RBL.P Rebel Capital Inc

Rebel Capital Inc. (“Rebel” or the “Corporation”) (TSXV: RBL.P), a capital pool company, is pleased to announce that it has entered into a non-binding letter of intent dated May 30, 2019 (the “Letter of Intent”) with Chief Commercial Construction L.P., a Pennsylvania limited partnership (the "Vendor"), to acquire a property located in Pittsburgh, Pennsylvania containing a 91,790 square foot data center with a three-story connected 43,800 square foot office property on an approximately 7.65 acre site (collectively, the “Property”) for a total purchase price (the “Purchase Price”) of US$32 million (the “Proposed Transaction”).

The completion of the Proposed Transaction will be subject to requisite regulatory approval, including the approval of the TSX Venture Exchange (the “TSXV”), and a number of additional conditions precedent, including the negotiation and execution of a definitive agreement, and the completion of a brokered private placement financing to fund a portion of the Purchase Price. There can be no assurance that the Proposed Transaction will be completed on the terms proposed in the Letter of Intent or at all.

The Proposed Transaction is intended to constitute Rebel’s “Qualifying Transaction” in accordance with TSXV Policy 2.4 - Capital Pool Companies. On closing of the Proposed Transaction, Rebel anticipates being classified as a "Tier 1" real estate issuer that will meet the TSXV's initial listing requirements applicable therefor.  The Proposed Transaction will not be a Non-Arm's Length Qualifying Transaction (as that term is defined under the TSXV policies), and as a result, it is anticipated that the approval of the shareholders of Rebel to the Proposed Transaction will not be required.  However, depending on the ultimate structuring of the Proposed Transaction, Rebel may be required to obtain shareholder approval under corporate law to approve certain matters ancillary to the Proposed Transaction.

Earnest Money Deposit and Proposed Non-Brokered Private Placement Financing

Pursuant to the Letter of Intent, Rebel has a 60-day period from the date of the Letter of Intent to conduct due diligence on the Property.  In connection therewith, Rebel is required to deposit US$640,000 (the “Deposit”) as earnest money with Chicago Title Insurance Company within five days of the date of the Letter of Intent.  The Deposit will be held in trust pending completion or termination of the Proposed Transaction.  If the Proposed Transaction proceeds, the Deposit would be credited on account of the Purchase Price on closing of the Proposed Transaction.

It is anticipated that a newly created entity to be acquired by Rebel on completion of the Proposed Transaction will, as soon as possible, complete a non-brokered equity private placement (the “Non-Brokered Financing”) for gross proceeds of no less than C$1 million to fund payment of the Deposit and certain other diligence-related costs and expenses in connection with the Proposed Transaction.  The actual size of the Non-Brokered Financing (subject to a minimum of C$1 million) and the issue price will be determined in the context of the market. 

Proposed Brokered Private Placement Financing

It is also anticipated that Rebel will complete a brokered private placement of subscription receipts (the “Brokered Financing”) for gross proceeds of approximately C$34 million to fund a portion of the Purchase Price. The actual size of the Brokered Financing and the issue price will be determined in the context of the market.

Rebel has engaged Canaccord Genuity Corp. (“Canaccord”) to act as the lead agent in connection with the Brokered Financing.  In connection with the Brokered Financing, Canaccord will be paid a cash commission equal to 6.0% of the gross proceeds of the Brokered Financing and, subject to regulatory approval, compensation options exercisable at any time up to 18 months following the date of closing of the Brokered Financing to purchase up to that number of common shares of Rebel as is equal to 6.0% of the number of Subscription Receipts sold pursuant to the Brokered Financing, at an exercise price equal to the issue price of the Subscription Receipts. 

The gross proceeds of the Brokered Financing will be held in escrow pending satisfaction of certain specified escrow release conditions, including the satisfaction of all conditions precedent to the completion of the Proposed Transaction (other than the payment of the Purchase Price). 

The Non-Brokered Financing and the Brokered Financing are both subject to TSXV approval.

Appointment of Shant Poladian and Anish Chopra to Rebel’s Board of Directors

Rebel is pleased to announce that Shant Poladian and Anish Chopra have been appointed to Rebel’s board of directors, subject to TSXV approval. In addition, Mihalis Belantis has agreed to resign as a director of the Corporation. Messrs. Poladian and Chopra bring significant experience in real estate and capital markets. For additional information see Messrs. Poladian and Chopra’s biographies under “Proposed Management and Directors” below.

Proposed Management and Directors

Subject to TSXV approval, on completion of the Proposed Transaction, it is currently anticipated that the board of directors of Rebel will consist of the following five directors and the management will consist of Mark MacDonald, Shant Poladian, Joe Damiani and Wilbur Wong. 

Mark MacDonald, Director and Co-Chief Executive Officer

Mr. MacDonald is founder and Chief Executive Officer of C15Edge Data Centers, which has developed and operates a highly secure, redundant 24/7 colocation facility in Toronto, Ontario. In addition, Mr. MacDonald has over 30 years of experience in broad investment, corporate development and restructuring, including co-managing Ontario Teachers Pension Plan’s $4.5 billion portfolio of private investments.

