Cairo and Swarmio Announce Agreement FOR Proposed Qualifying Transaction
Cairo Resources Inc.
Suite 1430 – 800 West Pender St.
Vancouver, British Columbia
Canada V6C 2V6
Telephone: (604) 638-8063
N E W S R E L E A S E
CAIRO AND SWARMIO ANNOUNCE AGREEMENT FOR PROPOSED QUALIFYING
TRANSACTION
Not for distribution to United States newswire services or for release, publication,
distribution or dissemination, directly or indirectly, in whole or in part, in or into the
United States.
Vancouver, B.C., October 1, 2019 – Cairo Resources Inc. (TSX-V: QAI.H) (“ Cairo ”), a capital
pool company listed on the TSX Venture Exchange (th e “ Exchange ”), and Swarmio Inc.
(“ Swarmio ”), a private Canadian federally incorporated techn ology company, are pleased to
announce that they have entered into arm’s length a malgamation agreement dated September
30, 2019 (the “ Definitive Agreement ”) in respect of a proposed business combination (t he
“Proposed Transaction ”) that would result in the reverse takeover of Cai ro by Swarmio. It is
anticipated that the Proposed Transaction will cons titute Cairo’s “Qualifying Transaction”
pursuant to Policy 2.4 of the Exchange. Following t he completion of the Proposed Transaction,
the resulting entity (the “ Resulting Issuer ”) will hold all of the assets and continue the bus iness
of Swarmio.
About Swarmio
Swarmio was incorporated under the provisions of th e Canada Business Corporations Act on
September 25, 2014 and currently has 9,617,905 common shares, 4,760,274 Class A Preferred
Shares, 3,477,945 Class B Preferred Shares (such co mmon and preferred shares are referred
to collectively as the “Swarmio Shares”), 666,281 c ommon and preferred share purchase
warrants, 4,675,000 common share purchase options a nd convertible debt instruments having
principal amount of $1,233,604.63 which are convert ible, including interest up to October 31,
2019, into 9,829,934 shares in the capital of Swarmio, issued and outstanding.
Swarmio is a global esports technology and media co mpany that provides solutions purpose-
built to support the growth of esports communities, enterprises and developers. Swarmio has
developed a unique set of internet infrastructure a nd software technologies that powers the
esports ecosystem.
The video gaming industry is the largest entertainm ent market on the planet with more than
US$139 billion in revenue. It is larger than sports (NFL, MLB, NBA, NHL), music and film
industries combined. Video gaming is increasingly b ecoming a competitive sport with prize
money and international competitions with millions of spectators. It has created a fast-growing
competitive gaming ecosystem, termed esports, where competitive gamers play video games
against each other for prize pools rivalling profes sional sports. Prize pools for esports
tournaments are reaching millions. DotA 2 has a pri ze pool worth US$34M and approximately
20 million viewers. Epic Games announced a US$100 million prize pool for its game Fortnite.
The fast growth of the video gaming and esports industry and the broad proliferation of real-time
applications such as IOT (Internet of Things) and s elf-driving cars expose the limits of today’s
Internet, cloud and telecom infrastructures. Despite vast improvements in today’s 4G/5G cellular
networks and their quicker download speeds, online video game players still have to connect to
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servers thousands of kilometres away at a cloud dat a center. This creates a very long
connection delay (aka “Latency”) and causes a poor gaming experience. Today’s Internet
infrastructure is simply not optimized for the low latency demands of the video gaming and
esports industry.
Swarmio has developed and deployed a latency optimi zed edge computing platform that
extends the limits of today’s Internet infrastructu re and delivers a better gaming experience by
deploying game servers closer to the players.
Swarmio partners with Telecom operators around the world to build a global edge computing
network using Swarmio’s intelligent orchestration e ngine and telco’s physical infrastructure
(servers and networks). Today, Swarmio’s edge compu ting platform connects more than 170
data centers in more than 70 regions globally.
Using the global edge computing platform, Swarmio d elivers a turnkey, white-labelled esports
platform solution for esports organizations (teams, tournament organizers, influencers, etc.),
game developers and telecom operators. Swarmio’s es ports solution enables organizations to
engage and monetize their userbase and fanbase.
