Cresval Capital Corp. Announces Signing of Definitive Agreement With Tess Inc.
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
VANCOUVER, British Columbia, Jan. 17, 2018 (GLOBE NEWSWIRE) -- Cresval Capital Corp. (TSXV:CRV) (“Cresval”) today announced that it has entered into a definitive agreement (the “Definitive Agreement”) to complete a business combination with Tess Inc. (the “Proposed Transaction”), a 52% controlled subsidiary of Riot Blockchain Inc., a NASDAQ listed corporation. If completed in the manner contemplated by the Definitive Agreement, the Proposed Transaction will result in, among other things, Tess Inc. becoming “TessPay Inc.” (“TessPay”). TessPay is a technology company developing a blockchain-based secure payment platform for businesses that can guarantee they are paid on time and in full. As part of the Proposed Transaction, TessPay intends to complete a private placement (the “Proposed Financing”) of an unsecured convertible note (the “Note”) for gross proceeds of up to $3,500,000. Further details with respect to the Proposed Transaction and the Proposed Financing, as well as a description of TessPay and its business, is contained in Cresval’s news release dated December 11, 2017.
The Definitive Agreement contains customary representations, warranties and covenants for transactions of this nature, and provides that the Proposed Transaction is to be completed pursuant to a plan of arrangement (the “Arrangement”). To facilitate the Arrangement, among other things, Cresval will incorporate a new wholly owned subsidiary (“Cresval Subco”). Pursuant to the Arrangement, the following transactions shall occur sequentially on the closing date of the Proposed Transaction (the “Effective Date”) in the following order:
- Cresval shall undertake a reorganization of its share capital by amending its Articles to create an unlimited number of Class A Shares and Class B Shares.
- Each of the issued and outstanding common shares of Cresval as at the Effective Date shall be exchanged for one-third (1/3) of a Class A Share and one (1) Class B Share.
- The Cresval Subco and Tess shall amalgamate under the provisions of the Business Corporations Act of British Columbia (the “Amalgamation”) and the resulting amalgamated company will be known as “TessPay Inc.”
- Because of the Amalgamation, all of the issued and outstanding common shares of Cresval Subco held by Cresval shall be exchanged for 8.4 million common shares of TessPay (the “TessPay Shares”).
- Because of the Amalgamation, all of the issued and outstanding common shares of Tess shall be exchanged for TessPay Shares on the basis of 15.36 TessPay Shares for every pre-Amalgamation one (1) Tess Share (resulting in approximately 123.4 million TessPay Shares being held by the current Tess Shareholders).
- All of the issued and outstanding Class B Shares of Cresval will be redeemed and cancelled by Cresval at their redemption value, being equal to their “paid-up capital", as that term is defined in the Income Tax Act (Canada), and Cresval will pay the redemption value of the Class B Shares by the distribution of 8.4 million TessPay Shares to the Cresval Shareholders on a pro rata basis in accordance with such Common Shareholders’ respective holdings of Class B Shares.
- All Cresval stock options and share purchase warrants not exercised prior to the Effective Date will be exchanged for an option or warrant to acquire Class A Shares of Cresval, adjusting the number of Class A Shares exercisable to one-third of the nearest lower whole number of Cresval Shares which the holder of such Cresval options or shares would have received if exercised immediately prior to the Effective Date, at an exercise price equal to three (3) times the exercise price of the option or warrant so exchanged.
- All outstanding Tess options and share purchase warrants will be exchanged for an option or warrant to acquire the applicable number of TessPay Shares and the Note will become an obligation of TessPay.
Following the completion of the Arrangement, and subject to meeting the listing requirements of the TSX Venture Exchange (the “TSXV”), the TessPay Shares will be listed on the TSXV and TessPay will be a separate, stand-alone, listed corporation from Cresval, with all of the shareholders of Cresval also becoming shareholders of TessPay and holding approximately 6.8% of the issued shares of TessPay, calculated on a fully diluted basis. Cresval will continue to hold all of its resource properties and all of its liabilities, and subject to meeting the listing requirements of the TSXV, all of its Class A Shares will be listed on the TSXV.
The Proposed Transaction is subject to a number of conditions as set forth in the Definitive Agreement, including (without limitation), the approval of the shareholders of TessPay and Cresval, the completion of the Proposed Financing, and the receipt of all requisite regulatory, court and stock exchange approvals.
Cresval currently intends to convene a special general meeting of its shareholders in March, on a date yet to be determined, to consider and approve the Proposed Transaction. Certain directors and officers of Cresval have entered into voting support agreements with Tess pursuant to which they have agreed to support and vote in favour of the Proposed Transaction at the Cresval shareholders meeting. A comprehensive information circular containing further details of the Definitive Agreement and Proposed Transaction will be prepared and filed in connection with the shareholder meeting.
Forward-Looking Statements
The information provided in this press release may include forward-looking statements relating to future events or the future financial performance of the Company. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Words such as "anticipates," "plans," "expects," "intends," "will," "potential," "hope" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon current expectations of the Company and involve assumptions that may never materialize or may prove to be incorrect. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties. Detailed information regarding factors that may cause actual results to differ materially from the results expressed or implied by statements in this press release relating to the Company may be found in the Company's periodic filings on SEDAR, including the factors described in the sections entitled "Risk Factors" at www.SEDAR.com. The parties do not undertake any obligation to update forward-looking statements contained in this press release.
Completion of the Proposed Transaction and the Proposed Financing are subject to a number of conditions, including but not limited to, stock exchange acceptance. There can be no assurance that the Proposed Transaction and/or the Proposed Financing will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the information circular to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction and/or the Proposed Financing may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered to be highly speculative.
The TSXV has in no way passed upon the merits of the Proposed Transaction or the Proposed Financing and has neither approved nor disapproved the contents of this news release.
NEITHER 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.
Media Contacts:
TessPay
Karen Chase or Travis Kruse
Russo Partners, LLC
(646) 942-5627
(212) 845-4272
karen.chase@russopartnersllc.com
travis.kruse@russopartnersllc.com
Cresval
Lee Ann Wolfin, President & CEO
Cresval Capital Corp.
Office ph: (604) 682-3701
Mobile: (604) 913-7788
lawolfin@cresval.com
TessPay Investor Contact:
IR@RiotBlockchain.com
CRESVAL CAPITAL CORP.
Suite 900 – 570 Granville Street
Vancouver, British Columbia
V6C 3P1
Ph.: (604) 682-3701
Fax: (604) 682-3600