Haw Capital 2 signs merger agreement for QT with Naked

Executive Summary

• Haw Capital 2 Corp. (Haw 2) has entered into a merger agreement with Naked Revival Inc. (Naked) to effect a qualifying transaction, resulting in a business combination where Haw 2 will change its name to Naked Revival Inc.
• The transaction involves a concurrent private placement financing of up to $3 million via subscription receipts, which will convert into common shares upon completion.
• Upon closing, the resulting issuer is expected to have approximately 96.8 million common shares outstanding, with Naked shareholders holding ~47% and Haw 2 shareholders holding ~14.5%.

Key Details

• Transaction Structure: Haw 2, through a wholly owned subsidiary (Subco), will merge with Naked Revival Inc. The resulting entity will be named Naked Revival Inc. and will carry on the business of Naked.
• Financing: A private placement of up to 14,097,744 subscription receipts is planned for aggregate gross proceeds of up to $3 million. These will convert into a maximum of 27,273,496 common shares.
• SAFE Conversion: Simple Agreements for Future Equity (SAFEs) held by Naked will automatically convert into common shares at a 20% discount to the subscription receipt price (21.28 cents per subscription receipt), resulting in a conversion price of 17.02 cents per share.
• Share Exchange Ratio: Each Naked common share (held by non-Canadian residents) and each Canadian resident Naked common share (cancelled without repayment) will be exchanged for 1.9346 resulting issuer common shares, based on a deemed price of 11 cents per Naked common share.
• Post-Closing Capitalization (Non-diluted):
  • Total Common Shares: 96,768,820.
  • Haw 2 Shareholders: 14,000,000 shares (~14.47%).
  • Naked Shareholders: 45,455,323 shares (~46.97%).
  • Subscription Receipt Holders: 27,273,496 shares (~28.18%).
  • SAFE Holders: 8,040,001 shares (~8.31%).
• Warrants:
  • Resulting Issuer Warrants: 6,000,000 warrants issued, exercisable at $0.11 for 3 years.
  • Finder’s Warrants: 1,909,145 warrants issued, exercisable at $0.11 for 18 months.
• Listing Requirements: The resulting issuer is expected to meet Tier 2 industrial listing requirements of the TSX Venture Exchange (TSX-V).
• Trading Status: Haw 2 common shares are currently suspended from trading and expected to remain suspended until transaction completion.
• Conditions Precedent: Includes shareholder approvals, regulatory approvals, TSX-V final approval, and satisfaction of customary closing conditions.

Notable Quotes

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