Mr. Scott Ackerman reports
VOICE MOBILITY SIGNS DEFINITIVE AGREEMENT
WITH MYCO SCIENCES LIMITED IN CONNECTION WITH
REVERSE TAKEOVER TRANSACTION
Further to a previously announced letter of intent, Voice Mobility International Inc. has entered into a share exchange agreement with MyCo Sciences Ltd., with respect to the acquisition by the company of all the issued and outstanding shares capital of MyCo.
The company and MyCo are at arm's length, and the acquisition of MyCo will constitute a reverse takeover of the company in accordance with the policies of the TSX Venture Exchange. Assuming completion of the acquisition, it is anticipated that the company will be listed on the exchange as a Tier 2 technology issuer.
About MyCo Sciences Ltd.
MyCo has developed and patented a solubilized copper zinc ammonium complex that appears to kill pathogenic fungi in plants directly while also potentially triggering a plant's immune system to defend itself against further fungus attack. In 2016 and 2017, the results of which were delivered in 2019 and 2020, MyCo, in collaboration with the research team at Exeter University, was granted two industrial partnership awards with the Research Council BBSRC in the United Kingdom worth over 1.19 million pounds sterling (approximately $2.06-million). MyCo is currently in discussions with a major North American research university to further research and develop its technology in the next two years with the end goal of commercialization applicable to the entire plant-based agricultural industry.
As of Sept. 30, 2020, MyCo has spent 793,848 pounds sterling (approximately $1,372,643) primarily on research and development and patent costs. MyCo has accounted 70,705 pounds sterling (approximately $122,256) in net losses from April 1, 2020, to Sept. 30, 2020. As at Sept. 30, 2020, MyCo had net assets of 27,723 pounds sterling (approximately $47,936), and total current liabilities of 185,998 pounds sterling (approximately $326,796). These numbers are taken from MyCo's unaudited interim financial statements of Sept. 30, 2020. Myco's total spend to date on research and development and patent costs is 1.98 million pounds sterling (approximately $3.42-million).
MyCo was incorporated in the United Kingdom as a private limited company on May 27, 2014.
Further financial information relating to MyCo will be released when available.
Terms of the acquisition
MyCo is a privately held company existing under the laws of the United Kingdom. Immediately prior to completion of the acquisition, MyCo will have 4,101 common shares issued and outstanding. Insiders of MyCo collectively control 70.54 per cent of the outstanding MyCo shares. Christopher Wightman, founder and executive chairman, and Stephen Chandler, an investor, will control 1,260 (30.72 per cent) and 1,123 (27.38 per cent) of the outstanding MyCo shares, respectively.
Under the terms of the acquisition, the company will complete a share consolidation on a one-for-24 basis such that upon completion of same, there will be no more than 2.4 million common shares of the resulting issuer outstanding (as such shares are constituted following completion of the consolidation, debt settlement and redomestication), and shareholders of MyCo will be issued postconsolidation common shares of the company in exchange for MyCo shares on a 3,535.723-for-one basis. This will result in the issuance of 14.5 million consideration shares based on the capital structure of MyCo on closing. Certain of the consideration shares will be subject to escrow pursuant to the policies of the exchange.
Further under the terms of the acquisition, the company will convert part of its debt into shares, and reduce its liabilities and encumbrances so that the company will have no debt, liabilities or encumbrances except for $75,000 (U.S.) at closing, and the company will have spun out (or otherwise disposed of) its Canadian subsidiaries and telecommunication assets.
Following completion of the acquisition and financing, it is anticipated that the shareholders of MyCo will own a significant majority (approximately 67.76 per cent) of the outstanding common shares of the company. It is also anticipated that the company will change its name in connection with the completion of the acquisition.
As a condition to completing the acquisition, the parties intend to complete a non-brokered private placement financing to raise at least $4.5-million (U.S.) through the issuance of up to 4.5 million subscription receipts at $1 (U.S.) per subscription receipt. The pricing of the financing was determined in the context of the market. The proceeds of the financing will be held in escrow, pending the company receiving all applicable regulatory approvals, completing the share consolidation described above and completing the acquisition. Upon satisfaction of the escrow conditions, each subscription receipt will automatically convert into one postconsolidation common share of the company for no additional consideration. If the acquisition is not completed on or before Dec. 31, 2020, the financing proceeds will be returned to the subscribers. Finders' fees may be payable to arm's-length parties which introduce the company to subscribers, in accordance with the policies of the exchange.
Upon closing of the acquisition and financing, the resulting issuer will have at least 21.4 million postconsolidated common shares issued and outstanding.
Board of directors and management changes
On completion of the proposed acquisition, the company's board of directors and management team will be reconstituted to consist of four directors, two directors designated by MyCo (being Mr. Wightman and Michael Sapountzoglou) and two directors designated by Voice Mobility (being David Arnold and Scott Ackerman), and Mr. Arnold will act as chief executive officer. Information on the chief financial officer and corporate secretary will be disclosed when available.
