CastleCap Announces Letter of Intent and Intention to Complete Its Qualifying Transaction

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CALGARY, AB / ACCESSWIRE / June 13, 2019 / CastleCap Capital Inc. (TSX-V: CSTL.P) ("CastleCap" or the "Corporation") is pleased to announce that it has entered into a non-binding letter of intent (the "Letter of Intent") dated June 11, 2019 with Plexus Technology Corp. ("Plexus") which outlines the general terms and conditions of a proposed transaction (the "Proposed Transaction") that will result in CastleCap acquiring all of the issued and outstanding common shares (the "Plexus Shares") and other securities of Plexus.

The Proposed Transaction is currently expected to be completed by way of a three-cornered amalgamation or other similar transaction between CastleCap and Plexus which will result in Plexus becoming a wholly-owned subsidiary of CastleCap.

Overview of Plexus

Plexus is incorporated in the Province of Alberta and is engaged in the business of utilizing local natural gas to generate electricity for various wholly owned enterprises. Plexus owns generation equipment to create electricity using Alberta's low-cost natural gas. The electricity will be sold to third parties, through multi-year Power Purchase Agreements (PPA's). A portion of the remaining generated electricity will be used to power large scale datacenters, blockchain miners, cannabis growers and greenhouse modules. Plexus enjoys a unique competitive advantage as stakeholder relationships have led to partnerships with energy producers that improve production net-backs for Plexus partners and provide wholesale priced electricity to off-take clients and to Plexus wholly owned enterprises.

Following the Closing and completion of the Plexus Financing (as defined below) and Ancillary Acquisitions (as defined below), Plexus is anticipating that it will acquire substantial electrical capacity and will be one of North America's lowest marginal cost electrical providers servicing large scale datacenters, blockchain miners, cannabis growers, greenhouse modules and other various industrial loads clients.

The Proposed Transaction

The Letter of Intent is to be superseded by a definitive agreement (the "Definitive Agreement") between CastleCap and Plexus with such agreement to include representations, warranties, covenants and conditions typical for a transaction of this nature. The Proposed Transaction is subject to, among other things, receipt of all applicable shareholder and regulatory approvals, the final approval of the Exchange and the satisfaction of customary closing conditions, including the conditions described below.

Prior to completion of the Proposed Transaction, the Corporation intends to hold a meeting of its shareholders for purposes of approving, among other matters, certain matters ancillary to the Proposed Transaction, including (i) a change of the name of CastleCap to " Plexus Power & Technology Corp." or such other similar name as Plexus may determine and which shall be acceptable to the Exchange, and (ii) a consolidation of the issued and outstanding common shares of CastleCap in an amount to be agreed between Plexus and CastleCap prior to execution of the Definitive Agreement but to be in the range of one "new" CastleCap common share for every 3 "old" CastleCap common shares (the "Consolidation"), with each post-Consolidation CastleCap common share being a "CastleCap Share".

Following the Closing, CastleCap will continue on with the business of Plexus with Plexus as its wholly subsidiary; owned and operating subsidiary and change its name to " Plexus Power & Technology Corp." or such other similar name as Plexus may determine and which shall be acceptable to the Exchange (CastleCap after the Proposed Transaction being referred to herein as the "Resulting Issuer"). Following completion of the Proposed Transaction, intends to list as a Tier 2 Industrial Issuer on the Exchange. The Proposed Transaction does not constitute a Non-Arm's Length Qualifying Transaction pursuant to TSXV Policy 2.4.

It is currently anticipated that under the Proposed Transaction, each shareholder of Plexus (excluding those receiving Plexus Shares as a result of the Plexus Financing) will receive 1.20 "new" CastleCap Share in exchange for each one (1) Plexus Common Share and each Warrant held by such holder.

It is expected that all CastleCap Shares (including CastleCap Shares issued upon exercise of CastleCap Warrants) and CastleCap Warrants (collectively "CastleCap Securities") issued pursuant to the Proposed Transaction, except those certain CastleCap Securities issued to U.S. persons, will be freely tradable under applicable Canadian securities legislation, but may be subject to Exchange imposed restrictions on resale. CastleCap Securities issued to U.S. persons will not be freely tradable and will be subject to restrictions upon trading under applicable U.S. securities laws. None of the securities to be issued pursuant to the Proposed Transaction have been or will be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and any securities issued pursuant to the Proposed Transaction are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 4(a)(2) and/or Regulation D of the U.S. Securities Act and applicable exemptions under state securities laws. The CastleCap Securities issued to U.S. persons may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under applicable U.S. securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

Further details about Plexus, the Proposed Transaction and the Resulting Issuer, including financial information, will be included in a subsequent press release in connection with the Transaction.

Proposed Plexus Financing

In connection with the Proposed Transaction, Plexus and CastleCap are proposing to complete a private placement of subscription receipts (the "Plexus Subscription Receipts") for up to $3,500,000 (the "Plexus Financing"). Helios Blockchain Solutions Inc. ("Helios") owns or exercises control or direction over (including managed accounts), directly or indirectly, approximately 44.90% of Plexus's current outstanding common shares and, if warrants and stock options held by them were exercised, would hold approximately 50.33% of CastleCap's then outstanding common shares, not including shares issuable pursuant to the Plexus Financing. Helios is incorporated pursuant to the laws of the Province of Alberta. In addition, Vytal Alternative Investments Inc.("Vytal") owns or exercise control or direction over (including managed accounts), directly or indirectly, approximately 25.02% of Plexus's current outstanding common shares and, if warrants and stock options held by them were exercised, would hold approximately 32.26% of CastleCap's then outstanding common shares, not including shares issuable pursuant to the Plexus Financing. Vytal is incorporated pursuant to the laws of the Province of Alberta.

