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Brachium Capital and WeCommerce Enter Into Definitive Agreement and Increases Proposed Financing


NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

VANCOUVER, British Columbia, Nov. 26, 2020 (GLOBE NEWSWIRE) -- Brachium Capital Corp. ("Brachium") (TSXV: BRAC.P), a capital pool company, and WeCommerce Holdings Ltd. ("WeCommerce") are pleased to announce that they have entered into an amalgamation agreement dated November 25, 2020 (the "Amalgamation Agreement") which outlines the terms and conditions pursuant to which Brachium and WeCommerce will complete a transaction that will result in a reverse takeover of Brachium by the shareholders of WeCommerce (the "Transaction"). 

In addition, as previously announced on October 29, 2020, WeCommerce and Brachium engaged Canaccord Genuity Corp. and TD Securities Inc., to act as co-lead agents, together with Stifel Nicolaus Canada Inc. and PI Financial Inc. (collectively, the "Agents") to complete a private placement offering of subscription receipts of WeCommerce (the "Subscription Receipts") on a "commercially reasonable efforts" basis (the "Offering"). WeCommerce and Brachium are pleased to announce that the aggregate amount of proceeds to be raised pursuant to the Offering has been increased to $60,000,871.

For additional information concerning the Transaction and the foregoing matters, please refer to Brachium's press releases dated August 17, 2020 and October 29, 2020 which are available under Brachium's SEDAR profile at www.sedar.com and the filing statement which will be filed under Brachium's SEDAR profile at www.sedar.com (the "Filing Statement").

The Transaction

Subject to TSX Venture Exchange ("TSXV"), shareholder approval and other conditions set out in the Amalgamation Agreement, WeCommerce will amalgamate with a wholly-owned subsidiary of Brachium in order to facilitate the completion of the Transaction. Upon completion of the Transaction, it is the intention of the parties that the resulting company after the completion of the Transaction (the "Resulting Issuer") will continue to carry on the business of WeCommerce.

Immediately prior to the completion of the Transaction, Brachium will effect: (i) a consolidation of all of the outstanding Brachium Class A common shares (the "Brachium Shares") on a 36.9763 to 1 basis (the "Consolidation"), resulting in an aggregate of approximately 214,286 post-Consolidation Brachium Shares outstanding; and (ii) a name change pursuant to which Brachium will change its name to "WeCommerce Holdings Ltd." or such other name as determined by WeCommerce.

Pursuant to the Amalgamation Agreement, in connection with the Transaction, the holders of common shares in the capital of WeCommerce (the "WeCommerce Shares") shall receive 19.8554 post-Consolidation Brachium Shares (the "Resulting Issuer Shares") in exchange for each WeCommerce Share held. Upon completion of the Transaction and without giving effect to the Offering (as defined below), the shareholders of Brachium will hold approximately 214,286 Resulting Issuer Shares and the shareholders of WeCommerce will hold approximately 27,175,891 Resulting Issuer Shares.

In addition to the foregoing, the former holders of Brachium securities convertible into Brachium Shares will hold securities entitling them to acquire up to an additional 32,247 Resulting Issuer Shares and the former holders of WeCommerce securities convertible into WeCommerce Shares will receive securities entitling them to acquire up to an additional 1,566,910 Resulting Issuer Shares.

Concurrent Financing

WeCommerce and Brachium intend to complete a private placement of 431,692 Subscription Receipts of WeCommerce at a price of $138.99 per Subscription Receipt for aggregate gross proceeds of up to $60,000,871.

Upon satisfaction of certain conditions, immediately prior to the closing of the Transaction, each Subscription Receipt will be automatically converted into one (1) WeCommerce Shares which will then be immediately exchanged for 19.8554 Resulting Issuers Shares, in each case without any further consideration or action by the holder thereof.

