Savoy Ventures Inc. Signs Letter of Intent to Purchase TIER1 Capital Inc.
February 20, 2015, Vancouver, British Columbia - SAVOY VENTURES INC. (TSX-V: SVO) (“Savoy” or the “Company”), a reporting issuer in British Columbia, Alberta and Ontario, is pleased to announce it has entered into a non-binding letter of intent dated for reference February 12, 2015 (“LOI”) regarding a proposed transaction (the “Transaction”) with Tier1 Capital Inc. ("Tier1"), a private British Columbia corporation, to acquire 100% of the issued and outstanding securities of Tier1. Tier1 is a financial software company.
The Transaction will constitute a “Change of Business”) transaction for the purposes of Policy 5.2 of the TSX Venture Exchange Inc. (“Exchange”). Savoy and Tier1 are at arm's length, and accordingly, the Transaction is not considered a "Non-Arm's Length Transaction".
The parties are working towards entering into a definitive agreement under which Savoy will acquire all the issued and understanding shares of Tier1 in exchange for common shares of Savoy in a reverse takeover transaction. As a result of the Transaction, Tier1 will become a wholly-owned subsidiary of Savoy (the “Resulting Issuer”).
As a condition of the Transaction, Savoy will:
(1) consolidate Savoy’s shares based on three or four (3 or 4) pre-consolidation shares for one (1) post-consolidation share (the "Share Consolidation"); and
(2) change of Savoy’s name to include "Tier1" in the company’s name.
The Share Consolidation will become effective prior to completion of the Transaction. All share numbers and pricing in this press release assumes completion of the Share Consolidation prior to closing of the Transaction.
Capital Structure of Tier1
The principal stakeholders of Tier1, who as a group, own beneficially, directly or indirectly, or exercise control or direction over 5,575,000 Tier1 common shares, representing 46.45% of the issued and outstanding Tier1 common shares, are founding shareholders Messrs. Muhammed Saeed, George Abdalla and William Davis, directors and officers of Tier1. Mr. Muhammed Saeed owns 1,500,000 Tier1 common shares or 12.50% of the issued and outstanding Tier1 common shares; George Abdalla owns 575,000 Tier1 common shares or 4.79% of the issued and outstanding Tier1 common shares; William Davis owns 3,500,000 Tier1 common shares or 29.17% of the issued and outstanding Tier1 common shares. .
Various other shareholders hold the remaining 6,435,000 Tier1 common shares issued and outstanding. All of these shareholders hold less than 5% of the issued and outstanding Tier1 common shares.
Tier1 has 12,000,000 Common Shares issued and outstanding. Tier1 does not have any convertible securities outstanding.
It is anticipated that at closing the Resulting Issuer will grant options to acquire common shares at a price to be determined to the directors, officers, employees, and consultants of the Resulting Issuer. The exact number of options has not yet been determined but will not exceed 20% of the issued and outstanding shares of the Resulting Issuer.
Contemplated Financing(s)
Under the letter of intent, Tier1 is required to raise a minimum of $2,000,000 to a maximum of $3,000,000 through the issuance of common shares of Savoy (the “Transaction Financing”). The shares issued in the Transaction Financing will represent approximately 10% of the Resulting Issuer’s issued and outstanding common shares at the time of Closing.
Tier1 may pay finder's fees to arm's length parties for proceeds raised under the Transaction Financing. These fees may be payable, at the discretion of Tier1, in cash or in common shares.
The parties anticipate the net proceeds of the Transaction Financing will be used to advance the business of the Resulting Issuer, and for general working capital purposes.
Sponsorship of Business Combination
Sponsorship of a Change of Business Transaction is required by the Exchange unless exempt in accordance with Exchange policies. Savoy intends to apply for an exemption from the sponsorship requirements. There is no assurance that Savoy will ultimately obtain an exemption from sponsorship.
Reinstatement to Trading
Savoy’s shares will be halted pending receipt by the Exchange of certain required materials from Savoy and until Savoy engages a sponsor.
