Hopefield Ventures Inc. Enters Letter of Intent with Madali Ventures Inc. for Qualifying Transaction
VANCOUVER, BC – TheNewswire – December 10, 2021 – Hopefield Ventures Inc. (TSXV:HVI.P) (“Hopefield”) is pleased to announce that it has entered into a binding letter of intent (the “LOI”), dated effective December 8, 2021, outlining the general terms and conditions with respect to the proposed acquisition (the “Proposed Acquisition”) by Hopefield of all of the issued and outstanding securities of Madali Ventures Inc. (“Madali” or “Madali Ventures”).
The Proposed Acquisition of Madali will constitute a reverse takeover and Hopefield’s “Qualifying Transaction” under Policy 2.4 of the TSX Venture Exchange (the “Exchange”). Assuming completion of the Proposed Acquisition, it is anticipated that Hopefield will graduate to Tier 2 of the Exchange as a technology issuer.
Madali is a private company incorporated pursuant to the Business Corporations Act (Alberta) that aims to bring faster, cheaper, and more transparent financial products to the world compared to traditional finance. Madali Ventures is leading this evolution of finance using blockchain technology, the bitcoin lightning network, and decentralized finance (DeFi).
“Our first product will be a mobile application and underlying platform that we expect to revolutionize global remittances. Sending money to your family and friends should be fast and essentially free,” stated Mitchell Demeter, CEO Madali Ventures. “It is unfortunate that it can cost up to 20% and take 5 days to send money to your family. We’re here to change that.”
Terms of the Proposed Acquisition
Hopefield will acquire all of the issued and outstanding shares of Madali (the “Madali Shares”), the resulting issuer of which (the “Resulting Issuer”) shall be a new publicly traded technology company. It is currently anticipated that Hopefield will acquire Madali by way of a three-cornered amalgamation, share exchange, plan of arrangement or other similar form of business combination transaction as agreed by the parties to ultimately form the Resulting Issuer. The final structure of the Proposed Acquisition is subject to the receipt of tax, corporate and securities law advice for both Hopefield and Madali. Upon completion of the Proposed Acquisition, the Resulting Issuer will carry on the business of Madali.
Under the terms of the Proposed Acquisition, it is contemplated that Hopefield will consolidate its common shares on a 1.76:1 basis (the “Consolidation”) whereby each holder of common shares of Hopefield will receive 1 post-Consolidation common share (a “Post-Consolidation Hopefield Share”) for each 1.76 common shares held at the time of the Consolidation. Following the Consolidation, Hopefield will have approximately 22,000,000 Post-Consolidation Hopefield Shares issued and outstanding, as well as incentive stock options entitling the holders thereof to purchase an aggregate of 2,005,297 Post-Consolidation Hopefield Shares at a price of $0.176 per share and broker warrants entitling the holder thereof to purchase 1,136,951 Post-Consolidation Hopefield Shares at a price of $0.176 per share.
Pursuant to the Proposed Acquisition: (i) holders of Madali Shares will receive 3.81 Post-Consolidation Hopefield Shares for each 1 Madali Share (the “Exchange Ratio”) held by them; and (ii) all options and warrants convertible into Madali Shares shall be exchanged, based on the Exchange Ratio, for similar securities to purchase Post-Consolidation Hopefield Shares on substantially similar terms and conditions.
In connection with the Proposed Acquisition, Hopefield has entered into a finder’s fee agreement (the “Finder’s Fee Agreement”) with an arm’s length party (the “Finder”) for the Finder’s introduction of Hopefield to Madali. Pursuant to the terms of the Finder’s Fee Agreement, the parties have agreed, subject to the approval by the Exchange, to pay the Finder a fee of 600,000 Post-Consolidation Hopefield Shares to be issued upon closing of the Proposed Acquisition.
It is expected that, upon completion of the Proposed Acquisition, the Resulting Issuer will have, on an undiluted basis, approximately 42,600,000 shares issued and outstanding (each, a “Resulting Issuer Share”). Upon completion of the Proposed Acquisition and on an undiluted basis, it is expected that: (i) the former shareholders of Madali will hold approximately 46.95% of the Resulting Issuer Shares; (ii) the former shareholders of Hopefield will hold approximately 51.64% of the Resulting Issuer Shares; and (iii) the Finder will hold 1.41% of the Resulting Issuer Shares. On a pro-forma basis, it is anticipated that the Resulting Issuer will have approximately $3 million in cash available upon the completion of the Proposed Acquisition.
