NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN UNITED STATES
MONTRÉAL, April 29, 2019 (GLOBE NEWSWIRE) -- GOLO Inc. (“GOLO” or the “Corporation”), a Montréal-based mobile on-demand delivery and pick-up platform, and HAW Capital Corp. (“HAW”) (TSX Venture: HAW.P) are pleased to announce that the Corporation has launched two non-brokered private placement financings for combined aggregate gross proceeds of up to $6,750,000 (together, the “Private Placements”).
Private Placements
Terms of the Private Placements
The Private Placements are expected to consist of a non-brokered private placement of up to 16,176,470 units (the “Non-Brokered Units”) of the Corporation at a price of $0.17 per Non-Brokered Unit for aggregate gross proceeds of up to $2,750,000 (the “Non-Brokered Placement”), each Non-Brokered Unit consisting of one common share of the Corporation (a “Common Share”) and one half of one common share purchase warrant (each whole warrant, a “Warrant”), and a non-brokered private placement of 23,529,411 units (the “Lead Investor Units”) of the Corporation at a price of $0.17 per Lead Investor Unit for aggregate gross proceeds of $4,000,000 (the “Lead Investor Placement”) to James McRoberts, the chief executive officer and a director of HAW, and affiliated entities of Mr. McRoberts, each Lead Investor Unit consisting of one Common Share and one whole Warrant, for combined aggregate gross proceeds of up to $6,750,000.
Each whole Warrant will entitle the holder thereof to acquire one Common Share at a price of $0.25 per Common Share for a period of 24 months following the closing of the Private Placements.
Conditions to Closing
In addition to the negotiation and entering into of definitive agreements regarding the Private Placements and other closing conditions customary for offerings of this nature, closing of the Private Placements will be conditional upon all of the conditions precedent to the completion of the Proposed Transaction (as defined below) set forth in the Business Combination Agreement (as defined below), other than the closing of the Private Placements, having been satisfied or waived. Completion of the Proposed Transaction is subject to a number of conditions including, but not limited to, third-party and board approvals and consents, satisfaction or waiver of all conditions set forth in the Business Combination Agreement (including completion of the Private Placements), TSX Venture Exchange (“TSXV”) acceptance of the Proposed Transaction and approval by HAW shareholders of the Proposed Transaction (including the Lead Investor Placement).
In connection with the completion of the Proposed Transaction, holders of Common Shares will receive one common share (a “Resulting Issuer Share”) of the Resulting Issuer (as defined below) in exchange for each Common Share held and holders of Warrants will receive one whole or one half of one warrant to acquire a Resulting Issuer Share in exchange for each whole or half Warrant held, as applicable.
Use of Proceeds
GOLO intends to use the net proceeds of the Private Placements to fund international expansion, additional marketing, consumer acquisition, and product development and enhancements as well as for general working capital purposes.
Advisory and Finder’s Fee
In connection with the Non-Brokered Placement, GOLO has entered into an advisory and finder’s fee arrangement with an arms length finder. Canaccord Genuity Corp. (“Canaccord Genuity”) will receive a fixed advisory fee of $85,000, payable in cash or Common Shares at the option of Canaccord Genuity, and a finder’s fee equal to: (i) 6.0% of the aggregate gross proceeds from the sale of Non-Brokered Units, payable in cash or Common Shares at the option of Canaccord Genuity; and (ii) such number of warrants (the “Finder’s Warrants”) equal to 6.0% of the number of Non-Brokered Units sold. Each Finder’s Warrant will be exercisable at any time prior to the date that is 24 months following the closing of the Non-Brokered Placement for one Non-Brokered Unit (or equivalent securities of the Resulting Issuer, as applicable) at an exercise price of $0.17 per unit. No finder’s fee or other commission will be payable in respect of the Lead Investor Placement.
Proposed Public Listing
This announcement follows a news release issued by HAW on April 1, 2019, that provided detail on a definitive business combination agreement (the “Business Combination Agreement”) for a transaction involving HAW and GOLO that, if completed, will serve as the qualifying transaction for HAW and would result in GOLO obtaining a public listing on the TSXV (the “Proposed Transaction”). The Business Combination Agreement was amended effective April 25, 2019 to, among other things, reflect the terms of the Private Placements. A copy of the amending agreement will be made available under HAW’s profile on www.sedar.com.
HAW as it exists following completion of the Proposed Transaction (the “Resulting Issuer”) is expected to be known as GOLO Mobile Inc. Further details on the Proposed Transaction and the Resulting Issuer, including the directors and management of the Resulting Issuer, are provided in the April 1, 2019 news release which is available under HAW’s profile on www.sedar.com. In addition, Stephane Morneau, the Chief Financial Officer of the Resulting Issuer, is expected act as corporate secretary of the Resulting Issuer.