Each Plexus Subscription Receipt will be deemed to be converted into one unit of Plexus (a "Plexus Unit") without further payment from or action on the part of the holder and concurrently with the satisfaction of certain escrow release conditions, including, among other things, confirmation that there is no impediment to the completion of (i) the Consolidation, (ii) the acquisition of two separate entities by Plexus (the "Ancillary Acquisitions"), and (iii) the Proposed Transaction. Each Plexus Unit will consist of one Plexus Share and one half Plexus Share purchase warrant (each whole Plexus Share purchase warrant, a "Plexus Warrant"). Upon completion of the Consolidation and the Proposed Transaction, holders of Plexus Shares referred to above will receive "new" CastleCap Shares and CastleCap Warrants in exchange for their Plexus Shares and Plexus Warrants.

Plexus intends to use the net proceeds of the Plexus Financing and CastleCap's existing cash on hand to complete the Ancillary Acquisitions and for general corporate purposes.

Conditions to the Proposed Transaction

Completion of the Proposed Transaction is subject to certain conditions precedent including, among other things:

  • the satisfactory completion of due diligence investigations by each of CastleCap and Plexus;
  • the receipt of all required approvals by the respective boards of directors of CastleCap and Plexus;
  • closing of the Plexus Financing;
  • completion of the Ancillary Acquisitions;
  • CastleCap having a cash balance net of all liabilities and payables of approximately $200,000;
  • the receipt of any requisite approvals of the shareholders of CastleCap required by applicable law or Exchange requirements;
  • the receipt of approval of the Proposed Transaction by shareholders of Plexus;
  • the receipt of all required consents, approvals and authorizations of any regulatory authorities, including, without limitation, the Exchange, as applicable; and
  • the receipt of all required consents and approvals of third parties.

Proposed Management and Board of Directors of the Resulting Issuer

It is currently anticipated that all of the current officers and all of the current directors of CastleCap will resign from their respective positions with CastleCap. Subject to Exchange approval, on completion of the Proposed Transaction, it is currently anticipated that the board of directors of the Resulting Issuer will be nominated upon agreement between Plexus and CastleCap and will consist of Cameron MacDonald, Damon Umscheid, Charles Chebry, Scott Reeves and a director to be named.

Details with respect to the additional proposed officers and directors of the Resulting Issuer, including the background of each such proposed individual, will be announced in subsequent disclosure.

Halt of Trading of Common Shares of the Corporation

In accordance with the policies of the Exchange, the common shares of the Corporation are currently halted from trading and will remain halted until further notice.

Sponsorship

Sponsorship may be required by the TSXV unless exempt in accordance with TSXV policies. The Corporation is currently reviewing the requirements for sponsorship and intends to apply for a waiver from the sponsorship requirements. There is no assurance that a waiver from this requirement will be obtained. The Corporation intends to include any additional information regarding sponsorship in a subsequent press release.

All information contained in this news release with respect to the Corporation and Plexus 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 the other party.

Further Information

In accordance with the policies of the Exchange, further details about the Proposed Transaction and the Resulting Issuer will be provided in a comprehensive press release when the parties enter into a Definitive Agreement, including details related to the business and assets of Plexus, proposed consideration, description of financing arrangements and loans. Further details will also be provided and in the disclosure document to be prepared and filed in respect of the Proposed Transaction.

Investors are cautioned that, except as disclosed in the disclosure document 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.

For further information, please contact:

Charles Chebry, President and Chief Executive Officer of CastleCap Capital Inc.
Email: [email protected]
Phone: (403) 680-8511

Cameron MacDonald, Chief Executive Officer of Plexus Technology Corp.
Email: [email protected]
Phone: (403) 585-9875

All information contained in this press release with respect to CastleCap and Plexus was supplied by the parties, respectively, for inclusion herein, and CastleCap and its directors and officers have relied on Plexus for any information concerning such party.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and, if applicable, pursuant to the requirements of the TSXV, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder and regulatory 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 the Corporation should be considered highly speculative.

This press release is not an offer of securities for sale in the United States. The securities described in this press release have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the U.S. Securities Act of 1933, as amended) absent registration or an exemption from registration. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction where such offer, solicitation, or sale would be unlawful.

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 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 RELEASE.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the Proposed Transaction; the terms and conditions of the proposed Financing; future developments and the business and operations of the "Resulting Issuer" after the Proposed Transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and delay or failure to receive board, shareholder or regulatory approvals. There can be no assurance that the Proposed Transaction will proceed and that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Corporation and Plexus disclaim 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.

SOURCE: CastleCap Capital Inc.



View source version on accesswire.com:
https://www.accesswire.com/548596/CastleCap-Announces-Letter-of-Intent-and-Intention-to-Complete-Its-Qualifying-Transaction

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