TORONTO, Sept. 6,
2024 /CNW/ - Wellfield Technologies Inc. (TSXV:
WFLD) (OTCQB: WFLDF) (FSE: K8D) ("Wellfield") and Leonovus
Inc. (TSXV: LTV) ("Leonovus") are pleased to announce that,
further to Wellfield's July 16, 2024
news release, they have entered into a definitive agreement (the
"Definitive Agreement") dated September 5, 2024 outlining the terms upon which
Leonovus will acquire all of the issued and outstanding common
shares in the capital of Tradewind Markets Inc.
("Tradewind"), a wholly-owned subsidiary of Wellfield
incorporated under the laws of Delaware, to Leonovus in exchange for an
aggregate of 444,444,444 pre-consolidated common shares in the
capital of Leonovus (the "Leonovus Shares"), which will
result in a "Reverse Take-Over" of Leonovus (the "RTO")
under the policies of the TSX Venture Exchange (the "TSXV").
In connection with the completion of the RTO, Leonovus will change
its name to "Tradewind Markets Inc." (the "Resulting
Issuer"), or such other name as determined by the parties.
The Resulting Issuer: Tradewind Markets Inc.
Tradewind: Revolutionizing Gold Ownership and Trading
Tradewind is at the forefront of the digital gold market,
leveraging blockchain technology and a unique collaboration with a
sovereign mint to provide investors with digital ownership of
securely custodied gold, along with powerful 24/7 trading
solutions. Through its flagship products, VaultChain™ Gold and
VaultChain™ Silver, Tradewind has digitized ownership of over
CDN$170 million in physical metal on
its platform. In the coming months, Tradewind will introduce a
suite of smart contract-based decentralized finance
(DeFi) services, including an Automated Market-Maker
(AMM) for instant settlement in spot gold trading, and products
offering investors a unique opportunity to generate yield on gold
holdings, denominated in gold.
Tradewind's collaboration with a sovereign mint to digitize
ownership of physical metal combined with its blockchain-based
trading ecosystem is one of a kind and represents a pivotal
advancement in the physical precious metals market. This
proprietary platform removes barriers for retail investors,
enhances efficiencies for institutions, and significantly lowers
trading costs. Thanks to its innovations in gold digitization and
blockchain-based trading, Tradewind is well-positioned to
capitalize on increasing demand from both institutional and retail
investors seeking an accessible and affordable hedge against
economic and geopolitical uncertainty.
Support Agreement with Wellfield Technologies
Tradewind will enter a support agreement with Wellfield
Technologies to enhance its platform's capabilities. Under this
agreement, Wellfield will supply a team of professionals with
extensive experience in electronic trading, market structure, gold
investment management, market operations, cryptography, and
blockchain technology. This collaboration aims to ensure seamless
technology transfer and operational support during the initial 18
months of Tradewind's service expansion, reinforcing its position
as a leader in the digital gold trading landscape.
Levy Cohen, Chief Executive Officer of Wellfield, stated:
"Spinning out Tradewind into this RTO is a strategic move that
underscores our commitment to advancing decentralized
finance solutions in traditional markets. Tradewind has developed a
truly innovative platform that redefines physical gold ownership
and trading. By launching this RTO, we are positioning Tradewind to
independently accelerate its growth and fully capitalize on the
enormous potential of its unique technology. We are excited to see
Tradewind take this next step and are confident that it will
continue to lead the way in the digitization of gold."
Michael Gaffney, Chair and Chief
Executive Officer of Leonovus, stated: "Tradewind's spin-out
through this RTO provides a unique opportunity in the gold trading
industry. As global economic uncertainties persist, the gold market
continues to demonstrate its resilience, with demand for gold as a
safe-haven asset reaching new heights. According to the World Gold
Council, gold demand in 2023 exceeded 4,700 tonnes, driven by
robust central bank purchases and strong investor interest. This
underscores gold's critical role in diversifying and stabilizing
investment portfolios. The technology and vision behind Tradewind
align perfectly with this growing demand, offering a seamless
digital solution for gold ownership and trading. We are excited to
support this transition and believe that Tradewind is poised to
significantly impact the market, bridging the gap between
physical assets and the world of decentralized
finance."
