MRKI.P Meraki Acquisition One Inc

Meraki Acquisition One, Inc. (TSXV:MRKI.P) (the “Company”) is pleased to announce that on November 21, 2022, it entered into a definitive agreement (the “Agreement”) with Vaultex Pte. Ltd. (“Vaultex”), Vaultex’s operating subsidiary and Vaultex’s security holders setting out the binding terms and conditions for an arm’s length reverse takeover acquisition to constitute the Company’s qualifying transaction (the “Transaction”) under the policies of the TSX Venture Exchange (the “Exchange”). The Transaction and its proposed terms and conditions were first announced by the Company in a news release dated April 8, 2022 and updated on May 6, 2022 and on June 20, 2022.

Transaction

Pursuant to the Agreement, the Company and Vaultex and its security holders will complete the Transaction by way of a securities exchange such that holders of Vaultex shares and warrants will exchange their securities for, respectively, shares and warrants of the Company and the Company will own and control all of the Vaultex shares and the Vaultex warrants will be cancelled. The exchange will be on a one-for-one basis (the “Exchange Ratio”) based on one Vaultex share having a deemed price of CAN$0.25 per share in exchange for one Company share having a deemed price of CAN$0.25 per share. The Exchange Ratio assumes that the Company will not complete a share consolidation prior to or in connection with the completion of the Agreement.

The Exchange Ratio under the Agreement is based on the following valuations: (a) approximately CAN$1,100,000 for the Company on a non-diluted basis, assuming 4,400,000 Company shares outstanding and (b) CAN$25,000,000 for Vaultex on a non-diluted basis, assuming 100,000,000 Vaultex shares outstanding, excluding (1) securities issued under the Pre-Listing Financing (as described below), (2) the Vaultex shares issuable upon the conversion of the Convertible Debenture (as described below) and (3) the securities to be issued under the Concurrent Financing (as described below). The Company currently has 4,400,000 shares outstanding and 440,000 stock options outstanding under its stock option plan and 200,000 agent’s warrants outstanding that were issued in connection with the Company’s initial public offering.

Vaultex is expected to have 100,000,000 shares outstanding, not including (1) the Vaultex shares and warrants issued in connection with the Pre-Listing Financing (as described below), (2) the Vaultex shares to be issued under the Concurrent Financing (if any), and (3) the Vaultex shares issuable on conversion of the outstanding convertible debenture of 150,000,000 Japanese Yen principal amount that is expected to be converted prior to completion of the Transaction into approximately 5,457,000 Vaultex shares at a conversion price of CAN$0.25 and the relevant currency exchange rate on the date of conversion (the “Convertible Debenture”). The Convertible Debenture has a interest rate of 15% per year and accrued interest will be paid in cash upon conversion.

Under the Agreement: (1) the holders of the Vaultex shares outstanding immediately prior to the completion of the Agreement, including the Vaultex shares issued under the Pre-Listing Financing, to be issued under the Concurrent Financing (if any), and issuable upon exercise of the Convertible Debenture, will receive, for every one Vaultex share held immediately prior to the completion of the Agreement, one Company share; and (2) the holders of Vaultex warrants outstanding immediately prior to the completion of the Agreement, including the Vaultex warrants issued under the Pre-Listing Financing and the Concurrent Financing, will receive equivalent warrants of the Company based on the Exchange Ratio, with such additional adjustments as needed. It is a condition for the completion of the Agreement that the holder of the Convertible Debenture fully converts the Convertible Debenture into Vaultex shares prior to closing, which will then be exchanged for Company shares under the Agreement.

As part of the Transaction, the Company is expected to continue from the jurisdiction of British Columbia to the jurisdiction of the Cayman Islands or another offshore jurisdiction acceptable to the Exchange (the “Continuation”). The Continuation would require necessary corporate approval, the approval of the Company’s shareholders and regulatory approval, including the approval of the Exchange.

On completion of the Transaction, the Company expects to be a Tier 2 technology issuer listed on the Exchange (the “Resulting Issuer”). It is also expected that the Resulting Issuer will change its name to “Vaultex Group Inc.” or such other name as determined by Vaultex and acceptable to the Exchange.

