/NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE
SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES/
CALGARY,
AB, Feb. 21, 2025 /CNW/ - Auka Capital Corp.
("Auka") (TSXV: AUK.P) a capital pool company as defined
under Policy 2.4 – Capital Pool Companies of the TSX Venture
Exchange (the "Exchange"), and Dr. Phone Fix Canada
Limited ("DPF"), are pleased to announce the completion of
DPF's second and final tranche of its previously announced brokered
private placement (the "Private Placement") of subscription
receipts ("Subscription Receipts"), led by Canaccord Genuity
Corp., as lead agent (the "Agent"), at a price of
$1.37 per Subscription Receipt for
aggregate gross proceeds of $1,590,749.47 (the "Final Tranche").
DPF completed the Final Tranche pursuant to an agency agreement
dated February 6, 2025, between DPF,
Auka and the Agent (the "Agency Agreement"). Under the Final
Tranche, DPF issued 1,161,131 Subscription Receipts at a price of
$1.37 per Subscription Receipt for
gross proceeds of $1,590,749.47.
Together with the first tranche and the Final Tranche of the
Private Placement, DPF has raised aggregate gross proceeds of
$3,036,006.31 and issued an aggregate
of 2,216,063 Subscription Receipts.
Immediately prior to the closing of Auka's proposed qualifying
transaction (the "Transaction") – as described in Auka's
previous press release dated November 8,
2024 and in its filing statement dated November 14, 2024 (the "Filing Statement")
– and provided the escrow release conditions in the Subscription
Receipt Agreement dated February 6,
2025 (the "Subscription Receipt Agreement") between
DPF, Auka, Odyssey Trust Company ("Odyssey") and the Agent
are satisfied or waived, each Subscription Receipt will be
automatically converted, without payment of additional
consideration or further action by the holder thereof, into one
unit (a "Unit") comprised of one Class "A" Common share of
DPF (a "DPF Share") and one-half of one common share
purchase warrant of DPF (each whole warrant, a "DPF
Warrant"), subject to adjustment in certain events. The DPF
Warrants are governed by a warrant indenture dated February 6, 2025 (the "Warrant Indenture")
between DPF, Auka and Odyssey, with each DPF Warrant entitling the
holder to acquire one DPF Share at a price of $2.28 per DPF Share. Upon completion of the
Transaction, DPF Shares and DPF Warrants issued upon conversion of
the Units will immediately be exchanged for shares and warrants,
respectively, of the resulting issuer of the Transaction (the
"Resulting Issuer") on the basis of 11.4402330114547 common
shares or warrants of the Resulting Issuer for every one DPF Share
or DPF Warrant, respectively.
Certain directors of Auka subscribed for an aggregate of 66,600
Subscription Receipts as part of the Final Tranche, and such
participation is considered to be a related party transaction
within the meaning of TSX Venture Exchange Policy 5.9 and
Multilateral Instrument 61–101 – Protection of Minority Security
Holders in Special Transactions ("MI 61-101") as the
Subscription Receipts will, upon completion of the Transaction, be
exchanged for common shares of the Resulting Issuer. Auka has
relied on the exemptions in Sections 5.5(a), 5.5(b) and 5.5(c) of
MI 61-101 from the requirement for a formal valuation contained in
MI 61-101 and has relied on the exemption in Section 5.7(1)(a) of
MI 61-101 from the requirement for minority approval contained in
MI 61-101.
Auka did not file a material change report more than 21 days
before the expected closing of the Final Tranche because the
participation therein by such Auka directors was not determined,
and the extent and terms of such participation was not settled,
until shortly prior to closing of the Final Tranche and Auka and
DPF wished to close on an expedited basis for sound business
reasons.
