Arkadia Capital Corp. And Oasis Technology Inc. Announce Proposed Business Combination.

 

CALGARY, Alberta, May 02, 2019 (GLOBE NEWSWIRE via COMTEX) — Arkadia Capital Corp. (“Arkadia”) (AKC.H) and Oasis Technology Inc. (“Oasis”) jointly announce that they have executed a non-binding letter of intent dated May 1, 2019 (the “LOI”), summarizing the principal terms under which they would be prepared to combine their respective businesses and continue as one corporation that designs and implements custom enterprise-level hardware and software solutions for the internet of things (IoT) and smart city markets (the “Business Combination”). Arkadia intends the Business Combination to constitute its Qualifying Transaction (as that term is defined in the policies of the TSX Venture Exchange (the “TSX-V”)).

Arkadia

Arkadia is a CPC (as defined in the policies of the TSX-V) that was incorporated under the laws of the Province of Alberta in July 2011. It does not carry on any business other than the identification and evaluation of assets and businesses with a view to completing a Qualifying Transaction.

Currently, the outstanding capital of Arkadia consists of 6,523,343 Arkadia Shares. Arkadia intends to disclose significant information about its historical financial performance in a subsequent press release.

Oasis

Oasis is a private-held company that was incorporated under the laws of the Province of Alberta in May 2017. Oasis was originally founded to develop cost effective, high performance, industrial IoT solutions in the oil and gas industry for remote well site locations. Subsequently, Oasis developed its own Smart Efficient Low Bandwidth (“SELB”) technologies to meet the needs of these remote platform installations. These SELB applications allowed Oasis to capitalize on a niche-market demand and acquire a strong customer base which includes several major oil and gas producers and government agencies.

With the number of IoT devices expected to increase significantly during the next few years, Oasis developed SELB technologies are expected to be in high demand as automation and “smart” technologies force the world to connect an escalating number of devices under cost and bandwidth constraints. With an initial customer base that required low cost and low bandwidth IoT and surveillance technologies, Oasis believes it is uniquely positioned to continue expanding into the general commercial and industrial markets where IoT technologies have traditionally been too expensive to implement effectively.

With experience in SELB technologies and expertise in the areas of artificial intelligence, data aggregation, and data analysis, Oasis believes it has a competitive advantage in this expanding market, and has recently expanded its client base into new industries including manufacturing, “smart city”, advanced surveillance, and end-to-end custom IoT platforms.

In the near term, Oasis intends to focus on large-scale commercialization and the continued deployment of technology to meet current project requirements while preparing for disruptive market changes that Oasis believes is vitally important to consider.

The concept of “Human Elimination of Activity and Liability” or “HEAL” is a core tenet of Oasis’ technology. Oasis recognizes that as artificial intelligence systems, robotics, and sensors become more prevalent, so too will their efficiencies and the inevitable consideration of how these technologies effect on the workplace, such as the expected reduction in liability associated with non-human labour solutions. Oasis believes that almost every job will be reinvented over the next decade and both companies and governments must reconsider how they design jobs, organize work, and plan for the future. Oasis sees strong opportunities associated with this trend and is committed to being on the forefront of solution development for HEAL.

Oasis intends to disclose significant information about its historical financial performance in a subsequent press release.

Pre-Closing Private Placement of Oasis Debentures

The first step of the Business Combination would be a non-brokered private placement of a minimum of 200,000 convertible debentures of Oasis (the “Oasis Debentures”) and a maximum of 1,000,000 Oasis Debentures, at a price of $1.00 per Oasis Debenture, for minimum gross proceeds of $200,000 and maximum gross proceeds of $1,000,000 (the “Pre-Closing Private Placement of Oasis Debentures”). Each 20 Oasis Debentures would automatically convert into one common share of Oasis (an “Oasis Share”) upon the satisfaction of certain conditions precedent to the completion of the Business Combination. Oasis would close the Pre-Closing Private Placement of Oasis Debentures shortly prior to the Acquisition (as that term is defined below) and use the net proceeds of the Pre-Closing Private Placement of Oasis Shares to finance the capital reorganization of Oasis more particularly described below and pay expenses incurred in connection with the Business Combination.

Capital Reorganization of Oasis

The second step of the Business Combination would be a capital reorganization of Oasis pursuant to which: (a) Oasis would use the proceeds from the Pre-Closing Private Placement of Oasis Debentures to acquire and then cancel the outstanding Oasis Shares; (b) Oasis would grant options to purchase a minimum of 6,825 Oasis Shares and a maximum of 14,000 Oasis Shares, at any time prior to the Acquisition (as described below) (the “Oasis Options”); (c) Oasis would convert all of the outstanding indebtedness it owes to Morand Farms Ltd. into 75,000 Oasis Shares, and all of the outstanding Oasis Debentures into Oasis Shares.