Financing Particulars
In connection with the RTO, Leonovus announces that it has
appointed Research Capital Corporation as an agent to Leonovus for
a proposed private placement equity financing (the
"Financing") of subscription receipts of a wholly-owned
subsidiary of Leonovus (the "Subscription Receipts") for
minimum gross proceeds of $4,000,000
and a maximum of $6,000,000. The
price and terms of the securities of the Financing will be
determined in the context of the market.
Transaction Particulars
Pursuant to the Definitive Agreement, a newly incorporated
subsidiary of Leonovus will amalgamate with a newly incorporated
subsidiary of Leonovus under the Business Corporations
Act (Ontario), and such
resulting entity will become a wholly owned subsidiary of the
Resulting Issuer. On completion of the RTO, the Resulting Issuer
will issue replacement common shares in the capital of the
Resulting Issuer (the "Resulting Issuer Shares") and
replacement warrants to purchase Resulting Issuer Shares to the
current holders of Leonovus Shares and the current holders of
warrants to purchase Leonovus Shares. Stock options of Leonovus
will be cancelled on closing of the RTO.
As part of the RTO, and subject to any required shareholder and
regulatory approvals, Leonovus will: (i) change its name to
"Tradewind Markets Inc." or such other name as determined by the
parties; (ii) change its stock exchange ticker symbol; (iii)
consolidate the Leonovus Shares on a basis of 11.11
pre-consolidated Leonovus Shares for one new post-consolidated
Leonovus Share (the "Stock Consolidation"); (iv) adopt new
by-laws and other corporate policies; (v) adopt new security-based
compensation arrangements; and (vi) reconstitute the board of
directors and management of the Resulting Issuer.
The full particulars of the RTO, and the Resulting Issuer will
be described in the management information circular of Leonovus
(the "Leonovus Circular") prepared in accordance with the
policies of the TSXV. A copy of the Leonovus Circular will be
available electronically on SEDAR+ (www.sedarplus.ca) under
Leonovus' issuer profile in due course. It is anticipated that an
annual and special meeting of the securityholders of Leonovus will
be held later in 2024 (the "Leonovus Meeting").
Shareholder approval at the Leonovus Meeting is required for
several of the transactions described in this press release,
including: (i) the change of name to "Tradewind Markets Inc."; (ii)
the Stock Consolidation; (iii) the approval of the RTO; (iv) the
election of directors; (v) the appointment of auditors; (vi) the
adoption of new securities compensation arrangements; and (vii) the
adoption of new by-laws. Each of the resolutions will require
approval by a 50% majority of votes cast at the Leonovus Meeting,
other than the resolutions to approve the change of name and the
Stock Consolidation, which will require approval by two-thirds (66
2/3%) of the votes cast at the Leonovus Meeting. The
resolution for approval of the RTO will also require approval by
disinterested shareholders of Leonovus.
Leonovus securityholders are urged to read the Leonovus Circular
once available, as it will contain additional important information
about the RTO. The RTO is expected to be completed in late November
or early December 2024.
In support of the RTO and related transactions, each of the
directors and officers of Leonovus, representing an aggregate of
1,429,175 Leonovus Shares (approximately 7% of the issued and
outstanding Leonovus Shares) have entered into a voting support
agreement with Wellfield in support of the RTO. The respective
boards of directors of each of Wellfield and Leonovus, following
consultation with their financial and legal advisors, have
unanimously approved the Definitive Agreement and the RTO.
The Resulting Issuer is expected to be owned approximately: (i)
70.6% by Wellfield, (ii) 21.2% by the holders of Subscription
Receipts, (iii) 3.3% by the current holders of Leonovus Shares, and
(iv) 4.9% by certain creditors of Leonovus, after giving effect to
the RTO and the Financing (assuming the Financing is completed for
aggregate gross proceeds of $6,000,000). The Resulting Issuer Shares
issuable to Wellfield will be subject to TSXV escrow policies and
releasable in tranches over a period of 36 months following the
closing of the RTO. In addition, 45% of the Resulting Issuer
Shares issuable to Wellfield shall be subject to contractual escrow
and releasable in tranches over 24 months following the closing of
the RTO.
In conjunction with the RTO, Wellfield will also provide to the
Resulting Issuer: (i) an intellectual property support agreement
for post-closing services and support related to the Tradewind
business valued at approximately $1,000,000; and (ii) a customary non-competition
agreement for a term of 5 years.