The gross proceeds of the Final Tranche, net of the Agent's
expenses and 50% of the Agent's commission and fees (the
"Escrowed Funds"), are being held in escrow pursuant to the
terms of the Subscription Receipt Agreement. Upon satisfaction or
waiver of the escrow release conditions as set out in the
Subscription Receipt Agreement (the "Escrow Release
Conditions") on or before March 31,
2025 (the "Escrow Release Deadline"), the Escrowed
Funds together with any interest earned thereon will be released to
the Resulting Issuer (and to the Agent in respect of the remaining
Agent's commission and fees). If the Escrow Release Conditions are
not satisfied or waived on or before the Escrow Release Deadline,
or if the Transaction is terminated, the Subscription Receipts will
be cancelled without any further action and the Escrowed Funds and
any interest earned thereon will be returned to subscribers on a
pro rata basis, with any shortage of funds being paid by DPF and
Auka.
Copies of the Agency Agreement, the Subscription Receipt
Agreement and the Warrant Indenture have been filed on Auka's
SEDAR+ profile at www.sedarplus.ca.
ABOUT AUKA
Auka is a capital pool company that has not commenced commercial
operations and has no assets other than cash. Except as
specifically contemplated in the Exchange's CPC Policy, until the
completion of its qualifying transaction, Auka will not carry on
business, other than the identification and evaluation of
businesses or assets with a view to completing a proposed
qualifying transaction.
ANY SECURITIES REFERRED TO HEREIN WILL NOT BE REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933 (THE "1933 ACT") AND MAY NOT
BE OFFERED OR SOLD IN THE UNITED
STATES OR TO A U.S. PERSON IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE 1933 ACT.
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY
CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.
Completion of the Transaction is subject to a number of
conditions, including but not limited to, final Exchange
acceptance, receipt of requisite regulatory approvals, and the
completion of the Private Placement, which has now occurred. Where
applicable, the Transaction cannot close until the required DPF
shareholder approval, and any ancillary matters thereto, are
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, 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 a capital pool company
should be considered highly speculative.
Forward-Looking Information Cautionary Statement
This news release includes forward-looking information
("forward-looking information") within the meaning of
Canadian securities laws regarding Auka, DPF, the Resulting Issuer
and their respective businesses, which may include, but is not
limited to, statements with respect to the completion, and the
terms and conditions, of the Transaction, the satisfaction of
conditions to closing, the terms and timing on which the
Transaction are intended to be completed and the ability to obtain
regulatory approval. Often, but not always, forward-looking
information can be identified by the use of words such as "plans",
"is expected", "expects", "scheduled", "intends", "contemplates",
"anticipates", "believes", "proposes", "estimates" or variations of
such words and phrases, or state that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur
or be achieved. Such statements are based on the current
expectations and views of future events of the management of each
entity, and are based on assumptions and subject to risks and
uncertainties. Although the management of each respective entity
believes that the assumptions underlying the forward-looking
information as applicable to them or their respective businesses or
the Transaction are reasonable, such forward-looking information is
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance
or achievements of Auka, DPF and the Resulting Issuer to be
materially different from those expressed or implied by such
forward-looking information and may prove to be incorrect. The
forward-looking information, events and circumstances discussed in
this release may not occur by certain specified dates or at all and
could differ materially as a result of known and unknown risk
factors and uncertainties affecting the companies, including the
risk that DPF and Auka may not obtain all requisite approvals for
the Transaction, including the final approval of the Exchange for
the Transaction, risks of the industry in which DPF operates,
failure to obtain regulatory or outstanding shareholder approvals,
general business, economic, competitive, political and social
uncertainties, any estimated amounts, the equity markets generally
and risks associated with growth, general capital market conditions
and market prices for securities and the market conditions of the
refurbished device and device repair industry in general,
competition, and changes in legislation affecting Auka, DPF and the
Resulting Issuer. Although Auka and DPF have attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in
forward-looking information, there may be other factors that cause
actions, events or results to differ from those anticipated,
estimated or intended. Accordingly, readers should not place undue
reliance on any forward-looking information contained herein. No
statements comprising forward-looking information can be
guaranteed. Except as required by applicable securities laws,
forward-looking information contained herein speak only as of the
date on which they are made and Auka and DPF undertake no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
or otherwise.
Neither the Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the Exchange) accepts
responsibility for the adequacy or accuracy of this news
release. The Exchange has in no way passed upon the
merits of the Transaction and has neither approved nor disapproved
the content of this press release.
SOURCE Auka Capital Corp.