Shant Poladian, Director and Co-Chief Executive Officer

Mr. Poladian has over 20 years of experience in real estate and capital markets, including as the founding Chief Executive Officer of FAM REIT which developed, leased and financed a 3 MW 64,000 square foot mission critical data center in Winnipeg, Manitoba for Bell MTS. In addition, Mr. Poladian has acted as a director of Amica Mature Lifestyles Inc., Equity Research Analyst at Canaccord Genuity and Managing Director – Investment Banking at Eight Capital.

Joe Damiani, Chief Operating Officer

Mr. Damiani is a data center and cloud service professional with over 25 years of international experience in Service Provider, IT Outsourcing and Financial Services verticals.  Most recently Vice President at C15Edge Data Centers, Mr. Damiani assisted with the launch and growth of the organization. Mr. Damiani was formerly VP & GM, Capris Data Center, Director, ThinOffice at Ceryx and Director, Product at Bird on a Wire Networks (acquired by AT&T Canada).

Wilbur Wong, Interim Chief Financial Officer and Chief Investment Officer

Mr. Wong has over 10 years of experience in real estate and capital markets, including VP of Investments for FAM REIT.  Mr. Wong is a former VP of Investment Banking at Eight Capital, Director of Asset Management at KEYreit, Asset Manager for GWL, and Real Estate Analyst for Delta Hotels and Blackwood Partners.

T. Richard Turner, Independent Director

Mr. Turner currently serves as Board Chair of ViveRE Communities Inc. He has acted as chair and/or director of many public real estate companies/REITs, including Pure Industrial Real Estate Trust, Invesque Inc., HealthLease Properties Real Estate Trust, IAT Air Cargo Income Fund and Sunrise Senior Living Real Estate Trust.

Andrew Oppenheim, Independent Director

Mr. Oppenheim is a partner and corporate lawyer at Gowlings WLG and has acted as the lead independent director of Amica Mature Lifestyles Inc.

Anish Chopra, Independent Director

Mr. Chopra is a Managing Director and Portfolio Manager at Portfolio Management Corp. Mr. Chopra has acted as a Managing Director and Head of the Innovative Solutions Group at TD Asset Management.

Details of insiders of Rebel will be disclosed in a further news release.

Filing Statement and Information Circular

In connection with the Proposed Transaction and pursuant to the requirements of the TSXV, Rebel will file a filing statement or a management information circular on its issuer profile on SEDAR at www.sedar.com, which will contain details regarding the Proposed Transaction, the Brokered Financing and the Property.

Sponsorship

Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless an exemption from the sponsorship requirement is available. The parties will be seeking a waiver of any requirement for a sponsor, but in the event a waiver is not available, the parties will update the markets accordingly.

Trading Halt

Trading in the Rebel Shares has been halted in compliance with the policies of the TSXV.  Rebel anticipates that trading will remain halted pending the review of the Proposed Acquisition by the TSXV.

General

Rebel will issue additional news releases relating to the Proposed Transaction, including information relating to transaction structure, the Brokered Financing and summary financial information of the Property, if and when the parties enter into the definitive agreement. For further information, please contact:

Craig Lindsay(604) 218-0559craig@otisgold.com

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV, majority of the minority shareholder approval.  Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained.  There can be no assurance that the Proposed 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 Proposed 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 press release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Statements Regarding Forward-Looking Information

This press release contains forward-looking information within the meaning of Canadian securities laws.  Such information includes, without limitation, information regarding the terms and conditions of the Proposed Transaction, the terms of the Non-Brokered Financing and the Brokered Financing and the composition of the board of directors of the resulting issuer upon completion of the Proposed Transaction.  Although Rebel believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct.

Forward looking information is typically identified by words such as: “believe”, “expect”, “anticipate”, “intend”, “estimate”, “postulate” and similar expressions, or are those, which, by their nature, refer to future events.  Rebel cautions investors that any forward-looking information provided by Rebel is not a guarantee of future results or performance, and that actual results may differ materially from those in forward looking information as a result of various factors, including, but not limited to: Rebel's ability to complete the Proposed Transaction; the expected timing and terms of the Proposed Transaction and the related private placements; the state of the financial markets for Rebel's securities; the state of the real estate sector in the event the Proposed Transaction is completed; recent market volatility; Rebel's ability to raise the necessary capital or to be fully able to implement its business strategies; and other risks and factors that Rebel is unaware of at this time.  The reader is referred to Rebel's initial public offering prospectus for a more complete discussion of applicable risk factors and their potential effects, copies of which may be accessed through Rebel’s issuer page on SEDAR at www.sedar.com.  

The forward-looking statements contained in this press release are made as of the date of this press release.  Rebel disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

About Rebel

Rebel is incorporated under the provisions of the Business Corporations Act (British Columbia) with its registered and head office in Vancouver, British Columbia. Rebel is a “reporting issuer” in the provinces of Ontario, British Columbia and Alberta. The Rebel Shares are listed for trading on the TSXV under the symbol “RBL.P”.

SOURCE: Rebel Capital Inc.