of the Company.
Following the closing of the Shares for Debt Transactions, the Company anticipates that Tim Nye and Kevin Ferrell, through his holding company, will become Control Persons (as defined below). TSV Policy 4.1 – Private Placements (“Policy 4.1”) requires shareholder approval when a transaction creates a shareholder that holds or controls 20% or more of an issuers shares (a “Control Person”). To fulfill the requirements under Policy 4.1, the Company intends to seek shareholder approval for the creation of the two new Control Persons, Tim Nye and Kevin Ferrell, at General Assembly’s upcoming annual general and special shareholder meeting.
None of the securities issued in the Shares for Debt Transactions will be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), and none of them may be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any state where such an offer, solicitation, or sale would be unlawful.
About General Assembly Holdings Limited
GA Pizza operates a fast-casual pizza restaurant in the heart of Toronto. For additional information, visit gapizza.com for more information.
ON BEHALF OF THE BOARD OF DIRECTORS
Ted Hastings
Director
(416)-803-1488
All information contained in this news release with respect to CanPR was supplied by CanPR, and the Company and its directors and officers have relied on CanPR for such information.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and completion of the Pre-Closing Transactions and if applicable, disinterested 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 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 GA Pizza 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.
Forward Looking Statements
Investors are cautioned that, except as disclosed in the disclosure document, any information released or received with respect to the Company may not be accurate or complete and should not be relied upon. Trading in securities of the Company should be considered highly speculative.
This press release contains statements which constitute “forward-looking information” or “forward-looking statements” (together “forward-looking information”) within the meaning of applicable securities laws, including statements regarding the Transaction, the Legacy Share Sale, the Shares for Debt Transactions, the Consolidation, the business of the Resulting Issuer, and TSXV acceptance of the Transaction. Forward-looking information is often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or similar expressions.
Investors are cautioned that forward-looking information is not based on historical facts but instead reflect the Company’s 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 the Company believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the combined company. Among key factors and risks that could cause actual results to differ materially from those projected in the forward-looking information may include, without limitation, the ability to obtain or delays in securing necessary stock exchange approvals; as well as those factors disclosed in the Company’s disclosure documents publicly available under its profile at SEDAR+ at www.sedarplus.com. This forward-looking information may be affected by risks and uncertainties in the business of the Company and market conditions. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has 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. The Company does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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