Pre-Closing Private Placement of Oasis Shares

The third step of the Business Combination would be a non-brokered private placement of a minimum of 12,500 Oasis Shares and a maximum of 75,000 Oasis Shares, at a price of $40 per Oasis Share, for minimum gross proceeds of $500,000 and maximum gross proceeds of $3,000,000 (the “Pre-Closing Private Placement of Oasis Shares”). Oasis would close the Pre-Closing Private Placement of Oasis Shares shortly prior to the Acquisition (as that term is defined below) and use the net proceeds of the Pre-Closing Private Placement of Oasis Shares for general corporate purposes.

Concurrent Private Placement of Oasis Shares

The fourth step of the Business Combination would be a non-brokered private placement of a minimum of 12,500 Oasis Shares and a maximum of 50,000 Oasis Shares, at a price of $40 per Oasis Share, for minimum gross proceeds of $500,000 and maximum gross proceeds of $2,000,000 (the “Concurrent Private Placement of Oasis Shares”). Oasis would close the Pre- Closing Private Placement of Oasis Shares immediately prior to the Acquisition (as that term is defined below) and use the net proceeds of the Concurrent Private Placement of Oasis Shares for general corporate purposes.

Acquisition

The fifth step of the Business Combination would be the acquisition by Arkadia of all of the outstanding Oasis Shares, for a purchase price of $40 per Oasis Share, such purchase price to be satisfied by issuing to the Oasis shareholders Arkadia Shares, on the basis of 2,500 Arkadia Shares for each one Oasis Share held (the “Acquisition”).

Assuming the issuance and conversion of a minimum of 200,000 Oasis Debentures pursuant to the Pre-Closing Private Placement of Oasis Debentures, 12,500 Oasis Shares pursuant to the Pre-Closing Private Placement of Oasis Shares, 12,500 Oasis Shares pursuant to the Concurrent Private Placement of Oasis Shares, and 6,825 Oasis Shares pursuant to the Oasis Options, Arkadia would issue a total of 292,062,500 Arkadia Shares to the Oasis shareholders in connection with the Acquisition, for total consideration of $4,673,000.

Assuming the issuance and conversion of a maximum of 1,000,000 Oasis Debentures pursuant to the Pre-Closing Private Placement of Oasis Debentures, 75,000 Oasis Shares pursuant to the Pre-Closing Private Placement of Oasis Shares, 50,000 Oasis Shares pursuant to the Concurrent Private Placement of Oasis Shares, and 14,000 Oasis Shares pursuant to the Oasis Options, Arkadia would issue a total of 660,000,000 Arkadia Shares to the Oasis shareholders in connection with the Acquisition, for total consideration of $10,560,000.

In each case, the Acquisition would result in the creation of a Control Person (as that term is defined in the policies of the TSX-V).

Amalgamation

Pursuant to the final step of the Business Combination, Arkadia and Oasis would amalgamate under the laws of the Province of Alberta and continue as one corporation (the “Resulting Issuer”) that would carry on the current business of Oasis under the name “Oasis Technology Inc.”

Conditions Precedent to the Business Combination

Arkadia and Oasis anticipate that the completion of the Business Combination would be subject to the satisfaction of the following significant conditions precedent, among others:

— a condition in favour of Arkadia that it is satisfied with its due diligence review of Oasis;

— a condition in favour of Oasis that it is satisfied with its due diligence review of Arkadia;

— a condition in favour of Arkadia that the directors of Oasis have approved the Business Combination;

— a condition in favour of Oasis that the directors of Arkadia have approved the Business Combination;

— a condition in favour of Arkadia and Oasis that all of the relevant parties have executed definitive documentation pertaining to the Business Combination;

— a condition in favour of Arkadia that Oasis has advanced to Arkadia sufficient funds to prepare and file audited annual financial statements for the year ended August 31, 2018, and unaudited interim financial statements for the periods ended November 30, 2018, and February 28, 2019;

— a condition in favour of Arkadia that Oasis has advanced to Arkadia sufficient funds to satisfy all of its outstanding indebtedness to trade creditors;

— a condition in favour of Oasis that Arkadia has obtained a revocation of the cease trade order issued against Arkadia by the Alberta Securities Commission on January 4, 2019;

— a condition in favour of Arkadia and Oasis that the TSX-V has conditionally accepted the Business Combination;

— a condition in favour of Arkadia and Oasis that the shareholders of Arkadia have approved the creation of a new Control Person (as that term is defined by the policies of the TSX-V);

— a condition in favour of Arkadia and Oasis that the shareholders of Arkadia have approved the election of the directors of the Resulting Issuer;

— a condition in favour of Arkadia that Oasis has sold a minimum of 200,000 Oasis Debentures pursuant to the Pre-Closing Private Placement of Oasis Debentures, 12,500 Oasis Shares pursuant to the Pre-Closing Private Placement of Oasis Shares, and 12,500 Oasis Shares pursuant to the Concurrent Private Placement of Oasis Shares;

— a condition in favour of Arkadia that there has been no change in the business, capital, or operations of Oasis that would reasonably be expected to have an significant adverse effect on the value of the Oasis Shares; and

— a condition in favour of Oasis that there has been no change in the business, capital, or operations of Arkadia that would reasonably be expected to have an significant adverse effect on the value of the Arkadia Shares.