Savoy will provide further details in respect of the Transaction, including the proposed number of shares to be issued out as consideration to the shareholders of Tier1, the pricing of the Transaction Financing, and financial information of Tier1, in due course by way of press release.
Closing Conditions
Closing the Transaction with Tier1 is subject to several conditions, including, but not limited to:
1. completion of all due diligence reviews;
2. receipt of all regulatory, shareholder, director and other third party approvals as required under applicable laws or regulatory policies;
3. execution of a formal share purchase agreement;
4. entry into any regulatory required escrow agreements by Tier1 shareholders;
5. completion of the proposed Transaction Financing;
6. the issued and outstanding shares of Savoy being consolidated prior to closing;
7. the ttotal number of shares of Savoy issued and outstanding immediately prior to completion of the Transaction, without considering the Offering, will equal 10% of the common shares of the Resulting Issuer immediately on completion of the Transaction;
8. Savoy shall be a reporting issuer in British Columbia, Alberta and Ontario, not in default;
9. no material actions, suits or proceedings at time of closing involving either party;
10. no material adverse change to assets, technology, liabilities, business, operations, or financial condition at tome of closing of either party; and
11. a new slate of directors be appointed as agreed by the parties.
New Board of Directors
At the close of the Transaction, the management and board of directors of Savoy will resign and a new board of directors comprising of three nominees of Tier1 and one nominee of Savoy will be appointed to the Resulting Issuer. The following represents an overview of the experience of the proposed new board members by the Resulting Issuer:
William W. Davis, Sr., (Director and Chairman)
Mr. Davis has held a number of management positions with Fortune 500 companies. He is currently the CEO of Palm Court Ventures, a private venture capital company (since January 2010). He was the founder and CEO of multiple technology companies specializing in software integration services, and electronic security surveillance for government and commercial clients from 1983-2010. These companies include Pulsar Data Systems of Lanham, MD, and Sim-G Technologies, Inc., Washington, DC.
Muhammed Saeed, (Director and Chief Executive Officer)
Mr. Saeed is a seasoned entrepreneur. He is a co-founder of Tier1. He also founded Firefly Capital Incorporated in 1999 in Delaware, a private electronic trading and brokerage firm. Firefly developed a pioneering execution management system (EMS) which provided execution gateway to listed exchanges, ECNs, ATSs and 3rd party brokers. Firefly-EMS was ranked as one of the top 5 EMS for best execution in large-cap trading by Plexus Broker EDGE in June 2006. Firefly was also named as one of the best emerging broker for quality of execution and post trade reporting by a major Pension fund in 2007. In 2008, Firefly merged with a developer of derivatives and high frequency trading applications firm.
Mr. Saeed was the CEO of Relevant Data Corp., a private company which specializes in predictive analytics from March 2013 to April 2014. Mr. Saeed was a Business Development and Strategy officer with Alivia Technology LLC, a private software and big data-consulting firm in Massachusetts from March 2012 to March 2013. He also been the managing partner of Hummingbot.com, a private Web solutions and search engine optimization firm since 2010. Mr. Saeed holds a BS in Management Science from Lock Haven University, and an MBA in Finance and Management from Providence College.
George Abdalla, (Director and Chief Financial Officer)
Mr. Abdalla is the CFO of Penson Technologies LLC (since August 2013). He was the Senior Vice- President of International Business Planning at Penson Worldwide, Inc. (November 2009 – August 2013) and Vice President of Planning and Analysis of Penson Worldwide, Inc. (August 2002 – August 2009). Mr. Abdalla served in various roles during his eleven-year tenure at Penson, including domestic and international business planning, acquisitions, divestitures, and public offerings (including stock, bonds and convertible notes). Most recently, he assisted in the wind down and distribution of assets of Penson Worldwide Inc. Mr. Abdalla holds a BBA from the University of North Texas and an MBA from the University of Texas.