Summary of Proposed Transaction
Transaction Structure
Pursuant to the Definitive Agreement, Cairo and Swa rmio will complete a three-cornered
amalgamation under the federal laws of Canada where by a newly formed wholly-owned
Canadian federal subsidiary of Cairo will amalgamate with Swarmio (t he “ Amalgamation ”) and
the shareholders of Swarmio will receive common sha res of Cairo (the “ Cairo Shares ”) in
exchange for their Swarmio Shares, resulting in a reverse takeover of Cairo by Swarmio.
Immediately prior to the Amalgamation, Cairo will c onsolidate its issued share capital on the
basis of one (1) new Cairo Shares for each 1.2 old Cairo Shares.
It is anticipated that the Resulting Issuer will co ntinue the business of Swarmio under the name
“Swarmio Media Inc.” (the “ Name Change ”).
Certain common shares of the Resulting Issuer to be issued pursuant to the Proposed
Transaction are expected to be subject to restricti ons on resale or escrow under the policies of
the Exchange, including the securities to be issued to “Principals” (as defined under Exchange
policies), which will subject to the escrow require ments of the Exchange. Additionally, certain of
the common shares of the Resulting Issuer to be iss ued pursuant to the Proposed Transaction
are expected to be subject to contractually based restrictions on resale or escrow.
The Proposed Transaction is subject to, among other things, the completion of the Concurrent
Financing (as described below) for gross proceeds of $4.0 million, receipt of Swarmio and Cairo
board approval of Proposed Transaction, receipt of Swarmio shareholder approval for the
Proposed Transaction, receipt of Cairo shareholder approval of the Continuation, the Name
Change, Cairo and Swarmio obtaining all necessary c onsents, orders and regulatory approvals,
including the conditional approval of the Exchange, and other standard closing conditions.
On closing of the Proposed Transaction the Concurre nt Financing and issuance of the Finder’s
Fee (all as discussed below), it is anticipated tha t there will be approximately 51,017,894
common shares of the Resulting Issuer issued and outstanding (55,085,683 common shares on
a fully diluted basis). Certain of the common shar es issued by Cairo pursuant to the Proposed
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Transaction will be subject to restrictions on resa le or escrow under the policies of the
Exchange or applied on a contractual basis.
Concurrent Financing
Swarmio intends to undertake a private placement of subscription receipts (the “ Subscription
Receipts ”) for anticipated gross proceeds of $4.0 million ( the “ Concurrent Financing ”) to close
on or before completion of the Proposed Transaction . Upon satisfaction or waiver of all
conditions precedent to the Proposed Transaction, t he principal amount of the Subscription
Receipts will automatically convert into Swarmio Sh ares at a conversion price of $0.40 per
Swarmio Share, and such Swarmio Shares will then be exchanged for Cairo Shares pursuant to
the Proposed Transaction. The proceeds of the Concu rrent Financing will be held in escrow
until conversion of the Subscription Receipts. In the event that the Proposed Transaction is
terminated, 100% of the proceeds of the Concurrent Financing will be returned to the investors.
Finders Fee
Concurrent with and conditional upon the completion of the Proposed Transaction, Swarmio has
agreed to pay a finder’s fee of 1,950,000 post cons olidated Swarmio Shares to an arms-length
finder.
Name Change
Immediately prior to the closing of the Proposed Tr ansaction, the directors of Cairo will resolve,
pursuant to the powers granted to them under the Co mpany’s articles, to change the name of
the Company to Swarmio Media Inc.
Proposed Directors and Officers
It is anticipated that all of the current directors and officers of Cairo will resign from their
respective positions with Cairo. The board and mana gement of the Resulting Issuer shall be
comprised of Swarmio nominees, and is expected to i nclude Vijai Karthigesu (CEO, Corporate
Secretary and director), Sorin Stoian (CTO), Kyle A ppleby (CFO), Andrew Ray (director) and
Malcolm Smith (director) with potential additional directors to be confirmed in due course. The
following are brief descriptions of the currently p roposed directors and officers of the Resulting
Issuer:
Vijai Karthigesu – CEO, Secretary and Director
Mr. Karthigesu is a serial entrepreneur, innovator, blockchain strategist, and a thought leader in
software-defined networking and decentralized compu ting technologies. He has over 20 years
of experience in guiding organizations create uniqu e and ahead-of-the-curve technology
strategies to adapt, change and lead major market transitions.
Mr. Karthigesu has been a speaker at major technolo gical events and has espoused the need
for technology to be human-focused and decentralize d in the emerging blockchain, Internet of
Things and 5G era.