Capitalization of Resulting Issuer

Following the completion of the Business Combination, the authorized capital of the Resulting Issuer would consist of an unlimited number of common shares (the “Resulting Issuer Shares”), and an unlimited number of preferred shares, issuable in series. The outstanding capital of the Resulting Issuer would consist of:

— 298,585,843 Resulting Issuer Shares, assuming the issuance and conversion of 200,000 Oasis Debentures pursuant to the Pre-Closing Private Placement of Oasis Debentures, 12,500 Oasis Shares pursuant to the Pre-Closing Private Placement of Oasis Shares, 12,500 Oasis Shares pursuant to the Concurrent Private Placement of Oasis Shares, and 6,825 Oasis Shares pursuant to the Oasis Options; or

— 666,523,343 Resulting Issuer Shares, assuming the issuance and conversion of a maximum of 1,000,000 Oasis Debentures pursuant to the Pre-Closing Private Placement of Oasis Debentures, 75,000 Oasis Shares pursuant to the Pre- Closing Private Placement of Oasis Shares, 50,000 Oasis Shares pursuant to the Concurrent Private Placement of Oasis Shares, and 14,000 Oasis Shares pursuant to the Oasis Options.

Insiders of Resulting Issuer

Arkadia and Oasis intend to provide information about the proposed directors and officers of the Resulting Issuer in a subsequent press release.

Arm’s Length Negotiations

The Non-Arm’s Length Parties (as that term is defined in the policies of the TSX-V) to Arkadia (i) do not own any direct or indirect beneficial interest in Oasis, (ii) are not Insiders (as that term is defined in the policies of the TSX-V) of Oasis, and (iii) do not have any relationship with the Non- Arm’s Length Parties to Oasis. Furthermore, the Business Combination does not constitute a Non-Arm’s Length Qualifying Transaction (as that term is defined in the policies of the TSX-V).

Trading Halt

Trading in the Arkadia Shares will remain halted until further notice.

Sponsorship

Pursuant to the policies of the TSX-V, a CPC is required, subject to certain exemptions, to obtain sponsorship of a Qualifying Transaction. Arkadia and Oasis are in discussions with several potential sponsors, and intend to announce the engagement of a sponsor for the Business Combination in a subsequent press release.

TSX-V Advisory

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

Investors are cautioned that, except as disclosed in the prospectus to be prepared in connection with the Business Combination, any information released or received with respect to the Business Combination may not be accurate or complete and should not be relied upon.

Trading in the securities of a capital pool company should be considered highly speculative.

The TSX-V has in no way passed upon the merits of the Business Combination and has neither approved nor disapproved the contents of this press release.

Neither the TSX-V nor its regulation services provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this press release.

Forward-Looking Information Disclaimer

This press release contains forward-looking information within the meaning of applicable securities legislation. In general, forward-looking information refers to disclosure about future conditions, courses of action, and events, including information about one’s prospective financial performance or financial position. The use of any of the words “anticipates”, “expects”, “intends”, “will”, “would”, and similar expressions are intended to identify forward-looking information. More particularly and without limitation, this press release contains forward looking information concerning the proposed terms, and the anticipated results, of the Business Combination, as well as the key business objectives of Oasis. The forward-looking information is based on certain key expectations and assumptions made by Arkadia and Oasis, including expectations and assumptions concerning the ability of Arkadia and Oasis to complete the Business Combination, as well as the ability of Oasis to achieve its business objectives. Although Arkadia and Oasis believe that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward looking information because neither Arkadia and Oasis can give any assurance that they will prove to be accurate. By its nature, forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed in this press release. These risks and uncertainties, include, but are not limited to, the inability of Arkadia and Oasis to satisfy the conditions precedent to the Business Combination identified in this press release. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date of this press release, and to not use such forward-looking information for anything other than its intended purpose. Neither Arkadia nor Oasis undertakes any obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities legislation.

Further Information

For further information about Arkadia, please contact:

Adam Rock

Chief Executive Officer

(403) 299-9601

arock@nerlandlindsey.com

For further information about Oasis, please contact:

Dan Houston

VP of Investor Relations

(403) 998-7325

dhouston@oasistechnology.ca

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.

Other sources for this press release:

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