NOT FOR DISSEMINATION IN THE UNITED STATES OR DISTRIBUTION TO U.S. NEWS WIRE SERVICES
TORONTO, Aug. 29, 2019 (GLOBE NEWSWIRE) -- FAX Capital Corp. (the Company) (CSE: FXC) is pleased to announce that it filed today a preliminary prospectus (the Preliminary Prospectus) with the securities regulatory authorities in each of the provinces and territories of Canada for a proposed public offering (the Offering) of units of the Company (Units). The Offering will be conducted on a best efforts basis by a syndicate of agents (the Agents) led by CIBC Capital Markets and National Bank Financial Inc. The offering price of the Units (the Offering Price) will be determined by negotiation among the Company and the Agents in conjunction with the filing of a final prospectus in respect of the Offering.
Each Unit will consist of one subordinate voting share of the Company (a Subordinate Voting Share) and one Subordinate Voting Share purchase warrant (a Founder Warrant). Each Founder Warrant will entitle the holder to acquire, subject to adjustment in certain circumstances, one Subordinate Voting Share at an exercise price equal to the Offering Price at any time prior to the date that is 24 months following the closing of the Offering (the Closing).
The Company's currently issued and outstanding Subordinate Voting Shares are listed for trading on the Canadian Securities Exchange (the CSE). The Company has applied to have the Subordinate Voting Shares that are currently issued and outstanding and trading on the CSE, as well as the Subordinate Voting Shares to be issued under the Offering (including the Subordinate Voting Shares issuable upon the exercise of the Founder Warrants) and the Founder Warrants listed on the TSX Venture Exchange (the TSXV). Such listing is subject to the approval of the TSXV in accordance with its original listing requirements or waiver therefrom. The TSXV has not conditionally approved the Company's listing and there is no assurance that the TSXV will approve the listing. The Company has also applied to list on both senior Canadian exchanges (the Toronto Stock Exchange and Aequitas NEO Exchange Inc.). Listing on either of these exchanges is subject to the approval of such exchange in accordance with its original listing requirements or a waiver therefrom. Neither of the senior Canadian exchanges have conditionally approved the Company's listing application and there is no assurance that either exchange will approve the listing application.
Substantial Equity Investment
Concurrently with and as a condition to Closing and subject to such Closing, Fax Investments Inc. (FII), the principal shareholder and promoter of the Company, will subscribe, on a private placement basis, for multiple voting share of the Company (Multiple Voting Shares) at a subscription price per share equal to the Offering Price for an aggregate subscription purchase amount equal to the sum of (i) $75,000,000 and (ii) the gross proceeds of the Offering realized by the Company on Closing in excess of the proceeds from the Minimum Offering (as defined below), up to a maximum subscription amount by FII of $200,000,000 (such private placement referred to as the Substantial Equity Investment). FII will not receive any Founder Warrants in connection with the Substantial Equity Investment.
FII currently holds 1,496,237 Subordinate Voting Shares and 1,501,502 Multiple Voting Shares, representing approximately 83.98% of the voting rights attached to all of the outstanding voting securities of the Company and 75.01% of the equity of the Company. Upon completion of the Substantial Equity Investment, FII will be controlled by Federated Capital Corp., a single family office operated for the benefit of the family of John F. Driscoll.
The Company will use the net proceeds of the Offering and the Substantial Equity Investment to make investments in accordance with its business objective and investment strategies as an investment holding company, as more particularly described in the Preliminary Prospectus.
Special Meeting of Shareholders
The Company has today filed on SEDAR its Notice of Meeting and accompanying management information circular (the Circular) in respect of its special meeting of shareholders (the Meeting), to be held at 10:00 a.m. on September 25, 2019 at the offices of Norton Rose Fulbright Canada LLP, 222 Bay Street, Suite 3000, Toronto, Ontario. The Circular will be mailed shortly to shareholders of record as at August 7, 2019. At the Meeting, or any adjournment or postponement thereof, the shareholders of the Company will be asked to vote on, among other things, a resolution approving the Substantial Equity Investment, resolutions amending and restating the rights, privileges, and restrictions of the Company's shares including fixing the number of votes attaching to Subordinate Voting Shares and the Multiple Voting Shares at one vote per share and 10 votes per share, respectively (the Share Amendment), a resolution approving a new by-law of the Company providing for certain measures voluntarily adopted by the Company and FII as described in the Preliminary Prospectus (the Voluntary Measures), and a resolution approving the Company's long-term incentive plan, as amended and restated, in the event that the Company's Subordinate Voting Shares are listed on the TSXV. Each of these matters is described in detail in the Circular, a copy of which can be found under the Company's profile on SEDAR at www.sedar.com, along with other materials relating to the Meeting.
Closing of the Offering is conditional upon a number of closing conditions, including but not limited to the sale of a minimum of $25,000,000 of Units (the Minimum Offering), the completion of the Substantial Equity Investment (described above), the Company's securities being listed on the TSXV or a senior Canadian exchange and, with effect on the business day prior to the Closing, the consolidation of its Subordinate Voting Shares and Multiple Voting Shares on the basis of one post-consolidated Subordinate Voting Share or Multiple Voting Share for each five pre-consolidation Subordinate Voting Shares or Multiple Voting Shares, (the "Share Consolidation") and the approval and implementation of the Share Amendment and the Voluntary Measures.
The Preliminary Prospectus contains important information relating to the Units and other securities offered by the Offering and has been filed with securities commissions or similar authorities in each of the provinces and territories of Canada. The Preliminary Prospectus is still subject to completion or amendment and has not yet become final for the purpose of a distribution of securities to the public. This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale or acceptance of an offer to buy these securities in any province or territory of Canada prior to the time a receipt for the final prospectus or other authorization is obtained from the securities commission or similar authority in such province or territory. Copies of the preliminary prospectus may be obtained from one of the Agents or under the Company's profile on SEDAR at www.sedar.com.
None of the Units, the Subordinate Voting Shares and the Founder Warrants 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. Accordingly, the Units may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About FAX Capital Corp.
The Company is an investment holding company with a business objective to maximize its intrinsic value on a per share basis over the long-term by seeking to achieve superior investment performance commensurate with reasonable risk. The Company intends to invest in equity, debt and/or hybrid securities of high quality businesses. The Company initially intends to invest in approximately 10 to 15 high-quality small cap public and private businesses located primarily in Canada and, to a lesser extent, the United States.
For additional information please contact:
Edward Merchand, CFO (416) 364-8788
Cautionary Note Regarding Forward-Looking Information
This press release contains forward-looking information. Such forward-looking statements or information are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Any such forward-looking information may be identified by words such as "proposed", "expects", "intends", "may", "will", and similar expressions. Forward-looking information contained or referred to in this press release includes, but may not be limited to, the details of the Offering; completion of the Offering; the applications for listing the Subordinate Voting Shares and Founder Warrants on the TSXV and the two senior Canadian exchanges; the details of the Substantial Equity Investment; and the date, time and location of the Meeting and the matters to be voted on thereat.
Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. Factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to, negotiations with the Agents concerning the particulars of the Offering including the Offering Price; comments from securities regulatory authorities on the Preliminary Prospectus and conditions of same for issuing a receipt for the final prospectus; the listing or other conditions imposed by the TSXV or the two senior Canadian exchanges for the listing of the Subordinate Voting Shares and the Founder Warrants; and other regulatory approvals required for the closing of the Offering. The forward-looking information in this press release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company.
Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. The forward-looking statements or information contained in this press release are expressly qualified by this cautionary statement.
No securities regulatory authority has either approved or disapproved of the contents of this news release. Neither the CSE nor its Market Regulator (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
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