Mr. Karthigesu is Swarmio’s founder. He was the Co- Founder / CSO of Cloud Dynamics, a
cloud automation technology company, and Co-Founder / CTO of SpectraVoice, one of
Canada's first commercial VOIP companies. Vijai als o held senior technology leadership
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positions in multi-billion-dollar public and private sector companies in Canada. Vijai is a licensed
Professional Engineer (P.Eng.).
Mr. Karthigesu holds an Electrical Engineering degr ee from the University of Waterloo and an
MBA from Wilfrid Laurier University.
Sorin Stoian – CTO
Mr. Stoian is a creative and result-driven IT archi tect with more than 20 years of experience in
IT infrastructure, Cloud, Software-Defined technolo gies, agile software development, gaming
network architectures and IT security. Mr. Stoian h as wide experience in conceptualizing and
developing revenue-generating cloud infrastructure management solutions and software-defined
cloud infrastructures.
He has worked in a senior capacity for major global brands such as IBM, Bell, Telus, Nokia,
Vodafone, Moneris and Scotiabank.
Mr. Stoian holds a Bachelor of Science degree from the Politehnica University of Bucharest.
Kyle Appleby – CFO
Mr. Appleby joined Swarmio as Chief Financial Offic er in August 2019. Mr. Appleby spent the
first 10 years of his career working in public acco unting where he worked in both audit and
advisory practices working with private companies a nd investment funds. Since 2007 Mr.
Appleby has focused on providing management, accoun ting and financial services to public
companies across a variety of industries including esports, technology, mining, food
production, cannabis, crypto-currency and others.
Kyle has been the Chief Financial Officer for numerous companies listed in Canada and the US,
and has extensive experience in financial reporting , accounting, IPOs, fund raising, and
corporate governance.
He holds a Bachelor of Economics from York Universi ty and is a member in good standing of
the Chartered Professional Accountants of Ontario.
Andrew Ray – Director
Andrew Ray is vice president of investment at Innov acorp, where he oversees the
organization’s venture capital activities. As part of the senior management team, he leads
Innovacorp’s work to find, fund and foster innovative Nova Scotia start-ups that strive to change
the world.
Mr. Ray works hands-on with Innovacorp’s portfolio companies to assist them in building teams,
accelerating their growth, achieving milestones and securing additional financing. He is a board
member at Swarmio, QRA, VineView and LeadSift, and a board observer at Proposify.
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Prior to joining Innovacorp, Andrew was the CEO of Bazari, a mobile banking services provider
for microfinance institutions in India. At Bazari, he helped financial institutions set up technology
infrastructure and oversaw the rollout of the compa ny’s mobile payment platform. Prior to this,
he worked for MacDonald, Dettwiler and Associates o n the Radarsat-2 Spacecraft, from design
through launch, specializing in spacecraft guidance and navigation.
Andrew holds a B.Sc. in astrophysics from Saint Mar y’s University, an M.Sc. in space studies
from France’s International Space University, and a n MBA from Brigham Young University’s
Marriott School of Management.
Malcolm Smith – Director
Mr. Smith is CEO of West Harbour Capital, where he oversees the organization’s merchant
banking activities and provides a variety of corpor ate finance services including capital-raising,
mergers and acquisitions, joint ventures, business development, as well as restructuring and
due diligence.
Mr. Smith has over 20 years of experience in capital markets on both the sell-side and buy-side.
Prior to founding West Harbour Capital, he was the CFO, CCO and a financial analyst at Edge
Hill Partners, an independent, specialized manager of alternative investment strategies. At Edge
Hill Partners, he was responsible for operations, e valuating investment opportunities and
managing the currency hedging program for the funds . Edge Hill Partners grew from a start-up
investment manager to a successful nationwide and offshore fund distribution company.
Prior to this, he worked for Salida Capital, Nation al Bank Financial and First Marathon
Securities.
Mr. Smith holds a Bachelor of Commerce degree from Saint Mary’s University.
Additional information on the proposed board and ma nagement of the Resulting Issuer will be
provided once available.
Sponsorship
In connection with the Proposed Transaction Cairo a nd Swarmio intend to apply for a waiver
from the Exchange’s sponsorship requirement.
Additional Information
Additional information concerning the Proposed Tran saction, Cairo, Swarmio and the Resulting
Issuer, including financial information of Swarmio, will be provided in subsequent news releases
and in Cairo’ Filing Statement to be filed in connection with the Proposed Transaction, which will
be available under Cairo’ SEDAR profile at www.sedar.com .