In connection with the Offering, WeCommerce has agreed to pay to the Agents a cash fee equal to six percent (6%) of the gross proceeds of the Offering, subject to a reduced commission of three percent (3%) for certain subscribers on a president's list (which is capped at a maximum of $20,000,000 of subscription proceeds) (the "Agents' Fee") and a corporate finance fee (the "Corporate Finance Fee") payable in cash. The gross proceeds of the Offering, less 50% of the Agents' Fee, the Corporate Finance Fee and all of the expenses of the Agents incurred in connection with the Offering, shall be held in escrow pending satisfaction of certain conditions, including, among others, the completion or waiver of all conditions precedent to the completion of the Transaction and the receipt of shareholder and regulatory approvals required for the completion of the Transaction (the "Escrow Release Conditions"). Upon satisfaction of the Escrow Release Conditions, the escrowed proceeds of the Offering, less any amounts owing to the Agents, will be released to WeCommerce, and each Subscription Receipt shall automatically convert into one (1) WeCommerce Share.

In the event the Offering is completed and is fully-subscribed, participants in the Offering will receive an aggregate of 8,571,429 Resulting Issuer Shares at a post-Transaction price per share of $7.00.

It is expected that the proceeds of the Offering will be used primarily for strategic acquisitions and general working capital purposes.

Directors and Officers of the Resulting Issuer

Upon completion of the Transaction, it is anticipated that the current directors and officers of Brachium will resign and that the management team of the Resulting Issuer following the completion of the Transaction will be comprised of Chris Sparling (Chief Executive Officer) and Evan Brown (Chief Financial Officer). It is anticipated that following the completion of the Transaction, the Resulting Issuer's board of directors will consist of five directors, namely Chris Sparling, Andrew Wilkinson, Shane Parrish, Sara Elford and Tim McElvaine.

The relevant experience of the proposed officers and directors of the Resulting Issuer is set out below.

Chris Sparling ? Proposed Chief Executive Officer and Director

Chris Sparling is the co-founder and general partner of Tiny, an ever-growing conglomerate focused on acquiring wonderful internet businesses. Chris has helped scale Tiny through the acquisition of more than 30 businesses, including Dribbble, Meteor, Pixel Union, and We Work Remotely. Before starting Tiny, Chris was the CFO of MetaLab Design Ltd., one of the world's leading design agencies and several other successful technology firms, many of which he is still an active owner and board member. It is anticipated that Mr. Sparling will devote the majority of his time to the Resulting Issuer.

Evan Brown - Proposed Chief Financial Officer and Corporate Secretary

Evan Brown is the Chief Financial Officer at WeCommerce. Prior to joining WeCommerce, Evan was the Chief Financial Officer at Carmanah Technologies. Previously, Evan held senior financial positions in Canada and abroad, including Goldman Sachs, State Street and York Capital. Evan holds a Bachelor of Commerce from Royal Roads University, a CPA designation and the Executive Program Certificate from Queen's University. It is anticipated that Mr. Brown will devote the majority of his time to the Resulting Issuer.

Andrew Wilkinson ? Proposed Director

In 2006, Andrew Wilkinson founded MetaLab Design Ltd., one of the world's top design agencies. After rapid growth, he used the profits to diversify into a variety of businesses, which today form Tiny. Andrew has gone from working out of his apartment a little over a decade ago, to today overseeing a group of companies with over 300 employees and tens of millions in revenue.

Shane Parrish ? Proposed Director

Shane Parrish, is the founder and CEO of Farnam Street Media Inc., a privately held media company. Mr. Parrish is also the CEO of Syrus Partners Inc., a private investment organization. He received his Bachelor of Computer Science from Dalhousie University in 2001, and his MBA from Royal Roads in 2009. Previously he worked for the Communications Security Establishment in various capacities from 2001 until 2016. Mr. Parrish has significant operating and financial experience through his firm's ownership and diverse collection of private investments.

