~TIMIA acquires Canadian-based private lender
to small and medium businesses~
VANCOUVER, BC, Sept. 21, 2021 /CNW/ - TIMIA Capital
Corporation ("TIMIA" or the "Company") (TSXV: TCA)
(OTCQB:TIMCF) is pleased to announce that it has closed on the
previously announced transaction to acquire the business of Pivot
Financial ("Pivot"), a Canadian-based private lender focused
on creative financing solutions for the small and medium business
market.
Pursuant to the Transaction, TIMIA has acquired the loan book
and other assets, and assumed specific related debt of Pivot
Financial Inc. ("PFI"), acquired all of the outstanding
common shares of Pivot Financial Services Inc. ("PFSI"), and
established a new wholly-owned limited partnership to manage the
loan book, other assets, and specific related debt of PFI.
Pivot Financial has successfully grown to profitability over the
past 6 years and will accelerate its growth through the combination
with TIMIA. Ken Thomson, CEO
of Pivot, has been appointed Chief Strategy Officer and has joined
the Board of Directors of TIMIA. Dan
Flaro, President of Pivot, will continue in his role with
respect to the Pivot business.
"The acquisition of Pivot Financial takes TIMIA Capital assets
to over $100 million, thereby
providing critical economies of scale," said Mike Walkinshaw, CEO of TIMIA. "Our
fintech-based loan origination and underwriting platform has proven
to efficiently and effectively originate and manage loans and we
look forward to applying our platform to those loan facilities
sourced and managed by Pivot."
The purchase price of the acquisition was $6.0 million plus working capital comprised of
aggregate consideration payable by TIMIA including the issuance of
5,000,000 Common Shares (at a deemed price of $0.30 per Common Share) and 2,000,000 Preferred
Shares (at a deemed price of $1.00
per Preferred Share) and the payment of $1.0
million in cash (subject to post-closing working capital
adjustments) to Ken Thomson
("Thomson"), and the issuance of 1,500,000 Preferred Shares
(at a deemed price of $1.00 per
Preferred Share) to PFI, a company owned and controlled by
Thomson.
In addition, the Company also announces that it expects to
shortly complete a private placement of 1,666,667 Common Shares at
a price of $0.30 per Common Share and
500,000 Preferred Shares at a price of $1.00 per Preferred Share with Dan Flaro ("Flaro"), a key employee of PFSI, for
gross proceeds of $1,000,000 (the
"Investment Transaction"). The Company anticipates using proceeds
of the Investment Transaction for general corporate purposes. All
securities issued in respect of these transactions are subject to a
4-month hold period in accordance with applicable securities laws
and the policies of the TSX Venture Exchange.
The Company has entered into voting agreements with Thomson, PFI
and Flaro, whereby, among other things, these parties will agree to
vote Common Shares held by them in favour of matters proposed by
management of the Company for a period of 24 months, subject to
certain standard exceptions (the "Voting Agreements").
The Company has also granted Thomson 100,000 stock options
exercisable at a price of $0.30 per
share for a period of 5 years, and Flaro, a key employee of PFSI,
150,000 stock options exercisable at a price of $0.30 per share for a period of 5 years. Thomson
and Flaro have entered into employment agreements with the
Company.
Early Warning
In connection with the closing of the
transaction, Thomson acquired ownership and control of 5,000,000
Common Shares, 3,500,000 Preferred Shares and 100,000 stock
options. Prior to the completion of the transaction, Thomson
owned and controlled no Common Shares, Preferred Shares or stock
options of the Company.
Thomson now owns and/or controls an aggregate of 5,000,000
Common Shares, 3,500,000 Preferred Shares entitling Thomson to
acquire an additional 3,500,000 Common Shares and 100,000 stock
options entitling Thomson to acquire an additional 100,000 Common
Shares, representing approximately 9.52% of the issued and
outstanding Common Shares assuming completion of the Investment
Transaction (or approximately 15.32% calculated on a partially
diluted basis, assuming completion of the Investment Transaction
and the conversion of the 3,500,000 Preferred Shares and 100,000
stock options).
Pursuant to transaction, the Company entered into Voting
Agreements with Thomson and Pivot Financial Inc., whereby these
parties agreed to vote Common Shares held by them in favour of
matters proposed by management of the Company for a period of 24
months, subject to certain standard exceptions in the event of
change of control transactions. In addition, Thomson shall have a
right to nominate one director to the board of the Company for a
period ending after the Company's 2023 annual general meeting of
shareholders. Thomson is the initial nominee director and has been
appointed as of the date hereof.
