TORONTO, July 26, 2013 /CNW/ - Folkstone Capital Corp. (TSX
VENTURE:FKS.P) ("Folkstone") and Sophia Capital Corp. (TSX VENTURE:SCQ.P) ("Sophia") are pleased to announce that they have entered into an agreement to
amalgamate pursuant to the Business Corporations Act (British Columbia) (the "BCBCA") and in accordance with the policies of the TSX Venture Exchange (the
Folkstone and Sophia, as capital pool companies pursuant to Policy 2.4 (Capital Pool Companies) of the Exchange ("Policy 2.4"), share the sole business objective of identifying and evaluating
assets and/or businesses with a view to completing a Qualifying
Transaction (as such term is defined in Policy 2.4). Folkstone and
Sophia also have identical directors and officers. Management of each
of Folkstone and Sophia reviewed several potential opportunities for
acquiring a business or assets for the purposes of completing a
Qualifying Transaction. However, Folkstone and Sophia each determined
that it would be better positioned to complete a Qualifying Transaction
as a combined entity (the "Resulting Issuer"). The Resulting Issuer will have 12 months from the date the shares of
the Resulting Issuer are listed on the Exchange to complete a
The amalgamation of Folkstone and Sophia (the "Amalgamation") is expected to become effective on or before September 3, 2013. It is
anticipated that upon completion of the Amalgamation:
each issued and outstanding share of Folkstone will be exchanged for one
(1) share of the Resulting Issuer;
each issued and outstanding share of Sophia will be exchanged for 1.09
shares of the Resulting Issuer;
each convertible security of Folkstone will automatically entitle the
holder thereof to purchase one (1) share of the Resulting Issuer at an
exercise price equal to the exercise price specified in the agreement
governing such convertible security;
the directors and officers of the Resulting Issuer will be the current
directors and officers of Folkstone and Sophia; and
the auditor of the Resulting Issuer will be Davidson & Company LLP.
Immediately following the completion of the Amalgamation, the
shareholders of Folkstone will collectively own 4,150,000 (or 71%) of
the shares of the Resulting Issuer and the shareholders of Sophia will
collectively own 1,721,233 (or 29%) of the shares of the Resulting
Issuer (in each case, calculated on a non-diluted basis). In accordance
with Policy 2.4, the share exchange ratio was based on the cash value
of each company on a pre-transaction basis.
The Amalgamation is considered a "business combination" and "related
party transaction" under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) and, accordingly, requires approval by the holders of a majority of
the shares of each of Folkstone and Sophia, excluding shares held by
interested parties ("Majority of the Minority Shareholder Approval") (2,000,000 shares in respect of Folkstone and 500,000 shares in
respect of Sophia) at each of the shareholders' meetings to be held by
Folkstone and Sophia to seek approval for the Amalgamation on August
27, 2013 (the "Meetings"), in addition to the requirements under the BCBCA which require that
the Amalgamation be approved by at least two-thirds (66⅔%) of all votes
cast at each of the Meetings. As a result, the Amalgamation is
conditional upon (among other things) the Amalgamation being approved
at each of the Meetings by: (i) special resolution (affirmative vote of
at least two-thirds (66⅔%) of the votes cast thereon); and (ii)
Majority of the Minority Shareholder Approval. If the requisite
shareholder approval is obtained at each of the Meetings, and all of
the conditions precedent to the completion of the Amalgamation have
been satisfied or waived, Folkstone and Sophia intend to complete the
Amalgamation under the BCBCA.
In connection with the Meetings a detailed joint information circular
will be prepared and distributed to shareholders and filed on SEDAR.
Pursuant to Section 272 of the BCBCA, registered shareholders of
Folkstone and Sophia are entitled to dissent in respect of the
Amalgamation. If the Amalgamation is completed, dissenting shareholders
who have complied with the dissent procedures under Sections 237 to 247
of the BCBCA will be entitled to be paid the fair value of their
Completion of the Amalgamation remains conditional on obtaining all
necessary regulatory and shareholder approvals, including the approval
of the Exchange.
About Folkstone Capital Corp.
Folkstone is a capital pool company under Policy 2.4. Pursuant to Policy
2.4, Folkstone is required to complete a Qualifying Transaction by
November 30, 2013. Folkstone has not commenced operations and has no
assets other than cash. Further information about Folkstone, including
the audited financial statements for the year ended February 28, 2013,
is available under Folkstone's SEDAR profile at www.sedar.com.
About Sophia Capital Corp.
Sophia is a capital pool company under Policy 2.4. Pursuant to Policy
2.4, Sophia was required to complete a Qualifying Transaction by June
3, 2013. As Sophia did not complete a Qualifying Transaction by June 3,
2013, trading in the common shares of Sophia was suspended by the
Exchange effective June 4, 2013 for failure to complete a Qualifying
Transaction within the prescribed time period in accordance with Policy
2.4. As a result, Sophia was placed by the Exchange on notice to delist
and notified that, in order to avoid delisting, it must, on or by
September 3, 2013, complete (i) a Qualifying Transaction, (ii) a
transfer to the NEX, or (iii) the Amalgamation. Further information
about Sophia, including the unaudited financial statements for the
three month period ended April 30, 2013 and the audited financial
statements for the year ended January 31, 2013, are available under
Sophia's SEDAR profile at www.sedar.com.
Completion of the Amalgamation is subject to a number of conditions,
including Exchange acceptance and disinterested shareholder approval by
the shareholders of each of Folkstone and Sophia. The Amalgamation
cannot close until the required shareholder approval is obtained. There
can be no assurance that the Amalgamation will be completed as proposed
or at all.
Investors are cautioned that, except as disclosed in the joint
management information circular to be prepared in connection with the
Amalgamation, any information released or received with respect to the
Amalgamation may not be accurate or complete and should not be relied
upon. Trading in the securities of Folkstone should be considered
The TSX Venture Exchange has in no way passed upon the merits of the
proposed transaction and has neither approved nor disapproved the
contents of this press release.
This news release contains certain forward-looking information. All
information, other than information regarding historical fact, that
addresses activities, events or developments that Folkstone and Sophia
believe, expect or anticipate will or may occur in the future is
forward-looking information. Forward-looking information contained in
this news release includes, but may not be limited to, the completion
of the Amalgamation and the terms, timing and consequences relating
thereto. The forward-looking information contained in this news release
reflects the current expectations, assumptions and/or beliefs of
Folkstone and Sophia based on information currently available to
Folkstone and Sophia. With respect to the forward-looking information
contained in this news release, Folkstone and Sophia have made
assumptions regarding, among other things, the receipt by Folkstone and
Sophia of all necessary approvals to proceed with the completion of the
Amalgamation. The forward-looking information contained in this news
release is subject to a number of risks and uncertainties that may
cause actual results or events to differ materially from current
expectations, including delays in obtaining, or a failure to obtain,
required regulatory and/or shareholder approvals and/or the inability
of Folkstone and Sophia to complete the proposed Amalgamation on the
terms set out herein or at all. Any forward-looking information speaks
only as of the date on which it is made and, except as may be required
by applicable law, Folkstone and Sophia disclaim any obligation to
update or modify such forward-looking information, either because of
new information, future events or for any other reason.
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.
SOURCE: Folkstone Capital Corp.
For further information:
Folkstone Capital Corp.
Chief Financial Officer
Sophia Capital Corp.
Chief Financial Officer