Sara Elford ? Proposed Director

Sara Elford worked in the capital markets industry for more than twenty years, beginning in investment banking in New York in 1994. She transitioned to equity research in Canada in 1996 as generalist analyst following primarily small and mid capitalization growth companies until 2015. Since then, Sara has served on seven boards for companies listed on either the TSX-V, TSX and/or Nasdaq. She currently serves on the boards of BioSyent Inc., BQE Water Inc. and Xebec Adsorption Inc. She also previously served on the boards of Carmanah Technologies Corp., Hydrogenics Corp., Pure Technologies Ltd., and TSO3 Inc., all of which were acquired. Sara earned her CFA Charterholder designation in 1997 and completed the academic requirements for the directors' education program with the ICD in 2015. She is a graduate of Bishop's University (Finance Major and Economics Minor).

Tim McElvaine ? Proposed Director

Tim McElvaine serves as President of McElvaine Investment Management Ltd. Tim has served on the boards of Glacier Media Inc. (2014-2019), Rainmaker Entertainment Inc. (2007-2016), Humpty Dumpty Snack Foods (2005-2006) and Sun-Rype Products (2001-2005). Tim is also both a CPA and CFA.

Other Insiders

Upon completion of the Transaction, it is anticipated that Tiny Island Holdings Ltd., Table Holdings LP and Freemark Partners Holding Company LLC will be significant shareholders of the Resulting Issuer.

Tiny Island Holdings Ltd. is a holding company beneficially owned by Andrew Wilkinson (director of the Resulting Issuer) as to 80% and Chris Sparling (proposed director and Chief Executive Officer of the Resulting Issuer) as to 20%.

Table Holdings LP is a private investment fund based in New York, USA.

Freemark Partners Holding Company LLC is a private investment fund based in New York, USA.

Financial Information of WeCommerce

The table below sets out certain financial data for the WeCommerce in respect of the periods for which financial information which will be included in the Filing Statement:

 6 months Ended
June 30, 2020
(Unaudited)
Year Ended
December 31, 2019

(Audited)
Total Revenues$9,475,338$15,168,051
Operating Income$1,240,596$933,871
Total Assets$26,691,024$14,016,376
Total Liabilities$17,835,932$13,113,695

Consolidated Capitalization

The following table sets forth the pro forma share capital of the Resulting Issuer, on a consolidated basis, after giving effect to the Transaction:

 Resulting Issuer Shares after giving effect to the Transaction and completion of the Offering
Resulting Issuer Shares held by existing Brachium shareholders214,286
Resulting Issuer Shares to be exchanged for WeCommerce Shares27,175,891
Resulting Issuer Shares reserved for issuance pursuant to the Offering8,571,429
Total non-diluted share capital of the Resulting Issuer: 35,961,606
Resulting Issuer Shares reserved for issuance pursuant to stock options issued in replacement of WeCommerce options1,566,910
Resulting Issuer Shares reserved for issuance pursuant to Brachium options21,429
Resulting Issuer Shares reserved for issuance pursuant to Brachium warrants10,818
Total Number of Diluted Securities37,560,763

About WeCommerce Holdings Ltd.

WeCommerce was incorporated on November 27, 2019, under the Business Corporations Act (British Columbia) (the "BCBCA") and, through its portfolio companies, has been operating in the Shopify eCommerce ecosystem since 2009. WeCommerce is not a reporting issuer in any province or territory of Canada. WeCommerce founders, Andrew Wilkinson and Chris Sparling, and a team of experienced executives have a proven track record of execution and creation of shareholder value, which consists of a family of companies and brands, including, Pixel Union, Out of the Sandbox, Yopify, SuppleApps, Rehash and Foursixty.

WeCommerce's primary focus is to build, grow and acquire businesses that serve the ecommerce platform ecosystem, with a focus on the Shopify ecosystem. These businesses consist largely of Software as a Service, Digital Goods and Services businesses. Generally, these businesses build digital goods such as Apps and Themes and run Agencies that support merchants. WeCommerce is focused on acquiring businesses with growth potential, a sustainable competitive advantage and that are, or have the potential to become, a leader within their particular market. WeCommerce targets businesses within the Shopify ecosystem due to its confidence in the Shopify platform, the fragmented nature of the ecosystem, and the attractive economics that the businesses generally exhibit. Given WeCommerce's management team's experience in this ecosystem, they believe they can understand those economics better than most of its competitors.

