Aneesh Capital to acquire eMusic via QT

Executive Summary

• Aneesh Capital Corp. has entered into a letter of intent to acquire 100% of eMusic.com Inc. in a qualifying transaction under TSX-V Policy 2.4, effectively taking the digital music pioneer public in Canada.
• The transaction values eMusic at a deemed valuation of $18 million (U.S.), while Aneesh Capital’s existing shares are deemed valued at $750,000 (U.S.).
• A concurrent private placement of approximately $3 million (U.S.) is intended to close alongside the transaction, with a definitive agreement expected by January 5, 2025, and closing targeted by March 31, 2026.

Key Details

• Transaction Structure: Aneesh Capital will acquire 100% of eMusic. The resulting issuer will carry forward eMusic's strategy.
• Valuation:
  • eMusic deemed valuation: $18 million (U.S.).
  • Aneesh Capital outstanding common shares deemed value: $750,000 (U.S.).
  • eMusic shareholders will receive Aneesh Capital shares in exchange for their eMusic shares based on the respective valuations.
• Concurrent Financing: A private placement of approximately $3 million (U.S.) is planned in conjunction with or prior to closing. Terms are subject to market conditions.
• Timeline:
  • Letter of Intent Date: December 2, 2025.
  • Definitive Agreement Expected: January 5, 2025.
  • Target Closing: On or before March 31, 2026.
• Management Changes: eMusic’s existing management team will assume leadership of the resulting issuer. All but one of Aneesh Capital’s current directors will resign, and the new board will comprise directors nominated by eMusic.
• Finder’s Fees and Arrangement Fees:
  • Baer Investments Ltd.: 2% of the transaction value as a finder's fee.
  • JDJ Merchant Partners Inc.: $100,000 (U.S.) arrangement fee, payable in cash or common shares.
  • Exiteam Ltd.: Finder's fee per separate agreement.
• Regulatory and Listing: The transaction is subject to TSX-V approval as a qualifying transaction and approval for the listing of the resulting issuer's common shares.
• Trading Status: Shares of Aneesh Capital have been halted from trading on the TSX-V and will not resume until the closing of the proposed transaction.
• Conditions Precedent: Execution of definitive agreement, satisfactory due diligence, regulatory/corporate/shareholder approvals, TSX-V acceptance, listing approval, completion of concurrent offering, delivery of financial statements, and no material adverse changes.

Notable Quotes

• "eMusic has a long history of innovation in the digital music space. This transaction will provide us with the capital and public currency to accelerate our growth, specifically with the launch of our new eMusic Royalties eXchange platform which will modernize music financing and create additional value for rightsholders," said Tamir Koch, president of eMusic.
• "We are pleased to have entered into this LOI with eMusic and look forward to working toward the completion of the qualifying transaction," said Peeyush K. Varshney, chief executive officer of Aneesh Capital.