Vancouver, British Columbia - TheNewswire - July 6, 2021 - Germinate Capital Ltd. (“Germinate” or the “Company”) (TSXV:GCAP.P), a capital pool company, is pleased to announce that it has signed a letter of intent dated June 29, 2021 to acquire all of the issued and outstanding shares of Beacon Hill Innovations Ltd. (“BEACN”), a streaming and gaming technology products company based in Victoria, B.C. This transaction, along with the associated financing outlined below and all other related transactions will constitute the Qualifying Transaction (“QT”) for Germinate under the TSX Venture Exchange (the “Exchange”) Capital Pool Company rules.

 

The QT will be an Arm’s Length transaction pursuant to which the shareholders of BEACN will become the largest shareholders of Germinate upon completion of the QT. Shareholder approval by shareholders of Germinate will not be required.

 

Germinate will be renamed as Beacon Hill Technology Ltd. (the “Resulting Issuer”) upon completion of the QT and a new trading symbol will be assigned.  BEACN is incorporated under the laws of British Columbia.

 

A Definitive Agreement outlining the detailed deal terms will be completed as a condition of closing of the QT.

 

Terms of the QT

 

Germinate currently has 4.8 million common shares issued and outstanding of which 2.3 million are currently held in escrow.

 

Germinate will issue 32,151,003 common shares to the shareholders of BEACN in exchange for 100% of the common shares of BEACN for an aggregate deemed price of approximately $6.75 million. It is anticipated that many of the common shares issued to the shareholders of BEACN will be subject to escrow requirements under the Exchange escrow rules.  Currently, 26.3% of BEACN’s shares are owned by one controlling shareholder, Mr. Jim Elliott and a company controlled by him.  

 

Financing

 

Germinate will also raise $2 million in conjunction with the QT by way of an Arm’s Length private placement of units (the “Units”) at $0.30 per Unit. Each Unit will be comprised of one common share and one-half of a non-transferable common share purchase warrant (each whole warrant, a “Warrant”). Each Warrant will entitle the holder to acquire one common share of Germinate at $0.60 for a 24-month period. All of the securities issued in the private placement will be subject to a four-month hold period from the date of closing.  

 

Director and Officers

 

Upon completion of the QT, the Board of Directors and Officers of the Resulting Issuer will be as follows:

Craig Fraser – Director and CEO  

 

Craig Fraser brings more than 25 years of experience in recording and broadcast audio, product management/development and marketing to BEACN. 

 

From being the "PA guy" in a band that saw successful regional radio airplay, running a recording and jingle studio, to most recently leading the gaming and streaming vertical in a well-known music industry company, Craig has shown consistent strength in both tech development/marketing and business leadership. 

 

Craig's professional successes took him from an entry-level tech support specialist to leading all outward-facing social interactions as a community leader, to developing/managing multiple financially successful products, to leading a new vertical that was conceptualized, built, and driven to fruition with a clear eye on the emerging streaming and gaming markets.

 

While watching Twitch TV "from the side of his desk" Craig noted the struggles streamers/gamers were having with audio and technical applications. That "lightbulb moment" led to attending multiple TwitchCon and other trade shows, meeting with VIPs from the industry, and ultimately designing and releasing multiple successful products into the market. This user-focused approach works especially well in a growing and relationship-based industry. "Just ask people. They will tell you what they want and it's up to us to interpret their desires and give them what they need."

 

Daniel Davies – Director, President and CTO

 

With more than 15 years experience in product development, Daniel leads all aspects of engineering and operations and is intimately involved in each product delivered by BEACN. Obsessed with taking blue-sky ideas and turning them into tangible products that simplify and enhance the lives of customers, he has spent his entire career honing the craft of designing, engineering, manufacturing, and leading teams to create low cost, high value consumer products.

 

Daniel holds a Bachelor of Engineering from the University of Victoria and a project management professional (PMP) designation. He acts as the integrator between engineering, manufacturing, marketing/sales, and finance, keeping BEACN focused on its overarching financial and business goals.

 

Daniel and Craig complement each other with their technical skills, proven leadership and commitment to quality.

Mark T. Brown B.Comm. CPA, CA – Director

Mr. Brown is a Chartered Professional Accountant with 25 years of financial experience with publicly listed companies and capital markets. He is the current CEO of Germinate and will continue with BEACN as a director.

Mr. Brown is President of Pacific Opportunity Capital Ltd. (“Pacific Opportunity”) since 1997, a company specializing in providing management and financial consulting services to public and private companies. His main corporate activities include transactions, financings and corporate financial planning. He is a founder of Rare Element Resources Ltd., which during his time became a $500 million company and listed on the New York Stock Exchange.

Mr. Brown currently serves as an officer and director of a number of public and private companies.

Mr. Brown earned his Chartered Professional Accountant designation while working at PricewaterhouseCoopers. He received his Bachelor of Commerce Degree from the University of British Columbia and is a member of the Institute of Professional Chartered Accountants of British Columbia.