Dave Arnold, chief executive officer and director
Mr. Arnold's career has been as a senior executive and venture entrepreneur with publicly listed and private companies operating in multiple technology sectors, principally serving international markets. He is currently founder and CEO of Vibrant Global Ventures Ltd., a private company incorporated in Hong Kong with the aim of founding and building early-stage technology companies. Mr. Arnold began his career in 1983 with Burlington Northern Inc., a New York Stock Exchange-listed Fortune 100 transportation and energy resource company based in Seattle. He worked on the $1.4-billion (U.S.) acquisition of NYSE-listed El Paso Natural Gas Pipeline Company and the $900-million (U.S.) merger with NYSE-listed Southland Royalty Company, and was promoted to senior corporate planner, and then to vice-president and chief financial officer of BNI's telecommunications subsidiary, National Exchange Inc. In 1988, he joined Pacific Northern Inc., a private oil distribution company, as vice-president, finance, and then became president, CEO and director, expanding sales fourfold to $265-million (U.S.) in 65 countries, mainly to major shipping companies. In 1995, Mr. Arnold joined Intermind Corp., a private software company, as chief operating officer, and then became CEO and director, raising equity capital and establishing an intellectual property base of patents in Internet privacy, and completing commercial products for personalized information interchange with 170 corporate partners. In 1998, he joined N2H2 Inc., a Nasdaq-listed software company as chief operating officer after its initial public offering, negotiating international marketing partnerships and with the share price increasing 3.9 times during his tenure. Mr. Arnold joined eFund LLC, a venture capital company in 2000, first as venture partner, and then became managing director, negotiating several multiplayer game company acquisitions in Asia for a portfolio company, Mforma Group Inc. He also served as its chief financial officer and director, and as president and general manager, Asia, raising for Mforma $84-million (U.S.) in equity at a $260-million (U.S.) premoney valuation, resulting in a 4.1 times venture fund return on investment during his tenure. Mr. Arnold holds an undergraduate degree from Cornell University as a college scholar, and an MBA degree in general management from the Amos Tuck School of Business at Dartmouth College.
Chris Wightman, director
Mr. Wightman was an investment banker with Goldman Sachs (head of risk, Europe), Bankers Trust (equity derivatives), NatWest Markets (founder, and chief executive officer, NatWest Financial Products) and BankAmerica (NationsBank head of global equities). Subsequent to his investment banking career, Mr. Wightman became a serial entrepreneur focused on broad technology themes. Amongst other continuing businesses, in 1997, he founded what became PuriCore, a business developing the chemistry behind the mammalian immune system (HOCl). As executive chairman, he listed it on the full list of the London Stock Exchange in 2006. Work there included a successful United Kingdom grant program investigation of the application for HOCl in agriculture, and the filing of a number of patents reflecting the novel formulations discovered. The team that led the studies (then) at Oxford University, now at Exeter University, requested that Mr. Wightman consider the potential for a copper/zinc/phosphite chemistry in 2014. The result is MyCo Sciences.
Michael Sapountzoglou, non-executive chairman
Mr. Sapountzoglou's principal career has been primarily in shipping corporate finance, direct private equity and capital markets. He is currently co-founder and CEO of Bluewater Acquisition Corp., a public company incorporated in Canada with the aim of raising capital for shipping investments. He began his career with the G.S. Livanos shipping group in Athens and subsequently in its Monaco family office focusing on trading and asset management. In 1994, he joined the Angelopoulos Group at its family office in London and Athens, where he held various senior positions in group investments within the group until his departure in 2015. He led projects within the group's core investments, including steel, shipping, yacht building -- through the ownership of Oceanco and offshore UDW rigs. As finance director for Metrostar Management Corp., he led the company's shipping financing strategy and business development. In the offshore drilling sector, he was director of Deepsea Metro, a joint venture with Odfjell Drilling Ltd., where he co-led the company's fundraising efforts, raising over $1.5-billion in the capital markets. He has held various non-executive directorships, and following the group's major investment in PuriCore, he was also a director from 1999 to 2013 and chaired the remuneration and nomination committees. Mr. Sapountzoglou resides in Athens, was raised in Toronto, is a Canadian citizen, and holds an honours BA in economics and international finance from Wilfrid Laurier University in Canada.
Scott Ackerman, director
Mr. Ackerman is the president and CEO of Emprise Capital Corp., a private merchant bank based in Vancouver, B.C., which provides management, restructuring, accounting and financial services to public companies. Mr. Ackerman has been active in the public markets for more than 25 years, having held senior executive roles in various capacities from investor relations to executive management. In addition to his role with Emprise, Mr. Ackerman serves as director and/or officer of a number of publicly traded and private start-up venture companies.
Closing of the acquisition
Closing of the acquisition is subject to a number of conditions, including the satisfactory completion of due diligence, the completion of the consolidation, debt settlement and disposition, the redomiciling of the company's jurisdiction of incorporation from the state of Nevada to the province of British Columbia, the completion of the financing, receipt of all required shareholder, regulatory and third party consents, including exchange approval, and satisfaction of other customary closing conditions. The acquisition and financing cannot close until the required approvals are obtained. There can be no assurance that the acquisition and financing will be completed as proposed or at all. Except in connection with the financing, no finders' fees or commissions are payable in connection with completion of the acquisition.
Approval of the shareholders of the company will not be required in connection with the acquisition, in accordance with exchange Policy 5.2 as the acquisition is not a related-party transaction and no other circumstances exist which may compromise the independence of the company or other interested parties. The company is without active operations, and is not subject to a cease trade order or trading suspension, and shareholder approval is not required for the acquisition under applicable corporate or securities laws. The company does intend to seek shareholder approval for the consolidation, the redomiciling of its jurisdiction of incorporation and the reconstitution of its board of directors.
Sponsorship of the acquisition is required by exchange Policy 2.2 unless an exemption from the sponsorship requirement is available. The company will be seeking a waiver of any requirement for a sponsor in connection with the acquisition.
Trading in the common shares of the company will remain halted pending further filings with the exchange.
We seek Safe Harbor.
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