Castlebar Capital arranges RTO with Blockgration as QT

Executive Summary

• Castlebar Capital Corp. has entered into a non-binding Letter of Intent (LOI) to complete a reverse takeover (qualifying transaction) with Blockgration Holdings Inc., a fintech company providing payment orchestration and digital finance infrastructure.
• The transaction involves Blockgration shareholders exchanging their shares for newly issued Castlebar shares, implying an equity value for Blockgration of $40 million based on 20 million new shares at $0.20 per share.
• The deal is contingent upon the completion of a concurrent private placement financing of at least $5 million by Blockgration prior to closing, as well as regulatory approvals and shareholder consent.

Key Details

• Transaction Structure: Reverse takeover via a three-cornered amalgamation, share exchange, merger, or similar form, intended to serve as Castlebar’s qualifying transaction under the TSX Venture Exchange’s capital pool company program.
• Valuation & Consideration: Blockgration shareholders will receive 20 million new Castlebar common shares. This implies an equity value for Blockgration of $40 million, calculated based on a price of $0.20 per share.
• Concurrent Financing: Blockgration must complete a private placement of subscription receipts for a minimum of $5 million.
  • Price: $2.00 per subscription receipt.
  • Conversion: Each receipt converts into one Castlebar share and one-half of one common share purchase warrant.
  • Warrant Terms: Each whole resulting issuer warrant is exercisable to acquire one share at $3.00 for a period of two years.
  • Use of Proceeds: Regulatory expansion and licensing, scaling technology/platform infrastructure, marketing, partner onboarding (including cross-border corridors), general working capital, and transaction expenses.
• Share Consolidation:
  • Castlebar: 5 pre-consolidation shares for 1 post-consolidation share.
  • Blockgration: 10.671 pre-consolidation shares for 1 post-consolidation share.
• Governance: Upon completion, the board will be reconstituted with up to five directors: two nominees from Castlebar and up to three nominees from Blockgration.
• Regulatory Status: The transaction is not a non-arm's-length qualifying transaction. Castlebar has requested a trading halt pending review; trading is expected to remain halted until closing or termination. The resulting issuer is expected to be a Tier 2 issuer.
• Conditions Precedent: Satisfactory due diligence, execution of definitive agreement, completion of concurrent financing, shareholder approval (if required), and receipt of all necessary regulatory, stock exchange, and governmental authorizations.
• Sponsorship: Castlebar is reviewing sponsorship requirements and may apply for an exemption from TSX-V Policy 2.4 sponsorship requirements, though no assurance of exemption exists.

Notable Quotes

• None provided in the text.