Neither Hopefield nor Madali will complete any type of financing in connection with the Proposed Acquisition.
Closing of the Proposed Acquisition will be subject to a number conditions, including, without limitation: approval of the Proposed Acquisition by the boards of directors of Hopefield and Madali; execution of a definitive agreement effecting the Proposed Acquisition (the “Definitive Agreement”); receipt of all regulatory approvals with respect to the Proposed Acquisition and the listing of the Resulting Issuer Shares on the Exchange; approval of the Proposed Acquisition by the shareholders of Madali; and completion of the Consolidation.
The Proposed Acquisition is not a “Non-Arm’s Length Qualifying Transaction”, as such term is defined in Policy 2.4 of the Exchange and consequently the Proposed Acquisition will not be subject to approval by Hopefield’s shareholders.
Information Concerning the Business of Madali
Madali Ventures provides financial applications and platform infrastructure built on blockchain technology to consumers and organizations such as financial institutions, banks, and companies involved in financial transactions. Its goal is to make the world of finance more transparent, low cost, and simple for the masses.
Madali Ventures is in the initial stages of software development of its underlying platforms, application interface (API), mobile and web applications. Madali is developing a layer 3 technology using the Bitcoin blockchain and the Bitcoin Lightning Network. Leveraging software-defined infrastructure (SDI), Madali’s platform implements redundancy and fault tolerance mitigation to achieve stability and scalability during high stress tests.
Functionality is live and evolving for sending and receiving Bitcoin transactions in the development environment. The Madali platform has developed functionality to communicate with Bitcoin Lightning Nodes from both internal resources and third-party providers with the codebase maintained by version control (GIT) and uploaded to a private repository.
Madali is also exploring innovations in decentralized finance (DeFi) that may be utilized by the platform to enhance the user experience.
The team behind the Madali product development is an experienced set of financial technology leaders and entrepreneurs with a strong background in marketing, product development, and operational management.
For more information regarding Madali, please visit Madali’s website at www.madaliventures.com.
Board of Directors and Management Changes
On completion of the Proposed Acquisition, Chris Donaldson and Mark Healy shall each resign as a director of Hopefield; Mark Binns will remain as a director of Hopefield and resign as Chief Executive Officer of Hopefield; and Zula Kropivnitski will resign as Chief Financial Officer and Corporate Secretary of Hopefield, and shall each be replaced by the anticipated nominees of Madali (as summarized below).
Directors and Officers of the Resulting Issuer
Mitchell Demeter, President, CEO and Director
Mitchell Demeter is the Founder and CEO of Madali Ventures. He previously was the President of Netcoins, a Canadian online cryptocurrency brokerage. He is a serial entrepreneur with a range of experience in blockchain, exchanges, and currency trading. He brought the world its first Bitcoin ATM and first physical Bitcoin brokerage in 2013. Mr. Demeter was the Co-Founder of one of Canada’s first cryptocurrency exchanges, where he led the exchange to its acquisition in 2015.
Kalle Radage, Director
Kalle Radage is the COO and CFO of Neptune Digital Assets and co-founder and chairman of Clearly Payments. He was President of a leading payment processor, Payfirma, until it was acquired. He has held senior roles at Oracle, Nokia, and Sabela Media. Kalle was also a Venture Capitalist at Nokia Ventures and BDC Venture Capital, investing in enterprise and consumer technology. Kalle holds a BSc in Computer Science from UBC and MBA from IESE Business School.
Mark Binns, Director
Mark Binns has over 20 years of experience building customer-driven sales and marketing strategies. Mark has founded, built, and sold two consulting companies that provided strategic advice on customer acquisition and revenue growth to Fortune 1000 technology companies including RIM, Cisco and Rogers.
Ryan Mueller, Vice President of Risk
Ryan Mueller is focused on risk management, compliance, fraud investigation, and AML/CTF space in Canada for over 18 years. Beginning in the ewallet and online gaming verticals and branching out into payment processing, credit risk, underwriting, and early stage crypto and alternative payment/stored value models Mr. Mueller has deep experience in the intersections of fiat and crypto especially where commercial settlement and remittance is concerned. Ryan is the current sole owner of Phantom Compliance, an outsourced operational and regulatory compliance consultancy and BravaPay, a full service PCI Level 1 payment services provider.