Anne Chopra (Director)
Ms. Chopra is a director of Caracara Silver Inc., a junior mining exploration company listed on the TSXV, (since July 2011). In addition Ms. Chopra, since August 2008, holds the office of President, CEO, CFO and is a director of Harvest One Capital Inc., a capital pool company trading on the NEX Board of the TSXV, (since August 2008). Ms. Chopra served as VP, Corporate and Legal Affairs with Potash One Inc., a TSX listed resource issuer from November 2007 to its buyout in a $430 Million cash transaction in March 2011. Ms. Chopra has practiced corporate, commercial and securities law with private regional law firms in British Columbia (since February 1997). Ms. Chopra is also the Equity Ombudsperson for the Law Society of British Columbia, a role she has held since May 1999 and the recipient of the 2006 CBA Equality and Diversity Award for her work in this field. Ms. Chopra also holds a B. Comm. degree and LL.B. degree from the University of Alberta, and a Masters of Industrial Relations from Queen's University.
About Tier1
Tier1 is a private company incorporated in British Columbia on August 27, 2014. Tier1 is a pre-revenue financial software company. Tier1 was founded to develop and provide a seamless securities trading technology solution to meet a demonstrated need in the financial services community for global market access, risk management and portfolio accounting and reporting services. As its first product, Tier1 has developed a proprietary “straight through processing” (“STP”) technology that integrates trading, realtime risk management, accounting, reporting and administration tools in a single platform for the capital markets. Tier1 intends to sell STP and similar products in two ways: directly to customer and through institutional licensing. Tier1 expects to commence sales of STP by the second quarter of 2015.
About Savoy
Savoy was incorporated in British Columbia on November 7, 2011. On October 22, 2013, Savoy commenced trading on the Exchange under the trade symbol “SVO”. Savoy is a mineral exploration and development company that is engaged in the acquisition, exploration, and development of gold, copper/platinum/palladium and molybdenum resources in North America. Savoy currently recently decided not to proceed with its option to acquire a one hundred percent (100%) interest in the Big Range Property situated approximately 23 kilometres east of Hope, British Columbia. Savoy is a reporting issuer in British Columbia and Alberta. As of February 11, 2015, the shares of Savoy were trading at $0.16 per share on the Exchange.
Further Information
All information in this news release, regarding Savoy and Tier1, was supplied by the parties respectively, for inclusion herein. Each party and its directors and officers have relied on the other party for any information concerning the other party.
Completion of the Transaction is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. 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 any management information circular and/or filing statement to be 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 Savoy should be considered highly speculative.
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.
If and when a definitive agreement between Savoy and Tier1 is executed, in accordance with the policies of the Exchange, Savoy will issue a subsequent press release containing the details of the definitive agreement and additional terms of the Transaction, including information relating to sponsorship, name change, terms and conditions of the private placement, and to the extent not contained in this press release, additional information required by the Exchange with respect to the history of Tier1 and a summary of key financial information.
Contact
For further information, contact Glen MacDonald, President and Chief Executive Officer of Savoy at: 604- 719-8129.
Cautionary and Forward-Looking Statements
Certain information in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Savoy, including but not limited to, the uncertainty of the Transaction proceeding, the impact of general economic conditions, industry conditions, dependence upon regulatory and shareholder approvals, the execution of definitive documentation and the uncertainty of obtaining additional financing. Readers are cautioned that the assumptions used in preparing such information, although considered reasonable at the time of preparation, may prove imprecise and undue reliance should not be placed on forward-looking statements. Forward-looking statements in this press release are expressly qualified by this cautionary statement.
The forward-looking statements in this press release are made as of the date of this press release, and the Company undertakes no obligations to update publicly or to revise any of the included forward-looking statements, whether because of new information, future events or otherwise, except as expressly required by applicable securities law.
This press release shall not constitute an offer to sell, nor the solicitation of an offer to buy, any securities in the United States, nor shall there be any sale of securities mentioned in this press release in any state in the United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.