Wellfield and the Resulting Issuer will also enter into an
investor rights agreement granting Wellfield a participation rights
in future Resulting Issuer financings, subject to Wellfield holding
at least 5% of the voting rights applicable to the outstanding
Resulting Issuer Shares.
Completion of the RTO is subject to several conditions,
including, but not limited to, receipt of Leonovus shareholder
approval, receipt of TSXV approval, closing of the Financing,
completion of certain upgrades to the Tradewind platform, no
material adverse change having occurred for either Wellfield nor
Leonovus, and compliance with the terms of the Definitive Agreement
by each of Wellfield and Leonovus. There can be no assurance that
the RTO will be completed as proposed or at all.
Upon completion of the RTO, the current directors and officers
of Leonovus will resign and the board of directors of the Resulting
Issuer (the "Resulting Issuer Board") will be comprised of
four persons nominated by Wellfield and one person nominated by
Leonovus for appointment to the Resulting Issuer Board at the
Leonovus Meeting, to hold office until the next annual general
meeting of the Resulting Issuer or until their successors are
elected or appointed. Wellfield will nominate the Chief Executive
Officer, the Chief Financial Officer and the Chief Operating
Officer of the Resulting Issuer for appointment by the Resulting
Issuer Board.
Investors are cautioned that, except as disclosed in the
Leonovus Circular to be prepared in connection with the RTO, any
information released or received with respect to the RTO may not be
accurate or complete and should not be relied upon. Trading in the
securities of Leonovus should be considered highly speculative.
The Definitive Agreement was negotiated at arm's length between
representatives of Wellfield and Leonovus. The Leonovus Shares will
remain halted pending further filings with the TSXV. Leonovus may
seek waivers or exemptions from certain listing requirements of the
TSXV in connection with the RTO, including the requirement to
obtain a sponsor for the RTO. However, there can be no assurance
that any waivers will be obtained. If a waiver from the sponsorship
requirement is not obtained, a sponsor will be identified later. No
deposit, advance or loan has been made or is to be made in
connection with the RTO.
Further details regarding the RTO, including details
regarding the management and board of directors of the Resulting
Issuer and the terms of the Financing will be disclosed in a
subsequent news release.
Update on Leonovus Cylentium Transaction
Leonovus previously announced a proposed transaction in
January 2024 with Cylentium Research
Ltd. for the sale of Leonovus' current software and patents to
Cylentium, which remains open and contingent upon Cylentium raising
the necessary funds to complete the acquisition (the "Cylentium
Transaction"). If the Cylentium Transaction proceeds
prior to the RTO, then the Cylentium Transaction would require
approval at the Leonovus Meeting by two-thirds (66 2/3%) of the
votes cast by Leonovus shareholders as a sale of substantially all
of the assets of Leonovus. If this transaction is
successfully completed, the proceeds therefrom would represent
significant capital for the Resulting Issuer, providing a strong
financial foundation for its future growth and development.
The TSXV has in no way passed upon the merits of the proposed
RTO and has neither approved nor disapproved the contents of this
news release.
Advisors
Bennett Jones LLP is legal counsel to Wellfield and DS Lawyers
Canada LLP is legal counsel to Leonovus.
About Wellfield Technologies
Wellfield Technologies, Inc. (TSXV: WFLD) is a leading fintech
company specializing in innovative solutions leveraging blockchain
technology. Our platform Coinmama (web and Mobile app), provides
seamless access to the cryptocurrency market for over
3.5 million registered users across 180 countries. We offer
disruptive on-chain and web3 secure and friendly self-custody
solutions through Coinmama. Additionally, Wellfield operates
Tradewind Markets platform to digitize and trade real-world assets,
including our flagship VaultChain™ Gold and VaultChain™ Silver
products. Expanding our offerings for institutional clients, we
present Brane Trust aiming to operate in Alberta Canada's second qualified digital
asset custodian.
Join Wellfield's digital community on LinkedIn and Twitter,
and for more details, visit wellfield.io
About Leonovus
Leonovus is a secure data management software company. The
Leonovus suite of data management tools offer customers a complete
end-to-end data-centric solution. This solution can stand on its
own or integrates with the organization's zero-trust strategy and
architecture. It takes seamless advantage of the organization's
existing storage infrastructure and network architecture, working
on-premises in the cloud. It extends the data-centric controls
across the entire architecture, including cloud resources. To learn
more, please visit www.leonovus.com.