Upon closing of the Proposed Transaction, the Resul ting Issuer expects to list as a Tier 2
Technology Issuer on the Exchange.
The Proposed Transaction will not constitute a “Non -Arm’s Length Qualifying Transaction” (as
such term is defined in the policies of the Exchang e). Accordingly, it is not anticipated that the
Proposed Transaction will be subject to the approval of Cairo shareholders.
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In accordance with the policies of the Exchange, Ca iro Shares are currently halted from trading
and will remain so until such time as the Exchange determines, which, depending on the
policies of the Exchange, may not occur until completion of the Proposed Transaction.
None of the securities to be issued pursuant to the Proposed Transaction have been or will be
registered under the United States Securities Act o f 1933, as amended, or any state securities
laws, and any securities issued pursuant to the Pro posed Transaction are anticipated to be
issued in reliance upon available exemptions from s uch registration requirements. This press
release does not constitute an offer to sell or the solicitation of an offer to buy any securities.
About Cairo
Cairo is a capital pool company formed under the Exchange capital pool company program.
Cairo currently has issued and outstanding 1,881,47 3 Cairo Shares, nil common share
purchase warrants and nil incentive stock options.
For further information:
Cairo Resources Inc.
Darryl Cardey, CEO
Phone.: +1.604.638.8063
Email: [email protected]
Swarmio Inc.
Vijai Karthigesu, CEO
Phone: +1.416.907.0000
Email: [email protected]
Neither TSX Venture Exchange nor its Regulation Ser vices Provider (as that term is
defined in the policies of the Exchange) accepts re sponsibility for the adequacy or
accuracy of this release.
Completion of the Proposed Transaction is subject t o a number of conditions, including but not
limited to, Exchange acceptance, completion of the Concurrent Financing and obtaining all
required shareholder approvals including, if applic able pursuant to Exchange Requirements,
majority of the minority shareholder approval. The re can be no assurance that the Proposed
Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed i n the management information circular or
filing statement to be prepared in connection with the Proposed Transaction, any information
released or received with respect to the Proposed Transaction may not be accurate or complete
and should not be relied upon. Trading in the secu rities of a capital pool company should be
considered highly speculative.
The Exchange has in no way passed upon the merits o f the Proposed Transaction and has
neither approved nor disapproved the contents of this press release .
All information contained in this news release with respect to Cairo, Swarmio, and the Resulting
Issuer was supplied by the parties, respectively, f or inclusion herein, and Cairo and its directors
and officers have relied on Swarmio for any information concerning such party.
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THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION.
Forward-Looking Statements
This news release contains forward-looking statemen ts relating to the timing and completion of
the Proposed Transaction and related transactions, the future operations of the Cairo, Swarmio,
and the Resulting Issuer and other statements that are not historical facts. Forward-looking
statements are often identified by terms such as “w ill”, “may”, “should”, “anticipate”, “expects”
and similar expressions. All statements, other than statements of historical fact, included in this
release are forward-looking statements that involve risks and uncertainties. There can be no
assurance that such statements will prove to be acc urate and actual results and future events
could differ materially from those anticipated in s uch statements. Important factors that could
cause actual results to differ materially from Cair o’ and Swarmio’s expectations include the
failure to satisfy the conditions to completion of the Proposed Transaction set forth above and
other risks detailed from time to time in the filin gs made by Cairo, Swarmio, and the Resulting
Issuer with securities regulators.
The reader is cautioned that assumptions used in th e preparation of any forward-looking
information may prove to be incorrect. Events or ci rcumstances may cause actual results to
differ materially from those predicted, as a result of numerous known and unknown risks,
uncertainties, and other factors, many of which are beyond the control of Cairo, Swarmio, and
the Resulting Issuer. As a result, Cairo, Swarmio, and the Resulting Issuer cannot guarantee
that the Proposed Transaction will be completed on the terms and within the time disclosed
herein or at all. The reader is cautioned not to pl ace undue reliance on any forward-looking
information. Such information, although considered reasonable by management at the time of
preparation, may prove to be incorrect and actual r esults may differ materially from those
anticipated. Forward-looking statements contained i n this news release are expressly qualified
by this cautionary statement. The forward-looking statements contained in this news release are
made as of the date of this news release and Cairo, Swarmio, and the Resulting Issuer will only
update or revise publicly any of the included forwa rd-looking statements as expressly required
by Canadian securities law .