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VANCOUVER, BC, June 4 2021 /CNW/ - Principal Technologies
Inc. (TSXV: PTEC.P) (the "Company"), a capital pool company
listed on the TSX Venture Exchange ("TSXV"), announces that,
pursuant to recent changes by the TSXV to its Capital Pool Company
program and TSXV Policy 2.4 - Capital Pool Companies
("Policy 2.4"), which became effective as at January 1, 2021 (the "New CPC Policy"),
the Company intends to seek the requisite approvals of the
shareholders of the Company (the "Shareholders") to adopt
and align the Company with the New CPC Policy at its June 30, 2021 Annual General and Special Meeting
of Shareholders (the "Meeting").
Capitalized terms used herein and not otherwise defined have the
meaning ascribed to them in the TSXV Corporate Finance Manual or
the New CPC Policy.
At the Meeting, as required to give effect to the New CPC
Policy, Shareholders will be asked to pass two separate ordinary
resolutions by the affirmative vote of not less than a majority of
the votes cast by disinterested Shareholders who vote in respect
thereof, in person or by proxy ("Disinterested Approval"),
to:
(a) approve the removal of the consequences associated with the
Company not completing a Qualifying Transaction within 24 months of
its listing date in accordance with the New CPC Policy; and
(b) authorize the Company to make certain amendments to the
Company's escrow agreement to effect certain changes contemplated
under the New CPC Policy.
Consequences of Failing to Complete a QT within 24 Months of
the Listing Date
Under Policy 2.4, if the Company fails to complete a Qualifying
Transaction within 24 months of its Listing Date, it faces the
consequences of either (i) having its common shares delisted or
suspended from the TSXV, or (ii) subject to the approval of the
majority of shareholders, transferring its common shares to list on
the NEX and cancelling certain Seed Shares issued to the Company's
founders.
The New CPC Policy eliminates the requirement for a Capital Pool
Company, such as the Company, to complete a Qualifying Transaction
within 24 months of the Listing Date and eliminates the associated
consequences of not completing such requirement. The Company
believes that the removal of the requirement to complete a
Qualifying Transaction within 24 months of Listing Date, and the
associated consequences of not completing such requirement, as
exists under Policy 2.4, will put the Company in a better position
to complete a Qualifying Transaction that will be beneficial to the
Shareholders and the Company, by allowing increased flexibility to
complete such a transaction.
The Company will seek Disinterested Approval to remove the
consequences of not completing a Qualifying Transaction within 24
months after its Listing Date. In seeking such Disinterested
Approval, the Company shall exclude all votes attached to its
common shares held by Non-Arm's Length Parties to the Company who
own Seed Shares, as well as their Associates and Affiliates.
Amendments to the Escrow Agreement
Under the New CPC Policy, securities subject to a CPC escrow
agreement are subject to an 18-month escrow period, as opposed to
the 36-month period previously required under Policy 2.4. At the
Meeting, the Company shall seek Disinterested Approval to amend the
terms of the CPC Escrow Agreement to which it is a party to reduce
the length of the term of any escrow provision to an 18-month
escrow term, as permitted by Section 10.2 of the New CPC Policy. In
seeking such Disinterested Approval, the Company shall exclude all
votes attached to its common shares held by shareholders who are
parties to the CPC Escrow Agreement, as well as their Associates
and Affiliates.
Other Changes
Under the New CPC Policy, the Company is permitted to adopt
other transition provisions without obtaining shareholder approval.
As a result, the Company intends to adopt the changes under the New
CPC Policy that do not require shareholder approval, including, but
not limited to:
(a) increasing the maximum aggregate gross proceeds to the
treasury that the Company can raise from the issuance of common
shares under the Company's initial public offering, Seed Shares and
private placements to the new maximum of $10,000,000, rather than $5,000,000 which was previously the limit for a
CPC that had not completed its Qualifying Transaction;
(b) removing the restriction which provided that no more than
the lesser of 30% of the gross proceeds from the sale of securities
issued by the Company and $210,000
may be used for purposes other than identifying and evaluating
assets or businesses and obtaining shareholder approval for a
proposed Qualifying Transaction, and implementing the restrictions
on the permitted use of proceeds and prohibited payments under the
New CPC Policy, under which reasonable general and administrative
expenses not exceeding $3,000 per
month are permitted; and
(c) removing the restriction on the Company issuing new agent's
options in connection with a private placement.
The proposed amendments remain subject to the final approval of
the TSXV.
Corporate update
As announced on October 7, 2020,
the Company intends to qualify as a Tier 2 Investment Issuer
pursuant to Policy 2.1 of the TSXV Corporate Finance Manual. That
is still the case; however, the Company now intends to transition
into becoming an Investment Issuer in two stages.
The Company has identified, and pursued, several potential
investment opportunities over the past several months. A number of
these potential investments are still of interest to the Company.
However, it has been challenging to advance the investment
opportunities to the point of completing transactions because of
the pandemic travel restrictions. The Company's geographic focus
has been in Europe and it has
proven almost impossible to meet with the principals of the
companies we may wish to invest in. The directors of the Company do
not feel it would be responsible to make investment commitments
without being able to spend time with the principals of the target
companies, and to be able to conduct physical due diligence. For
this reason, we have decided to complete our qualifying transaction
(subject to TSXV approval) by acquiring a controlling interest in
one company at this time.
All of the material details regarding the Qualifying
Transaction, will be available in the Company's filing statement
which has been submitted to TSXV. The Company will be providing
further updates shortly by way of a comprehensive news release. The
Company intends to continue pursuing other investment opportunities
once the pandemic travel restrictions allow.
Forward Looking Information
Statements in this press release regarding the Company's
business which are not historical facts are "forward-looking
statements" that involve risks and uncertainties, such as terms and
completion of the proposed transaction. Since forward-looking
statements address future events and conditions, by their very
nature, they involve inherent risks and uncertainties. Actual
results in each case could differ materially from those currently
anticipated in such statements.
Completion of the qualifying transaction and transition to
the New CPC Policy are subject to a number of conditions, including
but not limited to, execution of a binding definitive agreement
relating to the qualifying transaction, TSXV acceptance and if
applicable pursuant to TSXV requirements, Shareholder approval,
transition to a Tier 2 Investment Issuer and the completion of
subsequent investments after the completion of the qualifying
transaction. Where applicable, the qualifying transaction and
transition to the new CPC Policy cannot close until the required
shareholder approval is obtained. There can be no assurance that
the transition to the new CPC Policy, transition to a Tier 2
Investment Issuer, the qualifying transaction or any subsequent
investments 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 qualifying transaction, any information
released or received with respect to the qualifying 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 TSXV has in no way passed upon the merits of the proposed
qualifying transaction and has neither approved nor disapproved the
contents of this press release.
Neither 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.
SOURCE Principal Technologies Inc.