Cautionary Notice on Forward-Looking Statements
This news release contains statements that constitute
"forward-looking information" ("forward-looking information")
within the meaning of the applicable Canadian securities
legislation. All statements, other than statements of historical
fact, are forward-looking information and are based on
expectations, estimates and projections as at the date of this news
release. Any statement that discusses predictions, expectations,
beliefs, plans, projections, objectives, assumptions, future events
or performance (often but not always using phrases such as
"expects", or "does not expect", "is expected", "anticipates" or
"does not anticipate", "plans", "budget", "scheduled", "forecasts",
"estimates", "believes" or "intends" or variations of such words
and phrases or stating that certain actions, events or results
"may" or "could", "would", "might" or "will" be taken to occur or
be achieved) are not statements of historical fact and may be
forward-looking information. Forward-looking information in this
news release includes statements regarding: the completion of the
RTO; the completion of the Financing; the timeline to complete the
RTO and the Financing; the anticipated benefits of the RTO; the
conditions to be satisfied for completion of the RTO; completion of
the Stock Consolidation; the name and business carried on by the
Resulting Issuer; the reliance on a prospectus exemption for the
issuance of the Leonovus Shares to Wellfield; obtaining a waiver
from the TSXV sponsorship requirements; the timing and completion
of the Tradewind platform upgrades; the terms of the ancillary
agreements to the Definitive Agreement relating to the RTO,
including the support agreement, non-competition agreement and
investor rights agreement; and the approval of the TSXV of the
transactions contemplated herein, which are based on Wellfield and
Leonovus' current internal expectations, estimates, projections,
assumptions and beliefs, which may prove to be incorrect. These
statements are not guarantees of future performance and undue
reliance should not be placed on them. Such forward-looking
information necessarily involves known and unknown risks and
uncertainties, which may cause Wellfield and Leonovus' actual
performance and results in to differ materially from any
projections of future performance or results expressed or implied
by such forward-looking information. These risks and uncertainties
include but are not limited to Wellfield and Leonovus satisfying
the conditions for TSXV approval of the transactions herein; there
is no assurance that the Financing will be completed or as to the
actual gross proceeds to be raised in connection with the
Financing; there is no assurance that Wellfield and Leonovus will
obtain all requisite approvals for the RTO, including the approval
of the shareholders of Leonovus, or the approval of the TSXV for
the RTO (which may be conditional upon amendments to the terms of
the RTO); following completion of the RTO, the Resulting Issuer may
require additional financing from time to time in order to continue
its operations, which may not be available when needed or on terms
and conditions acceptable to the Resulting Issuer; unanticipated
costs and expenses of the RTO or the Financing; the ability of
Wellfield to conduct the Tradewind platform upgrades, in a timely
manner, if at all; new laws or regulations could adversely affect
the Resulting Issuer's business and results of operations; the
stock markets have experienced volatility that often has been
unrelated to the performance of companies, which fluctuations may
adversely affect the price of the Resulting Issuer's securities,
regardless of its operating performance; and general business,
financial market, economic, competitive, political and social
uncertainties. There can be no assurance that forward-looking
statements will prove to be accurate, and actual results and future
events could differ materially from those anticipated. Readers are
cautioned that the foregoing list is not exhaustive, and readers
are encouraged to review the disclosure documents accessible on
Wellfield and Leonovus' respective SEDAR+ profile at
www.sedarplus.ca. Readers are further cautioned not to place undue
reliance on forward-looking information as there can be no
assurance that the plans, intentions or expectations upon which
they are placed will occur. Such information, although considered
reasonable by management at the time of preparation, may prove to
be incorrect and actual results may differ materially from those
anticipated. Except as required by law, Wellfield and Leonovus
disclaims any intention and assumes no obligation to update or
revise any forward-looking information.
All information contained in this news release with respect to
Wellfield and Leonovus was supplied by the parties, respectively,
for inclusion herein, and each party and its directors and officers
have relied on the other party for any information concerning such
party.
Neither the TSXV nor its Regulation Services Provider (as that
term is defined in the policies of the TSXV) has approved nor
disapproved the contents of this news release, nor do they accept
responsibility for the adequacy or accuracy of this release.
SOURCE LeoNovus Inc.