The securities were acquired in a private transaction which did
not take place through the facilities of any market for the
Company's securities. This transaction was effected for investment
purposes and Thomson could increase or decrease his investment in
the Company at any time, or continue to maintain his current
investment position, depending on market conditions or any other
relevant factor. The securities were acquired for the consideration
described above in this news release.
This portion of this new release is issued pursuant to National
Instrument 62-103 – The Early Warning System and Related Take-Over
Bid and Insider Reporting Issues, which also requires an early
warning report to be filed on SEDAR (www.sedar.com) containing
additional information with respect to the foregoing matters. A
copy of the related early warning report may be obtained on the
Company's SEDAR profile or by contacting Thomson at 25 Price
Street, Toronto, Ontario M4W 1Z1,
Attention: Kenneth Thomson tel:
(844) 839-3863 ext. 223. The head office of TIMIA is located
at Suite 835 - 1100 Melville Street, Vancouver, British Columbia, V6E 4A6.
About Pivot Financial
Pivot is an asset manager that
deploys funds on behalf of institutions, retail investors, high net
worth individuals, its management team and shareholders. We seek
out favourable risk return lending opportunities through prudent
credit assessment and diversification targeting lower mid market
borrowers in Canada. We manage all
aspects of borrower relationships including origination,
underwriting and ongoing portfolio management. For more information
please visit: www.pivotfinancial.com
About TIMIA Capital Corporation
TIMIA Capital
Corporation has developed a proprietary loan origination platform
that services private market, high-yield loan opportunities,
thereby earning recurring fees and a share of the profit.
While focusing on the fast growing, global, business-to-business
Software-as-a-Service (or SaaS) segment, TIMIA's automated loan
origination system is applicable to multiple technology sectors, it
creates scalable and profitable growth for TIMIA's stakeholders.
For more information about TIMIA Capital Corporation, please visit
www.timiacapital.com
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 news release.
Forward-Looking Information
Certain information and statements in this news release contain
and constitute forward-looking information or forward-looking
statements as defined under applicable securities laws
(collectively, "forward-looking statements"). Forward-looking
statements normally contain words like 'believe', 'expect',
'anticipate', 'plan', 'intend', 'continue', 'estimate', 'may',
'will', 'should', 'ongoing' and similar expressions, and within
this news release include any statements (express or implied)
respecting the completion of the Transaction and Investment
Transaction, the future performance of the combined companies, the
conditions of closing the transaction, including the final approval
of the TSXV, making further disbursements upon the completion of
certain milestones, future value creation for shareholders, the
growth of the company's investment portfolio and expectations
regarding making further investments in the coming months.
Forward-looking statements are not guarantees of future
performance, actions, or developments and are based on
expectations, assumptions and other factors that management
currently believes are relevant, reasonable and appropriate in the
circumstances, including, without limitation, the following
assumptions: that the conditions to the completion of the
Transaction and Investment Transaction will be satisfied, that the
Company and its investee companies are able to meet their
respective future objectives and priorities, assumptions concerning
general economic growth and the absence of unforeseen changes in
the legislative and regulatory framework for the Company. Although
management believes that the forward-looking statements are
reasonable, actual results could be substantially different due to
the risks and uncertainties associated with and inherent to Timia's
business. Material risks and uncertainties applicable to the
forward-looking statements set out herein include, but are not
limited to, the conditions of the Transaction and Investment
Transaction not being satisfied, the Company having insufficient
financial resources to achieve its objectives; availability of
further investments that are appropriate for the Company on terms
that it finds acceptable or at all; successful completion of exits
from investments on terms that constitute a gain when no such exits
are currently anticipated; intense competition in all aspects of
business; reliance on limited management resources; general
economic risks; new laws and regulations and risk of litigation.
Although Timia has attempted to identify factors that may cause
actual actions, events or results to differ materially from those
disclosed in the forward-looking statements, there may be other
factors that cause actions, events or results not to be as
anticipated, predicted, estimated or intended. Also, many of the
factors are beyond the control of Timia. Accordingly, readers
should not place undue reliance on forward-looking statements.
Timia undertakes no obligation to reissue or update any
forward-looking statements as a result of new information or events
after the date hereof except as may be required by law. All
forward-looking statements contained in this news release are
qualified by this cautionary statement.
SOURCE TIMIA Capital Corp.