Upon completion of the Transaction, including the Concurrent Financing and the conversion of the Convertible Debenture, (1) based on a minimum Concurrent Financing of CAN$7,500,000, the current Meraki shareholders are expected to own approximately 3.04% of the Resulting Issuer common shares, the Vaultex shareholders are expected to own approximately 69.15% of the Resulting Issuer common shares, the Convertible Debenture holder is expected to own approximately 3.77% of the Resulting Issuer common shares (based on the expectation that approximately 5,457,000 Vaultex shares are to be issued to the Convertible Debenture holder on conversion), the Pre-Listing Financing shareholder is expected to own approximately 3.29% of the Resulting Issuer common shares, and the Concurrent Financing shareholders are expected to own approximately 20.74% of the Resulting Issuer common shares, all on a non-diluted basis; and (2) based on a maximum Concurrent Financing of CAN$10,000,000, the current Meraki shareholders are expected to own approximately 2.85% of the Resulting Issuer common shares, the Vaultex shareholders are expected to own approximately 64.68% of the Resulting Issuer common shares, the Convertible Debenture holder is expected to own approximately 3.53% of the Resulting Issuer common shares (based on the expectation that approximately 5,457,000 Vaultex shares are to be issued to the Convertible Debenture holder on conversion), the Pre-Listing Financing shareholder is expected to own approximately 3.08% of the Resulting Issuer common shares, and the Concurrent Financing shareholders are expected to own approximately 25.87% of the Resulting Issuer common shares, all on a non-diluted basis.

If a broker-agent is engaged in connection with all or a portion of the Concurrent Financing, it is expected that the broker-agent would receive broker’s fees, including broker warrants, as is customarily paid for such a transaction. The Concurrent Financing may also involve the payment of finder’s fees as permitted by Exchange policies, otherwise, no finder’s fees are payable in connection with the Transaction.

Vaultex is “arm’s length” to the Company and the Transaction was negotiated at arm’s length within the meaning of the policies of the Exchange. As such, the Transaction constitutes an arm’s length transaction pursuant to the policies of the Exchange and Company shareholder approval is not expected to be required for the Transaction, but shareholder approval is expected to be required for the Continuation and any other matters that require such approval, and subject to Exchange acceptance. No deposit, advance or loan has been made or is required to be made under the Agreement.

Transaction Conditions

Under the Agreement, the material mutual conditions precedent include: (1) receipt of Company shareholder approval for the Continuation and for all other matters contemplated by the Agreement that require shareholder approval; (2) receipt of Exchange conditional acceptance or approval for the Transaction; (3) the completion of the Concurrent Financing for a minimum of CAN$7.5 million, including the satisfaction or waiver of all conditions to the conversion of the subscription receipts, save for the requirement to complete the Transaction; and (4) the fulfilment of other mutual conditions precedent customary for a transaction of a similar nature to that of the Transaction.

The obligations of Vaultex and its security holders are subject to certain conditions that include: (1) the completion of the Convertible Debenture conversion, (2) the completion of the Continuation, (3) the Company shall have a positive working capital balance of at least CAN$30,000 on completion of the Transaction; (4) Joel Arberman and other principals of the Company who hold Company shares shall have entered into support agreements to approve and vote their Company shares in favour of the Transaction including the Continuation and any related matters in furtherance of the Transaction; and (5) the directors and officers nominated by Vaultex shall have been appointed effective upon completion of the Transaction.

Each of the Company and Vaultex has respective condition precedents that are customary for a transaction of this type such as: (1) all covenants shall have been performed in all material respects; (2) all representations and warrants shall be true and correct in all material respects; (3) no material adverse change has occurred; (4) there shall be no pending or threatened suit, action or proceeding by any governmental entity with a reasonable likelihood of success; and (5) all consents, approvals, authorizations and waivers of any persons required or necessary for completion of the Transactions shall have been obtained.

With the entry into the Agreement, the Company and Vaultex will prepare a mutually acceptable Filing Statement that is expected to be submitted to the Exchange and filed on SEDAR.

