Globalive Technology today announced that it has signed a binding arrangement agreement to complete the previously announced reverse takeover transaction with Yooma Corp., an Asia-focused social commerce company.

TORONTO, Dec. 16, 2020 (GLOBE NEWSWIRE) — Globalive Technology Inc. (TSX-V: LIVE) (the “Company”), a technology company based in Toronto, Ontario, announced today that it has signed a binding arrangement agreement (the “Agreement”) with Yooma Corp. (“Yooma”) to complete its previously announced arm’s length reverse take-over of Yooma (the “Transaction”). The Transaction is to be completed by way of a court approved plan of arrangement under the Business Corporations Act (Ontario) with the common shares of the resulting issuer (the “Resulting Issuer”) continuing following the amalgamation of the Company and Yooma to be listed on the Canadian Securities Exchange (the “CSE”). The CSE has conditional approved the listing of the Resulting Issuer shares on completion of the Transaction subject to customary conditions.

The Transaction

Subject to regulatory and shareholder approval, and the satisfaction of other conditions precedent, the Transaction will involve: (i) the Company transferring all of its material assets and liabilities, other than cash required to remain in the Company by the Arrangement Agreement (the “Legacy Assets”), to a newly formed holding company (“SpinCo”) in consideration for non-voting common shares of SpinCo, (ii) the distribution by the Company of such non-voting common shares of SpinCo to its shareholders, which will entitle such shareholders to share pro rata in any net proceeds realized from the Legacy Assets; and (iii) the amalgamation of the Company and Yooma to form the Resulting Issuer.

Yooma shareholders will receive common shares of the Resulting Issuer (“Resulting Issuer Shares”) in exchange for their shares in Yooma. The number of Resulting Issuer Shares to be received by shareholders of Yooma and shareholders of the Company will be based on aggregate consideration of approximately US$25 million allocated to Yooma and the value of all assets remaining in the Company on closing (including cash and cash-equivalents), plus US$500,000 for the shareholders of the Company. The Company estimates that it will hold cash and cash equivalents of no less than US$4,500,000 by the closing date of the Transaction.

The Company and Yooma will rationalize their equity incentive plans, any equity incentives issued under such plans and all other outstanding convertible securities to create a post-Transaction equity incentive plan in the Resulting Issuer to properly incentivize management, directors, employees and consultants.

The completion of the Transaction is subject to certain conditions precedent including: (i) on or prior to closing, the Company delisting its shares from the TSX Venture Exchange (the “Exchange”) and the shares of the Resulting Issuer being listed on the CSE; (ii) approval from shareholders of both Yooma and the Company; (iii) receipt of any necessary Exchange and CSE, regulatory and third-party approvals or consents; (iv) no material adverse change in either the Company or Yooma between the date of the Agreement and the closing of the Transaction; (v) the Company holding cash and cash-equivalents of no less than US$4,500,000 on closing of the Transaction; and (vi) other conditions typical for a transaction of this nature.

No insider of the Company, or any of their associates or affiliates, has any material interest, direct or indirect, in the Transaction other than: (i) in connection with the entitlement of such insiders who are shareholders of the Company to receive Resulting Issuer Shares on the same basis as other shareholders of the Company, (ii) Mr. Lacavera is expected to be a director of the Resulting Issuer, and (iii) a related party of the Company will own all of the voting common shares of SpinCo. No finder fee will be paid in connection with the Transaction.

Shareholder Meetings and Record Date

The Company and Yooma have each called special shareholder meetings to consider the Transaction and related matters on January 25, 2021. The Company has set December 21, 2020 as the record date for shareholders entitled to vote at the Company’s shareholder meeting.

The Company and Yooma have a hearing for an interim order scheduled for December 18, 2020, and intend to mail a joint management information circular (the “Circular”) to their shareholders later in December 2020.

To be effective, the Transaction will require the following approvals from shareholders of the Company and Yooma: (i) at least two-thirds (66 2/3%) of the votes cast by shareholders of the Company present in person or represented by proxy and entitled to vote at the Company’s shareholder meeting, (ii) a simple majority (>50%) of the votes cast by disinterested shareholders of the Company (within the meaning of Multilateral Instrument 61-101) present in person or represented by proxy and entitled to vote at the Company’s shareholder meeting, and (iii) at least two-thirds (66 2/3%) of the votes cast by shareholders of Yooma present in person or represented by proxy and entitled to vote at Yooma’s shareholder meeting.

Shareholders of the Company holding approximately 56% of the outstanding shares of the Company have agreed to vote in favour of the Transaction and related matters, and shareholders of Yooma holding approximately 76% of the outstanding shares of Yooma have agreed to vote in favour of the Transaction.

Board Recommendation

After careful consideration, the board of directors of the Company unanimously determined, after consultation with its legal advisors, that the Transaction is in the best interests of the Company and unanimously recommends that its shareholders vote for the Transaction at the upcoming special shareholders meeting. The recommendation of the Company’s Board is based on various factors that will be described more fully in the Circular.

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