About Brachium Capital Corp.

Brachium is a capital pool company, incorporated for the purposes of identifying and evaluating businesses or assets with a view to completing a Qualifying Transaction (as such term is defined under the policies of the TSXV). Brachium was incorporated on March 4, 2019 under the BCBCA and is a reporting issuer in the provinces of British Columbia, Alberta, Saskatchewan and Ontario. The Brachium Shares are listed for trading on the TSXV. The Brachium Shares were halted on August 14, 2020 in connection with the announcement of the Transaction and remain halted as at the date hereof. Until completion of a Qualifying Transaction, Brachium will not carry on any business other than the identification and evaluation of assets or businesses with a view to completing a proposed Qualifying Transaction.

Additional Information

Sponsorship of a Qualifying Transaction of a capital pool company is required by the TSXV unless an exemption or waiver from the sponsorship requirement is available. A request has been made to the TSXV for a waiver of the sponsorship requirements of Policy 2.2 ? Sponsorship and Sponsorship Requirements of the TSXV, but there is no assurance that such waiver will be granted.

Trading in the Brachium Shares is presently halted. It is uncertain whether the Brachium Shares will resume trading until the Transaction is completed and approved by the Exchange. There are not any interests in the Transaction held by non-arm's length parties to TSXV.

Except as disclosed herein there are no finder's fees or similar payable for the Transaction.

For further information regarding Brachium, WeCommerce, the Resulting Issuer or the Transaction, please refer to the Filing Statement which will be made available under Brachium's SEDAR profile on SEDAR at www.sedar.com.

Norton Rose Fulbright Canada LLP acts as legal counsel to Brachium. WeCommerce is represented by Fasken Martineau DuMoulin LLP. The Agents are represented by Miller Thomson LLP.

For more information, please contact:

Bryant Pike, Chief Executive Officer
bpike@westemedia.com
604-838-0110

Evan Brown, Chief Financial Officer
evan@wecommerce.co
250-888-9424

Cautionary Note Regarding Forward-Looking Information

This press release contains statements which constitute "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws (collectively, "forward-looking statements"), including statements regarding the plans, intentions, beliefs and current expectations of Brachium and WeCommerce with respect to future business activities and operating performance. Forward-looking statements are often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and includes information regarding: (a) expectations regarding whether the Transaction or the Offering will be consummated including whether the conditions to the consummation of the Transaction, the Offering or the conversion of the Subscription Receipts will be satisfied; (b) the timing for completing the Offering and the Transaction, if at all, and the conditions to such transaction; (c) expectations for other economic, business, and/or competitive factors; and (d) the use of proceeds of the Offering.

Investors are cautioned that forward-looking statements are not based on historical facts but instead reflect Brachium and WeCommerce's respective management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although Brachium and WeCommerce believe that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed thereon, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the resulting issuer. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: the ability to close the Offering and to consummate the Transaction; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other conditions to the consummation of the Transaction on the proposed terms and schedule; the potential impact of the announcement or consummation of the Transaction on relationships, including with regulatory bodies, employees, suppliers, customers and competitors; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws and regulations both locally and in foreign jurisdictions; compliance with extensive government regulation; the risks and uncertainties associated with foreign markets; and the diversion of management time on the Transaction. These forward-looking statements may be affected by risks and uncertainties in the business of Brachium and WeCommerce and general market conditions, including COVID-19.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Brachium and WeCommerce have attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended and such changes could be material. Brachium and WeCommerce do not intend, and do not assume any obligation, to update the forward-looking statements except as otherwise required by applicable law.

Completion of the Transaction is subject to a number of conditions, including but not limited to TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Brachium should be considered highly speculative.

The TSXV has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.

Neither the 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.



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