Concurrent Financing

Prior to or concurrent with the completion of the Transaction, a concurrent financing (the “Concurrent Financing”) for gross proceeds of a minimum of CAN$7,500,000 and a maximum of CAN$10,000,000 will be completed either (1) by the Company through the issuance of a minimum of 30,000,000 and a maximum of 40,000,000 subscription receipts of the Company at a price of CAN$0.25 per subscription receipt, with each subscription receipt to automatically convert, prior to or concurrently with the completion of the Agreement, into either: (A) one special warrant, each special warrant to automatically convert into one share and one-half of one warrant upon the earlier of the expiry of applicable hold periods and the date of prospectus qualification; or (B) one share and one-half of one warrant; and the Company and Vaultex will mutually determine at the time of the Concurrent Financing which one of (A) or (B) shall apply based on such factors as the expected distribution profile; and each whole warrant will be exercisable into one share at a price of CAN$0.45 per share for a period of 24 month; or (2) by Vaultex through the issuance of a minimum of 30,000,000 and a maximum of 40,000,000 units with each unit consisting of one Vaultex Share and one-half of one Vaultex Warrant; or by the Company and Vaultex in aggregate through (1) and (2). The net proceeds of the Concurrent Financing will primarily be used by the Resulting Issuer to launch its gold exchange services in Singapore and for general corporate purposes.

Vaultex has completed a pre-listing financing of 4,761,905 units of Vaultex at a price of CAN$0.21 per unit for gross proceeds of CAN$1,000,000, with each unit consisting of one Vaultex share and one warrant, with each warrant entitling the holder to acquire one additional Vaultex share at a price of CAN$0.30 per share for a period of 24 months from the date of issuance (the “Pre-Listing Financing”), such Vaultex securities to be exchanged for equivalent Company securities based on the Exchange Ratio under the Agreement. As announced in the Company’s news release dated June 20, 2022, Vaultex planned to raise a further CAN$500,000 under the Pre-Listing Financing; however, Vaultex currently no longer has such plans.

Principals and Insiders of the Resulting Issuer

It is expected that on completion of the Transaction, the board of directors of the Resulting Issuer will be consist of five directors who expected to be Douglas Betts, James Boettcher, Jeffrey Premer, Guan Seng Sim and Joanne Yan, of which Mr. Boettcher, Mr. Sim and Ms. Yan are expected to be independent directors.

The management of the Resulting Issuer is expected to consist of Jeffrey Premer as Chief Executive Officer, Mike Abbott as Chief Financial Officer, Paul Lee-Simion as Chief Technology Officer, Kevin Yoshinaga as Chief Strategy Officer, Umar Khattak as Chief Marketing and Communications Officer and Mark Gregory as Corporate Secretary.

The Principal of the Resulting Issuer is expected to be ICO Capital Management Pte. Ltd. (“ICM”) with approximately 59.3% to 62.1% of the Resulting Issuer shares on a non-diluted basis. ICM is a corporation existing under the laws of Singapore, which currently owns and controls 91.6% of the Vaultex shares. ICM is controlled by Jeffrey Premer (through his holding company Nebu Inc., a Wyoming company) with 45.3% of ICM and by Umar Khattak with 22.3% of ICM.

The backgrounds of the proposed board members and management appointees of the Resulting Issuer are set out in the Company’s news releases dated April 8, 2022 and May 6, 2022 other than for Paul Lee-Simion, who is expected to serve as Chief Technology Officer of the Resulting Issuer, whose background is as follows: Paul Lee-Simion has served as the Chief Technology Officer of RegulAItion. He was previously Head Wealth and Insurance Architecture, Innovation and Technology at DBS Bank from 2017 to 2020 and Director of the Evolve Centre for Design Thinking and Innovation at UBS from 2016 to 2017 and Head Engineering and Data Innovation at Standard Chartered from 2013 to 2015 and Director of IT, Architecture and Innovation at Deutsche Bank from 2010 to 2012. Over 40 years, Mr. Lee-Simion has built ground breaking systems to support the trading life cycle. Mr. Lee-Simion has head senior IT positions at various international financial institutions and other large corporations and in government. Mr. Lee-Simion has a Mathematics degree at Imperial College London.