Related Party Transaction
The Proposed Transaction was negotiated on an arm’s length basis between HAW and GOLO. However, as a result of James McRoberts’ expected participation in the Lead Investor Placement, the Proposed Transaction, if completed, will be a related party transaction for purposes of Multilateral Instrument 61-101 – Protection of Minority Shareholders in Special Transactions (“MI 61-101”). Mr. McRoberts currently holds approximately 14.8% of the issued and outstanding common shares of HAW. Following completion of the Proposed Transaction and assuming combined aggregate gross proceeds from the Private Placements of $6,750,000, Mr. McRoberts will hold approximately 20.1% of the issued and outstanding Resulting Issuer Shares.
HAW will seek to have the Proposed Transaction approved by the majority of the votes cast by minority shareholders in accordance with Part 8 of MI 61-101 at a meeting of HAW shareholders to be held to consider, among other things, the Proposed Transaction and matters ancillary thereto.
As HAW is listed on the TSXV and is not listed on any stock exchange outside of Canada or the United States, it will rely on the exemption from the requirement to obtain a formal valuation for the Proposed Transaction in Section 5.5(b) of MI 61-101. To HAW’s knowledge, no formal valuation of HAW or its securities or material assets has been made in the 24 months prior to the date of this new release and HAW has not received any bona fide offers from other parties during the 24 months prior to the announcement of the Transaction other than in respect of the amalgamation agreement with Merrco Payments Inc., the termination of which was announced by HAW in a news release issued on February 4, 2019.
About GOLO
GOLO is a private Montréal-based corporation incorporated under the Canada Business Corporations Act (the "CBCA"). In 2015, GOLO was launched as a mobile and web-based order ahead platform for item pick up and delivery at venues and stadiums allowing users to order food and get it delivered to their seat or pick it up at an express lane. Since then, GOLO has rapidly evolved to become a broader platform offering that can be customized to service multiple industries or communities such as cities, airports, office towers, condo towers, hotels, hospitals and convention centers.
About HAW
HAW is a capital pool company created to identify potential acquisitions of commercially viable businesses and assets that have the potential to generate profits and add shareholder value.
For further information, please contact: David Hyman, CFO, HAW Capital Corp., (403) 613-1453 or david.hyman72@gmail.com; Stephane Morneau, CFO, GOLO Inc., stephane.morneau@paysafe.com; or Kate Aldridge, SVP Corporate Communications, Paysafe Group, kate.aldridge@paysafe.com.
Completion of the Proposed Transaction and the Private Placements is subject to a number of conditions, including but not limited to, TSXV acceptance and majority of the minority shareholder approval. The Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction or the Private Placements 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 Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this news release.
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 news release.
Forward-Looking Information
When used in this news release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. Although the Corporation believes, in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in these forward-looking statements and information in this news release are reasonable, undue reliance should not be placed on them because the Corporation can give no assurance that they will prove to be correct. The forward-looking statements and information in this news release include, without limitation, information relating to the Proposed Transaction and the Private Placements including the timing and ability of the parties to satisfy the conditions to the completion thereof, the approval of the TSXV and the HAW shareholders, the terms of the Private Placements (including the structure, size, offering price, securities to be issued, terms of the Warrants, finders’ fee and gross proceeds), the treatment of the Common Shares and the Warrants under or in connection with the Proposed Transaction, the use of proceeds from the Private Placements and the officers of the Resulting Issuer upon completion of the Proposed Transaction.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause HAW's 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 include, among others, the following risks: (i) there is no assurance that the Private Placements will be completed on the terms contemplated in this news release or at all; (ii) there is no assurance that HAW and GOLO will obtain all requisite approvals for the Proposed Transaction, including the approval of the TSXV for the Proposed Transaction (which may be conditional upon amendments to the terms of the Proposed Transaction) and the approval of the HAW shareholders for the Proposed Transaction; (iii) following completion of the Proposed Transaction, the Resulting Issuer may require additional financing from time to time in order to continue its operations and financing may not be available when needed or on terms and conditions acceptable to the Resulting Issuer; (iv) new laws or regulations could adversely affect the Resulting Issuer's business and results of operations; and (v) the stock markets have experienced volatility that often has been unrelated to the performance of companies. These fluctuations may adversely affect the price of the Resulting Issuer's securities, regardless of its operating performance. There are a number of important factors that could cause HAW and GOLO's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others: currency fluctuations; limited business history of HAW; disruptions or changes in the credit or security markets; results of operations, activities and development of projects; project cost overruns or unanticipated costs and expenses; and general market and industry conditions. The Corporation and HAW undertake no obligation to comment on analyses, expectations or statements made by third parties in respect of the Corporation, HAW, their respective securities, or their respective financial or operating results (as applicable).
GOLO and HAW caution that the foregoing list of material factors is not exhaustive. When relying on GOLO and HAW's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. GOLO and HAW believe that the expectations in their forward-looking statements are reasonable and have assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. The forward-looking information contained in this news release represents the expectations of GOLO and HAW 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. GOLO and HAW do not undertake to update this information at any particular time except as required in accordance with applicable laws.
This news release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States or to or for the account or benefit of U.S. persons (as such terms are defined in Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”)), absent registration or an exemption from registration. The securities offered have not been and will not be registered under the U.S. Securities Act or any state securities laws and, therefore, may not be offered for sale in the United States, except in transactions exempt from registration under the U.S. Securities Act and applicable state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.