Sarah Weber P.Geo., MBA – Director

 

Mrs. Weber is a professional geoscientist with over 25 years of diversified experience in the natural resource sector. She is a skilled professional with proven track record of building positive relationships between industry, government, Indigenous communities and NGOs. She has recently completed the Executive MBA program at SFU Beedie, notably receiving the top mark in the Board Governance course. She has extensive experience with BC in community engagement, working with over 30 First Nations communities in the field of natural resource development, including mining, forestry, energy, and aquaculture. She has served as a senior technical editor, is skilled at media  relations, and has experience in policy development, association governance, conference management and event planning.

 

She is the former Director, Communications and Member Services, for the Association for Mineral Exploration British Columbia ("AME BC"). In this role, she served as the Editor of the AME BC mineral sector publication, Mineral Exploration Magazine, and participated as the mining industry representative to the Muskwa‐ Kechika Management Area Advisory Board.

 

Robert J. Doyle, B.Sc. CPA, CA – Chief Financial Officer

 

Mr. Doyle will be appointed as the Chief Financial Officer of Germinate upon completion of the QT.  Mr. Doyle is Sr. VP at Pacific Opportunity and has more than 30 years experience in mergers & acquisitions for succession planning in Canada and the USA, holds Bachelor of Science and Licentiate of Accounting degrees from the University of British Columbia, and articled with Touche Ross &Co. now, Deloitte LLP.

 

Mr. Doyle will be an active participant in managing and promoting the growth of BEACN with strong financial management, planning and execution.

 

About BEACN Hill Innovations

 

The founders and team at BEACN have spent much of their careers developing vocal effects products for the music industry. In 2020 the team got together to design and build a new line of modern products that take advantage of their personal technical and sound knowledge targeted at the rapidly growing online gaming and streaming market.

 

Since that time, the team has raised approximately $3 million for the development of two key products and designed several others for the future. The initial products include a sound control board (the “BEACN Mix” and “BEACN Mix Create”) and a high tech microphone (the “BEACN MIC”) with certain features that are more advanced than other products found on the market today. BEACN builds world-class equipment for creators, from podcasters to live streamers and more. BEACN has assembled an exceptional team of technology enthusiasts to design and manufacture products that help the users of their products get to making better content quickly and effectively. BEACN’s mission is to help an average user produce like a pro, without spending needless time tinkering with dozens of settings.

 

BEACN has approximately $1 million in cash and is ready to begin the commercialization phase of the initial products with plans to begin sales through online channels they have used in the past by the fourth quarter of 2021.

 

The funds raised in conjunction with the QT, along with cash on hand, will help fund inventory purchases for the initial three products and allow BEACN to begin working on the development of their next big idea.

 

The gaming and online streaming markets have exploded during the pandemic. While the sales of similar products in this industry are already hitting record levels, they continue to grow rapidly. Having the coolest and best tech is key for the success of any streamer, and many follow their lead in buying tech products. The BEACN team has contact with these leaders including direct access to the market and has established online sales channels for their products, as well as the manufacturing to allow for just-in-time, direct delivery, sales.

 

Financial Summary of BEACN

 

The following table sets out the selected financial information with respect to BEACN as at the dates noted. The selected financial information is derived from BEACN's unaudited financial statements for the periods noted which have been prepared in accordance with International Financial Reporting Standards, issued by the International Accounting Standards Board.

 

	As at March 31, 2021
Cash and cash equivalents	$639,370
Inventory	60,148
Other current assets	21,197
Non-current assets	259,609
Total assets	$980,324
Current liabilities	62,041
Non-current liabilities	275,000
Total liabilities	$337,041
Total shareholders’ equity	$643,283

 

	For the period from date of incorporation on February 7, 2020 to December 31, 2020	For the three months ended March 31, 2021
Research and development expenditures	$453,481	$171,985
Other expenses	325,715	142,986
Net loss	$779,196	$314,971

  

Completion of the QT is subject to a number of conditions, including but not limited to, Exchange acceptance and, if applicable, pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the QT cannot close until the required shareholder approval is obtained. There can be no assurance that the QT will be completed as proposed or at all.

 

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the QT, any information released or received with respect to the QT may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

 

The Exchange has in no way passed upon the merits of the proposed QT and has neither approved nor disapproved the contents of this press release.

 

Trading in the common shares of Germinate will remain halted until all conditions are completed and the Exchange approvals are received.

 

For further information please see the Company’s profile and documents available under the Company’s name on SEDAR at www.sedar.com

 

Contact Information

 

Germinate Capital Ltd.

Mark T. Brown, CEO and Director

Email: mtbrown@pacificopportunity.com

Telephone: (604)-687-3520

 

Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

 

This press release contains certain forward-looking statements, including statements about the Company’s future plans and intentions, listing of the Common Shares on the Exchange, use of proceeds of the Offering and completion of a Qualifying Transaction. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect management’s current beliefs and are based on information currently available to management as at the date hereof.

 

Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.