Ben Yua, Chief Financial Officer and Corporate Secretary
Ben Yua is a co-founder and CFO of Clearly Payments. He has previously held executive roles at Payfirma and ClearDent. Mr. Yua started his career at KPMG in audit and tax. He earned a Bachelor of Business Administration degree from Simon Fraser University and is a Chartered Professional Accountant and Chartered Accountant.
Upon completion of the Proposed Acquisition, Hopefield intends to change its name to “Madali Ventures Inc.” or such other name as Madali may determine, and the parties expect that the Exchange will assign a new trading symbol for the Resulting Issuer.
The Proposed Acquisition is subject to the sponsorship requirements of the Exchange unless an exemption from those requirements is granted. Hopefield intends to apply for an exemption from the sponsorship requirements; however, there can be no assurance that an exemption will be obtained. If an exemption from the sponsorship requirements is not obtained, a sponsor will be identified at a later date. An agreement to act as sponsor in respect of the Proposed Acquisition should not be construed as any assurance with respect to the merits of the Proposed Acquisition or the likelihood of its completion.
Additional information regarding the Proposed Acquisition, including financial information regarding Madali, will be provided in future news releases.
Trading in the common shares of Hopefield has been halted, and will remain halted, pending the satisfaction of all applicable requirements of Policy 2.4 of the Exchange. There can be no assurance that trading of common shares of Hopefield will resume prior to the completion of the Proposed Acquisition. Further details concerning the Proposed Acquisition (including additional information regarding Madali) and other matters will be announced when a Definitive Agreement is reached.
In connection with the Proposed Acquisition and pursuant to the requirements of the Exchange, Hopefield will file on SEDAR (www.sedar.com) a filing statement which will contain details regarding the Proposed Acquisition, Hopefield, Madali and the Resulting Issuer.
Completion of the Proposed Acquisition is subject to a number of conditions, including Exchange acceptance and the execution of the Definitive Agreement. Trading of Hopefield’s common shares will remain halted pending further filings with the Exchange.
Hopefield is a “capital pool company” within the meaning of the policies of the Exchange that has not commenced commercial operations and has no assets other than cash. The board of directors of Hopefield currently consists of Messrs. Mark Binns, Mark Healy and Chris Donaldson.
The officers of Hopefield are currently Mark Binns, Chief Executive Officer, and Zula Kropivnitski, Chief Financial Officer and Corporate Secretary. Except as specifically contemplated in the Exchange’s CPC policy, until the completion of its Qualifying Transaction (as defined under the policies of the Exchange), Hopefield will not carry on business, other than the identification and evaluation of companies, business or assets with a view to completing a proposed Qualifying Transaction.
For further information, please contact:
Mark Binns, Chief Executive Officer
Telephone: (604) 681-0084
Completion of the Proposed Acquisition is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Proposed Acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Acquisition 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 Acquisition, any information released or received with respect to the Proposed Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of Hopefield should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the Proposed Acquisition and has neither approved nor disapproved the contents of this press release.
Neither 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.
This news release may contain certain “Forward-Looking Statements” as defined under applicable Canadian securities laws. When or if used in this news release, the words “anticipate”, “believe”, “estimate”, “expect”, “target, “plan”, “forecast”, “may”, “schedule” and similar words or expressions identify forward-looking statements or information. These forward-looking statements or information may relate to: the terms and timing of the Proposed Acquisition (including the entering into of a Definitive Agreement); statements concerning the Resulting Issuer following completion of the Proposed Acquisition (including composition of the board of directors and management team); completion of the Proposed Acquisition; and expectations for other economic, business, and/or competitive factors.
Forward-looking information is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management’s perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. While management of Hopefield considers these assumptions to be reasonable based on information currently available, there is no assurance that such expectations will prove to be correct. By its nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information include: the ability to consummate the Proposed Acquisition; the ability to obtain requisite regulatory and security holder approvals and to satisfy other conditions to the consummation of the Proposed Acquisition on the terms and at the times proposed; the impact of the announcement or consummation of the Proposed Acquisition on relationships; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; changes in government regulation and regulatory compliance; and the diversion of management time on the Proposed Acquisition. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Readers are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking information.
The forward-looking information contained in this news release is stated as of the date of this news release. Hopefield does not intend, and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules and regulations.