Steep Hill signs agreement to acquire Good Purpose

Executive Summary

• Steep Hill Inc. has entered into an amalgamation agreement to acquire Good Purpose Investments Inc. (operator of the Waste2Wear textile business) via a three-cornered amalgamation, resulting in a reverse takeover where Good Purpose shareholders will control the resulting entity.
• The transaction involves a share consolidation (1-for-3), a name change to Good Purpose Investments Inc., and a reconstitution of the board and management.
• Completion is contingent upon shareholder and regulatory approvals, including CSE listing approval, and the successful completion of a concurrent private placement financing by Good Purpose.

Key Details

• Transaction Structure: Three-cornered amalgamation where Steep Hill acquires Good Purpose through its wholly owned subsidiary, 1561117 B.C. Ltd. (Subco). The resulting entity will be a wholly owned subsidiary of Steep Hill (post-closing "resulting issuer").
• Exchange Ratio: Good Purpose shareholders will exchange all common shares for resulting issuer shares at a ratio of 1:1, capped at a maximum of 62,005,820 resulting issuer shares.
• Business Description: Good Purpose is a private BC corporation manufacturing, marketing, and distributing textiles made from recycled plastics under the trade name "Waste2Wear," utilizing proprietary material analysis and traceability technologies.
• Corporate Changes:
  • Name change to "Good Purpose Investments Inc." (or mutually agreed alternative).
  • Stock ticker symbol change to be determined and approved by the CSE.
  • Share consolidation: 1 post-consolidation share for every 3 pre-consolidation shares.
  • Reconstitution of the board of directors and management team (names to be announced subsequently).
• Financing Component: Good Purpose intends to complete a non-brokered private placement offering with aggregate gross proceeds of a minimum of $3 million and a maximum of $10 million.
  • Effective price per Good Purpose share: 40 cents per resulting issuer share at the time of completion.
  • Shares issued in this financing will be exchanged for resulting issuer shares at the transaction's exchange ratio.
• Regulatory & Approval Requirements:
  • Constitutes a "fundamental change" under CSE policies.
  • Requires approval by not less than 66-2/3% of votes cast at a Good Purpose shareholder meeting.
  • Requires approval by Steep Hill shareholders for the transaction, name change, and consolidation.
  • Requires CSE listing approval and filing of a listing statement (CSE Form 2A) on SEDAR+.
• Escrow: Certain securities issued will be subject to CSE escrow requirements, mutually agreed conditions, and hold periods.
• Trading Status: Trading in Steep Hill common shares is currently halted and will remain halted until required documentation is filed and accepted by the CSE.

Notable Quotes

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