Sponsorship

Sponsorship for the Transaction may be required. Unless the Concurrent Financing is brokered, or a certain portion of it is brokered, and a due diligence letter to provided by the agent, sponsorship would be required unless a waiver from the sponsorship requirement is available. The Company intends to apply to the Exchange for waiver from the sponsorship requirement. At this time, no sponsor has been retained in connection with the Transaction.

Vaultex

Vaultex is an allocated gold and commodity trading platform based and regulatory compliant in Singapore. Access to its exchange is currently limited to institutional and accredited investors as defined by the Monetary Authority of Singapore. Initial products are limited to licensed exempt spot commodities such as physical gold and precious metals. Vaultex does not trade or provide custody of any digital assets.

Vaultex utilizes blockchain technology for the exchange ledger, but does not trade or have custody of digital assets. Vaultex will provide users in certain jurisdictions the ability to trade allocated gold in a regulated environment. Users from Canada or United States would only be considered in connection with the achievement of appropriate registrations in those countries. Physical gold storage is with Brinks Singapore, an arm of Brinks global security services.

Vaultex operates similar to a traditional exchange as it has the same core components for order entry, routing and matching with ancillary components required for clearing, management, reporting, market surveillance and regulatory compliance. In addition, Vaultex adheres to strict KYC, AML, ATF and PEP onboarding and ongoing screening.

Vaultex was incorporated on June 11, 2018 and is a private, unlisted corporation existing under the laws of Singapore with a wholly-owned subsidiary, Vaultex Exchange Pte. Ltd., also existing under the laws of Singapore.

According to Vaultex’s 2021 year-end audited financial statements, as at December 31, 2021, it had total assets of US$732,511, total liabilities of US$1,820,529 of which US$1,528,784 were borrowing and US$291,745 were other payables, and capital deficiencies of US$1,088,018. Vaultex did not generate any revenues and had a loss of US$1,003,298 in 2021.

Trading Halt

Trading of the Company’s listed shares on the Exchange was halted at the request of the Company on April 8, 2022 in advance of the announcement of the Transaction. The closing price for the Company’s common shares was CAN$0.20 per share when trading was halted. The trading halt is expected to continue until completion of the Transaction.

Further Information

For further information, please see the prospectus of the Company dated January 28, 2022 and filed on SEDAR or contact Joel Arberman, Chief Executive Officer of the Company, at (516) 299-9092 or joel@merakiacquisition.com.

Notices

The securities referred to herein have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. 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.

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.

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority 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 management information circular or 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 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 press release.

Information concerning Vaultex has been provided to the Company by Vaultex for inclusion in this news release.

Caution Regarding Forward Looking Information

The information set forth in this news release includes forward-looking statements under applicable securities laws. Forward-looking statements are statements that relate to future, not past, events. In this context, forward-looking statements often address expected future events, plans, prospects, business and financial performance, and often contain words such as “anticipate”, “believe”, “plan”, “estimate”, “expect”, and “intend”, statements that an action or event “may”, “might”, “could”, “should”, or “will” be taken or occur, or other similar expressions. All statements, other than statements of historical fact, included herein are forward-looking statements, including, without limitation, statements regarding the Transaction, the anticipated plans of Vaultex and its business, the Agreement, the Pre-Listing Financing, the Concurrent Financing, the Convertible Debenture, the exchange of or conversion of Vaultex securities for securities of the Company or Resulting Issuer, the use of proceeds from the financings, the agents, finders and sponsors in relation to the financings and the Transaction, the Continuation, any share consolidation, the name change, the changes to the board and management, board approvals, shareholder approvals and Exchange acceptance. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the 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: failure to complete the Agreement, failure to satisfy all conditions precedent to the Agreement, including shareholder approval, acceptance by the Exchange, completion of the Pre-Listing Financing, the Concurrent Financing and Convertible Debenture conversion, the Continuation, any share consolidation, the name change and the additional risks identified in the Company filings with the TSX Venture Exchange and applicable Canadian securities regulators. Forward-looking statements are made based on the Company or Vaultex’s management’s respective beliefs, estimates and opinions on the date that statements are made and the respective companies undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue reliance, importance or certainty to forward-looking statements.